New capital safeguards D-Backs payroll

Diamondbacks Managing General Partner Ken Kendrick said the club raised $50 million in a cash call to team investors earlier this year, a move that he said was designed as a safeguard against the slow economy.

"Most importantly, we want to continue to build the payroll," Kendrick said. "We want to be able to continue that at some modest level of growth going forward, and I didn't want to be caught in having to deal with payroll stress if we had revenue declines because of the economy. We do have revenue declines because of the economy and some probably attributed to the team not performing well."

over 2 years ago unnamedDBacksfan 31 comments 0 recs |

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Geez

these deferred salaries keep killing us.

I was so lucky getting mono. That was like the best diet ever.

by soco on Jul 13, 2009 2:04 AM EDT reply actions

We should be almost free

of them, shouldn’t we?

Have we sent the "Don't shoot, we're pathetic" transmission yet?

by unnamedDBacksfan on Jul 13, 2009 2:11 AM EDT up reply actions

I think

so. I hope so, anyways.

I was so lucky getting mono. That was like the best diet ever.

by soco on Jul 14, 2009 12:04 AM EDT up reply actions

I'd like to see a schedule of the deferred salaries.

Then, we can ask the $2001 question. Was one WS title worth 10(+?) years of hamstrung payroll budgets?

by older fart on Jul 13, 2009 6:30 PM EDT reply actions

This

is the continuing question….

"In the future, I want to be a fossil. Or, at least have my feces be fossilized"
-Pygalgia

by DbacksSkins on Jul 13, 2009 6:37 PM EDT up reply actions

I know Jim and

Diamondhack have gone at this a couple of times over the years. I’ll look to see if I can find a relevant post on it from days gone by…

Have we sent the "Don't shoot, we're pathetic" transmission yet?

by unnamedDBacksfan on Jul 13, 2009 7:35 PM EDT up reply actions

Hard to say exactly, but some idea can be found

December 2006 in the NY Times

Under Kendrick’s direction, the Diamondbacks have focused on steadily reducing $270 million in deferred salaries that Colangelo had negotiated with 18 players, with Johnson among the first to agree to a play-now, paid-later structure. ‘’Our friend Jerry Colangelo left us with a legacy,’’ Kendrick said, referring to the debt. Last year, the Diamondbacks spent $30 million on salaries for players who are no longer with the team. Next season, the team has budgeted $25 million to cover deferred salaries, which have been reduced to $100 million, Kendrick said.

February 2009, CNN Money

While Arizona’s profligate ways under former owner Jerry Colangelo did produce a championship and help the new franchise solidify a fan base, the financial impact was disastrous. “In our first seven years we lost $353 million,” Hall says. The old regime got around its cash-flow problems by persuading players to accept contracts backloaded with large deferred payments. It was baseball’s version of “buy now, pay later,” and eight years after the victory parade the Diamondbacks still owe $58 million in deferred salary, most of it to long-gone players from that 2001 team.

"Win, or die" -- Marquise de Merteuil

by Jim McLennan on Jul 13, 2009 9:17 PM EDT up reply actions

Numbers are iffy

But this was from the East Valley Tribune circa November 2007:

The D-Backs paid about $29 million in deferred money in 2007 and will pay about $20 million in deferments the next two years. The number drops substantially, to about $5 million, in 2010 and 2011.

If the three articles above are fact then it breaks down like this:

2006 – $25 million off – “reduced to $100 million”
2007 – $29 million off – $78 million left
2008 – $20 million off – $58 million left
2009 – $20 million off – $38 million left
2010 – $5 million off – $33 million left
2011 – $5 million off – $28 million left

Still a work in progress.

Wear your own fur.

by Marc Fournier on Jul 14, 2009 2:35 AM EDT up reply actions

I also suspect

That the amount left is perhaps actually lower, due to Matt Williams taking some shares in the team. I’m guessing that was instead of deferred money? I’ve no idea of the amount involved/

"Win, or die" -- Marquise de Merteuil

by Jim McLennan on Jul 14, 2009 11:26 AM EDT up reply actions

Good point

"In the future, I want to be a fossil. Or, at least have my feces be fossilized"
-Pygalgia

by DbacksSkins on Jul 14, 2009 12:08 PM EDT up reply actions

Another factor

Is interest. That’ll add on to the remaining sum, since the amount mentioned wasn’t deferred interest-free.

