Nycfc Annual Profit

[Kjbert]

With the salaries being laid out, I wanted hear thoughts on the profit of the club this year. The team should have roughly 500,000 paid attendees this year (29k per game at 17 games). That's before a potential playoff game. At an average of $40 per ticket, you could be looking at gate revenue of $20 Million. That should cover operating costs, no? $12 Million of DP salary plus another $3 Million of non-DP salary. $5 million of staffing overhead.

Then factor in apparel sales, sponsorship deals and television money. How much money do we think they take in as profit this year? $10 Million? Could they already be in the black in year 1?

 

[whill4]

I would guess a large chunk of the ticket sales goes straight into the Yankee's pockets.

 

[adam]

$20mm for DPs. 6+6+8. Don't forget the initial $100mm franchise fee (not sure how many years they amortized that on their books). Rent to YS, their nice office @ 600 3rd avenue, the CFG's fee for using their scouting network to help skirt FFP, the CFG apartment that Soriano stays in, etc... It's not so simple.

 

[northernburbs]

$20mm for DPs. 6+6+8. Don't forget the initial $100mm franchise fee (not sure how many years they amortized that on their books). Rent to YS, their nice office @ 600 3rd avenue, the CFG's fee for using their scouting network to help skirt FFP, the CFG apartment that Soriano stays in, etc... It's not so simple.

Rent to SUNY for field and training facility plus cost of building the field. not sure how TV rights work in MLS.

 

[413Blue]

LEGAL FEEs. Lawyers are involved in every aspect of the business. They cost a ton.

Also its very expensive to operate Yankee Stadium on a gamedday. Easily 200k a match in direct costs alone, probably way more.

 

[LionNYC]

I honestly don't think that the club is making money this year. The two biggest sources of income (typically) which are TV rights and kit sponsor are pennies.
- TV rights: I don't know what MLS gets as a league but on the local level there's YES Network which is owned by the Yankees which is our part owner.
- Kit sponsor: I'm sure that Etihad didn't have to write a check with more than seven digits in it for a long term sponsorship for our kits.

 

[Calmness Personified]

I honestly don't think that the club is making money this year. The two biggest sources of income (typically) which are TV rights and kit sponsor are pennies.
- TV rights: I don't know what MLS gets as a league but on the local level there's YES Network which is owned by the Yankees which is our part owner.
- Kit sponsor: I'm sure that Etihad didn't have to write a check with more than seven digits in it for a long term sponsorship for our kits.

Isn't the MLS TV deal worth $90m per year? I believe that doesn't Spanish language TV rights and overseas rights. The total figure might be over $100m, it's around $5m per team if all of it is shared equally.

 

[The Toe]

Even if CFG is losing a couple million per year on this, that is pennies compared to the potential of the club. It came out yesterday that many if not most NBA franchises are operating without profits.

 

[Gotham Gator]

I am sure this thing is a loss leader for the owners.

Don't forget concessions, which are considerable. Most of that probably goes to the Yankees, but it also makes it easier for them to charge a low rent.

 

[MagnusPax]

I'm struggling to understand allocation and salary cap rules, I'm not even going to try to figure out the murking ways of mls club profitability. I like my sanity. What's left of it anyways.

 

[doctorhoosier]

Even if CFG is losing a couple million per year on this, that is pennies compared to the potential of the club. It came out yesterday that many if not most NBA franchises are operating without profits.

I really don't know if that's true. There's a NBA Collective Bargaining Agreement coming up. Any time there's one coming up, the conversation turns to "we're not turning a profit."

If they actually showed their books, I'd guarantee that there's some creative accounting happening there. If they're not making money with the new TV deal, I'd ask where the hell all that money is really going.

 

[Kjbert]

Disagree with a lot of the above.

The DP salaries for Lampard and Pirlo are only 1/2 year salaries. 6 Million for Villa, 3.5 Million for Pirlo and 2.5 Million for Lampard.

Yankee Stadium owns the concessions. I didn't build that into the profit as I assumed that is the cost of playing in Yankee Stadium. They get $40 a game from me. Figure the average is $20 per attendee. $10,000,000 of revenue on concessions, not profit.

They would amortize the cost of the franchise fee and building at SUNY Purchase. I didn't factor that in as those are one time costs.

 

[SayWhat44]

Even if CFG is losing a couple million per year on this, that is pennies compared to the potential of the club. It came out yesterday that many if not most NBA franchises are operating without profits.

We've heard that before from owners... The NBA is starting to prep for their CBA talks so you'll see more crying from owners coming up.

 

[Kjbert]

We've heard that before from owners... The NBA is starting to prep for their CBA talks so you'll see more crying from owners coming up.

This a million times over. Tons of ways to manipulate the books to make it look like you don't have a profit.

All you need to know is that the Sixers were purchased for $250 Million and the franchise is worth probably $1 Billion 5 years later. The owners may not have significant cash flow, but the ROI is unprecedented. And the future television dollars starting (I think) in 2019 eliminate any and all excuse.

 

[413Blue]

Isn't the MLS TV deal worth $90m per year? I believe that doesn't Spanish language TV rights and overseas rights. The total figure might be over $100m, it's around $5m per team if all of it is shared equally.

The entire US rights deal (ESPN/FOX/Univision) was reported to average 90m per year, but being an 8 year contract, you would assume it increases per year and this year is likely below that average. Also, SUM sold the rights package, which also included USSF rights, which are most likely very valuable and eat up a decent chunk of that 90m. Also, SUM sold a chunk of itself to a private equity firm a couple of years ago, so some of that money goes to the private equity firm. How much of that 90m is left for the teams? Who knows. It just goes to show that you can't just look at one thing and go "Oh well that's $5m right there" this team is making bank!
It's kind of like me looking at your salary and saying "oh you make 120k/yr, that 10k a month. Your mortgage is 2k/mo and you buy $500 in groceries, your banking $7500/mo!" and not take into account taxes, insurance, utilities, prostitutes and a whole host of other expenses. The balance sheets of this club are far from simple and include millions of dollars in expenses that most of us would never even think of.
When the Don says that the league is still losing money, I believe him from an operations perspective, most of them are. However, when you factor in the growth of the franchise values, it looks much better. Especially for those who got in for around $25m and have franchises worth over $100m now!

 

[Paul]

...not take into account taxes, insurance, utilities, prostitutes and a whole host of other expenses...

Love how that little gem is just thrown in there.

 

[whill4]

Seeing as who are owners are, I'll be disappointed if we aren't making a loss every season. Whats the fun of having a billionaire sugar daddy pimping us out if we have to worry about profits?

 

[Tiger Jones]

a) Who cares?

b) It's impossible to know all of the expenses associated with running the team.

 

[Drainyoo]

You're all forgetting about the MCFC "bend me over and ram it in my poopchute" fee that NYCFC has to pay every year. That's a big expense right there.

 

[CP_Scouse]

I dont think NYC is renting out YS persae. I think its more of YS/Yankees get X% from net profits