First let’s start with an explanation of what the FCI is. It’s the acronym for Fan Cost Index, more specifically what the average fan spends at a major league baseball game. The MLB FCI average is $76.53 per fan. We don’t have an exact figure for the Phillies, but we expect it’s higher than the league average based on the Phils having the 4th most expensive average ticket price of $37.42. Only the Red Sox, Yankees and Cubs charge more per average ticket.
In the four years preceding 2013 the Phils were number one in attendance in the NL. Their best season during that stretch was 2010 when the Phils had 3,777,322 fans, or 46,634 people per game. By 2012 total attendance dropped to 3,565,817 fans, a still robust league leading 44,021 people per game. The Phils were making money hand over fist, and to be fair they were spending a good deal of that money on salaries. Wisely? Well that’s another question for another day, but they were putting money on the field. In 2013 the Phils were the third highest paid team in the league behind only the LA Dodgers and the NY Yankees.
It’s easy to see why 2010 was the Phils best season at the box office. They had just come off back-to-back World Series appearances, beating Tampa Bay in 2008 and losing to the Yankees in 2009. In 2010 the Phils acquired Roy Halladay and expectations were the Phils would be going back for another run at a title. Things didn’t go quite as planned, as the Phils lost to the eventual World Series Champion Giants in the NLCS. Cody Ross became two four-letter words nobody around Philly wanted to hear.
Going into the 2011 season the Phils re-acquired Cliff Lee and had their much talked about Four Aces staff of Halladay, Hamels, Lee and Oswalt. The Phillies won a team record 102 games in the regular season and were the favorites to win the World Series again. This time they were dispatched by the eventual World Series Champion Cardinals in the NLDS. We mentioned the Phils re-acquired veteran ace Cliff Lee, but we need to elaborate on the signing and how it came to be. All reports had Lee either staying with the Texas Rangers or signing with the NY Yankees. The Phils were reported to not be in the bidding, as they had traded Lee once to make room for Halladay’s $20,000,000 per year extension.
On December 14th, 2010 big news broke. Cliff Lee had just signed a five-year, $120,000,000 back-loaded contract with the Phillies, leaving millions on the table from the spurned NY Yankees. The story Ruben Amaro Jr. told us is that Lee had communicated his desire to come back to the Philadelphia. Though the Phils had shown no interest up to that point, when Cliff Lee calls and says he wants to play for your team for $18,000,000 less than the Yankees, you at least have to listen.
After the signing Amaro took to the airwaves and thanked us, the fans, for making this possible. He gushed on and on about how loyal the Phils fans were and how this deal wouldn’t have been possible without our years of patronage. We spent like there was no tomorrow, not only on tickets but jerseys, hats, sweatshirts, jackets, t-shirts…just about anything you could think of that had a Phillie logo on it. Money flowed in like never before in Phillies history.
In 2012 the Phils played the first half of the season without Ryan Howard and Chase Utley, both of whom started the season on the DL rehabbing injuries. The Phils fell 14 games under .500 before the all-star break and sold off veterans Hunter Pence and Shane Victorino before the trade deadline. Victorino was slated to be a free agent after the 2012 season and apparently didn’t fit in the Phils future plans, but what about Pence? We’re not sure why he was dumped, as the Phils spent a year and a half trying to replace Werth’s big RH bat before Pence’s arrival in July 2011.
Howard and Utley returned around mid-season 2012 but needed some time to get their strokes back. The Phils got hot in August and September but fell short of the playoffs, finishing at 81-81. The main culprit seemed to be the bullpen which blew 12 eighth-inning leads. Had they won 2/3 of those games they would have made the playoffs for a 6th straight season, this time as a wild card.
In 2013 the Phils broke camp with a mantra that went like this; If everyone stays healthy and everything goes according to plan we should be right in the thick of things. How often does everything go right? With an aging and injury-prone core what were the odds the Phils would stay healthy? Things fell apart fast.