"Win, or die" -- Marquise de Merteuil

by Jim McLennan on Jul 14, 2009 5:55 PM EDT up reply actions

Which is mind-boggling to me

Because it’s not like they aren’t getting millions of dollars anyway. Sheesh.

Wear your own fur.

by Marc Fournier on Jul 15, 2009 2:33 AM EDT up reply actions

Really, though...

is it fair to complain because of the amount of money they make? If I make a loan to you at 5% interest, do you have the right to complain because I’m already making “too much” money? I just don’t see it that way. They gave the team something: they provided services, but didn’t ask for the money upfront. In return, the team owed them something: interest. If you were in that position, would you be willing to both defer your pay and not get any interest on it?

From the article:

help the new franchise solidify a fan base,

But did it? I don’t know. On a personal level, I only got into pro baseball circa 2000. I love most other sports, but pro baseball just wasn’t on my radar. However, was this the case for many other people? With the attendance at games, it would certainly appear that the fan base is far from solidified. When you consider that the Cubs draw as many (or more) fans to Chase Field as the D’backs, the idea that 2001 solidified the fan base is even more questionable.

by azshadowwalker on Jul 15, 2009 3:44 PM EDT up reply actions

Agreed.

JC made the assumption that early success could be the equivalent of sheer length of time spent in a market. We know now that that’s wrong.

"In the future, I want to be a fossil. Or, at least have my feces be fossilized"
-Pygalgia

by DbacksSkins on Jul 15, 2009 4:03 PM EDT up reply actions

I beg to differ

Through 2009 we’re 19th out of the 30 teams in average attendance. Not bad for a team who was once eighteen games behind .500 and has, at times, been truly difficult to watch. Tampa Bay, who went to the World Series last year, is still having fan issues as they’re 25th with an average attendance of 23,038. In fact, since they’re inauguration they have never finished higher than 26th.

After winning the World Series in ’01, the team finished fourth in average attendance at 39,515 in 2002. Even in 2008, when we missed the playoffs, we still wound up 15th with an average attendance of 30,986.

The early success of this team definitely set the foundation. We may be dealing with a few of the repercussions but I think it was worth it.

Wear your own fur.

by Marc Fournier on Jul 15, 2009 6:12 PM EDT up reply actions

Where

are you getting your numbers?

"In the future, I want to be a fossil. Or, at least have my feces be fossilized"
-Pygalgia

by DbacksSkins on Jul 15, 2009 6:25 PM EDT up reply actions

Courtesy

http://sports.espn.go.com/mlb/attendance

Wear your own fur.

by Marc Fournier on Jul 15, 2009 9:43 PM EDT up reply actions

Puhlease

This wasn’t a loan and the players weren’t playing pro bono. Maybe I’m misunderstanding what the definition of interest is:

a. a sum paid or charged for the use of money or for borrowing money.
b. such a sum expressed as a percentage of money borrowed to be paid over a given period, usually one year.

I mean, whatever. Maybe I’m jealous, ignorant, or whatever you want to call it, I just don’t see many reasons as to why a player who is earning millions each year requires interest. Look at Randy Johnson. He’s receiving deferred payments from 2001 and he’s still banking from his salary with the Giants. Interest seems unnecessary.

Wear your own fur.

by Marc Fournier on Jul 15, 2009 5:54 PM EDT up reply actions

The union

tends to frown on actions like that, though — i.e., giving your team a break by accepting interestless payments.

"In the future, I want to be a fossil. Or, at least have my feces be fossilized"
-Pygalgia

by DbacksSkins on Jul 15, 2009 5:59 PM EDT up reply actions

Down

with the union!

Wear your own fur.

by Marc Fournier on Jul 15, 2009 6:13 PM EDT up reply actions

There

has to be an incentive to taking a deferred salary, hence interest. Do you honestly believe that the Diamondbacks can sign the players they did by saying “we know you deserve this amount, but we’re just going to wait to pay you because we’re poor. Is that okay?”

Don’t cry for the multi-millionaire owners on this issue.

I was so lucky getting mono. That was like the best diet ever.

by soco on Jul 15, 2009 8:32 PM EDT up reply actions