Scott Boras on Baseball Economics
When questioned by reporters last week about the tight economy and teams being able to pay the high prices he asks for his clients, this is how he responded.
"We heard a lot last year about the impending doom of the economics of baseball and they had another record year of revenues, $6 billion again this year and the economy is better," Boras said. "So the real truth of baseball right now is a lot of teams are starting to identify their ownerships from the following perspective - that they have an ownership that's going to pay off their debt by getting the revenue sharing and money they're getting from central baseball - $80-$90 million a year and they're going to turn around and draw 1.5-2 million, make 40 or 50 dollars a head. All of a sudden, they're sitting there with $200 million in revenues and they're spending $50,$60,$70 million on players. Those are obviously owners that are going to have to be looked at."
"We've seen a number of teams that are just sitting back. We have clubs who aren't successful, getting $80 million before they ever sell a ticket. The question is always going to be in the end, what are they doing with that money? For most of them they're paying off their debt to purchase the franchise. So they become owners, debt-free but they have not done a lot to contribute to the success of the game. Those are the things as an industry, certainly the fans have to look at it and realize that kind of revenue is available. The other part of it is I think we've proven time and time again that investment in players produces revenue streams and success points for franchises. Even in an economy where many businesses are struggling in our industry, as I said last year, we've been able to keep revenues at a record level," Boras said.
Looks like Boras believes fans will continue to pay whatever the asking price is to see their team play. Is there a point where you say no more, and stop going to the stadium to see games, purchasing memorabilia, etc.?
"We heard a lot last year about the impending doom of the economics of baseball and they had another record year of revenues, $6 billion again this year and the economy is better," Boras said. "So the real truth of baseball right now is a lot of teams are starting to identify their ownerships from the following perspective - that they have an ownership that's going to pay off their debt by getting the revenue sharing and money they're getting from central baseball - $80-$90 million a year and they're going to turn around and draw 1.5-2 million, make 40 or 50 dollars a head. All of a sudden, they're sitting there with $200 million in revenues and they're spending $50,$60,$70 million on players. Those are obviously owners that are going to have to be looked at."
"We've seen a number of teams that are just sitting back. We have clubs who aren't successful, getting $80 million before they ever sell a ticket. The question is always going to be in the end, what are they doing with that money? For most of them they're paying off their debt to purchase the franchise. So they become owners, debt-free but they have not done a lot to contribute to the success of the game. Those are the things as an industry, certainly the fans have to look at it and realize that kind of revenue is available. The other part of it is I think we've proven time and time again that investment in players produces revenue streams and success points for franchises. Even in an economy where many businesses are struggling in our industry, as I said last year, we've been able to keep revenues at a record level," Boras said.
Looks like Boras believes fans will continue to pay whatever the asking price is to see their team play. Is there a point where you say no more, and stop going to the stadium to see games, purchasing memorabilia, etc.?
