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Thread: Article: On Terry Ryan, Truth And Gravity

  1. #81
    Quote Originally Posted by johnnydakota View Post
    figure 5 million per 100,000 tickets and you will see that those 2 would have about paid for themselfs and the fan base would be happier,huh? would you be giddy to have those 2 in the top of our rotation?, would it have been nice to poach Sanchez from our foe?
    What are you assuming is the increased attendance?

    How did you come up with a figure of $50 profit for every man/woman & child in attendance?

  2. #82
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    Quote Originally Posted by Major Leauge Ready View Post
    What are you assuming is the increased attendance?

    How did you come up with a figure of $50 profit for every man/woman & child in attendance?

    We do know the cost when you fail to put up even a mediocre product for 3 years running:


    "Three years of losing costs Twins half their TV audience"



    http://m.startribune.com/news/?id=231241241

    But after all that is said and done, the core audience remains and the Twins have still done well financially:

    "The Twins have lost half of their TV audience since 2010, and they sell 23 percent fewer tickets than they did in Target Field’s first year — they averaged only 758 more fans per home game last year than in the Metrodome’s final season. But there is little doubt that the Twins — and the sport as a whole — remain profitable."


    "The best news for the Twins: Unlike through-the-turnstile attendance at Target Field, the decline in TV ratings has virtually no effect on their bottom line. In fact, their income from television is about to take a large jump in 2014.
    The increased revenue comes from MLB’s new national media contracts with ESPN, Fox and TBS, which agreed to payments totaling $12.4 billion over the next eight years, more than doubling their expiring contracts. That means the Twins, like the other 29 teams, will collect more than $50 million a year from the networks, instead of the roughly $25 million they took in this year."

    It appears that the way the TV deals are structured, there is little incentive to improve the product, so putting people in the seats is the main area to maximize the bottom line number.


    The Twins Fans Cost Index for 2013 suggests these numbers are operative:

    Minnesota $32.59/ticket $221.36/total cost per family of four

    This works out to $55.34 per fan after ticket, parking, food and concession purchases. Not all pure profit, to be sure, but puts the revenue/attendee ratio in perspective...

    http://www.kshb.com/dpp/sports/baseb...#ixzz2XtggOV6A
    Last edited by jokin; 12-16-2013 at 02:57 PM.

  3. #83
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    Quote Originally Posted by Major Leauge Ready View Post
    What are you assuming is the increased attendance?

    How did you come up with a figure of $50 profit for every man/woman & child in attendance?
    ticket prices were an average of 31.50+ in 2013 and if you add in concessions and merchandice ( whats the cost of 2 beers and a bag of peanuts?) We drew 2.4 million , it is reasonible to think the fan base would get excited by making 2 big signings and we would have an attendance over 3.millionor even 3.1 million , so with an increase of 700,000x 50 + the 10 million not spent on Pelfrey and Correia , these 2 about pay for themselfs(yes jimmy doesnt get his cut, but to me if hes looking to Pocket more profit from a team that flat out sucked for the last 3 years he is more greedy then most believe)
    Last edited by johnnydakota; 12-16-2013 at 02:45 PM.

  4. #84
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    Quote Originally Posted by johnnydakota View Post
    ticket prices were an average of 31.50+ in 2013 and if you add in concessions and merchandice ( whats the cost of 2 beers and a bag of peanuts?) We drew 2.4 million , it is reasonible to think the fan base would get excited by making 2 big signings and we would have an attendance over 3.millionor even 3.1 million , so with an increase of 700,000x 50 + the 10 million not spent on Pelfrey and Correia , these 2 about pay for themselfs(yes jimmy doesnt get his cut, but to me if hes looking to Pocket more profit from a team that flat out sucked for the last 3 years he is more greedy then most believe)
    My source above had the avg. ticket price @ $ 32.59 (perhaps more accurately reflecting premium pricing? But regardless, this further bolsters your point, if the Twins are competitive, all of those premium priced seats get sold, and maybe even at a higher average/tkt. to reflect the greater demand!)
    Last edited by jokin; 12-17-2013 at 12:18 PM.

  5. #85
    Thanks Jokin. That really helps understand the revenue implications. Incremental attendance has almost no variable cost. The $22.50/person for merchandise and parking obviously has some cost. So, we are talking roughly $50 profit for every ticket sold.

    Now, we just have to estimate the impact on wins and then the impact on attendance from fielding a better team. Would it be fair to say Grienke would have taken us from 66 to 76-78 wins? What would that have done for attendance?

