The Rockies’ Finances, As Told By The Owner, Bloomberg & Forbes

Colorado Rockies owner Dick Monfort recently told Troy Renck of the Denver Post that the Rockies’ earned $170 million revenue in 2013. Monfort shared the information as part of a larger discussion with Renck about the Rockies’ finances as the team looks to upgrade for the 2014 season. As Renck reports, Rockies fans were in an uproar in October after learning that the team was building a party deck in the upper right-field seats. After two consecutive last-place finishes, fans were clamoring for more money to be spent on the product on the field, not the fan experience off of it.

Perhaps in response to the fans’ negative reaction, Monfort told Renck that the Rockies have a conservative business plan that aims to get the team into the postseason two times every five years. Specifically, Monfort said about the 2013 season:

  • The Rockies earned $170 million in revenue;
  • The Rockies spent $84 million on player salaries, including in-season call ups;
  • The payroll accounted for 49.4% of revenues, in line with the 50/50 rule of thumb; and
  • The Rockies local TV rights deal is worth $200 million over ten years and expires in 2020.

Renck asked about the additional revenue all MLB teams will receive in 2014 from the new national TV deals. As I explained in this post a few weeks ago, ESPN, Fox and TBS will pay MLB $1.5 billion per season from 2014 through 2021, nearly double what the networks paid the league under the prior deal. That works out to approximately $25 million in additional revenue per team, if the TV money passes entirely from MLB’s Central Fund to the 30 teams. Monfort believes that MLB will only pay out $19 million per team, to account for Central Fund money the league planned to hold back in 2013 but paid forward after teams complained.

For the Rockies, Monfort expects to spend $5 million or so of the additional $19 million on player salaries and $5.5 million on loan payments to MLB. Another $3.5 million will make up for an expected decrease in ticket revenue compared to 2013 when the Rockies hosted the Yankees and Red Sox at Coors Field. That leaves another $5 million. For what, it isn’t clear. Under the 50/50 rule of thumb, you’d expect the Rockies to spend $9.5 million of the $19 million on players’ salaries.

At season’s end, Cot’s Contracts listed the Rockies’ 2014 obligations at just under $52 million. So far, the Rockies have picked up Jorge de la Rosa‘s $11 million option, signed LaTroy Hawkins for one year at $2.25 million, signed Justin Morneau for two years/$13 million (or an AAV of $6.5 million), and traded Dexter Fowler and his $7.85 million salary to the Astros for low cost outfielder Brandon Barnes and pitcher Jordan Lyles. If you use Matt Swartz’s arbitration estimates for Wilton Lopez, Juan Nicasio, Josh Outman and Jonathan Herrera, that’s another $6.5 million (Mitchell Boggs was non-tendered).  Add in another $5 million or so for first and second-year players, and the Rockies are looking at $75 million in salary commitments for 2014.

Monfort’s disclosures are interesting in several respects. For one, it’s unusual for team owners to share that kind of information with the public, and because of that, we have to be suspicious of Monfort’s motivation and the veracity of the numbers. Maybe Monfort felt the need to respond to the uproar over the party deck. Maybe he was sending a message (of what, we don’t know) to the league office or other MLB owners. Maybe he just felt like opening up. Nah, that couldn’t be it.

If Monfort’s $170 million revenue figure for 2013 is accurate, then we have to question the revenue numbers and team valuations published yearly by Forbes and, for the first time by Bloomberg Business. Last month, I took a deep dive through those two sets of valuations, both of which relied on financial information from the 2012 season. Forbes reported the Rockies’ revenue for 2012 as $199 million; Bloomberg had it at $195 million. Bloomberg’s figures explicitly included $13 million in revenue sharing. We don’t know if Forbes included revenue sharing or not. Same for Monfort’s revenue figure.

Bloomberg reported $71 million in “media rights” revenue. Unless that includes national TV money and the Rockies have a lucrative radio deal, that number is way off Monfort’s figures. He told Renck that the Rockies’ 10-year/$200 million deal expires in 2020. Most of those deals have escalators, meaning the team is paid less in the first year of the deal and the most in the final year. On average, that’s $20 million a year, way below Bloomberg’s $71 million. Forbes doesn’t provide a line item for media-related revenue.

