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So what does the postseason mean for the Reds, financially?

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There's always money in the playoffs.  Oh yeah, and the banana stand. (Photo by Joe Robbins/Getty Images)
There's always money in the playoffs. Oh yeah, and the banana stand. (Photo by Joe Robbins/Getty Images)
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Alternatively: are we gonna make enough $$ in the playoffs to pick up Bronson Arroyo's $11M option?  The short answer is yes, if we make the WS.  Maury Brown of BizofBaseball recently took a look at how much revenue playoff teams realize.  Here's the breakdown of who gets what in the playoffs:

  • 15% of WS receipts goes to the Commissioner’s office.  They also get an unspecified percentage of LCS receipts.  It's only fair - Selig's $18M salary has got to come from somewhere.
  • The players also get a slice of the playoff pie.  A players’ pool is created from receipts from the WS (60% of the first four games), LCSs (same), and LDSs (60% of the first three games).  The pool is distributed to all playoff teams (plus 4% goes to second-place, non-WC teams).  The players then vote on allocation of their pool money.
  • The teams get the rest.  Each series’ participating teams split the remaining revenue equally.  Because the players get a chunk of the first few games, it's in the teams’ best interests to see a long series.  The rules do not mention anything about whether concessions, parking, and other direct revenue streams from the games go straight to the teams, so my guess is that they do.  That obviously helps.   

The article cites some actual postseason revenues from the recently "leaked" financial documents.  Some examples: the Angels grossed $4.4 million in 2008 (lost in four games in the LDS) and $12.1 million last year when they pushed New York to six games in the LCS.  The Rays took in $17.7 million when they advanced to the WS in 2008.  That's quite a range.  Clearly, a deep postseason run can make a big impact on the bottom line.

While the direct revenues from the playoffs are significant, the long-term gains in attendance and TV ratings following a successful season will be even more critical.  Often a slingshot attendance boost occurs the season following a playoff appearance, especially if that appearance was preceded by several less successful seasons.  The 2007 Tigers, for instance, drew about 20% more fans after winning the pennant the prior year.  The Brewers' attendance increase this past decade doesn't quite fit the slingshot pattern, but they nearly doubled attendance over several years while building a team that would qualify for the playoffs, eventually drawing more than 3 million in both 2008 and 2009.  The Reds have averaged about 2 million in recent years, so there is certainly a lot of room to improve.  Hopefully a successful season with exciting and young players will draw more and more fans in the coming years.

But even without an attendance boost the Reds have a shot to increase their revenues significantly if their TV deal is up soon.  Information about TV contracts are hard to find, but it was recently reported that the Rangers signed a 20-year deal with Fox for over $1.5 billion, an average of $75 million a year.  As points of reference, the TV deals for Houston and Seattle are worth $45 and $33 million per year, respectively.  While the attendance bump might trail the winning by a year, it appears that there's no delay with TV ratings - the Reds' ratings are up 92% on the year.  With its broad geographic coverage, the absolute ratings for the Reds are high, higher than many other larger markets.  Hopefully the organization capitalizes on these trends when it next comes to the bargainning table with Fox.