2014 Trade Central Index
For any trade involving a major leaguer or a Prospect Handbook-caliber minor leaguer, we summarize the players’ strengths, weaknesses and possible future roles. We slant our trade analysis toward the […]
Giants Ready For Life After Bonds
Future success trusted to ballpark, Sabean’s plans
By Andy Baggarly
SAN FRANCISCO—It wasn’t so many years ago that Giants management saw optimism in a half-full stadium.
Candlestick Park was not a world-class venue. It was cold, windy, isolated, impersonal—and hollow on most nights.
“Our fans followed games on TV and radio,” Giants general manager Brian Sabean says. “They didn’t come.”
After a franchise renaissance, a beautiful new waterfront ballpark and five straight seasons of drawing more than three million fans, the big question is this: Will they come after 2006, when Barry Bonds is expected to play his final season?
Giants fans have become accustomed to a winning club,
a terrific ballpark experience and a milestone du jour from Bonds. They have watched him hit his 500th, 600th and 700th home runs, tie and pass his godfather, Willie Mays,
on the all-time homers list, go unconscious at the plate in the 2002 World Series, and of course, break the single-season home run record.
They could go to a Giants game, see Bonds do something amazing, then frame their ticket stubs. And judging by the standing ovation he received when accepting his National League MVP award on Opening Day, the BALCO scandal has done nothing to reduce Bonds’ popularity in the Bay Area.
There is no minimizing Bonds’ impact at the gate. In terms of road attendance, only the Yankees drew bigger crowds than the Giants last year.
While most franchises that move into new ballparks tend to lose steam after a few seasons, the Giants sold 2.8 million tickets before the first pitch was thrown in Year Six at SBC Park. Their season-ticket base of 28,229 is the wellspring of their revenues and the envy of other teams.
Preserving that base will be a challenge in the post-Bonds era. Interestingly, that era is expected to end at the same time the Giants’ most important customers will be asked to recommit.
Of the club’s 7,921 charter seat holders, about 6,100 (77 percent) signed up for a seven-year plan to lock in ticket prices at a 2 percent annual increase. That term ends after the 2006 season, at which point the club seat holders can re-enroll for one, three, five or seven more years.
So commissioner Bud Selig’s timing couldn’t have been better when he awarded the 2007 All-Star Game to San Francisco. Because only season-ticket holders are guaranteed seats for the All-Star Game, the Giants are well positioned to retain much of their base in 2007.
After that, it becomes a tougher sell.
Yet while the kayak population in McCovey Cove might dwindle after Bonds retires, Giants officials are holding fast to the belief that the club’s recent winning tradition and a positive ballpark experience will keep attendance—and revenues—stable in 2008 and beyond.
“Each year the fans have come in with hope,” says Giants executive vice president Larry Baer, who is also among the club’s principal partners. “Given the ballpark we have, if the fans have hope and belief we’ll be competitive, we’ll be fine. I truly believe that we will draw over three million the first year Barry is gone.”
The Giants are counting on it. Despite a successful year at the gate, they reported an operating loss of more than $10 million in 2004 and said they sustained slight losses in 2003. Since the ballpark opened in 2000, the team has just about broken even, Baer said.
Few teams must watch the bottom line as closely as the Giants, who are responsible for an annual debt service payment of about $20 million to a consortium of note-holders. Those commitments run through 2017, and stem from $170 million borrowed to assist in financing the construction of the new ballpark—the first privately financed baseball-only stadium in the major leagues since Dodger Stadium more than 40 years ago.
The Giants also contributed $12 million to $14 million to Major League Baseball’s revenue-sharing pool in 2003, and Baer predicts a similar contribution for 2004.
The organization has cash reserves to handle operating losses, but if those losses become heavy enough the Giants could require a cash call from its principal partners.
The Giants haven’t gotten into trouble like the Diamondbacks, who overextended themselves with deferred salaries. The Giants haven’t deferred much beyond the $5 million annual payments they must make to Bonds from 2007-11. In 2007, they have $20.35 million committed to Armando Benitez, Mike Matheny, Omar Vizquel and Bonds’ deferment. Beyond that, they have flexibility. Even with Bonds’ deferments, they have just $7.6 million committed in 2008 and $7.35 million in ’09.
“It’s totally manageable or we wouldn’t have done it,” Sabean says. “You’ve got to stay within the pro forma that are forecasted for us two or three years out. That kind of strict economic model is needed because we own and operate everything. In some ways, that’s good. You don’t put yourself over your head.”
Some high-profile agents have snickered that the Giants should be spending more than the $80 million payroll they have averaged over the past few seasons, pointing out that the franchise was bought for $100 million in 1993 and is now appraised at more than $370 million.
Giants officials counter that many principal partners joined Peter Magowan’s ownership group not primarily as equity investors but to keep the team from moving to Tampa Bay.
“We’re not going to be sold,” Baer says. “We’re not some offshoot of Disney or another large corporation in this as a means to some other end. We’re people who are passionate about baseball in San Francisco and we want to do things the right way.”
That means a competitive team, and to that end, Baer said the Giants expect to keep the payroll at $80 million after Bonds leaves the scene. His salary is a significant chunk—$20 million this season and $18 million next year, not counting the deferred portion.
