ceber said:
I don't follow this. Isn't it: revenue - cost = profit/loss?
So 600 million revenue (already having subtracted player costs) - additional costs = -300 million loss. So additional costs (interest pmts, insurance, bubble gum, etc.) for the 30 teams totaled 900 million. Unless I missed your point you make it look like the teams gave up 300 million bucks by not playing... I don't think that's how the numbers work. Maybe I'm missing it though.. head's all stuffed up today and my thinker might be affected...
Well you are right to a point .. But the cost of doing business is unknown in the equation .. The league lost 300 mil but the figure can't be tied to just player costs, ..Buliding leases, Overhead (light, heat, power,) Office Staff , GM, President, Coach, Assistant coaches wages etc., Travel costs, Building mantenance, Parking, Concession Staff wages, Benefits (Medical, Dental ) ..etc etc etc ..
The only thing we know for sure is that the players have guaranteed contracts that they got paid every cent .. So the 1.5 Billion (75 %) is a fact .. Now what contributed from here on in to the 300 league wide losses is not itemized .. So what part of that loss is contributed of all of the possible costs is unknown .. You would have to get in to see the owners books to determine that ..
However we do know that 2.1 bil is gross Revenue .. meaning that every 3 dollar hot dog or 10 bucks parking or replica jersey is included in that figure .. The cost of the Hot dog, mustard, relish, sales staff etc is not .. but those are all cost that contributed to the losses last season ..
So you are correct I can't pin point where the losses came or the exact amount as to take off the 600 mil Owners share .. but that number is Gross revenue and cost do need to come off and the Losses have to come from somewhere .. Follow me .. ??
In Fact by your formula which is correct ..
Plugging the numbers we know ..
Total Revenue (2.1 bil) - Costs (player salaries 1.5 bil) + Other Cost (??.described above) = (Loss) League wide of < NEGATIVE $ 300 mil> (as per Levitt report) ..
To make the equation true ..
$ 2.1 Bil (Revenue) - $ 1.5 Bil (player cost) - $ 900 mil (Other costs) = Negative $ 300 Loss ..
Total Revenue $ 2.1 Bil - Total Costs $ 2.4 Bil = Net Loss $ 300 mil
I deducted 300 mil loss, when in fact I should have deducted $900 mil extra costs .. NO??
My original equation was in error as it resulted in a $ 300 Profit league wide..
So that even more makes the case for the Owners wanting the season cancelled ..