If you’re a baseball fan, you already know that the ground shook last week when the Detroit Tigers signed slugger Prince Fielder. His nine-year, $214 million contract cost the Tigers as much as Ford plans to spend on a new engine plant in Brazil.
But Crain’s Detroit Business says the Tigers — and Detroit — can afford the former Milwaukee Brewers star.
That word comes from Chris Ilitch, the son of Tigers’ owner Michael Ilitch, and the president of Illitch Family Holdings, Inc., the family’s group of companies that includes pizza giant Little Caesar’s Enterprises.
Those companies, including the Tigers, the Detroit Red Wings, and Detroit’s Motor City casino, generate about $4 billion in annual revenue.
In 2010, the latest year for which information is available, the Tigers had annual revenue of $192 million, according to Forbes.com.
Crain’s says the Tigers’ upcoming payroll, is likely to surpass $110 million to $120 million in salaries and bonuses, as well as benefits.
The payroll includes $63 million alone this season to three players: Fielder ($23 million), American League batting champion Miguel Cabrera ($21 million) and Justin Verlander, the winner of the Cy Young and Most Valuable Player awards, who will earn $20 million.
“That spending is typical of markets larger than Detroit, but it isn’t thought to be financially stressful for the wealthy Ilitches, baseball insiders say,” according to Crain’s. Those salaries are “high-stakes bets on winning a World Series, which would provide the team millions in new revenue.”
Crain’s says the team is saving money in 2012 by not re-signing aging outfielder Magglio Ordonez, who was paid $10 million last season but who also has broken his ankle the past two seasons. Also off the payroll is second baseman Carlos Guillen, who got $13 million in 2011.
Together, their contracts have the same value as Fielder’s pay this season., Crain’s said. He also gets $23 million in 2013 before the team elevated it to $24 million annually over the final seven seasons. There also are several million dollars in potential bonuses in the deal.
Ticket prices are not going up for 2012, but If Fielder leads the team to a World Series, the team can expect a revenue bounce from a boost in season-ticket sales, suite sales, new corporate sponsorships, merchandise, and other things, Crain’s said.
Teams typically raise ticket prices after winning the series, and that bounce continues for several years. As Chris Ilitch put it, “There are opportunities to create revenue.”
What About Milwaukee?
As Tiger fans look forward to greeting their new star at the Tigers’ home opener on April, 5, how is Fielder’s departure playing across Lake Michigan?
The Milwaukee Journal-Sentinel looks at that today in the story headlined, “Brewers Focus on What They Have, Not On What they Lost.” Not only is Fielder gone, but slugger Ryan Braun could face a 50-game suspension over alleged steroids use, which he has denied.
On Sunday, the team, which won its division title last year, held its annual “On Deck” fan fest to promote the upcoming season. Asked what he might tell fans in need of a pep talk for 2012, effervescent outfielder Nyjer Morgan told the paper, “Don’t panic. Everything is going to be okay. We’re all professionals.”
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