Delmon Young, Amaro’s hand-picked RF wasn’t ready to start the season. Carlos Ruiz started the season suspended 25 games for using Adderral in 2012, then played poorly upon his return. He was soon shut down with a hamstring injury. Doc made only 7 mostly poor starts before he was sent to the DL requiring shoulder surgery, Cole Hamels had a very bad April followed by a sub-par May and June. Ryan Howard barely got to 80 games but it was apparent he was playing hurt most of the spring. Mike Adams, Amaro’s prized pickup to set up for Jonathan Papelbon pitched poorly before being shut down in mid-June with multiple tears to his pitching shoulder. Ben Revere hit .200 in April then went on a tear batting .347 over the next 65 games before breaking his foot. Last but certainly not least, Chase Utley missed a month with a strained oblique from mid-May to mid-June. So much for the mantra.
The team languished all year just to stay close to .500 and then it all fell apart right after the all-star break. The Phils went 5-21 over a 26 game stretch, fired the winningest manager in team history and Citizens Bank Park was no longer the toughest ticket in town this side of an Eagle-Cowboy game. Though the Phils still finished 4th in attendance in the NL, their average had dropped 6,831 fans per night over the long season we just closed the books on.
If the Phils FCI is at the league average of $75.63 per fan that equates to well over $42,000,000 less in revenue from 2012 – and this just from the fans that attended games. If interest is down at the ballpark you know the sporting goods stores are selling a lot less merchandise and apparel. TV revenues could be down as well, depending on how those contracts are structured.
The last couple years Ruben Amaro Jr. has spent right up to the luxury tax threshold being careful not to exceed the $170,000,000 it was designated at for the 2013 season. The luxury tax is going up top $189 million next year, but at least $10,000,000 of that has to be set aside for player benefits and insurance. Assuming there’s roughly $177,000,000 of salary available before brushing up against the luxury tax next year will Ruben Amaro have free reign to spend that much, or will management tell him to toe the line somewhere south of that figure?
Currently, the Phils have $118,500,000 committed to just seven players for next year’s squad. They are Mike Adams ($7M), Jimmy Rollins ($11M), Jonathan Papelbon ($13M), Chase Utley ($15M), Cole Hamels ($22.5 M), Ryan Howard ($25M) and Cliff Lee ($25M). You can tack on $4M for Miguel Alfredo Gonzalez and probably around another $5-6M for Carlos Ruiz. Ben Revere should do pretty well his first time as an arbitration eligible player. Let’s put these three players at roughly $13M. That’s 10 filled roster spots and $131,500,000 committed in salary.
Let’s assume near league minimum for the following non-eligible arbitration players expected to be back; Dom Brown, Cody Asche, Darin Ruf, Freddy Galvis, Cesar Hernandez, Jake Diekman, B.J. Rosenberg and Jonathan Pettibone. We’re now at 18 roster spots and $135,500,000. Yet to be decided is the fate of Kyle Kendrick, John Mayberry Jr, Kevin Frandsen (who looks to be caught in a numbers crunch – especially if the Phils can’t get another option on Cesar Hernandez) and Antonio Bastardo – all of whom are arbitration eligible.
For the moment let’s say they’re all back except Frandsen. The big salary boost among these arbitration eligible players will be Kyle Kendrick ($7M) and Antonio Bastardo ($2M). JMJ in his first year of arbitration will probably receive a little over a $1M, but we’ll call it 1M exactly for our purposes here. We just increased the roster to 21 spots and the payroll to $145,500,000.
If Amaro is tasked with cutting salaries 10% there’s now approximately $4M to fill out the remaining four roster spots. Those four positions are a backup OF, two relief pitchers and a backup catcher. With only $4M to fill these spots there’s a good chance they will be taken by low cost players already on the 40 man roster. If that’s the case, where’s the change? Where did the Phils improve? How will the Phils market the same group that finished 23 games out of first place?
With all the holes the Phils have to fill it will be tough enough to field a contender if Amaro is given the open check book he’s had the last few years, but with such a large drop in revenue in 2013 the owners desire for profits may outweigh their desire to field a team capable of contending. This could be the start start of a vicious cycle that continues to see the team falter as revenues drop even farther.
The 2008 team was built on a core of young players who mostly came up through the Phils system and had not yet reached the pinnacle of salaries they’re currently making. Pat Gillick only spent a little over $94,000,000 on the 2008 World Championship Phillies. Are the owners willing to wait on the farm to produce another core capable of winning it all? If they are, it could be a number of years before we see another parade down Broad Street.