News: Rapids lost $1.3 million in 2012

Discussion in 'MLS: News & Analysis' started by JasonMa, Nov 29, 2012.

  1. OleGunnar20

    OleGunnar20 Member+

    Dec 7, 2009
    Club:
    Manchester United FC
    i am more than happy to take suggestions as to the % PAID and Average Ticket Price for each team ... all i was saying is that given the 2007 Portland study as a starting point and what we know of the teams, their performance, the demand/popularity in their market i think the assumptions i made are on the whole pretty safe and acceptable especially in terms of one team related to the others.

    as i understand it, the 33% ticket revenue share is what the league uses to cover the salary caps for each team. the national tv contracts and advertising are used to run the league HQ and the capital calls are the way expansion clubs payoff their expansion fees (ie not all in one lump sum but over a period of time in chunks). i could be mistaken in that understanding but that is how i understand it to work. which means teams like Seattle should be pissed as shite at the situation.
     
  2. OleGunnar20

    OleGunnar20 Member+

    Dec 7, 2009
    Club:
    Manchester United FC
    another interesting thing is that right now every team has a cap of 2.88M and the league is collecting only $3M less than it is paying out in that cap.

    but for a mere $2M extra deficit the league could actually fund a flexible cap of $2.5M-$5M for each team, all the same DP rules etc apply, which would do wonders for the overall talent level and depth of teams.

    it is simple, each team gets at least $2.5M of cap space no matter what their 33% contribution. in order to raise a team's cap above $2.5M the team must contribute the difference to the league, either as part of their 33% or as an extra payment.

    so Seattle with an 8M contribution would get the full $5M cap and not need to contribute anything more. LAG would get the full $5M cap with their $4M from the 33% plus 1M in extra contribution to make up the difference. a team like Chicago would get their $2.5M min cap for their $2M 33% contribution, to get the rest of the $5M cap they'd have to pony up the $2.5M difference. and so forth.

    even if every team in the league used the full $5M cap and contributed following the above (33% plus any uncovered difference between $2.5-5M you'd get the league paying out $95M in salary cap but collecting $90M.

    how much better would the league be under the exact same rules with the only difference being a flexible 2.5-5M cap as described above? a lot i'd think.
     
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  3. MLSFan123

    MLSFan123 Member+

    Mar 21, 2011
    Boston Area
    Club:
    New England Revolution
    Nat'l Team:
    United States
    Are you under the impression that they were tricked and not actually informed how the finances work when they became an expansion team?

    If you are not under that impression then your comment makes no sense. They knew what they were getting into and likely did significantly more due diligence on the finances than any of us have done and were happy enough to invest.
     
  4. OleGunnar20

    OleGunnar20 Member+

    Dec 7, 2009
    Club:
    Manchester United FC
    i am pretty sure that no analysis they did before starting the team covered me whining 7x-8x as much as Chivas USA did to the league every single year ... especially not indefinitely ... and especially when I don't get persuade anyone extra for doing so.

    {couldn't resist--sgc}
     
  5. Allez RSL

    Allez RSL Member+

    Jun 20, 2007
    Home
    I was fairly sure that the capital call referred to in the Portland study was for salaries. I'll go check.

    It would suck donkey ass -- at least, for me. LA already has a huge salary advantage over my team, but it's mitigated by concentrating the extra salary in three players. If LA could suddenly pay each player double what RSL could pay, I'd eventually stop watching the league, because the Salt Lake market won't ever be able to compete with the LA market willingness to pay for tickets.


    Who's to say it's indefinite?
     
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  6. tab5g

    tab5g Member+

    May 17, 2002
    no one can be pretty sure of the level of analysis that Seattle (or any new expansion team/ownership group) does or did prior to paying to gain entry into the league.

    exactly.

    and isn't the "anything extra" that the top ticket-selling teams get the "extra" revenue they keep (and don't have to send to the league), relative to all of the other teams who aren't selling as many tickets at their home venues?
     
