The Diamondbacks' payroll could increase by as much as $15 million annually over the next 10 years if a new business plan is successful, Jerry Colangelo said Wednesday.
Colangelo and a group of four businessmen who invested $160 million in the Diamondbacks in 2002 have launched two initiatives in an attempt to raise additional equity for the franchise.
The Diamondbacks want to sell 33 shares of the team worth $3 million apiece. The club hopes to raise an additional $5 million annually by offering personal seat licenses to fans who own premium season tickets costing $50 to $83 per game. The plan could generate $14 million annually in additional revenue, which would be used to fortify a payroll that is projected to drop to $55 million next season, Colangelo said. This year's payroll is about $80 million.
“By undertaking all this, what it means is we're going to be much more stable and have more ability to improve the product,” Colangelo said. “You run the business and if you're successful, it allows you to have more cash to put in the product.”
Colangelo said he doesn't envision the Diamondbacks again having a $100 million payroll, as was the case when they won the World Series in 2001.
A $70 million payroll is realistic, he said. Last season, teams spending $70 million on players ranked 13th, 14th and 15th among the 30 major league clubs.
Colangelo cautioned that a payroll increase is dependent on the success of the two initiatives.
“We need to generate revenue in order to create the (payroll) number,” he said. “But I do feel pretty comfortable it will give us an additional $10 million to $15 million a year to put into the product, assuming attendance holds up.”
The seat licenses would come with perks such as valet service, Colangelo said. The cost of a license will be announced later.
The four investors who bailed out the team in 2002 — Valley residents Dale Jensen, Ken Kendrick and Mike Chipman, along with Toronto native J.C. Royer — also have bought Colangelo's general partnership, thus giving them controlling interest in the team.
“I really feel incredibly positive that this is going to get done,” Jensen said. “I don't think it will necessarily be a hard sell.”
Jensen said 15 of the 33 shares already have been sold.
The businessmen made Colangelo the fifth member of their ownership group — he'll be in charge of the day-to-day operations — and Colangelo said each member will have 20 percent say in all major financial decisions.
The democratic process reins in Colangelo's power. No longer will he have the unfettered authority to sign six free agents for nearly $119 million, as he did after the 1998 season.
Jensen said Colangelo, whose title will be chairman and chief executive officer, can run the baseball team within the parameters of an established budget.
“A guy just can't have a whim and say Qwest looks like a good buy, let's go buy it,” Jensen said. “He (Colangelo) has a board of directors to report to.”
Said Colangelo: “That's understandable and acceptable.”
Colangelo said he does not anticipate the ownership group disagreeing on issues such as payroll or player acquisition.
“We're all on the same page,” he said.