So, I spent a bunch of time over the weekend preparing my final case for Rogers to increase the Blue Jays Payroll. I actually read the entire 2009 Rogers Annual Report (it's kinda boring mostly, and they do their best to disguise any Blue Jays Related revenues)
Here is what the Jays contribute to the Empire:
-$181 Million in total Revenue. This is the only line where Rogers admits that the Jays bring in money, though they make several references to $19 Million in contract buyouts (which they used to save money on taxes, but that's a minor point)
-The Media wing of Rogers Corporation took in 674 Million in advertising revenue in 2009. Considering that Sportsnet accounted for about 1/4 of those channels, I will assume that they provided 1/4 that revenue. (About $168 Million) Since the Jays provide 162 days worth of prime-time content, they must be considered the primary contributor for this revenue (not counting 30 or so hockey games that Snet broadcasts)
-interesting note: The first quarter of each of the last 4 years has been the poorest performing revenue wise. There is a sharp increase in revenue for the Media arm at the beginning of each Blue Jays season. I have no evidence to prove correlation, but I'd like to think they are related.
-The Ownership and ad Revenue from the Rogers Dome is not clearly explained in the report, but it has to be assumed that it is accounted for elsewhere.
-10 Million people within 2 Hours drive of Rogers Dome. This has to be considered as the total market. Forbes Magazine incorrectly uses 2.5 Million people as the population of Toronto, which SEVERELY diminishes the valuation of the Franchise. Since the size of the market is so large, they have much higher potential for ticket sales, as well as ancillary income (Jerseys, Hats, etc)
-In 2010, the Media arm introduced Sportsnet One. They are expected to be the primary carrier of the team next season.Various reports have Sportsnet one costing $3 per month per subscriber, and Rogers expects it to be available to all homes in Canada by the end of 2010. There are about 15 Million Potential Subscriptions in Canada, and if we only account for the 6 months that the Blue Jays season lasts, they will be helping the new channel to genereate $270 Million dollars. This is accurate within the sport, as the Yankees and Red Sox both receive in excess of this amount as part owners of their respective broadcasters.
Based on the FACTS that I've been able to gather from publicly available sources, I am going to make an educated guess: The Toronto Blue Jays are directly responsible for approximately $500 Million in Revenue for the Corporation. This is completely in line with my estimated revenues for the Boston Red Sox, who play in a smaller market, but have a larger National Brand Presence.
Obviously, I don't have access to internally available numbers, so this analysis can't be concrete. But, if the Jays revenue matches the Red Sox, what is preventing them from matching the Red Sox Payroll?
I would go another step: If the Blue Jays manage their brand carefully, and develop additional, complementary revenue sources, the ultimate goal SHOULD be to match the New York Yankees in Payroll. A lofty goal to be sure, but with smart fiscal management, it can be accomplished.
I'd like to hear your thoughts.