Dolan: Financial reality led to Deadline deals

Dolan: Financial reality led to Deadline deals

CLEVELAND -- The Indians' ownership family is prepared to lose $16 million this season, according to president Paul Dolan, and more losses are in store for 2010.

That financial reality provided the backdrop to the whirlwind of activity by the Tribe prior to the July 31 Trade Deadline, when Cy Young winner Cliff Lee and All-Star catcher Victor Martinez were shipped off in a series of moves that didn't sit particularly well with their fan base.

But Dolan told reporters Thursday that the moves were for the greater good of an organization operating in a market hit hard by the recession.

"The reality is we were suffering financially before we made these deals," Dolan said. "Given the team's performance this year, had we stayed put, we would not have been able to go outside the organization to bring in any new talent [in the offseason], and I think we would have suffered even greater losses [in 2010]. Our moves we've made now will certainly exacerbate that, but probably not by a significant amount."

Dolan refuted the notion that the Lee and Martinez trades were mere cash dumps and said ownership was willing to go with the 2010 projected payroll that included Lee's $9 million option and Martinez's $7.2 million option. But with no significant offseason additions, the Indians didn't envision a particularly strong chance of that club contending.

That's why the Indians made the moves they did, injecting the system with a wealth of new prospects, primarily pitchers.

"The magnitude of the financial issue is that if we didn't succeed on the field at a high level next year, it would have had a negative impact on the team for years to come," Dolan said. "Whereas now, given the level of talent infused into the system and the level of financial flexibility that we've given ourselves, we have a better chance of being successful on the field in the outlying years [beyond 2010]."

Dolan believes in this plan, and he has shown faith in general manager Mark Shapiro and assistant general manager Chris Antonetti in executing it. But he knows a significant portion of the fan base doesn't like it one bit.

"Yes, they're not happy with us now," he said, "but they weren't going to be happy with us for years to come if we didn't do the things we did."

Cululative Major League records and payrolls, 2005-09
Team
W-L-PCT
Payroll
*Payroll Diff.
Angels442 - 312 .586$562,892,354$232,407,497
Yankees441 - 315 .583$1,071,941,910$741,457,053
Red Sox434 - 321 .575$707,951,121$377,466,264
Phillies415 - 339 .550$543,839,598$213,354,741
Mets408 - 348 .540$645,120,444$314,635,587
White Sox406 - 352 .536$491,835,223$161,350,366
Cardinals406 - 351 .536$496,739,931$166,255,074
Twins399 - 358 .527$332,626,863$2,142,006
Indians394 - 362 .521$330,484,857--
Dodgers392 - 365 .518$587,695,228$257,210,371
Blue Jays387 - 368 .513$401,115,845$70,630,988
Cubs384 - 369 .510$600,061,530$269,576,673
Tigers385 - 370 .510$534,656,484$204,171,627
* Payroll difference from the Indians.

Standings are through Aug. 7

Dolan, whose father, Larry, bought the club from Dick Jacobs in 2000, is not immune to the negative reaction. Many fans have taken to Internet message boards and demanded that the Dolans sell the team, but they have no plans to do so. The family is, however, open to outside investment into the club and always has been.

"I get the suggestion to sell the team a few times a day from various fans," Dolan said with a laugh. "If I've gotten that suggestion once, it's probably been 100,000 times. But for the very first time this week I got an e-mail that not only said I should sell the team but told me who to sell it to. I happen to know those people and I ran into them at the ballgame. I told them, and they smiled."

The Dolans aren't going anywhere, but it appears more possible than ever that changes could be made elsewhere in the organization this offseason. Shapiro is certainly safe, but he has said that he will evaluate the front office to see if changes need to be made. And it's already well-documented that manager Eric Wedge and his coaching staff will come under review.

Dolan will, of course, be a part of that process, but he said it's important for fans to judge the Indians' leaders on their entire track record and not just what's transpired the last two years.

"If you look at the last four seasons, I think we are fifth in the American League in total wins, just behind the major markets," Dolan said. "That's a significant accomplishment in today's baseball climate. Every four or five years, if we can have a shot at the World Series like we did in '07 and compete for the playoffs like we did in '05, that's as good as it gets, and that reflects well on our personnel."

Ownership will have a say in the fate of Wedge, who is in his seventh year at the helm.

"Eric and his staff have achieved a lot in their time here," Dolan said. "I think fans tend to forget that. When he took over in '03, he took over what was, in essence, an expansion franchise. In a relatively short period of time, he turned it into a competitive team. He and others deserve a lot of credit for that. Despite that, we have not been successful the last few years with a team that should have been successful. We have to understand why that is. We also have to understand that sometimes fans want or need to hear a different voice. We have to balance that."

While Major League Baseball's labor agreement provides assistance to small- and mid-market clubs in the form of revenue-sharing, there is no salary cap and no restrictions on the money teams can offer international free agents and First-Year Player Draft signees, so it can be difficult for clubs like the Indians to keep up with the deep pockets of clubs like the Yankees, Red Sox and Dodgers.

While a salary cap is the most popular proposed change among fans, Dolan cited a worldwide draft with a slotting system as a more realistic proposal that would help out the smaller-market clubs. He said that proposal will likely be a major talking point in baseball's next round of Collective Bargaining Agreement talks. The current CBA is due to expire in December 2011.

"The larger market teams have managed to take their money and, in fact, manipulate the amateur draft situation," Dolan said, "so that not only are they bringing in the elite talent at the Major League level, but they're bringing in at a disproportionate basis the elite talent at the entry level of Major League Baseball."

For now, the Indians are operating under economic realities that create the need for creativity. The Tribe decided it could not afford to keep high-profile players like CC Sabathia, Lee and Martinez for the length of their careers, and it's likely that keeping an elite player like Grady Sizemore beyond his 2012 option year will prove just as difficult.

"CC was a prime example," Dolan said. "There was no chance that the Cleveland Indians or the Milwaukee Brewers or any other team in this market size was going to sign that level of free agent. We could sign them, but we couldn't build a winning team around them. That's our reality. We have to operate as effectively as we can within that reality."

The Indians hoped to draw 2.2 million fans this season but are now projected to bring in 1.75 or 1.8 million, according to Dolan. Even if attendance had reached the 2.2 million mark, ownership figured to lose money.

Revenue sharing and the profit turned by SportsTime Ohio, the regional sports network the Dolans started in 2006 to air Indians games, offset some of the losses, but the $16 million figure Dolan shared took those profits into account and was a net number.

Dolan said the Indians' ownership is not in the position of having to borrow money from Major League Baseball, as is the reported case with the Texas Rangers. But the Dolans are operating a ballclub that is in a much different financial position than when they acquired it from Jacobs.

"What's happened here in the general economy over the last 10 years," Dolan said, "is we've been in recession of some form or another since early 2000, really since we bought the team. Jobs have been lost. Populations have declined. And there is more competition in the marketplace [with the Browns and Cavs, in particular] than there was in the '90s. That's our reality, and we understand it."

Anthony Castrovince is a reporter for MLB.com. This story was not subject to the approval of Major League Baseball or its clubs.