This week in “Last Week in BizBall”, the McCourt divorce proceedings provides a lesson in “related party transactions“, declining TV ratings for Yanks/Red Sox, Lehigh Valley set to set new minor league attendance mark and record audience for MLB Network.
Astute observers of the business of professional sports rightfully view the stated losses and profits of franchises with some (or a lot) of scepticism. The related party transactions involving the team and its ownership can have a very significant impact on the franchise`s bottom line. LWIB the divorce proceedings of Dodgers owners Jamie and Frank McCourt provided an example of this practice. Bill Shaikin (HT Buster Olney) reported for the LA Times that court filings reveal that in recent years the Dodgers have been charging themselves exorbitant rents to play in the stadium which they own. ($14 million for this season)
In 2006, two years after purchasing the team, Frank McCourt divided the stadium property into three parcels and established Blue Land Co. to own two of them. Those two parcels, parking lots immediately surrounding the ballpark, serve as collateral for a $60-million loan, court records show.
The Dodgers pay rent to Blue Land, which is not involved in stadium operations. Boies said the rental payments offered the McCourts the option of working around restrictions on receiving cash directly from team coffers.
"It's a way of taking money out of the Dodgers and putting it into a place they can access it," Boies said. (Boies is David Boies, one of the attorneys representing Jamie McCourt)
Ms. McCourt`s lawyers are claiming that the couple siphoned off $108 million from their baseball franchise from 04-09. During the last two seasons of owning the Dodgers, Fox claimed losses in the range of $100 million. LWIB reminds us not to put too much stock in these claims.
Baseball`s chattering classes have been discussing this season whether or not the Yankees/Red Sox rivalry has peaked. LWIB the Sports Media Watch blog reported (via SportsBusiness Daily) that recent TV ratings support the notion that MLB‘s best rivalry has lost some of it‘s lustre. SportsBusiness Daily reported on the audience measurement for the August 8 game on Fox.
FOX drew a 2.1 final rating and 3.250 million viewers for regional MLB action featuring Red Sox/Yankees on Saturday, down 22% in ratings and 18% in viewership from coverage featuring the same matchup last year (2.7, 3.962 mil), and even in ratings and up 7% in viewership from coverage featuring Yankees/Angels in '08 (2.1, 3.055 mil).
That said, Red Sox/Yankees still draws the largest regular season audiences in baseball. The highest rated, most-viewed afternoon game of the season on FOX featured the rivals, as did the top Sunday Night Baseball game on ESPN.
However, the games are far less of a draw than in recent years. The 2.1 for Saturday's telecast is tied as the lowest for a Red Sox/Yankees telecast on FOX since at least 2001* (ratings prior to 2002 were not available).
Of the past 28 MLB on FOX telecasts to feature Red Sox/Yankees (dating back to 2002), Saturday's matchup was only the sixth to draw less than a 2.5 rating.
Josh Leventhal of Baseball America reports that despite floundering on the field, the Triple A Lehigh Valley IronPigs are on pace to set a new record for single season minor league attendance. The IronPigs expect to break the record that Triple A Columbus set only last season. The IronPigs attendance is all the more impressive considering that they play in the 27th largest market of the 30 Triple A clubs. Read Josh‘s piece for an explanation of how they do it.
The Sports Media Watch blog (again via SportsBusiness Daily) reported that the week of July 31 - August 6 was the most watched yet in the brief history of MLB Network.
Pete Toms is senior writer for the Business of Sports Network, most notably, The Biz of Baseball. He looks forward to your comments and can be contacted through The Biz of Baseball.
Follow The Biz of Baseball on Twitter
Follow the Business of Sports Network on Facebook