Rockies owner Dick Monfort gives a detailed look at the team’s budget and financial structure – The Denver Post

On October 9, Rocky Mountain owner Dick Monfort announced plans to build a party platform at Coors Field in the upper deck right-hand seats rarely occupied in the past decade.

The money for the project will come from a surplus of capital construction funds and money that the Rockies and Denver Metropolitan Stadium District have received from Aramark and RTD.

The announcement, intended to excite Rocky Mountain fans, sparked widespread criticism on social media. Fans already unhappy with the team’s second last consecutive place in the Western National League were apoplectic that the first big news of the offseason added a party deck – not, say, the acquisition of a first baseman. or an ace pitcher.

Concern among Rockies fans or not, Monfort is not about to make drastic changes to his business model.

Last season, the Rockies placed 24th in baseball in opening day payroll, a figure Monfort calculated at $ 84 million – his accounting includes in-season orders and free agent additions – which amounted to 49.4 percent of the team’s $ 170 million in revenue. Monfort presented these numbers in the context of his business model, saying his rule of thumb was to spend “50% of income on player salaries.”

For the 2014 season, he said he was ready to take the payroll to around $ 95 million while trying to add an impact bat, starting pitcher and another reliever to join veteran LaTroy Hawkins, which was signed last month.

Given that baseball’s new TV contract begins next season, that $ 95 million payroll looks small. After all, each team will receive $ 54 million next year under the eight-year, $ 12.4 billion domestic television contract, including an additional $ 27 million based on the previous contract.

To explain his thinking, Monfort, for the first time, provided the Denver Post with a line-by-line budget. He also explained why he wasn’t about to spend all that new money on TV next year. He said he expects to receive $ 8 million less, or $ 19 million, believing that some will be kept for baseball’s central fund to make up for last season. MLB said it was going to withhold money last year for the central fund, but after owners complained the money was not withheld, leading Monfort to believe that additional money will be retained next year.

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

The $ 18 million is also siphoned off, Monfort explained, to pay $ 5.5 million to the MLB line of credit for past loans, $ 5 million for player increases and $ 3.5 million. to cover the projected loss of earnings due to the Yankees and Red Sox not playing at Coors Field, a series that drew huge crowds last summer at inflated ticket prices. That leaves about $ 4 million to $ 5 million in “new” money, and the potential to add about $ 11 million to payroll, he said.

Stay tuned for TV contracts

The critical revenue stream that the Rockies haven’t successfully exploited along with other teams is local TV money. The Rockies have a 10-year, $ 200 million contract that expires after the 2020 season, putting them at a disadvantage. Based on the recently negotiated deals, the Rockies will receive a significant boost in their next television contract. The Rangers and Angels have new rights deals that will net them around $ 3 billion over the next 20 years.

That’s why Monfort is determined, despite the outcry from Rockies fans, to stick to his philosophy. The Rockies get extra money, but so do all the other teams. The Rockies, however, have been at the bottom of the league for the past two years and haven’t played any meaningful games in September for three years. When asked what the likelihood, with his business model, is that the Rockies will reach the playoffs, Monfort said a realistic goal is “twice every five years.”

The Rockies’ most recent playoff appearance dates back to 2009.

“I think (our plan) is working. Yes, we have the last place. Yes, we were 10 better games, ”said Monfort. “Yes, we had three pitchers, four starting pitchers, with a winning percentage of 61%. So if you had a fifth, just like the other four, and you had an enclosure that was doing its part of the bargain, you would win 98 games. That’s a lot of games.

The Rockies have been operating as a small market franchise since 2003, when starting pitchers Mike Hampton and Denny Neagle’s contracts, worth a combined $ 175.3 million, turned out to be disastrous free agency measures. The Monfort brothers, Dick and Charlie, took a controlling stake in the Rockies ahead of the 2005 season, buying the shares of former CEO Jerry McMorris. They immediately focused on a more “sustainable” business model, focusing on drafting and actor development. It worked in 2007, the team’s only World Series season, and in 2009, but the Rockies have fallen to the bottom since then.

