Best of BP: It’s abundant – MLB Sports

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This article was originally published on June 10th.

St. Louis Cardinals Chairman Bill DeWitt conducted a radio interview at St. Louis Gateway Station 590 fan It’s pretty noteworthy. (click here, Scroll down Bill Dewitt 6/9/20). I was able to write about much of what he said. For example, about the possibilities of the 2020 season, or how small amounts paid to players didn’t increase profits (“Don’t think for a moment that salary cuts increased revenue. It wasn’t.” So the owner’s pocket “). But you don’t want to read the 2,500-word article and I don’t want to write it. Instead, focus on one sentence.

To be honest, the industry isn’t very profitable.

How i wrote Baseball finances are diagonal.. that’s OK. As I wrote Forbes Offers Reliable quote Of the profitability of the industry.And around Forbes:

  • Bildewitt purchased the Cardinal in 1996 for $ 150 million.It’s not Forbes Estimate, It’s a public record..
  • Cardinals, per Forbes, Was worth $ 2.2 billion in March. This is a compound annual growth rate (CAGR) of 11.8 percent for an investment of $ 150 million.
  • But wait, there’s more.Cardinals, per ForbesLast year, it generated $ 72 million in operating income (interest, taxes, depreciation and pre-amortization cash). That alone raises the CAGR to 12.0 percent. Did they make money in 2018? Yes. 2017? Yes. 2016? Yes. You see, this is monotonous. Let’s say DeWitt has created a CAGR of over 12%.

As I mentioned in a previous article, I was a financial analyst on Wall Street. We recommended stocks to institutional investors such as pension funds, mutual funds and hedge funds. To do this, I had to get a license. One of the licenses I had to get was as an investment adviser. In other words, I was able to talk to the general public about investing.

If you tell someone, “This is an investment that will bring you more than 12% profit in 24 years,” the best scenario is for me to lose my license. In the worst case, I’m wearing an orange. Absent My color. Here’s a professional tip from someone who was a real professional: if someone tells you about an investment that brings you 12 percent each year escape.. In short, Bernie Madoff, the architect of the largest Ponzi scheme in history, said he could generate consistent revenues of 10 to 12 percent. We know how it worked.

The bottom line: DeWitt has made huge profits every year for 24 years.Oh, and about $ 150 million he paid to the Cardinal-he got half that back Within a year, Selling the four parking lots you received with your club purchase for $ 75 million. Therefore, if necessary, we will receive and double these oversized returns.

Bill Dewitt benefits from his investment in baseball far more than anyone outside his financial class can reasonably expect. why?As I wrote, baseball team owners are engaged in activities It distorts the free market.. They have a thumbs up on a scale, endorsed by legislatures from the federal to local levels. An executive of a free market capitalist, he seeks a state-sponsored industry.

And this is what I especially feel the bite.Bildewitt Estimated net worth money For about $ 4 billion. Taking away the Cardinals of $ 2.2 billion leaves $ 1.8 billion. The net $ 75 million he invested in the Cardinal (after the sale of the parking lot) is 4.2 percent of his net worth. With that 4.2% investment, he appeared on television with two World Series trophies and walked the clubhouse calling him “Mr.” to all the famous athletes.”Dewitt” and yes, I was interviewed 590 fan And other outlets. He enjoyed intangible benefits that you and I never dreamed of. 4.2% investment. It increases in value at the speed of blushing Bernie Madoff.

I do not resent Bill Dewitt’s wealth. I do not resent his desire to make more money. Hey, I was working on Wall Street, I got it.

But to be honest, to yell out. The baseball industry is off the charts and profitable. You are very rich, and baseball has made you much richer. Claiming anything else is frankly insulting. And I’m “quite honest” in your words.

Thanks to FanGraphs’ Craig Edwards for telling us about selling the garage.

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Best of BP: It’s abundant Best of BP: It’s abundant

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