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Column | John Romano

Tampa Bay Rays' growing payroll is a gamble

ST. PETERSBURG — Turns out, the Rays screwed up. They got too good.

Not that they're complaining, mind you. The tale of their turnaround was as captivating as any baseball story in 2008, and those memories will be held as dearly as a first embrace.

It's just that success arrived a little ahead of schedule, and it has put them in something of a financial bind today. They can either spend beyond their budget, or take a step backward on the field. From the looks of things, they've decided to spend.

The recent signings of Pat Burrell, Gabe Kapler and Joe Nelson brought to mind a conversation with Stuart Sternberg on the field at Fenway Park before an American League Championship Series game in October. I suggested to the Rays' owner that Tampa Bay's payroll for 2009 was going to approach $60-million.

Sternberg winced at the thought. Can't do it, he said. The revenues aren't there yet to support it.

Three months later, the Rays are flirting with a $60-million payroll. And the revenues still aren't there to support it.

So what does that mean?

Basically, that the Rays are gambling.

They are gambling that they will be contenders again in 2009. They are gambling that their season-ticket base and advance sales will catch up to their expenditures. They are gambling that their 3-year-old baseball business model is sound.

"We're never going to do something that jeopardizes the franchise's health, that's first and foremost," team president Matt Silverman said. "But, yes, every dollar we spend this year will have an effect on future years.

"We think what we've done this offseason in extending ourselves is the right thing to do for the organization and the community. We've done it with the expectation that support this year, and sustained support, will follow, and we will get closer to our goal of having a franchise that can be competitive on an annual basis."

The Rays have always maintained they do not look at their payroll as a one-year endeavor. They consider it as part of a three-year budget window. For instance, because they spent a little less than expected in 2007, they were able to spend more than they had budgeted in 2008. This concept has given them a little more flexibility than some rigid bottom line.

Today, that flexibility is gone.

The Rays have spent well beyond their supposed means, which means one of two things:

Either revenues (i.e. ticket sales) go up, or the payroll will eventually go back down.

It won't happen this season, and it may not happen in 2010. But if Tampa Bay's attendance remains near the bottom of the league, the Rays are going to start whacking the roster in order to trim the payroll.

Is there a break-even point? Yes, but it depends on when you decide to count what's in the register. Just as they do not look at the payroll in one-year snapshots, the Rays also do not look at losses and profits as a 12-month proposition.

Word is, the Rays are counting on attendance in the 2-million range in 2009. That would be an increase of more than 200,000 from last season but would still put them in the bottom third of the majors. To get there, the Rays are going to need to sell between 8,000 and 10,000 season tickets, which would be a substantial improvement from last season.

The team does not release its season-ticket figures, but Silverman did say renewals have been encouraging, and the team will begin its push for new season-ticket holders after the Super Bowl on Feb. 1.

"There's never been more excitement about the Rays," Silverman said. "You see it everywhere on the streets, in hats and T-shirts, you see it in Port Charlotte, where we have already sold every fixed seat for spring training. It gives us optimism as we head into the heart of the season-ticket drive that we will see a substantial jump."

This is sort of the way the Rays planned it when Sternberg assumed control of the franchise in October 2005. The biggest miscalculation is the timetable. The team improved more quickly on the field than expected.

The Rays had hoped to be competitive in 2008 and assumed attendance would then gradually begin to grow. By winning the AL pennant last year, they raised the stakes in terms of payroll needs and attendance expectations.

If you recall, Sternberg once promised the payroll would increase, on average, 10 to 15 percent a year. Using 12.5 percent as a midpoint, such an annual increase should have put the payroll in the $50-million range for 2009.

And if they had not signed Burrell, Kapler and Nelson, that's almost exactly where the Rays would be today.

Instead, they are closer to $60-million with no margin for error.

This may not be the ideal economy in which to put your faith in the ticket-buying power of a historically disinterested fan base, but the Rays do not have much choice. The Red Sox and Yankees are loading up in the AL East.

Either the Rays continue to move forward, or they return to their past.

Tampa Bay Rays' growing payroll is a gamble 01/14/09 [Last modified: Thursday, January 15, 2009 4:00pm]

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