Speaking to Marc Topkin of the Tampa Bay Times, Rays principal owner Stuart Sternberg claimed that they Rays have not made money since his group took over in 2005:
Though there have been "some" years when they have made money, and they get in excess of $50 million annually from MLB while operating with payrolls in the $60 million to $70 million range, the net since taking over in October 2005 is in the red. "We have lost money from every point in time you can pick," he said.
Topkin presents this bombshell as a bullet point, tacked on to the end of the article to summarize a comment otherwise not written about; whether he pressed Sternberg to elaborate is not reflected in the column, leaving us with many questions.
Does Sternberg mean that the team has only lost money, even during the World Series run in 2008? Does he simply mean that the ownership group has not yet made their investment back in cash disbursements? Or that the cost of operations has not outweighed the team’s overall revenue since 2005? As a privately held business, the Rays have no obligation to reveal their revenues and expenses to the public, so we are unable to assess his claims.
He certainly can’t mean that the members of the ownership group have lost equity. According to Cot’s Contracts, Sternberg’s ownership group gained a controlling interest in the Rays in October 2005 after previously purchasing 48% of the club in May of the prior year for $65M, with a possible total investment of ~$200M. Vincent Naimoli had paid $130M for the franchise in 1995.
Forbes magazine valued the Rays at $650M in March, 2016. To say the team is a bad investment would be ludicrous.
It is possible that, at least in some years, the team’s operating revenue doesn’t cover all its operating expenses. The Rays have consistently trailed the rest of the league in attendance, which means less gate revenue and fewer dollars earned on stadium food and merchandise.
Also, while Tampa Bay — and for that matter, North and Central Florida — is a huge television market, and while the Rays regularly rank in the top half of TV ratings, the team’s contract with Fox Sports (about which little is known) is outdated, as noted in a different Topkin bullet point.
The Rays are "working on" a new TV deal but won't have one in place until 2019 at the earliest. "That's another one of the challenges we have in front of us," he said. "It could be months, it could be years."
Of course, the $50 million a year in revenue sharing dollars should help offset some of those deficits, but Sternberg has an incentive to plead poverty.
It’s been just over a year since the Rays negotiated a release clause in their lease of Tropicana Field, with permission to search for a new stadium site, and they will certainly ask for public funds to help with stadium costs. Their investment banker-owner surely understands that focusing on the potential for a more lucrative TV contract, or on the increasing value of his initial investment would hardly improve his negotiating position when he goes, hat in hand, to elected officials.
But these are all future considerations. The reality remains that, according to Sternberg, the Rays are bleeding money and, without post season revenue, will likely continue to need to field sub-$70 million payroll teams.