Rogers setting table for investment in payroll?
Executives willing to pay to keep competitive window open: Jays CEO
The Blue Jays announced a major new ticket-pricing program this week and, no matter how they spin it, it is designed to put a ton more money in the Rogers war chest.
As an entity whose existence is dedicated to gratifying its shareholders, that is not only Rogers’ right, but its responsibility.
Blue Jays fans have rights as well, at least the ones who can afford a second consecutive season of price hikes. They can swallow hard and pay or they can decide to wait and see just what they’re buying. And that is the crux of the issue. Blue Jays president and CEO Mark Shapiro recently told a radio audience that Rogers executives have assured him that they want to keep this competitive window open as long as possible and that they are ready to spend what it takes to make it so. How could they not? The Blue Jays’ revenue streams are overflowing. They lead the American League in attendance. They rake in US$50 million a year as their share of the various American broadcast rights contracts.
The elephant in the room, as it always is with the Blue Jays, is the revenue they realize from their own “local” broadcast rights. Since Rogers owns both the team and the cross-Canada networks that are used to broadcast the games, they simply move vast amounts of revenue from one pocket into another.
The ad revenue — and with a first-place team, those rates are sky-high — simply goes directly to the corporate bottom line, bypassing the team altogether.
While most teams sell their broadcast rights to media companies for ever-increasing amounts of money, Rogers does not have to bid on those rights.
If the local broadcast rights for the Arizona Diamondbacks, a team with a market that is just a tiny fraction the size as the Blue Jays, are worth $100 million a year, then what are the Blue Jays’ local rights, which stretch from coast to coast, worth?
The Blue Jays, whose exploits are the very reason for those TV revenues, never see the vast major- ity of that money. They simply wait with their hats in their hands until Rogers gives them their allowance.
Likewise, the ticket-pricing schedule the Jays released this week is designed to maximize revenue from that ticket demand.
The corporate honchos have to know that the extraordinary demand for tickets lasts only as long as the team is competitive.
The only way to tell if ownership is really on side, is how the team responds to its various player personnel needs this off-season. They have a host of free agents who either need to be re-signed or replaced if the team is going to be competitive going forward.
Two of the club’s best players — Edwin Encarnacion and Jose Bautista — are pending free agents. Encarnacion has made a strong case for a four-year contract in the $80- to $100-million range. Bautista might have been expected to win a contract in excess of that at the start of this season, but injuries have derailed his productivity at this crucial time. Either way, the Jays either have to pay him what they believe he’s worth or replace him at considerable cost.
Beyond that, the contracts of Russell Martin and Josh Donaldson call for hefty raises in 2017. Between them, Martin and Don- aldson are making $26.65 million in 2016. Next year, their combined total goes up to $37 million.
Likewise, J.A. Happ and Marco Estrada both get $3-million bumps in salary in 2017. Their combined salaries in 2016 were $21.5 million. Next year, they’ll be paid $27.5 million.
To satisfy all those salary increases, in addition to improving the overall quality of the roster through free agency or judicious trades, is going to cost a lot of money. But there is still a lot of money to be made in this market as long as the club stays in this position of competitiveness.
This season will take care of itself, one way or the other. The Jays (6952) are positioned to take a second consecutive run at a championship. They arrived in Cleveland off yet another road series victory at Yankee Stadium. For the first time this season, they have held first place in the American League East all alone for three consecutive days. Where it all goes from here is anybody’s guess, but there’s no doubt that it will be entertaining from now until October.
How that entertainment value translates beyond this October isn’t up to the players on the field. That destiny belongs to the players in the board room.