Dodgers seek bounce-back from poor 1992 season.

Despite losses last year, experts say team is doing OK

The Los Angeles Dodgers had its biggest crowd ever for a Dodger Stadium home opener last week but whether that initial attendance showing bodes well financially for the team remains to be seen.

Coming off what the team said was one of its worst financial seasons ever, the Dodgers opened the 1993 baseball season hoping for better play on the field and in the accounting books.

But experts in the business of professional sports last week said that despite the general decline of baseball franchises, the Dodgers are probably doing quite well.

"My advice to you is to treat whatever the Dodger front office tells you about their dire financial condition with a great deal of skepticism," said Gerald Scully, author of "The Business of Major League Baseball" and a professor of management at University of Texas at Dallas. "I think they are still probably pretty robust."

Michael Megna, senior vice president of American Appraisal Associates in Milwaukee, said the Dodgers are still one of the strongest teams in professional baseball.

"They own their own stadium, they own their own spring training facilities and have one of the strongest organizations in baseball, so I certainly wouldn't say the Dodgers are in any kind of financial trouble," said Megna, who does financial valuations of professional sports teams.

Last season, after the team finished in last place and attendance dropped 23 percent, the Dodgers said the team could lose more money than during any other season in the 102-year history of the franchise. Estimates of the team's losses ranged from $5 million to $10 million on revenue that in an average year is believed to be about $64 million.

In a normal year, the Dodgers are believed to make between $5 million and $10 million.

The drop in attendance, the team said, caused a significant decline in revenue at the Dodger Stadium gates, parking lots and concession stands. Meanwhile, player salaries, by far the team's biggest expense, went up to $44 million last season from about $32 million during the 1991 season.

Because the Los Angeles Dodgers Inc. is a private company owned by Peter O'Malley and his family, the team is not required to reveal financial data.

Last week Vice President of Finance Bob Graziano said how well the team does businesswise depends on attendance.

"Our season ticket sales are off a little bit from 27,000 but whether that's an indication of how the season will go is hard to say. So far, it's just too early to say because we've only had one home game," he said.

He confirmed the team had a financial loss last year but declined to be specific.

But financial experts who follow professional sports teams said even if the team lost money last year, the Dodgers are in better shape than most of the other 27 teams in Major League Baseball.

"Look, even with attendance of say 2.6 million, the Dodgers are doing pretty good," said Barrie Driscoll, a partner in the New York office of Coopers & Lybrand, the accounting firm. "Maybe they haven't been doing as good as they're used to, but they're in better shape than most teams, even here in New York. If the Mets draw 2.8 million, it's a good year, and the team probably did pretty good financially."

Driscoll, who does valuations of franchises that may be sold, said as far as he knows, the Dodgers are not for sale.

Professional baseball franchises' two main source of revenue are television rights and ticket sales. Other sources are parking fees and concession stand sales.

In the case of the Dodgers, the team is believed to get about $30 million a year from television and radio rights and about $10 million from concession stand sales and parking fees. That would leave about $24 million in revenue from home ticket sales for a total of about $64 million, according to professional sports experts.

Last year, revenue from concession-stand sales was off about 17 percent, according to the team, and the experts speculated that ticket sales were probably down about $7 million.

Graziano said the team's biggest expense -- player salaries -- has dropped from $44 million during 1992 to about $38 million for this season but one source of television revenue -- Sport Channel -- has been eliminated. Sports Channel Los Angeles, a cable television network, broadcast Dodger games last season but has gone out of business and not been replaced.

Sports business experts said even if the Dodgers lose money last year, it is still one of the most valuable franchises in baseball and its value continues to increase every year.

"Franchises like the Dodgers appreciate an average of 15 percent a year," said author Scully. "I would bet the team is probably worth about $200 million. And how much did the O'Malley's pay for it, about $2 million?"