Angelos opens up Orioles' books

March 27, 1994|By Mark Hyman | Mark Hyman,Sun Staff Writer

ST. PETERSBURG, Fla. -- Orioles owner Peter G. Angelos took the rare step yesterday of going public with his team's finances, and he urged other major-league owners to follow suit.

"Maybe I'm setting a precedent, an example for others," the Orioles owner said yesterday.

The budget documents, supplied by the Orioles, show a projected net income this year of $7.9 million, a healthy performance by industry standards but well below the $25.5 million the club raked in in 1993.

The steep decline in projected net income, which team officials had expected, can be attributed mostly to two changes on the Orioles' balance sheet -- a $10 million increase in player salaries and an $8 million decline in the team's share of revenues from baseball's national TV deal.

Mr. Angelos said that in disclosing the information he hoped to set the record straight among fans and players who are convinced -- wrongly, he contends -- that the biggest winners in any baseball season are the 28 team owners.

Mr. Angelos says the Orioles are one of the few baseball teams turning a profit of any kind.

"The public needs to know: Most teams are not making any money," the owner said. "The argument being advanced by the players, that the owners are profiteers, is absolutely incorrect.

"The Orioles will show profits. The [New York] Yankees will show profits. But if many teams followed our example [by disclosing financial information], it would be revealed that major-league baseball owners are not profiteering. In fact, they are committing 60 percent of gross revenues from major-league baseball to pay the salaries of major leaguers and all other players down into the minor leagues."

Mr. Angelos' comments came as representatives of major-league owners and the players union have begun negotiations for a new collective bargaining agreement. Most observers expect the talks to be particularly contentious, with each side charging the other with greed.

In disclosing financial information now, Mr. Angelos said the owners could blunt the rhetoric of the players' negotiators.

"Let's take the advantage away from those who are taking advantage of our tendency to be secretive," he said.

On the day that he went public with the Orioles' finances, Mr. Angelos first shared the information with other team investors who have gathered here this weekend to hear from manager Johnny Oates, general manager Roland Hemond and Mr. Angelos, among others.

Only a few of the team's 20 investors were no-shows, and at least one had a novel excuse. Author Tom Clancy is at home in Maryland writing his next book.

Several investors said they were pleased with Mr. Angelos' handling of the team, including its finances.

Sportscaster Jim McKay said the decrease in net income did not trouble him. "It is not that important to me as an investor. We got into this -- and I think most [investors] did -- because we are real Oriole fans."

Even the higher player payroll did not faze many.

"They can afford it," said Cincinnati businessman William O. DeWitt Jr. "I think it demonstrates a commitment to get good quality players."

There were few surprises in the figures released by the Orioles. On the expense side, the major change was the player payroll, which leaped from $27.7 million to $37 million due, in large part, to Mr. Angelos' success during the off-season in signing four high-profile free agent players -- Rafael Palmeiro, Sid Fernandez, Lee Smith and Chris Sabo.

In contrast, the projections for this year show the Orioles making deep cuts in their budget for front office personnel. That figure, listed as "general, administrative," was cut from $7.9 million last year to a projected $4.4 million this year, a reflection of Mr. Angelos' aggressive restructuring of Orioles management.

The owner has fired or forced the resignation of a number of senior officials, moves that have reduced the payroll by millions of dollars. He cut again from the front office by deciding to forgo a salary or a management fee. Last year, the Orioles were to pay a $1.3 million management fee to former owner Eli Jacobs, according to team financial records.

In revenue, the Orioles expect to take a big hit from the national TV contract, which will pay the Orioles about $6.7 million this year, compared with $15.7 million in 1993.

In some cases, the 1994 projections appear quite conservative. In the budget, the team assumed attendance at Camden Yards this year of 3.6 million, slightly below last year's number. Team officials say they have already sold and received payment for 3.25 million tickets and expect to reach an Orioles record of 3.7 million.

Mr. Angelos wouldn't disclose the team's revenue projections for 1995. But he said they may include ticket price increases.

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.