Friday, April 21, 2006

Guess Who's Making Lots of Money

Cleveland Scores has a couple of posts bemoaning the Tribe's pitching situation. It's still early, but I think most Indians' fans feel your pain, fellas. What's more interesting to me, however, is the snapshot of the team's financial situation that one of the posts provides, via a link to a Forbes magazine survey of the various MLB clubs.

As Cleveland Scores points out, the Forbes survey suggests that the Tribe has the highest valuation of any team in the AL Central. Of course, as my 401(k) found out the hard way, Internet companies once had high valuations too, so that doesn't impress me all that much.

What does surprise me is the Indians' operating income number. I'm sure it will surprise you, and maybe even anger you a little too. That's right gang--we're number one. Of course, even that number wouldn't mean much if the Tribe was awash in debt, but they aren't--the team's debt-to-value ratio is in the bottom half of all clubs.

How are the Indians able to make this kind of money? The answer seems to be revenue sharing. I wasn't able to find specific revenue sharing numbers for the Tribe, but as this article that accompanies the Forbes list makes clear, a lot of the income that is being generated by these "poor" teams is coming from revenue sharing--and the lion's share of that is being paid by the Yankees.

The Indians' overall financial health doesn't mean that they can throw money around like the Yankees and Red Sox--they simply don't generate the revenues to support that kind of payroll. Still, be sure to keep this chart in mind the next time you hear the front office cry poverty.

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