Blue Jays Payroll in 2008 & Beyond Part 2
At the conclusion of part one:
In part two we’ll look at the bottom line question for the Jays, operating profitability and the trade off between the $$$ & on-field success.
Straight off the bat, I don’t think we’re going to be able to find a definitive answer to this question. More philosophical than not, just how profit sensitive are the Jays ownership?
Owned by Ted Rogers (CEO of Rogers Communications), the prevailing logic in most media circles is that the income that the team itself produces is inconsequential (to a point). The real success to ownership is the brand awareness, subscription additions, ratings at Rogers Sportsnet and bottom line gains to that of Rogers Communications Inc.
With that in place, I’ve yet to see a figure placed on the revenue that the Blue Jays add to the bottom line of Rogers Inc. The recent payroll addition is due to Rogers putting revenue sharing gains back into the team, as opposed to pocketing the profit as teams like the Marlins have been doing.
This data is a little old but here’s the top 10 operating income (profit pre tax, etc) MLB teams in 2006.
Many teams on this list have put the added revenue back into the team to make it more competitive. Others, such as the Marlins & Pirates are simply pocketing the cash.
The Jays took their newfound revenue and upped the payroll for the 2007 season. Here’s a Forbes chart outlining a number of economic variables from the past few seasons.
All team values have skyrocketed, although the Jays have grown faster than others. For the 2007 season
league wide revenues increased 17%. For this past graphical example the 2007 numbers are estimates. The Jays Operating income increased in 05 and hit a high $30 million in 2006. As previously stated, that money was pushed back into the team, leading to a 2007 decrease in OI to $11 million.
The ultimate question is this; Will Jays ownership be content with a .500 level, non-playoff style team at a profit of $10 million? If this is the case year after year, will non baseball revenue (TV, subscriptions) continue to rise?
We’ll answer these in Part 3, coming on January 2nd.