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    Quote Originally Posted by Major Leauge Ready View Post
    Thanks Jokin. That really helps understand the revenue implications. Incremental attendance has almost no variable cost. The $22.50/person for merchandise and parking obviously has some cost. So, we are talking roughly $50 profit for every ticket sold.

    Now, we just have to estimate the impact on wins and then the impact on attendance from fielding a better team. Would it be fair to say Grienke would have taken us from 66 to 76-78 wins? What would that have done for attendance?
    Probably to a great extent Greinke-specific games. Greinke started 28 games in 2013. Assuming that 15 starts come at home through a slight manipulation of the rotation, Greinke would potentially increase attendance by 10,000 per game (just used convenient rounding numbers from 30,000 per game to 40,000 per sellout game). That makes 150,000 X $50 = $7.5M. Clearly, the rest of the team would have to step up performance-wise to goose the W/L number to get the gate up sufficient enough (about $13.5M, or 270,000) to cover the difference between Greinke and Correia.
    Last edited by jokin; 12-17-2013 at 11:22 AM.

  7. #87
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    The "average" cost per ticket should not be used because the most expensive tickets have already been sold. Incremental ticket sales will be from unsold seats--"the cheap seats". Those tickets were in the $13-17 range per seat.

  8. #88
    Quote Originally Posted by Kwak View Post
    The "average" cost per ticket should not be used because the most expensive tickets have already been sold. Incremental ticket sales will be from unsold seats--"the cheap seats". Those tickets were in the $13-17 range per seat.
    Nice catch, Kwak! I assumed this was probably the case but I did not want to be accused of any bias that might disprove financial viability. The 10,000 incremental seats sold probably does not fly either because of two factors. One, many people by tickets well in advance and don't know who is pitching. Two, even if they did come to specifically see Grienke, they likely chose his game instead of another game.

    This is a somewhat crude analysis but I think we can say with confidence that the incremental revenue would not have come even remotely close to covering the cost of these players even assuming they remain healthy, make every planned start and perform to expectations for the entire duration of the contract which of course is HIGHLY unlikely.
    Last edited by Major Leauge Ready; 12-16-2013 at 04:24 PM.

  9. #89
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    The criticisms levied here against the Twins earnings and their spending can be used against every team. Ostensibly, every club should be able to sign any free agent, if they are willing to pocket less money. Though, there's clearly a diminishing return in terms of how much more money a club will earn in the future (or this season) by spending more money now. As others have stated, signing Grienke probably wouldn't have put many more butts in the seat, nor improved the club above it's battle for fourth place.
    Last edited by PseudoSABR; 12-16-2013 at 05:01 PM.

  10. #90
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    Quote Originally Posted by jokin View Post
    Probably to a great extent Greinke-specific games. Greinke started 28 games in 2013. Assuming that 15 starts come at home through a slight manipulation of the rotaion, Greinke would potentially increase attendance by 10,000 per game (just used convenient rounding numbers from 30,000 per game to 40,000 per sellout game). That makes 150,000 X $50 = $7.5M. Clearly, the rest of the team would have to step up performance-wise to goose the W/L number to get the gate up sufficient enough (about $13.5M, or 270,000) to cover the difference between Greinke and Correia.
    Did 10,000 more fans come out to watch Santana pitch on days he was sceduled other than opening days? 2000 per game more for Frankie V? There is absolutely zero historical basis for the idea there would be that great of an icrease of Twins fans coming out to watch a specific pitcher.

  11. #91
    Senior Member All-Star TheLeviathan's Avatar
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    Its one thing to try and still be bad and another to sit on your hands and fail. The twins were going to lose butts in the seats very soon without more effort. This offseasons spending could be argued as just as citical a financial down payment as a talent one. if we had repeated last season's inaction there was a strong chance public perception was going to sour terribly.

    We may still finish fourth with this team next year but that doesn't mean our signings this year were bad moves. (One could flip some arguments here and conclude that) When your money maker is publicly financed and goodwill is critical to your profit margin, its not always about wins when you decide to spend.

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  13. #92
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    The owner has said that a payroll of over $100MM is acceptable (esp. now that they get another $25MM in revenue, with no increase in expenses, it is all gravy)......so this whole line of arguing seems off to me. They clearly spent less money than they had available last year. So far, they are spending less money than they have available this year. All the other stuff is people arguing on message boards with insufficient information to draw rational conclusions (which was the whole point of the thread, ironically).
    Lighten up Francis....

