This excellent article by Childs Walker in the Baltimore Sun about Team’s 2013 revenue success deserves a little more attention. It shows the Orioles are ecstatic about their business while reminding us that Team of Blog has never, really, wanted the public to know the details.
But you can do some back-of-the-envelope calculations that bolster the notion that the Orioles’ ownership is probably turning cartwheels in the corridors of the Warehouse right about now…
Team says 255,000 more people came to the park in 2013 over 2012 (a jump of 12 percent). You can multiply that number by Team’s average ticket price (as reported here.)
[255k x $23.89 = $6.09 million]
That’s $6 million in potential additional ticket revenue based on this year’s increase in attendance alone. Those would be adult ticket prices, however, so let’s assume that number is lower than $6 million (not counting luxury boxes).
From 2011 to 2012 the Orioles experienced a 16 percent jump in attendance — which would have generated a similar jump in ticket revenue that year — to which this year’s rise can be added.
If you guessed the Orioles’ 2013 ticket revenue was $10 million higher than it was back in 2011, I bet you wouldn’t be too far from the truth.
That revenue, of course, does not take into account money the surveyors in the above article (a group called Team Marketing Report) say is generated through tickets plus other ballpark concessions — the so-called “Fan Cost Index.”
Team’s $169 Fan Cost Index, the estimated total cost of a day at Camden for four adults, would run the profit margin into even chunkier territory based on 255,000 additional 2013 fans.
[255k additional fans ÷ 4 (to account for how the fan cost index is calculated) x $169 = $10.7 million.]
That would be nearly $11 million in free cash flow from just the additional fans this year!
If you run that same index through Team’s total 2013 attendance of 2.36 million fans, you end up with cash-on-the-barrelhead revenue just below $100 million. Even if you admit that number might be inflated, you’d be on safe ground assuming it’s not wildly inflated.
So the numbers, at least as far as Blog’s now-very-messy-looking bar napkin or envelope are concerned, are looking very, very healthy. But wait! There’s more …
Walker also quotes a top MASN executive, senior vice president John McGuinness, as saying the network is in an excellent position to jack up commercial advertising rates — if it hasn’t already — going forward.
corresponding advertising interest was such that the network was often low on inventory for retailers seeking commercial space during games.
Let’s assume, based in years of experience, that Orioles have always operated at a profit. When you start to look at the money now coming in, it’s safe to assume that those margins are getting fatter and fatter.
And you can look at their payroll obligations easily enough. The fall-off from 2013 to 2014 is precipitous.
The picture suggests, to Blog of Team anyway, that Team should have little difficulty reaching up not only to keep guys like Matt Wieters (and some other coming free agents, if they want them) in Baltimore, but also to go out and find additional talent, which Team clearly needs to make in-roads in October.