  7. OleGunnar20

    OleGunnar20 Member+

    Dec 7, 2009
    Club:
    Manchester United FC

    why would it suck for you? your team could have a $5M cap as well ... you'd just have to pay for it? RSL would get the $2.5M min cap for their $2.25M 33% contribution and they could then raise their cap up to $5M by ponying up another $2.5M dollars. for the price of a DP you could have the full cap as anybody else could. now whether your team ownership would do so is a different story and not really a fault of the rules. if you want to have a higher cap with only your 33% contribution then your team would need to get more fans to come to the stadium and raise ticket prices like other teams with good revenues.

    it is a perfectly fair system. it allows teams to translate off-field success into on field product, but not without restraints so that parity isn't totally destroyed, it is just lessened a bit. it affords "some" charity to teams that struggle generating revenue but it also allows for ANY team to compete with the same upper cap as any other team AS LONG AS THEY ARE WILLING TO PAY FOR IT.

    and it is indefinite until the system changes ... no hint of the system changing has been put into the public sphere. which is why i said seattle should be pissed and fighting to change the system to something fairer like i suggested.

    i am looking directly at the Portland Study and the capital call listed is 3.1M which makes no sense as a "salary contribution" because the cap back then was barely over 2M ... it makes far more sense that the capital call is a amortized payment of the expansion fee ... which is why it is a regular and flat expense on their calculations (if the "capital call" was for the salary cap it wouldn't be the same exact number for each of the 5 years in the study it would be rising as the cap rises).

    the idea that the 33% contribution goes to cover the salary cap is a bit simplified, it really goes into the general MLS LLC central pool of money to cover expenses, salary cap being one of those expenses. sure any single dollar might actually end up paying for Greg Lalas' salary or something but in terms of the operation of the league since each team contributes 33% and each team "receives" 2.88M in salary cap it is easy enough to put one on each side of the equation (understanding that there is some short fall that other league revenues must cover).
     
  8. OleGunnar20

    OleGunnar20 Member+

    Dec 7, 2009
    Club:
    Manchester United FC
    i should have been more specific. they don't get anything extra in terms of direct on the field investment power. sure they get to put more cash in their pocket but a fair league would allow for some measure of off-field success to be translated into on-field power, WITH LIMITS of course to keep some but not absolute parity.
     
  9. SYoshonis

    SYoshonis Member+

    Jun 8, 2000
    Lafayette, Louisiana
    Club:
    Michigan Bucks
    Nat'l Team:
    United States
    Let's not pretend that anyone honestly projected the kind of success at the gate that the Sounders have seen. They knew the percentages involved. The amount of extra money that they would pony up to the league as a result of their insane attendance would have been viewed as a good problem to have, had someone in the organization actually dreamed of it.

    And I guarantee that they, not being burdened with your blind, irrational hatred bordering on serious mental illness, wouldn't have thought to compare themselves to Chivas USA specifically. :rolleyes:
     
  10. JasonMa

    JasonMa Member+

    Mar 20, 2000
    Arvada, CO
    Club:
    Colorado Rapids
    Nat'l Team:
    United States
    Oh look, ANOTHER thread going off the rails... :rolleyes:
     
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  11. OleGunnar20

    OleGunnar20 Member+

    Dec 7, 2009
    Club:
    Manchester United FC
    i picked Chivas USA because they are at the bottom of contribution to MLS, no other reason.

    and you don't seem to understand what the disparity actually entails ... Seattle put $8M into the league kitty and Chivas puts in about $1M. and both teams get the same thing.

    that would be like you and your friends buying pizza and everybody chipping in about $3 and you chipping in $8 while one friend is short on cash and puts in $1.25 in change. and when the pizza comes everybody gets exactly three pieces of pizza.

    now once, you as a generous sort of person might not mind your cheap broke friend getting 3 slices of pie for a handful of change. but how many times of this happening would it take for you to begin to feel taken advantage of and get upset? 3? 5? 10? there is a point at which being charitable becomes being foolish and a sucker.

    now multiply the above example by 1,000,000 times the stake and remember we are talking about a bunch of rich guys who aren't particularly inclined to be taken advantage of financially indefinitely (no matter how charitable they might be) or they wouldn't be rich in the first place.

    as this disparity grows and the number of teams on the top end of the disparity grows and the teams on the lower end of the disparity get fewer the situation becomes more and more untenable.
     
  12. Allez RSL

    Allez RSL Member+

    Jun 20, 2007
    Home
    Oops. This one's on me. I didn't read it completely.

    I found this http://keepinitrealsoccer.com/2011/03/mls-highlighted-on-sportsmoney/
    on an RSL blog covering a report on MLS on a program called SportsMoney from the beginning of 2011. They repeated the $3.1 million capital call as a recurring expense for every team.
     
