John Fay has an excellent article up this morning about the Reds’ financial picture. It’s based on a long interview with Reds’ CEO Bob Castellini. If you’re interested in taking the pulse of the top leadership for the organization, I strongly recommend you read it.
Fay’s reporting confirms that the Reds can, in fact, afford nice things. As I’ve been saying for a couple of years, the local sources who uncritically repeat the talking point that the Reds don’t have enough money for this or that haven’t carefully studied the new revenues washing up into baseball, even in Cincinnati.
For example, Castellini talks positively about the ability of the Reds to sign Mat Latos and Johnny Cueto to extensions. Castellini also discusses a few details of the national broadcast contract. I particularly enjoyed reading Castellini’s remarks about negotiating the Reds’ next local TV agreement.
Ã¢â‚¬Å“We will maximize the value of our rights when weÃ¢â‚¬â„¢re able,Ã¢â‚¬Â Castellini said. Ã¢â‚¬Å“We will consider every option.Ã¢â‚¬Â
His reference to “every option” might include a competitive bid from Time Warner/Comcast or possibly a stand-alone regional sports network. Either way, I bet the Reds end up with ownership equity in their new broadcasts. That’s a positive financially, because franchises don’t have to share revenue they earn from owning the broadcast. That’s considered “media revenue” not “baseball revenue” and therefore beyond the scope of the revenue sharing provisions of the CBA.
In the midst of taking a shot at media reports (including blogs, I suppose) criticizing the lack of action by the Reds this offseason, Castellini also puts attendance figures into context by comparing Reds’ season ticket sales to those of the Cardinals. I’d have never guessed this (my emphasis):
Ã¢â‚¬Å“The Cardinals have a huge ticket base because they deserve it,Ã¢â‚¬Â Castellini said. Ã¢â‚¬Å“They win year-in, year-out. But when we bought the Cardinals in 1996, they had fewer season tickets than we have now. But they brought back that winning tradition. You have to contend.Ã¢â‚¬Â
Castellini gets it. You have to spend money (wisely) to generate revenue. Baseball franchises can’t cut corners and expect to thrive.
Fabulous reporting by John Fay.