This was seen as an offseason in which the Rockies could play a role for some big name free agents. And they tried, making a losing offer of $ 63 million over six years for Cuban defector Jose Abreu. Monfort said Abreu was an exception to what he could usually pay due to his age (26) and power.

The Rockies had a surprising run against free agent wide receiver Brian McCann, who signed a five-year, $ 85 million contract with the Yankees. They aggressively pursued 34-year-old wide receiver Carlos Ruiz (offering two years at $ 15 million, with a club option) before signing a three-year, $ 26 million contract with the Phillies. They landed Hawkins with a one-year contract worth $ 2.5 million. Now they’ve focused on free agent first baseman Justin Morneau, and the talks are set to intensify this week.

Hawkins, 40, has just had a solid year with the Mets, but he’s not exactly the top reliever Rockies fans wanted. Colorado is more likely to add a reliever through a trade, with center fielder Dexter Fowler attracting interest from several teams.

Tulo, are the CarGo offers too big?

The Rockies are moving dangerously towards a payroll imbalance, which Monfort acknowledged. They have four players (Troy Tulowitzki, Carlos Gonzalez, Jorge De La Rosa and Michael Cuddyer) who are expected to earn just over half ($ 48 million) of the expected payroll of $ 95 million in 2014.

Monfort said his projected payroll for 2017 is $ 114.5 million at a time when Tulo and CarGo together earn $ 40 million, raising the question of the viability of transporting the two star players in the future. .

“It’s a concern. Our model was a bit like the college model. That every year you have four new players coming in, which means all the time you have 12 minimum players and then you have 13 of the others, ”said Monfort. “This is how the model is built. And last year we had 13 or 14, and then we had a few injuries, so we had 15 or 16 minimum (salary) guys – rookies or sophomores. One of the things is that we have too many young children. When our young children are not ready or are injured, their replacements tend to be young children. We don’t tend to go out and recruit experienced lifeguards. I think it’s a fault.

For Monfort, while admitting that his roster was far too young last season, the momentum doesn’t change and neither does his plan. This means the Rockies can only win if they spend their money wisely and have a farming system that consistently produces impact players.

But can they win this way?

“I would say my answer to that is if Oakland, Pittsburgh and Tampa Bay can win, yes we can win,” said Monfort.

Troy E. Renck: [email protected]


Swing and a miss

The Rockies haven’t signed a top free agent this offseason, but it’s not because they haven’t tried. Here are three examples of teams determined to outbid the Rockies:

JOSE ABREU, FIRST BASEMAN

Offers $ 63 million six-year contract; signed with the White Sox.

CARLOS RUIZ, SENSOR

Offers $ 15 million contract over two years; signed with the Phillies.

BRIAN McCANN, SENSOR

The Rockies grew late; signed with the Yankees for $ 85 million.


Expense account

The Rockies finished last in consecutive seasons for the first time in franchise history, a performance many fans attribute to their payrolls, which ranked 24th in MLB. Rockies owner Dick Monfort said his rule of thumb was “half the income for the players’ wages.” He detailed the team’s 2013 budget for the Denver Post:

Category Rising
Returned $ 170 million
Team pay $ 84 million
Company staff payroll,
travel, retirement / health
insurance for all employees
$ 25 million
Draft bonus, international
signatures
$ 12 million
Stadium operations $ 12 million
Minor league player
development
$ 10 million
Major League Operations $ 10 million
Ticketing / marketing $ 7.6 million
Spotting $ 4.3 million
MLB Debt Service $ 4 million
Referees $ 1.5 million
Spring training $ 1 million
Community expenses $ 1 million
Total salary cost excluding team $ 88.4 million
Total cost plus payroll $ 172.4 million

Source: Colorado Rockies


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Marianne R. Winn

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