Linda “2×4” Pewterschmidt-Takayama, Shin Seiki Post
December 1, 2011

According to Forbes.com, the LRS posted a massive $39.6M net loss for the 2011 season.  The loss was far worse than their previous projection of $14.1M.  Forbes chalked up the inaccuracy of their previous projection to a failure to predict the drop in attendance non-contending teams saw late in the season.

The losses were as widespread as they were deep.  Only two teams turned a profit in 2011: Shin Seiki, with a solid $5.2M, and Lupin, with a gigantic $20.3M.  Lupin’s results were so spectacular that they have led to rumblings from their fan base questioning why more of that profit hasn’t been put back into the team’s payroll.  Lupin currently has only the 8^th-largest payroll despite taking in the 5^th-most revenue in 2011 and being only one of five teams to be net payers in revenue sharing.  However they just added superstar 3B José Escalante and his $10M 2012 contract and are poised to make waves in the free agent market this offseason, so to call them cheap is a clearly premature.

Beyond those two bright spots, it was not a pretty picture out east.  The Edo Battousai and Kuwana Steel Dragons each posted small losses while contending but appear to be on solid footing for the future.  It only got worse from there.

OK, so 2011 was not a good year for most teams in the LRS, but how does the future look?  Ned Būssletots, Jr. from Forbes.com had this to say: “It is far too early to even begin to say how things will turn out financially in 2012 and beyond for the LRS.  The biggest variable is what level of emphasis clubs will be put on staying competitive while building for the future.  Many LRS teams are focusing almost exclusively on their farm systems to develop their own young and cheap talent.  This is a solid strategy for lowering the cost of contention in the medium to long-term, but they should be wary of letting their LRS clubs become complete disasters devoid of stars for prolonged periods of time.  If they don’t, they may find that when they are ready to win, they don’t have nearly the budget or market that they thought they would when the process started.  That could make taking the last step from being a developing team to a profitable championship-caliber team much more difficult to make.”