Yesterday we wrote about how the Cincinnati Reds have more sponsorship deals than any other team in baseball. It’s not even a close race for the top spot, either, with the Reds having over 200 of them and there’s a pretty wide gap between them and the New York Yankees, who are second in the league in total number of sponsorships. There wasn’t a ton of detail about how much revenue that was bringing in on a team-by-team basis, just that the league as a whole was pushing the $2,000,000,000 mark on all of their sponsorship.
Today we get some more money information. Travis Sawchik of theScore looked at team revenues from 2023 and compared it to how much each team spent on their big league payroll to come up with what he coined “The Scrooge Index”, where the lower the number, the more an ownership steward is considered a Scrooge.
One team topped the 67% mark of revenue spent on payroll. That team was the New York Mets, who actually spent more on their payroll in 2024 than they brought in in 2023. Steve Cohen, the richest owner in the game, sat at 102% on this chart.
Half of the league was at 50% or higher. In the National League Central, there were two teams in this group. The St. Louis Cardinals and Milwaukee Brewers were at 51% and 50%. But what about the Cincinnati Reds? They were 27th in baseball, spending 39% of their revenue on their big league payroll. Only the Detroit Tigers, Oakland Athletics, and Tampa Bay Rays spent a lower percentage of their revenue on their payroll.
Does that tell us what we need to know? Well, not exactly. The lower your revenue, the tougher it’s going to be to spend a higher percentage of it on your big league payroll. At least if you don’t want to lose money on the year (which one can argue that perhaps some teams should do in order to try and raise their revenues in the future thanks to hopefully winning more games, making the playoffs, etc).
All teams have similar expenses when it comes to running their farm system. Organizations generally have the same number of players to pay, their salaries are generally set and the same, and spending in the draft and international free agent space on amateur players is only going to be a few million difference between the top and bottom teams.
Likewise, the employee payroll is probably going to be pretty similar for most organizations with only a few million here and there being the difference. It’s going to be spending on the players on the big league roster that moves the needle.
So teams with lesser revenues are spending a larger percentage of that revenue on their “non-big league roster” operations. While it’s not a fixed cost for every team, it’s not likely to be a big gap between the top and bottom teams, and given how the draft works that number isn’t going to be the same for any team from year-to-year, either. Some years you may have $16,000,000 to spend in the draft and others you might only have $7,000,000. Small difference when you’re talking about the overall revenue, but there is a bit of a difference.
When it comes to revenues brought in, the data used by Sawchik comes from Sportico, while his payroll numbers are from Spotrac. According to their numbers, the Reds revenue’s for 2023 were $303,000,000. Forbes had that number at $315,000,000 for last year. Similar ballpark numbers, so it’s close-ish and probably accurate-ish.
That number puts the Reds 23rd in baseball. Six of the seven teams that bring in lower revenues are spending less than 50% of their revenue on the big league payroll. Only the Kansas City Royals are above the 50% mark among the group, and they are at 59%.
Until more teams open their books (only two teams are owned by publicly traded companies, but only Atlanta is in the US and has to show their numbers – The Blue Jays, in Canada, don’t have to do it the same way), we are all just guessing – some with a lot more accuracy than others – as to just how well (or not well) these clubs are doing.
With that said, even if they did, it’s important to remember this quote from former Toronto Blue Jays executive and MLB Chief Operating Officer before that, about “the books”:
I can turn a $4 million profit into a $2 million loss and get every national accounting firm to agree with me.
And as pointed out many times by many people, teams don’t report certain revenues as they can “hide” them with subsidiary companies. The biggest examples in recent memory are when teams signed television contract deals and took partial ownership stakes in the network they signed the deal with instead of straight payment for their broadcast. Now teams were able to say their revenue was only for the money paid for the broadcast in the “team” books, but not claim the money made from their stake in the television network that only exists because of those baseball games.
When Major League Baseball sold BAMTech for a billion dollars, Bob Castellini was adamant in his interview with Paul Daugherty of the Cincinnati Enquirer that “was not baseball revenue”.
That is silly, of course. The BAM in BAMTech comes from MLBAM, which is Major League Baseball Advanced Media. It’s the company that was started by all 30 teams two decades ago to stream MLB games for MLB.tv. Things went well and before Netflix and every other streaming service existed in their current form, MLBAM was so far ahead of the game when it comes to the technology capable of streaming to large audiences that they were then able to sell off that technology. Which only existed because of their selling of baseball broadcasts. But sure, that’s not baseball revenue, Bob.
I’ll leave it up to you to try and decide what you want to about whether the Reds are spending enough of their revenue on their big league payroll or not. But there’s at least some numbers to work with – even if it feels like they are very incomplete.
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