Is there that big a difference between the Forbes/Bloomberg roughly $200 million revenue estimates and Monfort’s $170 million? Well, $30 million is $30 million. And if the Rockies do, indeed, follow the 50/50 rule of thumb, that’s a difference of $15 million the Rockies either do or don’t have to spend on player salaries. For a payroll in the $75 million to $85 million range, $15 million could make a huge difference.

All of which leads us . . .  nowhere in particular. We’ve always known we had to read the Forbes and Bloomberg team valuations with a critical eye. We must do the same with Renck’s account of Monfort’s disclosures. Until we see the financial statements the teams send to the Commissioner’s Office, we won’t know the real story. And absent leaked financials like the ones Deadspin received a few years ago, we’re very unlikely to ever see the real numbers.




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Wendy is also a contributing writer for Sports on Earth. Her writing has appeared on ESPN.com, Baseball Nation, Bay Area Sports Guy, The Score, The Classical and San Francisco Magazine. Wendy practiced law for 18 years before beginning her writing career. You can find her work at wendythurm.pressfolios.com and follow her on Twitter @hangingsliders.

32 Responses to “The Rockies’ Finances, As Told By The Owner, Bloomberg & Forbes”

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  1. Dick says:

    I disagree.

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  2. Joey says:

    Bloomberg reported $71 million in “media rights” revenue.

    No mention of other media in this figure. Obviously no one is sure if it includes the national TV money, but since it can’t be all Radio, it has to be something else. No mention of MLB advanced Media; MLB.TV, MLB Radio, MLB At Bat App, etc. Teams get a piece of that revenue pie. Any other streaming or web based content services?

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  3. ChadT says:

    The vagaries of sport being what they are (injuries, luck, etc.), if you really want to make the playoffs two out of every five years, you need to be “aiming” for the playoffs every year.

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  4. rusty says:

    The part I find confusing is that even using the Bloomberg or Forbes revenue number, the team is in the bottom 10 for revenue and payroll — but 10th in the league in attendance (13th in 2012, when they finished 64-98).

    Either they’re much worse at monetizing the butts they put in the seats, or the Monforts aren’t telling us the whole story, seems like. They may have a relatively bad regional TV deal, but they aren’t the only team that renewed at a disadvantageous time, and they’re the largest outlier in if you plot attendance against revenue or payroll.

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    • cass says:

      Adding a party deck would make sense if they’re trying to make more money per fan, wouldn’t it?

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      • rusty says:

        It seems like not a bad move — especially since they’re replacing something like 4,000 seats that go unsold for all but the big-ticket dates.

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    • triple_r says:

      The Monforts seem to be hiding something from the public, in a manner not dissimilar to that of a certain Miami-based pariah. To quote Jonah Keri:
      “[The Rockies'] management doesn’t seem to have much of a tangible plan, other than keeping its biggest star in town so fans will keep lining up to buy $12 microbrews on sunny afternoons and the club can keep raking in gigantic gobs of money that it pretends not to have.

      Actually, forget everything I just said. That’s a pretty brilliant plan.”

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    • Wendy Thurm says:

      Rockies have low ticket prices. So high attendance x low ticket prices = middling tix revenue.

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  5. Guy says:

    “Another $3.5 million will make up for an expected decrease in ticket revenue the Rockies received in 2013 when they hosted the Yankees and Red Sox at Coors Field”

    Am I the only confused by this? Shouldn’t it be an increase in revenue, or it was an unexpected decrease?

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    • etrain says:

      The logic is that the Rockies will not receive the $3.5M in increased revenue they received in ’13 bc the Yanks and Sawx don’t come to Coors in ’14, while they did in ’13.

      Whether you buy the numbers is another story …

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      • batpig says:

        Looking at the numbers…

        The Rockies 5 home games against the Yankees and Red Sox were all mid-week games (T/W/Th vs NYY and T/W vs. BOS). They averaged 40,761 in attendance for those 5 games. They averaged around 30k per game for the other 37 non-weekend home games.

        So the NYY/BOS series added about 50k fans (10k per game) over the average mid-week matchups. If it wasn’t NYY/BOS it would have been some other mediocre interleague matchup (like the Orioles or Blue Jays) which wouldn’t have been a huge draw.

        So a $3.5m delta over 50k fans is about $70/fan. That seems kind of high to me, but another factor could be if the Rockies use Dynamic Pricing, in which case *every* fan might have paid a higher price, not just the incremental 50k.