  14. #93
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    Quote Originally Posted by The Wise One View Post
    Did 10,000 more fans come out to watch Santana pitch on days he was sceduled other than opening days? 2000 per game more for Frankie V? There is absolutely zero historical basis for the idea there would be that great of an icrease of Twins fans coming out to watch a specific pitcher.
    Did you actually read what I wrote, and the ongoing conversation that resulted in my posts? The qualifier, "potentially" was carefully and intentionally inserted for a reason- it's a hypothetical. Of course, the evidence you cited was based on a completely different set of circumstances, particularly an outmoded ballpark that didn't lend itself to expanded walk-up appeal on good weather days. And of course, baseball clubs are never mindful of ticket demand relative to appealing to the fans intense favorite player interests, vis a vis, marquis pitching matchups or players like Joe Mauer appearing in as many home games as possible, right Wise One? And all that PR talk from Gardy and Ryan to the media that they're ever-mindful about putting their best players on the field for home games for the fans who drove all the way from Wahpeton is just so much windage, right Wise One?

    We do know that "premium pricing" exists for a reason, and has more than "absolutely zero historical basis for the idea"- that games that involve teams with more talent and more tradition create more demand for tickets, which allows higher prices to be charged. When the consumer walk-up ticket buyer has the discretionary option of attending a game pitched by Cole DeVries or a game pitched by Zach Greinke, it's pretty obvious where the stronger demand would lie. Would it be 10,000 more per game? Of course not, but again, we were using the extreme hypotheticals to flesh out the economics for the Twins in signing the top FA target of the previous offseason- a point that you so conveniently swerved right past in pursuit of your thread hijack.
    Last edited by jokin; 12-17-2013 at 11:55 AM.

  15. #94
    Quote Originally Posted by mike wants wins View Post
    The owner has said that a payroll of over $100MM is acceptable (esp. now that they get another $25MM in revenue, with no increase in expenses, it is all gravy)......so this whole line of arguing seems off to me. They clearly spent less money than they had available last year. So far, they are spending less money than they have available this year. All the other stuff is people arguing on message boards with insufficient information to draw rational conclusions (which was the whole point of the thread, ironically).
    How is “this line of arguing off”. Johnny made a very specific argument that they should have signed Grienke and Sanchez because they would have paid for themselves. We evaluated that premise listing all of the variables and assumptions. Granted, we would have had a more accurate profit contribution per fan number if we knew the gross margin for concessions and other products but the math does not fly even at 100% gross margin. We were able to basically boil this debate down to one assumption. That being the gain in attendance from signing these two players.

    The one other assumption that was debatable was the use of an average ticket price to determine incremental revenue from ticket sales. As Kwak pointed out the addition attendance was more likely to be from “cheap seats”. I am sure the Twins FO has exact figures on the lost revenue opportunity and could calculate this rather precisely.

    This specific argument is not if they have payroll capacity. Clearly, they do. However, using salary capacity is an very simplistic rationalization IMO. Capacity to act has little to do with the wisdom of an action.

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  17. #95
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    We disagree. I think doing nothing much to improve a 95 loss team is a bad idea (indeed, they traded two starting OFers for 2 AA pitchers and Worley). I think given that they lost 95 again, shows that what he did did not help last year. It may or may not help this year, we'll see. It doesn't look like May or Meyer will help much this year, and if he believed Worely would, I'm not sure he'd be signing this much pitching. But that's a guess, maybe he does think Worley is good and will help this year, and he's signed this much pitching for some other reason.

    We disagree that leaving money on the table is unlikely to make the team better, apparently. You believe not using your resources to get better is a fine strategy. I do not generally believe that. You seem to believe they are still 2+ years away from being good, I believe that if they spent anywhere near their budget, they could compete this year.
    Lighten up Francis....

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  19. #96
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    Too many are dismissing the good for the perfect.

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    Quote Originally Posted by Major Leauge Ready View Post
    How is “this line of arguing off”. Johnny made a very specific argument that they should have signed Grienke and Sanchez because they would have paid for themselves. We evaluated that premise listing all of the variables and assumptions. Granted, we would have had a more accurate profit contribution per fan number if we knew the gross margin for concessions and other products but the math does not fly even at 100% gross margin. We were able to basically boil this debate down to one assumption. That being the gain in attendance from signing these two players.

    The one other assumption that was debatable was the use of an average ticket price to determine incremental revenue from ticket sales. As Kwak pointed out the addition attendance was more likely to be from “cheap seats”. I am sure the Twins FO has exact figures on the lost revenue opportunity and could calculate this rather precisely.