  13. OleGunnar20

    OleGunnar20 Member+

    Dec 7, 2009
    Club:
    Manchester United FC
    interesting. i'd have like to see that program for myself. the blog doesn't show the 33% and the Portland Study clearly shows BOTH a 33% contribution to the league AND a capital call of 3.1M so there is a chance the blogger didn't understand or the program had it wrong.

    but if it is true then it is just like the 33%, it goes into a kitty and all expenses are paid out of it. and if every team does it then the only fair way to compare teams and what they are putting in compared to what they are taking out is to compare the one variable contribution the 33%.

    it just means the league is taking in a hell of a lot more money than i thought at the league level. it means the teams are putting in $52M in 33% contribution and $59M in capital call, this ignores the national TV and sponsorship income or SUM.

    which means the league is being incredibly cheap in the salary cap. taking in over $100M and paying out less than half of that in cap? that is ridiculous. the league HQ should more than be able to run operating expenses based on the income from national TV and sponsorship and the salary cap for each team should be paid/covered by the team's contributions to the central kitty.

    profit over product it would seem. i'll remember this next time the CBA comes up and the league cries poverty and tries to say they can't afford to have the cap be $5M for each team.
     
  14. SYoshonis

    SYoshonis Member+

    Jun 8, 2000
    Lafayette, Louisiana
    Club:
    Michigan Bucks
    Nat'l Team:
    United States
    Right. I stand corrected. :rolleyes:

    What in the world would lead you to believe that? I wasn't talking about the effect of the disparity AT ALL, just the origins of it, and your purely speculative (as in, 100% of it was pulled out of your ass) assertion that Seattle didn't know what they were getting into.

    And now you again engage in pure speculation (once more, doing nothing but making shit up) as to my understanding of something that I didn't even allude to, let alone mention, let alone discuss. As if I don't know the difference between $8 million and $1 million.

    Here's a piece of advice for you going forward: Grownups understand that pretending to know what other people are thinking, and basing an argument on that pretense of mind-reading, is only for those who don't have an actual, logical point to make. Ask one sometime.

    And save that "you just don't understand" bullshit for those who actually do demonstrate a lack of understanding. Using it as a default setting for anyone who disagrees with you makes people want to take a 6-iron to your junk.
     
  15. OleGunnar20

    OleGunnar20 Member+

    Dec 7, 2009
    Club:
    Manchester United FC
    you claimed that A. the extra amount they have to pony up would be considered a "good thing" and B. they wouldn't compare themselves to Chivas USA.

    both of those show a clear misunderstanding of the data i put forth and the point i was trying to make.

    you also claimed that the idea seattle didn't know before hand in 2008 that this great of a disparity would be the case is totally baseless. how would they have possibly known? they, by your own admission, never projected averaging 44K fans a game or having the success they've had ... so while they might have expected SOME disparity they could never have reasonably expected a 7.5x disparity. they also could not have projected in 2008 just how wretched Chivas USA or the bottom team in the league would be in comparison.

    and even knowing going in that there would be some disparity, and if things went spectacularly, maybe even a large disparity, doesn't mean that seattle is happy with that disparity and not wanting it to change ... that is an assumption on your part that is baseless itself. it is far safer to assume that rational businessmen are not prone to giving away large wads of cash continuously or allowing themselves to remain in a very disadvantageous financial situation in relation to competitors without receiving commensurate benefit for doing so.


    yes, i am sure seattle is happy it has great attendance and revenue but i am willing to bet they aren't viewing contributing 7x what some other team does to the league as a "good" situation. and i'd guess they have a pretty clear understanding of which teams are not contributing as much as they are and the relative disparity between themselves and those teams and one of those teams is surely Chivas USA.

    no perhaps you understood this but it isn't what you said in your objection. i suggest you learn to be clearer.
     
  16. RapidStorm

    RapidStorm Member+

    Jan 30, 2005
    Denver, CO
    Guys, do we really have to do this bitchfest about Chivas USA or Seattle or team x inequities every ********ing 3 months?
     
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  17. Allez RSL

    Allez RSL Member+

    Jun 20, 2007
    Home
    Well, I don't know if it's that cheap. $2.88 million per team works out to about $50 million in player salaries alone. With benefits, it's probably more like $65-$70 million. There's probably $5-$8 million in allocation money, so we're at more like $70-$78 million in player salaries. Then you've got operations of the league that are another few million. So, maybe the league is sitting on a $20-$30 million that I can't immediately account for in costs, but I imagine I've missed something pretty significant.

    TV rights and sponsorships go on top of that, too, I guess. Even with that, though, it's not an insane proposition that they're holding on to a little bit of profit. Franchise fees and values wouldn't be increasing if they weren't.
     
