Major League Baseball’s playoffs begin next week, and few teams are more intriguing — financially, anyway — as the Chicago White Sox.
They arguably can use the increased revenue from a long postseason run more than anyone else still standing but could play one home game if they don’t hold up against their first-round opponent, most likely the powerful Houston Astros.
Credit White Sox Chairman Jerry Reinsdorf for betting heavily on the talents of his players and front office. The timing of his “all-in” approach for 2021 couldn’t be more striking.
On one side of Chicago, Cubs owner Tom Ricketts was blunt about the impact of the Covid-19 pandemic on baseball. “The scale of losses across the league is biblical,” he said in an interview with ESPN in June, 2020, when MLB was locked in an awkward dispute with the players’ union over how to address games played with no fans in the stands.
Ricketts would subsequently order that his front office downsize the payroll in a major way. The result was 15 players who had earned a combined $149.3 million in their last season as Cubs were either traded or sent packing in other ways, including eight who had salaries of at least $11.5 million.
The Cubs, who had won the World Series in 2016 and had a .570 regular-season winning percentage from the start of 2015 until the trade deadline last summer, took one of the most abrupt, intentional backward steps in baseball history, leaving themselves with only $38.5 million in guaranteed contracts on the payroll for 2022.
Meanwhile, on the other side of Chicago, Reinsdorf kept his thoughts to himself about baseball finances. He spoke through his actions and his desire to win the eighth championship of his determined tenure as the primary owner of the Sox and the NBA’s Bulls.
Having committed to a rebuild when General Manager Rick Hahn traded Chris Sale to Boston after the 2016 season, Reinsdorf not only kept the faith but doubled down.
After trading for Lance Lynn and adding free agents Liam Hendriks and Adam Eaton in the off-season — and bringing Hall of Fame manager Tony La Russa out of retirement — the White Sox opened the season with a projected payroll of $128.7 million, the biggest in franchise history. That mark had stood at barely more than $70 million at the start of ’17, when Hahn was focusing his attention on acquiring and developing players like Luis Robert, Lucas Giolito, Eloy Jimenez, Yoan Moncada, Michael Kopech and Dylan Cease.
The White Sox have increased their payroll throughout the season, with the trade deadline acquisition of Craig Kimbrel as their biggest move. Their share of salaries for Kimbrel, Cesar Hernandez, Billy Hamilton and Brian Goodwin have pushed the payroll to about $135 million.
This hardly puts the South Siders on a level with teams like the Dodgers, Padres, Yankees and Red Sox, of course. But as Ricketts said in his June, 2000, interview, MLB teams don’t “hoard cash” so they’ll always have it “sitting in a pile we’ve collected over the years.”
Throughout most of his 42 seasons owning the White Sox, Reinsdorf has largely followed a financial model that Ricketts touches on.
“Most baseball owners don’t take money out of their team,” Ricketts said. “They raise all the revenue they can from tickets and media rights, and they take out their expenses, and they give all the money left to their GM to spend.”
While White Sox fans have fully embraced this year’s team, which used a 19-9 run in May to build a comfortable lead in the AL Central, it is unclear how much that enthusiasm has generated in increased revenues done to offset the team’s aggressive spending.
With little late-season drama to drive the September narrative, the White Sox drew 23,018 to Guaranteed Rate Field for Wednesday night’s victory over Cincinnati. Three similar crowds for this weekend’s series against Detroit would leave the Sox with a season attendance of about 1,570,000.
Amazingly, that’s fewer fans than they drew when they went 72-89 in 2019, the last season before Covid-19 changed the dynamics for everyone whose revenue depends on crowds.
Here’s a telling fact: The White Sox were 11th in the AL in attendance in ’19, outdrawing only Oakland, Detroit, Kansas City and Baltimore; they figure to move up to sixth this season, yet as they do this their own attendance is down about five percent (from 2019).
Every game they host in October helps MLB teams improve their bottom line.
A run to the World Series could mean as many as 10 postseason home games for the White Sox, who are currently in line for only Game Three of the AL Division Series, which is set for Oct. 10.
No matter how well the Sox play, their success this season should help them bounce back quicker from the pandemic, at least on the surface. But Reinsdorf’s ownership group is paying a high price for the success, and should probably thank Ricketts for pointing it out.