The Business of Losing Teams

- By

By Steven Barboza

The Pittsburgh Pirates may be losing on the baseball diamond, but they’re winning where it really counts: at the bottom line.

Talk about the weird complexities of sports economics. The losingest team in pro sports — a team that hasn’t so much as whiffed a winning season in nearly two decades — ends up smelling like roses when it comes to making money.

The Pittsburgh Pirates, perennially at or near the bottom of  MLB standings, has earned a profit of tens of millions of dollars in recent years, proving that sometimes it pays handsomely to walk off the ball field wondering what it feels like to win a game.

The Pirates had 18 losing seasons in 18 seasons, the longest losing streak in the history of the four major professional sports leagues.

But from 2007 to 2010, the team made $34.8 million in profit, even with a 197-288 record during that span.  Financial records, leaked to the press, revealed that the Pirates spent $23.1 million on player development, which compares favorably with other teams, such as the Tampa Bay Rays ($21.9 million), the Los Angeles Angels ($16.3 million) and the Seattle Mariners ($15.5 million).

But the Pirates spent less than other major league teams on salaries — the team places 27th out of 30 teams with a team salary of $45.6 million this year. In contrast, the New York Yankees’ salary is $196.8 million, and the Angels’ is $139 million, three times that of the Pirates.

Still, the Pirates have managed to make a bigger profit from losing than the Angels have made from winning. In 2008, the Pirates had a $51 million payroll and placed last in the NL Central. But because the team received a revenue sharing payout of $39 million, it made $14.4 million in profit. In contrast, the Angels won 100 games, placed first in the AL West — and yet made a profit of only $7 million; meanwhile the Rays played in the World Series, but made a net income of just $4 million.

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