Breaking even with David Glass
By now I’m sure just about every Kansas City Royals fan has heard about Danny Parkins’ interview* with David Glass on the first day of All Star Weekend. Glass, of course, came off as aloof and utterly clueless as he ever has, and earned as much ire for the way he ended the interview as he did for anything he said. He sparked a Twitter debate amongst the fan base over who is more to blame, him or Dayton Moore. You know, exactly the type of thing you want to do as you begin to welcome all of baseball to your city for the first time in nearly 40 years.
* For a transcript of the interview, click here
While it was completely unprofessional for Glass to walk away from the microphone mid-interview, that really isn’t what bugged me about the whole debacle. It was this exchange here:
Parkins: What do you say to fans that wish you spend more on payroll for this team?
Glass: Uhh, Well, in a market this size you can spend a certain amount on payroll. You… You’re never going to be able to spend what the Yankees and the other big market teams can spend but our approach from the very beginning has been that we’re not looking to make money with the franchise we simply want to break even and if we have an if we have an opportunity to win we’ll step up and do whatever it takes to… to help us take that extra step. But for the most part all the money that we can generate we’ll spend on payroll and singing amateur players
We have heard this song and dance from Glass since he bought the team in 2000 and it has been the source of much debate. There are a lot of people that think professional sports owners should expect to operate at a loss, as if owning a professional team is a charity, I am not one of those people. However, I do feel like owners should at least be honest with the fans about their plan, and their motives…a look at the numbers show Glass has been far from honest.
According to Forbes annual MLB valuation, the Royals turned a profit of $10.3 million in 2011, their eighth consecutive season of profits and the eleventh out of twelve since Glass bought the team in 2000. What’s more, the team is now valued at $354 million dollars. While that may be modest in terms of the value of a professional franchise, it is $258 million more than Glass paid originally. Added to the income the Royals generated over the last 13 years, it brings a net gain of $332 million in 12 years on a $96 million investment.
To put that in perspective, if Glass had taken that $96 million back in the year 2000 and invested it, he would have had to earn 13.27% for twelve years in a row to bring in the type of money this club has for him. Does that sound like breaking even to you?
What makes everything so much worse is that Glass has turned this profit while fielding one of the worst teams in the history of baseball. In his 12+ years as owner the Royals are 847-1179 (.418). Before he took over they were 2471-2411 (.506) all-time. That’s the difference between averaging 82 wins a year and 68. But it’s getting better lately right? Um, Forbes projects 2012 as the most profitable year of the Glass era, with the team earning a whopping $28.5 million in income. This for a team that was less than 6 games out of first for a good part of June after three of its best pitchers had Tommy John surgery. How much different would this team look if Glass had signed C.J. Wilson for 5 years and $85 million dollars? He could have done that and still cleared more than $10 million in profit!
The fact is that Mr. Glass has not only tarnished, but nearly destroyed the legacy that Ewing Kauffman left with the Kansas City Royals, profited handsomely from it, and lied through his teeth to his customers as he’s done it. Glass purchased a respected franchise with a World Championship and a history of winning more than losing. He has turned it into a cash cow that doubles as the laughingstock of baseball. What can we do about it? Nothing, as evidenced by this exchange from the aforementioned interview:
Parkins: You would never consider selling the team?
Parkins: What do you say to fans who would like you to sell the team?
Glass: Uhh, yeah, I’m sorry.
Sorry…I could not have said it better myself. A sorry excuse for an owner…a sorry steward of the Kauffman legacy…but one hell of a businessman.