The Pirates are making much, much more money than they’re spending

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It’s good that the Players Association didn’t drop their revenue-sharing grievances against various MLB clubs during the collective bargaining that shaped the new CBA. The league tried to get them to do so again and again, but the union held firm to the idea that combatting the way teams were using revenue-sharing funds — or, more accurately, the way teams were not using revenue-sharing funds — was vital. We got one pretty good reminder of why recently, since the A’s keep on cutting payroll despite being re-added to the revenue-sharing recipients pile, and now we have another: the Pirates reportedly “often” make enough money from their gate alone to cover their payroll, which leads you to wonder where the local and national television revenue is going, and what those revenue-sharing dollars they receive are being used on, too.

The Pittsburgh Post-Gazette reported the details on Sunday (this link has been removed due to an ongoing strike at the Post-Gazette):

…the lion’s share of the Pirates players’ payroll in many years since 2007 has been covered by ticket and concession revenues — even before accounting for the millions that Pittsburgh’s team collects from TV and Major League Baseball.

Those years when the Pirates finally went to the playoffs after a two-decade drought?

In 2013, 2014 and 2015, fans’ spending on tickets and peanuts, popcorn, and other concessions covered the payroll, based on an analysis by the Pittsburgh Post-Gazette of never-before-released documents created to fulfill the team’s rental agreement for its use of the baseball showpiece PNC Park.

In 2013, the first time the Pirates made the postseason since 1992, net ticket and concession revenue totaled $70.8 million — the same season the team shelled out $66.8 million on its opening day roster.

The next year, the Pirates made $80.7 million in net ticket and concession revenues while spending $71.9 million on their roster.

The Post-Gazette brings up the Pirates’ standard defense that there are all kinds of things that money goes towards in order to operate a team, and the club’s payroll isn’t the only indicator of what is being spent, while also giving the club’s representative space to say that claims that owner Bob Nutting pockets profits is “blatantly untrue.” The problem is, as I am always saying and the Post-Gazette mentions, too, that the books of MLB’s teams aren’t open. The Pirates can say they aren’t letting Nutting or the minority owners pocket profits, that they are reinvesting in the club, that they are spending revenue-sharing dollars on all kinds of things that you don’t see with the information easily available to the press or fans, and no one can do a fact check on any of it.

Without the cold, hard numbers, though, without the direct proof contained within those closed off books, what we do have room to do is piece together the puzzle. The Pirates have been able to cover their payroll with just their gate revenue, which involves tickets, concessions, stadium merchandise sales, and parking. There is just no way that the day-to-day operations of the team, or the costs of minor-league salaries, or the bonuses handed out at draft time, add up to be equal to or more than all the rest of the Pirates’ revenue sources: revenue-sharing dollars, national television dollars, and local television dollars. Teams are now receiving roughly $100 million (or more!) each year in combined television revenue, between what the league sends them plus their local. That figure was lower in even the recent past, yes (MLB’s national television revenue continues to grow apace, and it was only with the most recent local deals that teams were pulling in $40 million or more annually uniformly) but not by so much that we can believe the Pirates’ annual sob stories. And that’s before you get to the revenue-sharing!

The Pirates can cover their payroll just with their gate revenue, and they stop there. Each team is pulling in at least $100 million from television alone as of 2022, and yet, there are seven clubs with Opening Day payrolls below $100 million, and four that can’t even cross the $100 million threshold when you account for their 40-man rosters and everything else (like medicals) that goes against the competitive balance tax threshold. The Pirates can say all day long that teams are more expensive to operate than we know, and that’s where the money goes, but if that were true, all they would have to do is open the books and prove it. And neither the Pirates nor MLB wants them to do that: if they weren’t concerned about opening the books, they wouldn’t have asked for the revenue-sharing grievances against the A’s, Rays, Marlins, and yes, the Pirates to be dropped during this winter’s bargaining. They know that they don’t have the proof they need to win those grievances, and that opening their books will only make it more obvious that these clubs are running a racket.

The richer teams must hate the way the Pirates and A’s and all of them operate, but what’s to be done about it? They’re all in this together, the more individualistic of the owners with their stronger personalities left behind in a different time, replaced, sometimes, by their kids more willing to look the other way to keep the cohesion that’s served them all so well as a unit since former commissioner Bud Selig united them all in the first place. George Steinbrenner probably would have hated seeing his greatest fear about revenue-sharing realized, but that’s not something Hal Steinbrenner has to worry about, you know? I’m sure the Yankees’ owner can sleep at night, regardless, and if not, well, all the better from where I’m sitting.

While I’m not thrilled about the union dropping the other grievance over the length of the 2020 season, the more vital one from bringing about change are these revenue-sharing grievances, so if talks came down to needing to drop one or the other in order to move forward, the PA made the right call on which to get rid of. The 2020 grievance could have meant a sizable award, the largest since the three years of collusion granted them today’s equivalent of $600 million, yes, but the set of revenue-sharing grievances could force open the books of some teams, or, at least, give us the kind of settlement that lets us know that MLB’s clubs are operating in a shady way and don’t want the details getting out. It could mean more when it comes time to argue in 2027 about forcing teams to compete, or enacting changes to the way revenue-sharing dollars are both spent and allotted. In the long run, that’s the better play, and the reported behavior of the Pirates is only further evidence of the need for those kinds of battles and changes.

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