BPloG

Spend Money to Make Money

A somewhat pointless math lesson about why the Mets were wise to sign Beltran and Martinez.

The Mets' season is still relatively young, and the only word that could possibly be used to characterize this team so far is mediocre, but all that said, the Omar Minaya experiment is already proving to be a success. Here's why:

• In 2003 and 2004 the Mets were AWFUL. A combined 137-186 for a paltry .423 winning percentage. They finished in last place in 2003, and fourth place in 2004.
• Despite opportunities to sign Alex Rodriguez and Vladimir Guerrero to enhance these '03 and '04 teams, the Mets declined to do so, citing financial concerns.
• Prior to the 2005 season, however, the Mets disregarded financial concerns and spent large sums on Pedro Martinez and Carlos Beltran.
• The Mets, though far from a bona fide contender right now, are imminently better than the disastrous teams of the last two years. This seems, at least at first glance, to be a direct result of the extra money put in to the team.
• The best part, however, is that as a result of the additional money spent on the team, the Mets have possibly increased their chances of adding additional talent in future years.
• In 2003 and 2004, the Mets' average attendance at home games was 28,165 and 28,979 respectively.
• Through 13 homes games in 2005, however, the Mets home attendance has jumped to 35,046.
• Comparing this number to the average for 2003-2004, the Mets attendance has increase by just under 6,500 fans per game.
• Given economies of scale, every fan over the first few is basically pure profit for the team. Assume an average ticket price of $25, and another $5 per fan in concessions, and the Mets are generating an additional $195,000 of profit per home game thanks to the increased attendance. If these attendance numbers hold (keep in mind that the 2005 numbers do not yet include the three Yankee games which are already sold out), that's an extra $15,795,000 in profit for the team as a result of the off-season signings.
• Moreover, that extra $16 million does not include any increased revenue from merchandising, other sales, etc., which, given the number of Beltran and Martinez jerseys around town, seems significant.
• Now, the Mets attendance numbers may not stay so high - fair point. Given the parity that seems to exist in the NL East, however, it is at least plausible that the Mets will be within striking distance of the division title into August. If they are, people will go to Shea.
• Also, some may point out that the Mets spent much more than $16 million per year to get Beltran and Martinez. True. But that's not the point. The point is, they were going to sign someone in the offseason, but if it was a mediocre guy who couldn't generate the buzz of the mega-signings, then these enhanced revenues would be absent.
• So, the point is this: when people talk about how much the Mets spent this off-season, you have to discount those numbers by the added revenue the team is generating as a result. Clearly, that added revenue is significant, and may justify future large-scale signings so as to make the team even more competitive, and even more of a draw for fans.

posted by Brian G. @ 11:05 AM