Are the Tampa Bay Rays turning a profit?
The team declines to open its books but says it lost $20-million to $30-million the past two seasons and has budgeted for a loss this year.
Business magazine Forbes estimates the Rays took in nearly $50-million in profit the past two seasons.
Who is right depends on how you count the money.
The Rays make their money in three ways: at their ballpark; from revenues shared among all major league teams; and from a second pot of national revenues meant to prop up baseball's least valuable franchises.
This year, the team's take from Tropicana Field will represent about half of all the money it makes — $65-million to $80-million.
The single greatest source of local money comes from ticket sales, which could generate $30-million or more, based on average ticket prices and 2008 attendance.
Other sources include sponsorships, advertisers, concessions, merchandise, suite seat sales, local television and parking.
The rest of the Rays' revenues come from somewhere else.
The first pot, called the Major League Baseball Central Fund, is split equally among teams and represents the payouts for baseball's national television contract and successful Internet business. That payout will be around $35-million per team in 2008.
The second pot of national baseball revenues shifts money made by the league's highest-earning clubs to the league's lowest-earning franchises. Tampa Bay will receive almost another $35-million in revenue sharing.
In total, that means the Rays could have a potential to earn $135-million to $150-million this year.
Comparatively, Forbes' 2007 analysis pegged the team's revenues at $138-million, the third least in all of baseball. The New York Yankees' revenues were estimated at $327-million.
It is easier to see how teams make money than how they spend it.
Forbes doesn't calculate total expenses, and baseball officials say the magazine's numbers are consequently inaccurate.
In fact, the only expense publicly available is a team's major league payroll — about $43.8-million for the Rays in 2008.
How much the Rays spend after that isn't clear, though payroll figures do indicate a range.
Trying to justify public investment in a retractable-roof stadium in Milwaukee, baseball officials released 10 years of financial statements starting in 1994.
The audited statements suggest about half of the expenses were player salaries.
As it turns out, Major League Baseball financial statements published from 2001 suggest a similar ratio. According to MLB's own analysis, payroll costs accounted for no less 41 percent of a team's overall expenses and no more than 68 percent.
If the ratios remain valid, the Rays could be spending between $69.4-million and $106.8-million.
But those numbers may not reflect one-time capital improvements the team made to Tropicana Field, the Rays say. In 2006 and 2007, for instance, the team says it spent $20-million in upgrades at the Trop.
Profit or loss?
"More dollars went out the door than we took in," Rays president Matt Silverman said of 2006 and 2007. "That's the reality."
Forbes' estimates are based on a calculation called EBITDA — earnings before interest, taxes, depreciation and amortization.
The accounting formula has been criticized, even by Forbes, as inflating the health of a business. But the Rays accounting methods may not be perfect either.
Take the cost for principal owner Stuart Sternberg to acquire the Rays. Although it is not known how much he paid, the money didn't come out of his savings account. It is likely, baseball officials say, Sternberg's yearly loan payments are being included in the Rays' expenses.
Maury Brown, founder and president of the Biz of Baseball, said he would be surprised if the Rays were making a windfall. But to cry poverty isn't realistic.
"They are spending a lot of money to make improvements, that's for sure," Brown said. "But to say they're going in the red is probably not truthful. I don't think anybody's losing money."
That's in part, Brown said, because the value of the asset is rising, profit or not. A new stadium may increase the profit for Sternberg if he were to sell.
Eli Jacobs bought the Baltimore Orioles in 1989 for $70-million. After Camden Yards ballpark opened in 1992, Jacobs sold the team to Baltimore lawyer Peter Angelos for $173-million.