Frank Coonelly told the Post Gazette yesterday that the Pirates have made about $11 million in profit over the last two seasons, that the front office has sunk all of that money back into the team, and that he can prove at least the second point, which will presumably be done in an article in the PG tomorrow.
At first glance, this seems like Coonelly tossing a number out in the air, hoping the public would simply accept it at face value. I read it at midnight, hoping to see a longer post about the background on it from Dejan Kovacevic, the author, on the PBC Blog this morning and he didn’t disappoint:
[The 2005 piece on the Pirates’ finances] didn’t have the Pirates saying anything about money on the record, at least not with specific dollars attached, nothing that could be called out by the people who do see their books, that being Major League Baseball, the other 29 teams and the players’ union.
Where was the accountability?
This one is different.
Not only are these numbers now out there, with Frank Coonelly standing behind them rather than some anonymous source or sources, but so, too, have Coonelly and Bob Nutting reiterated that no owner has taken a dividend in the past two years. Nor, Nutting added, has any many been divested to Seven Springs, Ogden Newspapers or to any other venture. (More on that in Part 2.)
During his time on the Pirates’ beat, DK has done an awesome job reporting on the off-field stuff, whether it’s the financial aspect of the team, the Latin American operations, etc. (not to knock his on-field reporting, but that’s not what we’re talking abou there). He hasn’t been a mouthpiece for ownership, and if anything, his reporting has created a lot more transparancy within the front office, I think, which is very commendable. That’s besides the point though; Coonelly naming a number is obviously significant to him, and so it should it should be significant to us.
Despite all of the pleas for the Pirates to open their books to the public, that’s never going to happen. You might say that’s because they’re keeping their true profit from us, but I think it’s far more likely that it’s because they’re keeping their creative accounting practices from coming to light (meaning that they’re likely excellent at hiding money by dumping it in to various holding firms that aren’t necessarily subject to the same taxes a baseball team might be; of course this sword cuts both ways — that sort of money probably isn’t counted towards this $11 million, either). As DK points out, this is likely as close as we’re going to get and because of the transparancy between the teams and the union, we should probably be happy with that.
Consider that each of the groups calling teams like the Pirates out on hoarding money are all doing so with an agenda. John Henry and the other rich owners pay some unspecified amount of their profits into a pot for owners who aren’t making as much money. No one wants to subsidize someone less successful than them, even if those teams are spending the money wisely. Scott Boras and the player’s union both want more money for the players that they represent; shaming small market teams into spending more money would accomplish that goal.
Of course, there are two sides to this. On one hand, Coonelly gives a number and says, “Hey, if I’m lying all the other owners know and they’ll call me out on it.” On the other hand, Coonelly has given something solid to the public debate and now a response of, “He’s lying and I know because I’ve seen the numbers” won’t suffice from Henry or any other owner. Now, it has to be backed up with substance. It has to be something more like, “Coonelly is lying and I know because we paid $XX million into the revenue sharing pot in 2009 and that money is split between X teams.” Is there another owner willing to be that transparent? If Henry reveals how he put into revenue sharing payments, it wouldn’t be hard to figure out his profit, which I’m sure is substantially more than $11 million.
Coonelly’s taken his gloves off and I don’t think he’s a guy that’s afraid to get his hands dirty. I’m not sure how many other owners really want to get into this with him, whether than $11 million figure is honest or not.