There are questions that can forever nag even the most ardent fan, one who wants to be able to tie on-field success and failure to the team coffers. How do you know what a baseball team is really worth compared to its competitors? If it’s more profitable or losing money? The answer depends on how you look at the statistics.
With an estimated value of $585 million the Seattle Mariners are the 12th-most valuable team in Major League Baseball. Out of 30 franchises the M's place 14th in revenue at $210 million but a lowly 26th in operating income with a profit of just $2.2 million.
Yet with $20 million of excess working capital on the balance sheet and receivables of $21 million Seattle is one of only three clubs with a debt-to-value ratio of zero! That means its financial health looks a lot better compared to last year’s anemic .414 winning percentage, one that left the team 29 games behind the American League West-winning Texas Rangers, 22 behind the Oakland A’s and 10 behind the Angels.
So how do we balance these two sides of modern baseball; the winning off the field and the losing on it? Actually it's not as uncommon as one would think. Take for instance Texas. Or New York. Or Los Angeles. To wit:
- The Texas Rangers declared bankruptcy because billionaire owner Tom Hicks accumulated too much debt.
- The New York Mets lost their Bernie Madoff-supplied bankroll when Madoff’s billion-dollar Ponzi scheme collapsed, revealing that the Mets had “feasted in debt for a decade.”
- Los Angeles Dodgers fans are rid of debt-riddled and near-bankrupt owner Frank McCourt, he of a soap-opera style divorce between the rich and infamous. Bill Wrigley, famed (and long-gone) owner of the Chicago Cubs, once called baseball a “very peculiar business.”
True enough – and yet in Wrigley's day baseball had yet to help coin the parlance of "big-market clubs and "small-market teams."
Big-market teams support the smaller ones through revenue sharing, an arrangement that skews all the finances anyway. And let us not forget that most team owners have always demonstrated fancy ways of cooking their books
Are the Mariners profitable? Well, barely. Are they better off than a lot of other teams? You can make that case. Can it get better? Perhaps.
On one hand, the Mariners are at the beginning of a 10-year, $450 million television deal with Root Sports, which hooks them up with 8.3 million cable/satellite subscribers in 18 states. On the other, you can expect the Mariners to lose a slew of Japanese advertisers – and their yen – when 37 year-old Ichiro Suzuki finally calls it quits sometime in the next couple of years.
So again, you can look at the numbers any way you want and draw just about any conclusion you want from them. Only one thing is for certain – winning always helps.
As of today the Mariners are 7-10. For a lot of people those are the only numbers that really count.