The MLB is a competitive business and there are teams that tend to be more profitable than others. The Colorado Rockies and the Boston Red Sox are two teams that fall on opposite ends of this spectrum. The Sox are notorious for winning seasons and making playoff appearances, whereas the Rockies struggle to succeed within their division.
When a team wins games, profits increase and when they lose, profits decrease. It comes as no surprise that certain years for the Rockies may have generated losses for the franchise. Ticket sales, merchandise, and advertising revenue are just a few of the factors that could contribute to the teams’ losses. From a tax (IRS) point of view, organizations are allowed to defer certain losses until a later date in the future. Deferring losses can be an effective strategy for a business because these losses can be used to offset gains at a later date. Decreasing gains with losses minimizes the taxes that the Rockies would owe if they did well down the road.