SBD/January 23, 2012/Franchises

Increased Rangers Ticket Prices Tied To Signing Of P Yu Darvish

Rangers' payroll increased from $57M two years ago to expected $125M in '12
Rangers co-Chairs Ray Davis and Bob Simpson Friday wired a $51.7M posting fee to P Yu Darvish's former Nippon Professional Baseball team and "that mere act helps explain why ticket price increases are necessary," according to Brad Townsend of the DALLAS MORNING NEWS. Simpson said that the franchise "has operated at a deficit despite going to the World Series each of the last two seasons, during which payroll has increased from $57 million to an expected $125 million" in '12. Simpson said, "I want fans to understand that we’re committed. We’re putting money in and not taking any money out. So if we have to raise ticket prices, we’re all partners in this thing together. And financially, we’ve got to get it sustainable" (DALLAS MORNING NEWS, 1/21). Meanwhile, Simpson said of adding free agent 1B Prince Fielder to the Rangers' roster, "He's been considered, but given our set of cards, too pricey. If that were to change, I guess they'd look at it harder. Right now he's priced himself out of what we could do." ESPN DALLAS' Richard Durrett noted when it "comes to the club's finances, Simpson talked about a strategy to make the Rangers a 'dynasty.'" He said, "You're trying to take it to a new level, a sustainable level, where it is a dynasty franchise like the Dallas Cowboys achieved. Then in the off-years, and inevitably you'll have some, they still support you" (ESPNDALLAS.com, 1/21).

SUSTAINABLE FRANCHISE: Simpson said of the Rangers’ front office, “I believe them and trust them. They've done a lot of work. But it goes back to the theory of are you in a sports organization to try to second-guess them. We don't do that. … If you think you can improve your management personally as an owner, you need to get somebody else and not try to do it yourself. That's where I disagree with the owners that are so proactive and involved technically. It's like, knock yourself out if that's fun for you. That's in hobby area. Here you get the very best people and support them. We were fortunate in that we had such superb staff when we bought the thing that we're not reinventing anything." Asked how he balances spending with generating revenue, Simpson said, “Winning comes first, and then support comes. We can't ask fans to come to every game when you're losing and help you increase your revenues.” He added, “The one thing we know for sure is money can’t buy [wins]. Silly guys get in with big egos and a lot of money and just make a mess. I don’t believe that is going on here. You’ve got thoughtful spending behind superb management. That’s a different model.” Simpson said, “Payroll has gone from $57 million to maybe $125 million this year. That's $70 million. When ticket sales are $70 million, you can't expect it to be covered quickly. It'll need further increases in ticket prices, and this TV increment for revenue, and a winning team. Then we'll have a sustainable model. But people who invest in a baseball franchise are, in our case on the financial side, looking for ultimate appreciation of the value of the team. We're not looking to take money out. We also are putting in money now” (FT. WORTH STAR TELEGRAM, 1/22).
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