|Tuesday, September 24
Updated: September 25, 11:55 AM ET
High payroll could be to blame for strain
PHOENIX -- Despite an increase in attendance and a likely playoff appearance, the Arizona Diamondbacks are projecting operating losses of $40 million to $50 million this season, a team official said Tuesday.
Tom Harris, the Diamondbacks' senior vice president of finance, predicted the loss would be similar to last year's, even if the defending World Series champions go deep into the postseason. They reported a $36.6 million loss for 2001 after paying $4.4 million in revenue sharing, according to figures released by the commissioner's office.
''If we lose up to $50 million, that would include all of the performance bonuses,'' Harris said.
The team is on a 10-year plan to post a profit. Four investors, Phoenix area businessmen Mel Shultz, Dale Jensen, Ken Kendrick and Mike Chipman, have promised an infusion of $16 million a year during the next decade in exchange for more ownership.
''This year we have the highest payroll we have ever had, and it's the highest we are projected to have. Payroll will be somewhat reduced next year,'' Kendrick told The Arizona Republic.
Harris said reduced salaries were essential to the plan.
''The key to our situation really stems from getting our full share of the national TV money, which will occur in 2003, and then getting players' salaries down to a level that's a little more manageable. The loss is going to be dependent upon the player salaries. We've put scenarios together -- kind of a high range to a low range, but it's too early to say what it will be.''
Arizona's Opening-Day payroll was $102.8 million, but the team will not have to actually pay that much to players because much of the total is being deferred.
The Diamondbacks say they have turned a profit since 1998, when they made $21 million, according to Harris.
He said cost overruns at Bank One Ballpark forced the Diamondbacks to incur $130 million in bond debt. The team makes an annual payment of about $10.5 million on the bonds.
''In 1999, that was the first year that we paid principal on them. It's very similar to a home mortgage -- it's a fixed amount, and it amortizes over 27 years,'' Harris said.
Operating losses since 1999 will exceed $125 million after this season, he said.