Sunday, January 20, 2002
The best team $45 million can buy
Budget dictated Reds' 25-man roster
By John Fay
The Cincinnati Enquirer
After a 96-loss disaster of a season, a season in which attendance dropped 750,000, you would have expected the Reds to spend every waking moment trying to improve the club.
Instead, the Reds brass used most of its time and energy cutting the budget this offseason.
General manager Jim Bowden went from Trader Jim, swapper of players, to CPA James, balancer of the books.
With all but one player — Scott Williamson — in the fold, the Reds have the payroll where chief executive officer Carl Lindner wants it. Based on the Enquirer's projected 25-man roster and projected salaries for the unsigned players, the Reds' payroll for 2002 will be about $45 million. That figure includes what the Reds account for in deferred payments to Ken Griffey Jr. and Barry Larkin as well as a $350,000 buyout due Ruben Rivera.
Every move the Reds made was geared toward getting that payroll number in line. Getting the payroll to $45 million wasn't easy when two players make up 41 percent of it.
“The most difficult thing to do isn't to find talent. It's to get the payroll where it needs to be,” Bowden said. “A lot of other clubs were under the same pressure. Look at the Colorado Rockies, the Baltimore Orioles, the Toronto Blue Jays.”
“It's not just the small-market teams. Everybody's slashing ...”
The slashing left the Reds with a club that appears, on paper, to be potentially worse than the 2001 team, a team that tied for the fourth-most losses in team history.
The Reds are asking for patience.
“We've been up front about what we're trying to do,” Bowden said.
The Reds' financial mandate under Lindner is to not lose money. Last year, according to figures released by Major League Baseball, the Reds broke about even — losing $280,000 on the season. That was the sixth-best bottom line in baseball.
“The light at the end of the tunnel is we're getting a new stadium in 2003,” Bowden said. “That will increase revenue. None of the other 29 clubs is in that position. With the younger players we have, we're in good shape.”
The Reds have been talking about the boon of 2003 for years. But chief operating officer John Allen tossed a little cold water on the hopes of fans who are thinking Great American Ball Park will mean instant success for the Reds.
When the Reds announced ticket prices for GABP Friday, Allen cautioned reporters about adding up the potential increase in revenue and equating it with increased player payroll.
“That would be unfair and improper,” Allen said.
Revenues are expected to rise $20 million to $30million, but Allen said $2.5 million of that will go to rent and $9million will go to park expenses. The Reds also will see a major decrease in revenue sharing (unless a new contract with the players allows for more). The only reason the Reds nearly broke even last year was the $13.4 million they received in revenue sharing.
Allen pointed to Milwaukee and Pittsburgh as examples of clubs to look at when evaluating the impact of a new stadium.
Pittsburgh, according to MLB figures, had a player payroll of $53.2 million and lost $1.2 million. Milwaukee had a player payroll of $51.1million and made $14million.
As far as drawing fans, Cincinnati would seem likely to be closer to what Milwaukee (2.8 million) drew than Pittsburgh (2.4 million) the first year of the new ballpark.
So given the break-even theory, the Reds potentially would have $20million more in payroll available in 2003. Milwaukee spent $6.1million more and made $14million more in profit.
But, until 2003, expect the Reds to keep squeezing pennies. They broke even last season by keeping the player payroll to $45.4 million.
To keep the payroll at that figure, the Reds couldn't stand pat. Had the Reds brought back the same players as they had in 2001 for 2002, the payroll would have ballooned to the $50 million range because of the number of arbitration-eligible players.
Arbitration is a no-lose situation for the players. To wit:
• Dmitri Young, who made $3.5 million last year, will get between $5million and $6.1million in arbitration from the Detroit Tigers, to which Young was traded.
• Danny Graves, who made $2.1 million last year, got a $1.425million raise when the Reds settled with him to avoid arbitration.
• Aaron Boone went from making $400,000 to $2.1million.
• Elmer Dessens went from making $300,000 to $1.85 million.
The Reds made a decision to move Young and Pokey Reese to be able to keep Graves, Sean Casey, Boone and Dessens.
The reason the Reds chose to keep Graves, Casey, Boone and Dessens is they won't be eligible for free agency until at least 2004. Both Young and Reese would have been eligible after this season.
But given the market, teams weren't willing to part with much for players making good money who could walk after one season. So the Reds took what they could get — and in both cases that meant taking salaries the other club wanted to dump.
Detroit gave up outfielder Juan Encarnacion and pitcher Luis Pineda for Young. Encarnacion signed for $1.55million Friday. That's a net savings of at least $3.45 million for the Reds.
Colorado gave up pitchers Gabe White and Luke Hudson for Reese and Dennys Reyes. The Rockies wanted to dump White's salary ($2.35 million for 2002).
Reese, had the Reds kept him and offered him arbitration, would have made around $4million. Reyes is asking for $900,000 and the Rockies are offering $700,000 in arbitration. That's a net savings of about $2million.
Those two moves were the keys to getting the payroll under control, but money affected every move the Reds made — or more often didn't make.
They didn't sign veteran reliever Jeff Shaw, who offered them a bargain of a contract ($1.5 million for 2002, $4 million deferred) because they couldn't fit it in the budget.
They offered Pete Harnisch only $500,000 in base salary for 2002 becausethey couldn't risk any more on a player with a history of injuries.
Furthermore, they couldn't even consider top-shelf free agents such as pitchers Aaron Sele or Jason Schmidt.
The Reds did talk to second-tier free agents such as Albie Lopez, Dave Burba and Terry Adams. But they made the same offer to them all — virtually nothing for 2002 with a chance to make a lot more in 2003 when Great American Ball Park opens.
The Reds did sign Jose Rijo, Joey Hamilton, Jimmy Haynes and Brian Bohanon to minor-league contracts and invited them to big-league camp.
But, given the payroll situation, money could affect whether any of the four makes the club. Rijo, Hamilton and Haynes would make $500,000 if they make the team, Bohanon $300,000.
The New York Yankees spend that kind of money on snacks for the clubhouse. For the Reds, it could be a budget breaker.
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The best team $45 million can buy
