Forbes Is With Players

Major league players and members of Congress have gone on record doubting baseball owners’ claims of impending financial disaster, and now Forbes magazine has too.

In its April 15 issue, the financial publication disputes baseball’s cry of poor.

Forbes’ report says baseball’s 30 major league teams combined to turn an operating profit of $75 million last season. Commissioner Bud Selig testified to the House Judiciary Committee in December that baseball had operating losses of $232 million.

Selig also said only nine teams made money last season; Forbes said 20 teams were profitable.

Forbes did agree with the commissioner on one account: The Dodgers lost more money last season than any other team. But while Dodger officials have put the club’s losses in the $50 million-$65 million range, Forbes says it was more like $29.6 million.

The club had no comment Friday, referring questions to the commissioner’s office.

With negotiations for a new collective bargaining agreement set to resume next week, Forbes’ report could provide more ammunition for the players’ union in its public relations war with the owners. Players have disputed management’s claims of hundreds of millions of dollars in annual losses, and the sides are not in agreement about the cause of what owners say is baseball’s competitive-balance problem.

Many in baseball believe a work stoppage is inevitable because neither side appears ready to capitulate on major differences, and Forbes’ story won’t make things easier for owners seeking significant changes to the current system.

Not surprisingly, owners reacted angrily to the Forbes report.

“It is dishonest,” baseball spokesman Rich Levin said. “They came to us asking us to show them our books, which we did.

“Rob Manfred [executive vice president of labor relations] went through all the clubs’ finances with them. They showed him what they had, and he showed them where they were wrong, and they completely ignored the whole session.”

Forbes’ study, which the magazine claims included data provided directly from some teams, determined that baseball had $3.57 billion in revenues. Owners put the figure at $3.55 billion, so there’s not much disagreement about that.

However, Forbes and baseball had big differences in expenses, with baseball reporting $3.78 billion and the magazine at $3.495 billion.

Forbes’ annual lists of the richest and most profitable are often disputed. Similarly, discrepancies in baseball accounting are nothing new.

“There are multiple ways to look at the numbers, and these numbers have been called into question as long as there has been labor strife in baseball,” said David Carter of the Sports Business Group, an L.A.-based consulting firm. “You can look at it in terms of actual cash flow, how are you doing year to year, or you can look at it in terms of book profits and losses.

“Many owners are incurring losses, other owners are claiming book losses. Because of tax breaks, some owners showing a loss are actually doing all right financially. Owners are trying to lump every possible expense into this. Owners are always trying to show they’re in the worst financial position, and players are trying to show they’re doing OK.”

Selig is doing better than most in baseball, according to Forbes.

His family’s Milwaukee Brewers had the highest operating profit in baseball--$18.8 million--after accounting for revenue sharing. The New York Yankees, which Forbes estimated had the highest franchise value at $730 million, were second on the profit list at $18.7 million. The San Francisco Giants ($16.8 million), New York Mets ($14.3 million) and Seattle Mariners ($14.1 million) complete the most profitable teams.

The Dodgers, despite their big losses last year, were third in franchise value at $435 million, trailing only the Yankees and New York Mets ($482 million).

The two least-valuable teams were the Montreal Expos ($108 million) and Minnesota Twins ($127 million). They were targets for elimination in the off-season and could be again next winter.

Attempts to contact several baseball officials late Friday were unsuccessful. Mike Ozanian, a senior editor at Forbes, said baseball declined to release details of clubs’ specific expenses.

“They didn’t offer us their books, what they offered us was the same exact numbers that they used to give before Congress,” he said. “As Congress said, there wasn’t anywhere near sufficient breakdowns to see where the numbers came from.

“I would be willing to sit down and show them where everything we had came from if they would do the same.”

Levin disagreed with Forbes’ numbers, saying they are not audited and that baseball’s are audited at three levels.

“A lot of it is accounting semantics, but let’s be clear that a lot of these teams are doing poorly,” said Carter, who believes some small-market teams could be in trouble but is suspicious when clubs backed by deep-pocket corporations cry poverty.

“It’s the same undercurrent, same backdrop as we’ve seen before [in labor negotiations]. The union is trying to show the owners are making money in a vibrant business, and owners are trying to use their means and standard accounting practices to show they aren’t.”

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The Associated Press contributed to this report.