Analysis: Pirates better off financially than most taken on the North Shore (Pirates)

Bob Nutting in Bradenton, Fla. during spring training. - AP

Time is running out to hammer out the details for the 2020 Major League Baseball season. There is still hope that the league and players association will be able to broker a deal, which would bring in new revenue streams, increase players salaries and keep both sides out of arbitration, but it is starting to become more likely that the season will have to be mandated by Rob Manfred, who was given that power under the March agreement.

A recent spike of COVID-19 positive tests across the country, most notably in Florida, could also jeopardize the season, but if it were to unravel, it looks more likely that the labor dispute will be the cause.

If there is a season, without fans in attendance, it is destined to be a down year financially for the league and its 30 member franchise, regardless of the structure of any final agreement. In-stadium revenue accounts for roughly 40 percent of the league's total pool and, even with fewer games leading to less pay for players, that lost income could put multiple -- or all -- teams in the red for 2020.

However, those losses might not be equally distributed. Small-revenue teams, such as the Pirates, seem to be in better position to absorb the blow better than their larger-revenue counterparts.



The league acknowledged as much to the players association back in May. In a presentation made to the union, the league claimed that teams would take an average net loss of $640,000 per game over an 82-game season if they had to pay players their full prorated salaries. That presentation was obtained by Ronald Blum of the Associated Press.

While an 82-game season is no longer a possibility, with owners making clear this weekend they will not play more than 60, the presentation does offer a glimpse at how each team could be impacted financially without fans in attendance.

In those figures, the Yankees would be hit the hardest, losing $312 million before interest, taxes, depreciation and amortization. The Pirates, on the other hand, would be $91 million in the hole, tied for the third-smallest amount with the Rays. Only the Orioles and Tigers were lower. Those figures should be taken with a grain of salt since the season will be shorter and MLB wouldn't let the MLBPA into its books to confirm those numbers, but it's clear the Yankees have much, much more to lose than the Pirates.

Of course, a large portion of that is due to the Pirates having a very low payroll. According to information obtained by Blum, the Pirates originally had a projected payroll of $54.3 million, the lowest of any MLB team in six years. There are additional costs in running a franchise, but the major-league payroll is the one that draws the most attention.

That payroll will be prorated to the number of games played. For simplicity's sake, let's assume the 2020 season will be 54 games long, one-third its usual length. If that's the case, the Pirates' 2020 payroll would be $18.1 million.

However, there are other reasons why the Pirates are better off this season, including their not being as reliant on their smaller gate pull. According to Forbes, the league brought in $4.15 billion last year through gate receipts and other stadium revenue. That accounted for just under 40 percent of the total $10.5 billion it brought in last year. Although some states, notably Texas, have been planning to allow fans into stadiums at 50 percent capacity for sporting events, it seems likely that most, if not all, of the $4.15 billion will be lost in 2020.

In April, Mike Ozanian of Forbes estimated how much revenue each team would lose if games were played without fans. That included lost gate receipts, concessions, parking, team stores and some sponsors, plus the stadium debt each franchise has.

Going based on Forbes' official team revenues in 2019, here is how much each franchise brought in last year:

Courtesy of Forbes.
Courtesy of Forbes.

Loading...
Loading...