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Is Bob Nutting pocketing profits?


Bob Nutting announces the firing of Dave Littlefield - Andy Starnes, Post-Gazette
Bob Nutting announces the firing of Dave Littlefield - Andy Starnes, Post-Gazette
First of all, a disclaimer. There will be no new information in this post. Everything I am about to share has been written somewhere else, either in print or on the internet.

I do not bring up this topic very often in my writing. Frankly, it bores me. But I find it somewhat annoying that anytime Bob Nutting is mentioned, the “fact” that he is making a large profit as the Pirates owner is casually added. As if it is a proven truth.

Clearly, he is making significant money from the team.

He has to be in the business for the profits and nothing else.

If you don’t trust Nutting, that’s fine. I’m not sure I completely trust him myself. But let’s knock him for things we know for certain (such as approving the Matt Morris trade), not for commonly accepted “realities” that are unsubstantiated and, honestly, don’t make a whole lot of sense. Let’s look at some actual facts, as reported by Dejan Kovacevic.

Bob Nutting “is believed to have a controlling interest [in the Pirates] approaching three-quarters.” That means that for any money that Nutting receives, a proportional amount has to go to the minority owners. If Nutting simply slips profits into his back pocket, he is quickly going to find himself in the middle of a lawsuit. According to both Nutting and the minority owners, nobody is receiving any cash.

The Pirates maintain that neither Nutting, who is believed to have a controlling interest approaching three-quarters, nor anyone in the ownership group has been paid dividends related to the past two years. Neither has Nutting drawn any salary.

Not all of the minority owners are pleased, apparently: One minority owner, who declined to be identified, described a meeting several months ago in which the minority owners were denied distributions to cover taxes they owed on the team. Some owners promptly left the room.

So either Nutting is telling the truth, or the unidentified minority owner is also lying to Dejan. I suppose that is possible. All parties with ownership stakes could have gotten together to fabricate the story of a group of owners angrily walking out of a meeting. Well, some other people would need to be in on the scheme. Major League Baseball has access to the Pirates’ books, so the league can ensure that revenue sharing funds are used appropriately.  Let’s hear from commissioner Bud Selig.

“I know how painful this is for the fans in Pittsburgh,” Selig said by phone from his office in Milwaukee. “But, in watching this management team the past couple of years and how aggressive they’ve been and how they’re restocking the farm system, that’s where they had to start. And if they weren’t doing it, you’d hear from me.”

Has Selig ever considered a full investigation of the Pirates’ finances to ensure those funds are being spent appropriately?

“No, not with the Pirates or anybody else. Because we’ve shown it,” Selig said. “The economic myth that they’re putting it in their pocket is just not right.”

Of course, Frank Coonelly used to work with Selig. We already know that Coonelly left his high profile job in the Commissioner’s Office to help Nutting milk his cash cow, because that, and not successfully turning around a floundering franchise, is the kind of thing one strives to add to his résumé (sarcasm alert!). So it makes sense that Selig would help his old friend by ignoring Nutting’s intentional destruction of the Pittsburgh Pirates.

Of course, the Players Association also has access to each team’s financial records. Union head Michael Weiner probably does not approve of the Pirates’ low payroll.

“If a club legitimately trying to compete has a plan that calls for them to be at a particularly low payroll for a given year as part of a longer-range plan to compete the following year or years after that, management should have that flexibility,” Weiner said.

I guess Weiner is also in on the elaborate plot.

I don’t expect anyone to mindlessly accept the front office’s claim that the team made only $11 million in profit the past two years. But the idea that Nutting is pocketing profits, and that the minority owners, Major League Baseball and the Players Union are all keeping his secret just doesn’t add up.

The major league payroll is low, because the team is made up of mostly young players. It will probably remain low for several years, but by 2014, the Pirates will probably need some financial flexibility. Wasting money now, simply to appease the frustrated fan base, just does not benefit the franchise.

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