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Monday, December 2, 2013
Inside the Colorado Rockies' finances

By David Schoenfield

Troy Renck of the Denver Post has a rare look into a team's finances, as Colorado Rockies owner Dick Monfort discloses information about the team's budget.

Monfort says the team had $170 million in revenue in 2013 and spent $84 million on player salaries -- just under 50 percent. The Rockies' Opening Day payroll, reported at $72 million, ranked 25th in the majors. Forbes magazine estimated the Rockies' revenue in 2012 at $199 million, so Monfort's number lies well below that estimate. Even though the Rockies have done well at the gate -- they ranked 10th in the majors in attendance in 2013, drawing over 2.79 million fans despite finishing 74-88 -- they are somewhat hamstrung by a local TV contract that runs through 2020 and pays them $20 million per season, among the lower figures in the majors.

The bottom of the piece includes a table listing the team's expenditures. Besides the $84 million for major league payroll, it includes $22 million for draft and international signing bonuses plus minor league player development, $25 million for corporate staff/travel/health and pension benefits, $12 million for stadium operations, $10 million for major league operations, $4.3 million for scouting, plus other costs.

Like the other 29 teams, the Rockies will get a big economic boost in 2014 with an increase in national TV money -- an additional $27 million. But Monfort says it's not as simple as just taking that extra $27 million and adding it to the team's payroll. Renck writes:
He said he is planning to receive $8 million less, or $19 million, believing a chunk will be kept for baseball's central fund to compensate for last season. MLB said it was going to hold back money this past year for the central fund, but after owners complained, the money was not withheld, leaving Monfort to believe extra money will be withheld next year.

"I don't know if other clubs are looking at it like that, but we are," Monfort said. "We have been told (as owners), and I don't know if it is scare tactics or not, that (each team) will pay that back this year. The way we are budgeting right now is that not only are we not getting that extra $4 million (like last season) but we will be paying back the $4 million from last year."

The $18 million is additionally siphoned, Monfort explained, to pay $5.5 million to the MLB credit line for past loans, $5 million for player raises and $3.5 million to cover projected revenue loss from not having the Yankees and the Red Sox play at Coors Field, series that drew huge crowds this past summer at inflated ticket prices. That leaves approximately $4 million to $5 million in "new" money, and the ability to add about $11 million to the payroll, he said.


I'm not exactly sure why the credit line would come from the "new" money -- according to the article, the Rockies paid $4 million on their debt service to MLB this year, so I read that as $1.5 million in additional expense, not $5.5 million. Also, the MLB central fund distributes an equal payment to all 30 teams; since that revenue includes things like merchandising, licensing and Internet fees (as well national TV money), shouldn't that payment be higher in 2014, considering MLB's total revenue keeps increasing? Maybe not; I'm not sure. And it sounds like Monfort clearly isn't expecting the Rockies to improve on their attendance figure -- even though just two years ago they drew 2.9 million fans, when the Red Sox and Yankees didn't visit Coors Field.

Of course, that season followed a playoff appearance in 2009 and a winning season in 2010. The Rockies are coming off their third consecutive losing season, so maybe an expected decrease in attendance does make sense.

Anyway, the kicker to the article is this quote from Monfort: "I think (our plan) is working. Yes, we got last place. Yes, we were 10 games better. Yes, we had three pitchers, four starting pitchers, whose winning percentage was 61 percent. So if you had a fifth, just like the other four, and you had a bullpen that did its share of the deal, you would win 98 games. That's a lot of games."

So there you go. All the Rockies need is a better fifth starter and a better bullpen and they'll win 98 games. (There is a little truth here -- Roy Oswalt, Jeff Manship, Drew Pomeranz, Collin McHugh and Chad Bettis combined to go 0-19 in 26 starts with a 7.42 ERA.)

But if that's the case, why does the article point out that the three players the Rockies supposedly pursued unsuccessfully so far this offseason were Brian McCann, Carlos Ruiz and Cuban first baseman Jose Abreu. Last I checked, none of them could pitch.