... even I could do a better job analyzing the leaked PBC financial data than either the AP or the P-G.
1. In 2003, the Nuttings loaned a chunk of money to the PBC. Based on the average rate for BAA corporate bonds in 2003 (6.76%), I'd estimate that to be somewhere around $25M.
2. In 2008, that convertible note matured. The Nuttings could have taken their $25M principal repayment in cash; instead, they converted it to equity (a larger ownership of the PBC).
3. At the same time, the Nuttings preferred to take the $9.6M interest due as equity; however, the minority owners required them to instead take it as cash (per the DK article, the Nuttings recused themselves from that vote).
So the Nuttings could have forced the PBC to hand them $34.6M in cash. Given their choice, they would have taken $0, but the other owners required them to take $9.6M. And the story is that the Nuttings are looting the Pirates??
4. In 2008, the board voted to distribute $10.8M in cash to cover the partners' tax liabilities on 2006-2007 profits. The top marginal tax rate in 2006-2007 was 35%, so you can calculate that the PBC's combined profits in 2006-2007 were about $31M. According to the article, the 2007 profit was $15M, so the 2006 profit was $16M.
So that gives us the following picture:
Net income (profit)
And the story is that the Pirates "win while losing"? Seems they were "winning" a lot more financially three-four years ago.
5. Since 2008, the board has not distributed any cash to cover the partners' tax liabilities (or anything else).
Total net income, 2006-2009: $50.8M
Cash distributions, 2008-2009: $20.4M
Retained earnings (reinvested in the PBC): $30.4M
This figure would have been $39.4M had the minority owners allowed the Nuttings to convert the interest on the convertible note to equity.
So the PBC reinvested 60% of their profits into the club, and would have reinvested 80% had the minority owners not refused to dilute their stakes, and the story is that the Nuttings are just trying to take as much money out as they can??
I weep for journalism.
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