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  18. SYoshonis

    SYoshonis Member+

    Jun 8, 2000
    Lafayette, Louisiana
    Club:
    Michigan Bucks
    Nat'l Team:
    United States
    No, they do not. Please stop pretending that your "point" is even slightly difficult to understand. I put it in quotation marks because it relies completely on assumptions and speculation that you have to make out of whole cloth.

    The points that have completely flown over YOUR head are A. They had no idea whatsoever when they joined MLS (because that's the time-frame we're talking about, not the 20-20 hindsight that you exhibit) that there would BE an "extra amount," and B. that, BY ITSELF, would preclude their comparing themselves to ANY OTHER TEAM, and certainly not Chivas USA SPECIFICALLY.

    Damn, if you're going to put on airs of superior understanding, at least try not to be so thick doing it. Caddy, let's go with the driver.
     
  19. OleGunnar20

    OleGunnar20 Member+

    Dec 7, 2009
    Club:
    Manchester United FC
    in a discussion about team revenues and profit/losses i think it is completely relevant.
     
  20. JasonMa

    JasonMa Member+

    Mar 20, 2000
    Arvada, CO
    Club:
    Colorado Rapids
    Nat'l Team:
    United States
    Is this where I get to claim that this is my thread and I can tell people to take it elsewhere?
     
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  21. SYoshonis

    SYoshonis Member+

    Jun 8, 2000
    Lafayette, Louisiana
    Club:
    Michigan Bucks
    Nat'l Team:
    United States
    In a discussion of one specific team's revenues and profit/losses, not so much.
     
  22. RapidStorm

    RapidStorm Member+

    Jan 30, 2005
    Denver, CO
    Except, you've made your point already ad nauseum in god knows how many other threads. We know where you stand and we know where you're going to pretend to know how other people/organizations are thinking without actually asking them what they're thinking. We've all seen the film before.

    There's absolutely nothing to be gained from discussing it further.
     
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  23. LongDuckDong

    LongDuckDong Member+

    Jan 26, 2011
    Club:
    FC Schalke 04
    Nat'l Team:
    United States
    This is the same argument people make for flat taxes. It doesn't work. Seattle may very well be pissed, the but the number of teams benefiting from their generous contribution to the league coffers significantly outnumbers those "getting screwed over." As a result, those "getting screwed over" like Seattle can do absolutely nothing about it.

    It's exactly like the lunch date parable in which one man is paying for the majority of the lunch of a group of men. He may not like paying for 80% of the groups's lunch, but where is he going to go? If he doesn't show up, the renaming men go to his house with pitchforks and torches and burn it down.

    Seattle is in a similar situation, but where can they go? They can't leave the league. They're at the mercy of the teams that benefit from their massive ticket sales.
     
  24. OleGunnar20

    OleGunnar20 Member+

    Dec 7, 2009
    Club:
    Manchester United FC
    are you a complete idiot? i am talking about where Seattle is TODAY and the situation as it is TODAY and how they compare to other teams TODAY and how they might feel about that TODAY.

    what they felt in 2008 is sort of irrelevant because in 2008 they couldn't possibly have predicted the current level of success compared to other teams (like Chivas USA). we seem to agree on this point yet you don't seem to get it.

    meaning that in 2008 when they accepted the terms of the league they could not have known how big the disparity of said terms would be in 2012 and now that they know today in 2012 exactly how big a disparity those terms have created they are unlikely to be happy about it and might even be in favour of changing it ... do we know for absolutely sure? of course not but it isn't a ludicrous assumption to think that a team giving 7x what another does and getting the same thing back might not like that situation much.

    unfortunately the league and the teams are very closed mouth about this sort of thing, i have tried asking both the league and teams to comment on such things and have been denied. and famous journalists with influence don't bother to ask these questions. so the clandestine nature of how this situation sits with the various parties is unkown and likely to remain that way due tot he cloud of MLS secrecy that surrounds the teams and league's finances. so all we can do is speculate and collect bits and pieces of data as the dribble out ... like this 1.3M loss by Colorado ... and then discuss the implications and how those effect the issues and speculations surrounding this topic ... or we could just not have BS threads about it at all but what fun would that be?
     
  25. OleGunnar20

    OleGunnar20 Member+

    Dec 7, 2009
    Club:
    Manchester United FC

    i completely agree ... which is why i said as the number of "givers" increases and the number of "takers" decreases the situation BECOMES more untenable. it isn't untenable at the moment because as you rightly point out only one team is really being screwed royally. most other teams are just being slightly screwed or are doing the screwing.
     

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