“Just because his payroll comes off doesn’t mean we won’t spend it somewhere else,” Baer says.
The Giants expect Sabean, general manager since the end of the 1996 season, will find the right way to spend it. Under Sabean, who was Baseball America’s Executive of the Year in 2003, the Giants have won three NL West titles, one pennant and have made four playoff appearances. Only the Braves and Yankees have better records over that span, and the Giants have never won more games over an eight-year period since moving to San Francisco in 1958.
The club showed its faith in Sabean by quietly extending his contract toward the end of last season, with the deal staying out of the public eye until January. Terms of the deal have not been announced, even the length of the contract. Baer says only that Sabean is signed “beyond this season.”
“Having Brian as the architect is critical,” Baer says. “We think he’s the state-of-the-art GM. He’s the perfect blend of old school and new school. He is the perfect person to take us well into the future and into the post-Barry era.”
Sabean’s quick-strike efforts to sign Benitez, Vizquel and Moises Alou were well received in San Francisco, though it wouldn’t have happened without assistant GM Ned Colletti’s ability to creatively negotiate deals that allowed the three salaries to squeeze into the 2005 budget. The joke in the Bay Area is that the Giants and A’s are actually fielding teams with similar payrolls while Bonds is on the disabled list.
Sabean hasn’t regretted too many deals, and his worst mistakes haven’t crippled the franchise. His most egregious contract might be the three-year, $11.1 million extension he gave outfielder Marvin Benard after the 1999 season.
“He knows the free agents to pursue and which ones not to pursue,” Baer says of Sabean. “When needed, he can make cagey offseason trades and smart in-season trades. Absolutely he’s our architect. When you take the greatest player perhaps of this generation or perhaps ever off your team, does it lower the risk when you have a GM with the credentials of Brian? Absolutely.”
Sabean does not talk excitedly about the challenge of fashioning the Giants’ future without Bonds. While Bulls GM Jerry Krause was eager to remake a basketball team to prove he could win without Michael Jordan, Sabean puts on no such airs.
“Baseball just isn’t like that,” Sabean says. “One guy cannot make a franchise. As great as Barry is, he doesn’t pitch. So you’re going to win as a whole ballclub in baseball. In reality, there’s a lot more you need to improve on a club.”
Sabean’s challenge is to keep the Giants competitive because their operating model does not allow for rebuilding projects.
“It’s been that way especially since we’ve gotten this new ballpark,” he says. “No matter who’s on the team, you’ve got to have a formula to compete or a chance to win. In our market, paying our own bills, you don’t have a year to step back and catch your breath or do things in your own time like in another city, especially Cleveland.
“In general, when you own or operate everything, you’re on a shorter leash for a lot of reasons. When you fill the ballpark, fans aren’t going to tolerate taking a step back. You can’t say, ‘We’ll be in the middle of things in a year or two.’ So in our case it’s an absolute must to be as strong as we can be year after year.”
While the Giants haven’t saddled themselves with deferred contracts, it appears they have operated with a short-term focus in regard to the draft. This year, they will forfeit their first-round selection to the Marlins for signing Benitez, their second-round selection to the Cardinals for signing Matheny and their third-round selection to the Indians for signing Vizquel.
Prior to the 2004 season, the Giants intentionally signed Michael Tucker a day before the Royals faced a deadline to offer arbitration, guaranteeing that the Royals would receive a compensatory pick. The Giants used the money they otherwise would have spent on a first-round bonus and instead transferred it to the major league payroll to cover Tucker’s salary.
While the lack of draft choices undoubtedly has reduced the amount of premium talent in the system, the Giants still have a number of promising pitchers, and Sabean said he isn’t focused on building solely from within.
“(Other organizations) can wait to do that,” Sabean says. “They get subsidized either by revenue sharing, or they don’t pack the house and they don’t have the same expectations. They’re allowed to let their plans come to fruition.
“You hope to have folks for your system coming through the ranks and in position to take over, but that’s only one end of the spectrum. You’ve got free agent and trade opportunities year-round. You have to rely on all three, and they all have relative tradeoffs associated with them. If you go with kids, you give up experience. If you go with free agents, you give up draft picks. If you go with trades, you usually give up your better prospects. We try to do all of the above.”
Excluding current left fielder Pedro Feliz, the Giants have not drafted (or signed internationally) and developed their own everyday position player since Bill Mueller in 1993. Yet Matt Cain, Merkin Valdez, David Aardsma, Brad Hennessey and Pat Misch are the most promising and advanced arms in a system that has become renowned for grooming pitchers, and there’s nothing better than dependable innings to keep a team competitive.
“It helps because pitching is fallible and it’s tough to invest long-term in it,” Sabean says. “At this point, we’re in pretty decent shape.”
While the Giants would love to add a megastar to anchor their franchise after 2006, they also must attend to Jason Schmidt’s potential free agency in 2007. That situation is one of many that keep the Giants from sketching a master plan in the post-Bonds world.
“I don’t think you can do that anymore a year or two out because the game has changed,” Sabean says. “Is anybody going to take Barry’s place? No, I don’t expect that. Nobody does. I don’t know what ultimately it might be. That might be spent on two players. It might be four players. The commitment is to spend the money allotted in the best way possible.”