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2058 Financial Report: P/L Tables
”Abercrombie G. Findley” wrote: September 29, 2058
From the Offices of Finance
Bikini Krill Management Team
RE: Overview of Financial Histories and Positions
To Whomever It Concerns.
This report is written and submitted annually after each season with intent to reveal and document the successes and failures of financial activities made by the team each season. This report covers the second full season with the club on the Atoll after having been moved from Seattle, and as you will see, while the team’s performance on the field improved to a degree, it’s numbers in the banking world can officially be said to have some full circle. While the Krill almost managed to pull off a miracle post-season effort on the field, the financial books were a bona fide success.
The steps taken to achieve these accomplishments are outlined below.
Season Budgets & Starting Balances
Commentary: This season has seen the continuation of growth of the club’s cash holdings that began last season (which corrected the balance by some $18M), and will see the team entering 2059 with a full $20M cash balance. We also created enough revenue to funnel money into the club’s Bonus Account, which can then be used to fund P. Moreau Westmoreland’s plans to expand Forever Park again this offseason.
2056 2057 2058 Budget $112,000,000 $112,000,000 $120,000,000 Starting Balance $2,572,180 -$11,866,464 $7,382,895
From a budgetary standpoint, the club has grown revenue enough that most insiders think that Westy will allow for as much as $126M in fresh spending next season (augmented, of course, by the $20M cash on hand). If so, surge spending could actually move up as far as $146M if the situation warrants. One more seasons of prudent growth, however, should see the club move into deeper waters with reduced risk of running aground.
Sources of Revenue
Commentary: Buoyed by intense fan support, season ticket and gate receipts that came with both winning more games and finding strategic signings of marquee names, revenue from both ticket sales and merchandising greatly exceeded last year’s numbers. Of interest is that receipts from visiting games dropped not insignificantly, a situation that probably comes from the lack of enthusiasm found in the ballparks around the Heartland division.
REVENUE SOURCE 2056 2057 2058 Season Tickets $15,213,744 $12,165,309 $15,038,784 Gate (Home) $8,759,271 $10,501,131 $16,936,730 Gate (away) $14,689,678 $15,192,453 $13,748,429 MEDIA $68,000,000 $67,000,000 $71,000,000 Merchandising $5,194,233 $5,294,344 $7,058,811 $111,856,926 $110,153,237 $123,782,754
It is hard to draw fans from such dour locations.
This year’s media contract also rose, and barring something unforeseen is set to increase yet again in 2059.
The overall result is that the team’s year-over-year operating revenue increased by $13M this year—which is a large cause of the club’s projection for increased budget next season.
Season Ticket Sales: The prices of season tickets were lowered a touch in the offseason, and with that prodding and the energy that came with news of player signings and ballpark expansion, the club saw season ticket sales increase from 11,500 last year to nearly 15,500 this season. That represented a 33% increase in season ticket revenue, which is valuable since such revenue does not go into the sharing pool.
With further expansion planned to the stadium, expectation of additional growth in 2059 is high.
Season Gate Receipts: As noted in the above table, walk-up gate revenue increased by a considerable amount, helped in no part we’re sure to the publicity created by our Community Outreach department and by the tactic of bringing our highly popular minor leaguers to Forever Park for autograph and virtual gaming experiences. Pepe Madrid was a particularly popular guest. Finally, the late season push toward an actual post season appearance clearly brought attention at the end of the season.
Media Receipts: As noted, the $2M increased media contract for 2059 should improve things by a fair percentage, and indicated that global interest in the Krill continues to grow. The Forever Land Sports Network has had some considerable success growing the team’s market, highlighted by the continued increase in the profile of Misty Morgan, the team’s broadcast spokesperson.
Ledger of Expenses
Commentary: Per plan, spending increased to nearly $118M in 2058, though the planned expenditures were reconfigured during the season when it became obvious the club was not going to be able to find players to fill on-field roles they had been looking to fill. Instead, a decision was made to divert funds from Free Agents and into the draft class, where the team made selections that were known to be more expensive than they would normally have focused on. As a result, spending on the selection process ballooned to over $17M—a majority spent on the first three rounds.
EXPENSES: 2056 2057 2058 Players $108,167,423 $80,347,556 $82,294,987 Staff $7,729,999 $8,829,938 $7.058,811 Draft $8,845,000 $8,700,000 $17,930,000 IFA $2.609,000 Miscellaneous $1,376,543 $7,388,889 $6,772,531 $126,118,965 $105,266,383 $117,635,704
The club also allocated over $2.5M on the International Free Agent market, boosting the International Complex.
Spending on staff decreased slightly, mostly because the front office only replaced a few key roles—a change from last season when considerably more contracts were bought out.
Player Spending: Payroll increased by only $2M in 2058, primarily using trading players and selling salaries to offset free agent acquisitions. One item of note that could not be moved was Wilson Andrade’s $12.4M contract. His vesting option clearly did not vest, so his $12M will come off the books next season. Regardless, the front office brought in $5.9M in cash from selling player contracts. Once again, some retention of salary was incurred in order to save cash in the long run.
Staff Spending: Total expenditures in 2059 are expected to remain mostly steady, though the club has one expiring contract to replace, and probably one more staff member that the front office would replace if the right candidate were to be found.
Draft Signing Bonuses: As noted, spending on the draft increased dramatically, but succeeded in bringing three interesting prospects into the pipeline. Given that much of the club’s top prospects were moved up to the majors this season, the decision to divert funds has helped populate the lower portion of the organization. It is hoped that this will begin to form the “second wave” of Krill domination. Expect spending on this line item to fall back to the $10M default the club’s front office uses as a rule of thumb.
Operating Profit
Commentary: A $6.1M profit in operations represents a strong performance executed while increasing the quality of the product on the field.
2056 2057 2058 PROFIT/LOSS -$14,442,039 $4,896,854 $6,147,050
Final Ledger
2056 2057 2058 ADDED CASH Trades $0 $8,175,000 $5,896,970 Other/Misc $0 $6,437,500 $3,500,000 FINAL BALANCE -$11,866,464 $7,632,892 $22,926,915
Commentary: A second season of fairly strict trades, fire sales, and giveaways, saw the team add nearly $6m to the register, a number that could have been better if a taker could have been found for Wilson Andrade. In addition, for the second season in a row, the team’s miscellaneous income grew when front office took an equity loan from its own bonus cash – which was created by converting PPT. The combination netted $9.5m that added directly to the bottom line. As a result, the Krill’s revenue has finally become large enough that it’s fueling a meager (but still positive) flow of cash into the bonus system, where it will be used to pay for both stadium maintenance as well as additional modifications to keep the park in line with Forever Land’s reputation as a cutting edge baseball facility.
Final Summary
The team won 78 games in 2058, and nearly managed to grab a post season billet. It was a performance that exceeded front office expectations. Financially, too, the club beat projections and as a result appears to be capable of spending something much closer to the salary cap if appropriate targets are available. Planning on possible focused have already begun, but obviously cannot be completed until the actual Free Agent and trade markets reveal themselves after the silly exhibition tournament that the league continues to play.
It is the Finance Team’s opinion the Bikini organization is one more solid season away from having their financial basis in complete working order.
Coordially,
Abercrombie G. Findley
Bikini Krill Finance Team
