Club Finances
It’s not looking good if we don’t win!!!!
One the eve of the start of the 2nd half of the season the Architects are sitting in 4th place with a 500 record of 36-36. I knew this season would be a tough fight with Duluth and Toledo, but I didn’t expect to be 500 and behind Detroit with the Bad News Bears nipping at our heels.
Before I get into the finances of the season we said goodbye to RP Ken Shannon as we designated him for assignment with the hopes that someone might take a chance on his contract remaining for this season (roughly $2 million if anyone picks him up). It’s not a big savings but at this point being projected to be $14 million in the red for the season, every little bit helps. What would really help would be if we could get everything clicking and make a run for the playoffs. That is a tall order being 5 games behind Toledo, but not impossible. It would take getting off on the front foot in the 2nd half with 3 games at 1st-place Duluth.
Replacing Shannon on the staff is not the pitcher many would have predicted. I am resisting the temptation to bring up LHSP Curt Hopkins who is a AAA All-Star and has gone 7-2 this season with a 2.82 ERA. Hopkins feels he is ready but our scouts and AAA staff are telling me to be patient and not rush him. While the numbers are great he did struggle last season in a late callup. So for now I am going to pass on Hopkins because I don’t feel the need is great for SP with Yale Hulburt back. No the results haven’t been great for Hulburt but it feels like he is starting to round into form a bit. So instead of 21-year-old Hopkins coming up we are opting for a P who has been pretty successful in his own right and that is 25-year-old RHP Kieron Alpin (8-1 3 saves 3.51 ERA in 80IP). Alpin has been starting mostly at AAA (13 starts in 17 games) and he will slot into the bullpen in a long man and middle relief role for now.
To start things off, our attendance is off nearly 6% and I can attribute that to raising ticket prices 5.6% in the off-season (Chicago was in the bottom middle portion as far as ticket prices) to get us up to roughly league average. With the size of this town and our market size and fan loyalty, I didn’t think this amount would impact things but we were off about 3% for most of the early season. With the club's sluggish play, it has been noticeably off against last place Milwaukee where we drew a crowd of less than 30,000. That is an alarming number for a club that averaged 38,652 last season. It’s also not helping our budget issue as we are roughly $27,000 off our last season’s revenue per game and honestly about $100,000 off from where I thought we would be (matching last season's attendance totals). That creates over $7 million off my budget projections for the season, let alone if we miss the playoffs.
The budget for this season, after making our 2nd straight GLBL World Series last year was $178 million, which was $2 million lower than what it was in 2055. Mr. Bouquet Jr. wasn’t going to budge off that because I guess in his mind we didn’t make enough profit last season. We had $13.2 million in extra “cash” so we could exceed our budget by that number and still be okay, and if we made the playoffs add an extra $5 to $15 million in revenue. I really felt this team was playoff worthy and even enhanced our position with the acquisition of SS Kennelly Mulford and SP Mutoyuki Inoue. Since the 2nd deal to bring on Inoue the club has gone 14-17. I was thinking perhaps 19-12 would have been an acceptable record since those deals.
For next year the budget is pegged at again $178 million and I have no doubt that if we don’t make the playoffs that number will go lower by our grumpy owner because of the loss we would show for the season. So the question is do we sell and try to break even, or continue to ride this out with a team that we believe can still make the playoffs. The answer might be a little of both, but we will get into that more in the week or two after the 2nd half starts.
Just looking at the financials for next season our player payroll now is estimated to be $195.6 million. So reducing the scouting and the development will be required but that still adds $10 million and then if we budget $3 million for IAFA that brings out estimated expenses up to $209 million dollars. We won’t be able to sign any free agents above a minimum contract and we won’t be able to offer C Joe Hunt an extension, and he deserves one.
The obvious candidates are finding a trade partner for SP Bill Lutz who will be owed $8.5 million for the 2057 season. Lutz is a league average pitcher most seasons based on ERA+ and is definitely the description of a roll of the dice SP. But with some of the pitchers that are starting in this league, he would be an improvement for some.
We are going to have to eat the contract of JJ Walker. We DFA back in late May and tried to give him away, but he was one I made a mistake too when I was handing out long term deals. In 2054 he pitched to a 4.16 ERA and had an ERA+ of 108. So we decided to take a chance and signed him to a 6-year deal worth $34.1 million in total. Now it does had a team option in year 5 and a vesting option in year 6 both for $9 million so our total commitment was just 4 years and $17.5 million. So besides this year’s sunk cost (he is failing at AAA), we are on the hook for $4 million next year and $7.5 million in 2058. Unless I attach a top prospect in the deal and I am not going to do that, we are stuck with him on the payroll through 2058. Lesson learned on trying to find “cheap” pitchers and going on a big contract.
Other than those two the choices get much tougher because while it looks tough to make the playoffs this season, I am of the mindset that this is still a playoff club in 2057. So parting with either SP Yale Hulburt ($20 million in 2057 and team option in 2058 for $17 million) or team captain SP Val Imbert ($10 million in 2057 and player option in 2058 for $10 million) is harder to swallow. While I do believe that we have the pieces on the team to cover losing one of them or potentially both, I really still want to go all in on next season. We will offer them up and we will see what happens. Hulburt is the better pitcher but is a few years older and the salary is more. Imbert is a league average guy fitting in the back half of any rotation and a team captain.
The real problem comes in 2058. Our projected payroll is estimated at $271.1 million and that is a big black hole financially. If Hulburt is traded that is $17 million off that number. If he is not traded he will have his team option declined most likely. SP Val Imbert has a player option but my guess is he will not exercise it so that $10 million stays on the books. DH/RF Jose Aranda has a player option in 2058 for $29 million (team option in 2059 for $25m so long Jose), but with the injuries he has had last season and now this season, I can’t see him thinking there is a market for him to get that kind of money. I could try and trade him, but the one taker last season (Thunder Bay who has worse financial issues now than I do) and I turned him down. I don’t see them stepping up to take on the contract now, especially with the players union contract being negotiated at present.
That brings us to SP Motoyuki Inoue who is someone I still feel is one of the top pitchers in the league despite his good but not great results so far. When I traded for him the thought was to get him in for this year and next as he was under contract. He then was not a free agent, but would be arbitration eligible for 2058. Our cap guy has put a $54 million dollar arbitration number on him which would shatter league records. I felt that we could sign him to a 6 year deal, low ball the first year and then deal with the large amount in later seasons. But still can I do a deal with him for basically ⅓ our player payroll for one guy. With the financial losses we could be facing, it might not be possible to sign him beyond 2058 so he might be leaving after 2057 as a free agent.
In looking at things unless we swing a major trade, it looks like our financial pain even without signing Inoue to an extension will last until after the 2060 season. We can manage it but my fear is that for my extreme profit owner, he is going to see big losses over the next 5 seasons without any playoff berths of at least $50-$75 million.