Nats Finances - A First Look

One useful thing to do is to analyze the potential revenue of the Nats in DC. Knowing the Nats' revenues will allow us to judge the ability of the team to compete in the NL East right away. This analysis one is going to have to be based on old data - the Commissioner's 2001 disclosure of financial data to Congress. But here goes.

National Revenues - These are the revenues shared among all 30 MLB clubs from the ESPN and Fox contracts and other national MLB revenue. In 2001, that figure was $24.4 million. Let's assume that figure has grown about 10% over the last three years (about the level of inflation), and is now $27 million.

Gate Receipts - Tony Tavares has expected average ticket prices to run about $25 per ticket. At an estimated 2.4 million fans (30,000 per game), that would equal $60 million in 2005 revenues.

Other Local Operating Revenue - Parking and concessions and in-park advertising generate additional revenues. I assume that the Nationals will generate revenues from these sources commensurate with the rest of MLB (although I'm not sure what the parking situation is for 2005- the city may keep those revenues). Call this another $24 million - a conservative 10% below the 2001 average for all 30 teams.

Local Media Revenue - This is the revenue from local broadcasting, cable and radio contracts. The Nats are likely to sign deals with, for example, WBDC or WDCA to broadcast 40-50 games, while allowing Comcast Sports Net (or a new regional sports network) to televise the rest. For an insight into the amount of money that will generate, we can look at similarly sized TV markets. The markets closest in size to DC (sans Baltimore) are Dallas and Atlanta. Atlanta is kind of funny because TBS, which is a national cable TV network, broadcasts 75 of its games. But we can still use these markets as a conservative measure of the potential media revenues. In 2001, Dallas and Atlanta averaged about $23 million in local media revenue. That seems like a reasonable starting point.

Altogether, these four sources would generate about $134 million in 2005 revenues for the Nats. That's comparable to the Colorado Rockies and St. Louis Cardinals in 2001, and would put the Nats in the top 10 franchises in terms of revenues.

There are reasons to believe these numbers are conservative (e.g., the DC fan base is wealthier than other fan bases), but they seem to support the notion that the Nats have some room for reasonable expansion of the payroll (perhaps to $70 million or so) when the new ownership group takes over. I agree with the concept that payroll should not shoot up right now, because the new ownership group should be afforded the opportunity to build the team how they would like. Hopefully, they will like high OBPs and low WHIPs. But with a new stadium coming hopefully for 2008 and a new ownership group in place, the revenues available to the Nats suggest that they could field a very competitive team in the next few years.