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Fred Gerson and Dan Fumai: The men behind the money of the San Diego Padres

Fred Gerson is the CFO of the Padres. Dan Fumai is the VP/Controller of the Padres. They came in today and talked to our class about money as it relates to the Padres.

What did I learn? Heck, what didn't I learn?

  • Padres aren't so much happy about their current TV deal with Cox. At least that's what I think. OK. I'd be unhappy with the current deal. They didn't come out and say as much, but they were very tight lipped. Their current Cox deal is in effect till 2011. They did make mention that the Indians just turned down a deal recently that was worth four times as much as what the Padres get, and those guys are in Cleveland. I mean, really. That's some kind of crappy deal when they can pull scoreboard on you from Ohio.

    Cause I been to Cleveland. That place ain't pullin' scoreboard on much.

  • The food is supposed to be better this year. I'll believe it when I taste it and then later when my stomach attempts to break down the enzymes into something that doesn't result in either extremely improper bodily functions or a really bad tummy ache. (Though, for the record, I really enjoy the food at PETCO.)

  • The Padres are tying themselves really closely to MLB Advanced Media (MLBAM) in an attempt to broaden their audience and participate in of some of the potential media revenue that they're missing out on with their crazy Cox deal. MLBAM, of course, are the people who believe that fantasy baseball players shouldn't have access to fantasy stats unless they pay them directly. MLBAM is also responsible however for all that cool free (for now) live internet gameday stuff. I'm torn on MLBAM.

  • San Diego: 7th largest city. 26th largest media market. Is it possible for that many people to not watch TV? Are you people that much cooler than me? Can I hang out with you guys? I'm just kidding of course. But no, seriously. What are you guys up to later?

  • Q: How do they decide KT's budget? A: Figure out a number and then don't tell him what it is because he'll go over whatever number you give him anyway.

    Pssst... KT... they be short changing you, dog. No joke, yo. Spend the hizzy. They got you covered.

  • On revenuve sharing: The Padres actually paid into the revenue sharing bucket in 2004, but anticipate drawing from it again in 2005 and 2006. That new ballpark honeymoon really doesn't get you much these days.

  • On rich owners: They're pretty sure that most owners get into the gig with a hobbyist mentality until they start losing money. And even then, they figure most owners are willing to take a loss to a point. Says Gerson, "It's a hobby until it's $100 million."

    I'd heart being rich enough to blow $100 million on a hobby. But then again, who knows how that would change me. What if I turned into a total prick? I mean, I can be a pretty big prick as it is. I couldn't imagine being a total one.

  • How much did the Padres see from the WBC being at PETCO? Apparently, the Padres got their operating costs covered and concessions and that's it. I gotta - gotta - believe that "concessions" must include merchandise. All gate went to Major League Baseball and the Padres aren't even sure if they're gonna get security covered (extra police force) as it's not part of normal ballpark operations. They're confident they will, but Gerson and Fumai say that most of the benefit came from showcasing the park and the city.

  • Along those same lines, they estimate that non-baseball activities that happen at PETCO account for 1% of their revenue. They said 2% would be like your hot 25-year-old middle school teacher wanting to show you how grownups pass the time. What? Is that bad to say?

    They also said that the Giants claim some really big number from the crap they do at Phone Company Park, but when somebody got a hold of their numbers, it actually turned out to be 10% of what they were claiming.

    Just like the Giants. All big talk. Nothing to back it up.

  • Padres get 70% of net from non-baseball activities at the ballpark. City gets 30%. This is in effect during baseball season. When it ain't baseball season, it's reversed and the city gets 70% while the Padres only get 30%.

    Therefore, the Rolling Stones are good for nothing (when it comes to baseball).

  • On the search for international talent:

    Dominican: The Padres have been able to pull nobody and no one at all from the Dominican Republic. The only player from the Dominican that we've found is Freddie Guzman and he wasn't even an alternate on the Dominican WBC team. The Padres academy in the Dominican is apparently really nice, but Gerson seems really skeptical about throwing more money into it. By his thinking, what good is providing those Dominican players with this really high quality academy when they'll just sign big league contracts with other clubs once they're in the U.S.?

    Australia: Great place for a boondoggle. Logistically, not a great place to be trying to find big leaguers.

    China: The Padres have already been out to China in an attempt to scout and assess the situation. Currently, Gerson doesn't seem so high on China either.

    Taiwan and Korea: Gerson is really high on these two places. Remember, this is the CFO we're talking about. He sees the best value for his buck being spent trying to cultivate talent out of Taiwan and Korea. Chan Ho Park! Chan Ho Park! Daaaaaeee han min-GOOK!
And that's it. Tomorrow, I'll have a summary of our other speaker from today, Dennis Cruzan. Cruzan was a major player in terms of the PETCO real estate deal. Some more good stuff then.

Update [2006-3-23 18:19:19 by Dex]: Fixed the 70% to 30% bullet point.