Cafe Hayek - Latest Comments in Poor Poor Pitiful Me

Re: Poor Poor Pitiful Me

Half Sigma — Fri, 25 Aug 2006 12:41:49 -0000

The Yankees (notice the plural) are making LOTS and LOTS of money.

What you all mean is that the owners of the residual profits made a bad deal with the employees and other stakeholders.

Re: Poor Poor Pitiful Me

Forbes — Fri, 25 Aug 2006 06:40:46 -0000

Not mentioned herein is the fact the the so-called luxury payroll tax that the Yankees pay into league coffers for distribution to the lowest payroll teams will be used to fund the new stadium, i.e. stadium costs are an offset against the calculation of the payroll tax.

In other words, the Yankees are substituting the expenses of the new stadium for the expenses of the payroll tax, rather than incurring the expense of the new stadium on top of the existing cost structure.

Undoubtedly EclectEcon's comment above is correct, as the Yankees revenue advantage has always been its broadcast rights. With the rights funneled through an affiliate, the affiliate should be able to capture the profits associated with the sales of broadcast advertising.

Re: Poor Poor Pitiful Me

EclectEcon — Thu, 24 Aug 2006 11:36:37 -0000

It is possible that the team, itself, is losing money if you look only at gate revenues and subtract all the expenses. And it is also possible (likely?) that the team is undercharging its media affiliates for broadcasting rights, and these affiliates (also owned by the umbrella firm) are making nearly $100m/year.

Hiding team profits in the balance sheets of ancillary and auxiliary operations is an old trick. Too bad politicians still fall for it.