    This specific argument is not if they have payroll capacity. Clearly, they do. However, using salary capacity is an very simplistic rationalization IMO. Capacity to act has little to do with the wisdom of an action.
    Just like the shinny new out door stadium , the fans of Minnesota want nothing more then to cheer for there teams , especially if the owners are willing to live up to there promises, signing both these guys would have driven up season ticket sales, and increased attendance, while i wouldnt expect them to go 29 -12
    pitching with last years Twins defense, I would expect a 10-12 game swing directly from there efforts, and I would also expect the rest of the pitchers to step up there game,getting us to a .500 club and with that i would expect an additional 600-700,000 in attendance , maybe they wouldnt pay for them selfs, maybe ownership would have to cough up an extra 6-10 million per season...but to me it aint **** compared to having a chance to knowing your gona get bent over game after game..it also is ...they would ABOUT pay for themselfs

  21. #98
    Quote Originally Posted by johnnydakota View Post
    Just like the shinny new out door stadium , the fans of Minnesota want nothing more then to cheer for there teams , especially if the owners are willing to live up to there promises, signing both these guys would have driven up season ticket sales, and increased attendance, while i wouldnt expect them to go 29 -12
    pitching with last years Twins defense, I would expect a 10-12 game swing directly from there efforts, and I would also expect the rest of the pitchers to step up there game,getting us to a .500 club and with that i would expect an additional 600-700,000 in attendance , maybe they wouldnt pay for them selfs, maybe ownership would have to cough up an extra 6-10 million per season...but to me it aint **** compared to having a chance to knowing your gona get bent over game after game..it also is ...they would ABOUT pay for themselfs
    An increase of 700,000 would get us back to 2010 levels. Are you suggesting that a 500 team would get attendance back to the level they were Target Field opened?

    Of course, I was just taking this is an acedemic discussion to see if your hypothesis was reasonable. I think it would be a huge stretch to think it would make a 300K difference in attendance which equates to $15M. Of course, even this estimate requires to others assumptions that are very unlikely. One, the remaining tickets are of average prices. I tend to believe Kwak's suggestion that the remaining tickets have a value significantly below average. The even bigger assumption is that these guys remain healthy and perform at an elite level for the durationof thier contract.

    In reality, unless I miss my guess, Grienke would not have been considered even if could have been persuaded to come here because it makes absolutely no sense for a rebuilding team, especially with the Twins revenue. The risk and performance/cost ratio simply do not make sense for the Twins.

    Here is the test. Name a team in the Twins position (revenue & rebuilding) has ever signed the top FA starting pitcher. I have asked this question before. If this is a viable idea, where are examples. When fans are mad that the FO is not willing to make a move that other GMs have clearly demonstrated they would not make, the problem is the fan with a fanatical perspective.

    Show me an example of a team in the Twins position, just one, and I will believe there is merit in signing the top FA starting pitcher where we were developmentally in 2012 or for that matter 2013.
    Last edited by Major Leauge Ready; 12-17-2013 at 01:49 PM.

  22. #99
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    MLR, are you suggesting that if no team has ever done something before, that it would not be a good idea for some team to do it in the future? At some point, someone was the first person to pay a player $1MM, or $5MM. At some point, someone was the first team to trade a proven player for a minor leaguer. At some point, lots of things happen for the first time in the world.

    Now, arguing that signing the best FA pitcher, who some think will remain very good for 5+ years but is very expensive, is a bad idea, that's a different argument than you seem to be making. But maybe I'm not reading it right.
    Lighten up Francis....

  23. #100
    Quote Originally Posted by mike wants wins View Post
    MLR, are you suggesting that if no team has ever done something before, that it would not be a good idea for some team to do it in the future? At some point, someone was the first person to pay a player $1MM, or $5MM. At some point, someone was the first team to trade a proven player for a minor leaguer. At some point, lots of things happen for the first time in the world.

    Now, arguing that signing the best FA pitcher, who some think will remain very good for 5+ years but is very expensive, is a bad idea, that's a different argument than you seem to be making. But maybe I'm not reading it right.
    You are comparing milestones and accepted practices. They are two very different things. This has absolutely nothing to do with the premise you suggest. In this case, the opprtunity for clubs in the Twins position to sign the top FA SP has been present every year. Are you really suggesting the fact teams have not made such a transaction is NOT an indication that it is a bad practice.
    Last edited by Major Leauge Ready; 12-17-2013 at 04:19 PM.

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