        For example, if it was an “average” 5 game mid-week stretch, they would have expected 150k fans total instead of the 200k they got. If each of those 150k fans paid an extra $10 per ticket due to dynamic pricing leveraging the Red Sox and Yankees, that’s $1.5m of incremental revenue right there. Which means the incremental 50k fans drawn only need to have been worth $40 a pop to make up the other $2m to get to the $3.5 total incremental revenue figure, which is entirely reasonable.

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    • Wendy Thurm says:

      I fixed it to clarify that Rox had jump in tix revenue last year with NYY and Sox in town.

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  6. FeslenR says:

    Love to see the true reports on the Mets Wilpons finances…

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  7. noseeum says:

    Wendy, I don’t see any mention of merchandise licensing in Monfort’s talk. Do you know approximately how much each team receives from licensing? Would that be including in Bloomberg’s “Media Rights” category?

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    • Wendy Thurm says:

      All MLB-licensed merchandise sales go to the Central Fund and are distributed equally to all 30 teams. I don’t know if that’s included in Media Rights on Bloomberg. It would be an odd way to characterize it.

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  8. Neal says:

    Look we can argue about the particulars but the Rockies are a mid-market club. I don’t think there is any argument there. To be successful, mid-market clubs have to make smart baseball decisions. That means a good farm system, buying low, selling high…all the things the Rays do. Everything Monfort says is just covering up the real mess and that is his front office. I don’t doubt Monfort’s business savvy, he is most likely making a killing when it comes to the Rockies, but his loyalty to his staff and inability to move on is killing the product on the field.

    At some point, fans might stop going to the games and then and only then will Monfort realize people actually care about the product on field and not the swanky upper deck bars!

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    • rockymountainhigh says:

      Coors field and lower downtown is such a good summer scene, I’m not sure it matters too much how good the team is. We might end up being the new Wrigley. I’ve been pretty frustrated with the front office the last three years, but every time I go back to Co. in season, Rockies tickets are a priority.

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  9. joser says:

    I wouldn’t be surprised if Monfort’s “revenue” number doesn’t include any of the luxury tax / revenue sharing money: owners don’t like to talk about those numbers (it annoys the subsidizers and embarrasses the recipients); moreover, it’s easy to imagine an owner talking about revenues strictly in terms of gross receipts (tix/media/merch) without including any handouts from the rest of MLB. That way he can maintain his Weltanschauung as free market capitalists without any inconvenient cognitive dissonance. Owners tend to leave tax concessions and other public financing out of their discussions for the same reason.

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  10. Donald says:

    So Wendy, what happened to the Rockies local TV deal expiring after the 2014 like you reported in this article here?

    http://www.fangraphs.com/blogs/dodgers-send-shock-waves-through-local-tv-landscape/

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  11. Sihtdaertnod says:

    How can you out right say to the public that your goal is make it to the playoffs 2 out of 5 years? Seems pretty schmucky to not even aspire to win the world series. Just feign an interest in competing 40% of the time to keep butts in the seats.

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    • joser says:

      Making the playoffs is all you can really aspire to. Once you’re there, it’s mostly a crapshoot. I’d be quite happy to have the ownership of the team I follow aspire merely to reach the playoffs, provided they were trying to do so more often than once a decade.

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    • Plucky says:

      It’s certainly impolitic to say that publicly, but for the Rockies as a franchise that’s a very reasonable goal. If upgraded their F/O to one which operated with average competency (not everyone can be above average), they are still a mid-market team in a division with 2 teams that have clearly superior resources, one of which is a juggernaut. Their situation is comparable to Toronto or Baltimore (or Cincinatti in an alternate universe where the Cubs got their act together). 1 Division champ and 1 WC in a 5-year stretch seems about right for a decently-run Rockies

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  12. batpig says:

    Don’t ask me how I know, but I’m confident that $170m figure does NOT include revenue sharing. MLB teams report Operating Revenue internally as the sum of Local Revenue (tickets, concessions, advertising/sponsorship, parking, etc) and MLB Central Revenue (including MLBAM). Revenue sharing receipts/payments are treated on a separate line.

    That $71 million in “media rights” revenue figure is insane, unless it implicitly includes all central revenue (which was probably in the neighborhood of $45-50M per team in 2012 or 2013).

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  13. BleacherDave says:

    Natl TV = $50MM + local TV = $20MM = $70MM in Media Rights. What’s the confusion here?

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