Dollar Watch....

[Roxpert]

The payroll figures for the 2007 season are now posted here:

ESPN.com: Colorado Rockies Clubhouse

As you can see, the Rockies rank #25 in team payroll according to these figures, at $54.4 million. This payroll is $28.2 million or 34% below the MLB median payroll of $82.6 million.

Forbes also came out with franchise valuations and team revenue estimates, which the Post highlighted:

The Denver Post - Forbes: Rockies' value rising

According to Forbes, the Rockies franchise ranks #22 in valuation at $317 million. This is $57 million or 15% below the median estimated franchise value of $374 million.

Also notice that Forbes estimated team revenues, which placed the Rockies at #21 with $151 million. This is only $8 million or just 5% below the MLB median franchise revenues of $159 million. I believe the revenues are net of revenue sharing receipts (or payments).

The Rockies did rank very high in one area: operating income. According to Forbes, we had the 6th most profitable franchise with OI of $23.9 million.


What does all this mean? IF accurate, it points to a very well-run franchise where operating profits are concerned, but one which is failing to keep up with MLB in terms of percentage of revenues devoted to team payroll. This should be no surprise to anybody. The franchise is run for the owners more than for the fans, and the Rockies are better at that than most other MLB franchises.

It's good to know that the owners are good at SOMETHING, at least. Too bad it's never reflected in the W/L column, though. However, the business success may be the major factor that the Monforts looked at when justifying the GM extention, and the GM wanted the manager extended as well, according to what I heard.

It's a business, guys. Unfortunately, the fans get the short end of the stick.

[DieHardRoxFan]

Yes, but look at the entertaining circus act they put on for the money they spend.

[Dante Bichette]

Your statistics would seem to be correct, Roxpert, and if that is in fact the case than it serves as more proof as to why we will be stuck with the Monforts for a very long period of time. Why would they sell the team when they are able to make 20 million a year in profit? Public sentiment is certainly against them, but it is not so bad that they would feel any great urgency to sell.

I wish they were losing money. Since they run the team as they would run any other business, if they were losing money they would probably be interested in selling. But, thanks to the great job MLB has done in marketing their product and taking advantage of the new opportunities that exist with sattelite and cable TV (the extra innings package), satellite radio, the internet, and the globalization of the economy and baseball, the amount of money the Rockies will receive from the overall baseball pot is stable and will only increase in the coming years, and the attendance at Coors field is stable (albeit fairly low) as well. People will always go to the ballpark and buy a few $6 beers because it is something to do in the summer when the weather is nice.

[RMF]

Charlie wasn't lying, this team could afford a difference maker like Andruw Jones.

There are at least 3 big name CF's available this offseason. Cameron, Jones, Hunter. CF is really a problem they need to solve.

[Roxpert]

While the Rockies are running a successful franchise in terms of annual operating profits and keeping costs under control, they are doing little if anything in enhancing franchise value. Still, the franchise value should rise over time commensurate with MLB industry value. The old "rising tide lifting all boats" thing is in effect here. Of course, if the Monforts actually invested in the product, even at a mid-market level, they would have the opportunity to inflate franchise value even further.

Obviously, the Monforts' focus is not to enhance franchise value as that would only matter if they were intent on selling the ballclub. So either they have no interest in selling the franchise for a long time to come, or they are misplacing business priorities in stressing yearly OI over the long-term enhancement of their own equity value in the franchise.

At this point, fans should be OK with the Rox simply following the A's and Twins. After all, those two franchises are spending an average of about $80 million and $71 million respectively in 2007. If only it were true that we ran the team like the A's or Twins, we may just be competitive!

[hiaspire]

All too often we take small samples of momentary data and come to grand conclusions about them.

In the larger picture beyond this one season, the A's and the Twins ABSOLUTELY went for years and years quite competitively with low payrolls. From 96-02 the A's never had a payroll over $35M but had 4 consecutive 87-103 win seasons and several playoff appearances (and 4 more very successful seasons after that to follow with slighly higher payrolls). Prior to 2002, the Twins never had a payroll above $28M which included a couple of world's championships. That is what is referred to typically as an example of those models, no matter what those specific teams might do years and years from now under different future circumstances.

Are things different now for those two franchises beyond their historic often-cited models for being competitive on a budget? Sure. Things can change for a club's financial picture for a variety of reasons both on and off the field over time. The A's financial future has changed quite dramatically recently.

A large part of that is that those teams have developed some impact super stars (especially on the Twin's part). Their payroll is going to have to grow even more if they are going to keep just some of their elite MVP-type talent that they produced.

The same will be true of the Rockies as their young inexpensive players mature.

But following the Twins and A's WOULDN'T mean paying a ton more money now while you have cheap inexpensive talent building. When the A's and Twins were in the Rockies same position, they were paying amongst the lowest payrolls in baseball ALSO as mentioned above. Just like us, on the same course as them at that time of their young player's early development. The Rockies are on that same path and running things very much like those organizations did at those similar times, but not in the same place in terms of development now. Our youth movement was started and is happening later than theirs. They are several years ahead of us on that path, but we'll have to join them also with payroll increasing if much of the core is kept together here. Just like the Twins. No different (other than them also developing stronger impact talent than us probably). They all had lower team payrolls while players are inexperienced and learning with low salary figures, and those individual player salaries are going to have to expand as the players achieve significant success down the line in a couple of years.