Friday, May 06, 2011

No Pay for Play? LA Dodgers payroll at risk.

Although they’re faring a bit better of late, the Red Sox’ performance has been fairly dismal this season, Given their ultra-high (although not quite Yankee-level) payroll, there were great expectations at the season’s start that they would, if not win every game, then most of them. Out of the batter’s box, that didn’t quite happen. Big swing and a miss, you might say. (As I write this, they’re playing under .500 ball.)

Given the tribulations of the Olde Towne Team, and the early season’s skewed payroll-performance ratio, I’ve been reluctant to point fingers at the business peccadillos of other major league teams. Even when Major League Baseball grabbed the reins of the Los Angeles Dodgers because they were spinning out of financial control.

And now comes the news, which I saw in The New York Times, but which originated in the LA Times, that the Dodgers don’t have the cash on hand to make their May 31st payroll.

Based on its opening-day payroll of $103.8 million, the Dodgers' payroll for its major league roster in the second half of May will be approximately $8.25 million. The figure includes 16 days salary, but not any signing bonus payments that happen to fall due.

MLB will supposedly step in and make good, but the thought of a professional sports team as venerable, storied and long-lived as the Dodgers would make this type of whiff is pretty near unimaginable. But the Dodgers’ owners, Frank and Jamie McCourt are going through a difficult divorce, and there are all sorts of rumors of financial irregularities hovering over Dodger Stadium, so….

Personally, I don’t feel all that badly for the boys in Dodger Blue who are on the field. Even the lowliest paid guy on the squad should be doing better than living paycheck to paycheck.

But, of course, there are the front office folks and assorted other grunts on the payroll who aren’t pulling down millions a year, and you don’t want to see them going home with a couple of hot dogs and foam fingers in lieu of a check.

I have been through the wolf-at-the-door, will-we-make-payroll scenario a few times during my career.

This was during my nearly 10 year roller coaster ride with Softbridge, an oddball little software company where I spent entirely too long making myself entirely too crazy.

For my first couple of years there, I was a staffer to the CEO and Vice-Chairman, and spent most of my time writing business plans and drafting PowerPoint presentations, to be used by our CEO for the sole purpose of getting one of our long-suffering investors to throw a bit more of his good money after our bad. (Before we got clean and sober, I believe we frittered away $40M in OPM – other people’s money.)

In the nick of time, the CEO would fly off somewhere, and come back with a million bucks, which would keep us going for another while. Then, off he went again.

The CEO reminded me of Mighty Mouse.  We, the employees, were the people of Mouseville.

We’d be wringing our hands, singing, “Mighty Mouse, oh, Mighty Mouse. Save us, oh, save us.” And Mighty Mouse would fly in, “Here I come to save the day…” And damned if he didn’t for a good long while.

I ran the Mighty Mouse metaphor by the CEO one day, but it just drew a blank. That’s because our own personal MM hadn’t grown up in the States, but had been raised culturally deprived and cartoon-less in Scandinavia.

Even after our investors finally wised up and brought in a turnaround guy, and the CEO got D-CON’d, we still had occasional near misses.

At one point, we had a list of who would and wouldn’t get paid if worse came to worst. By that point, I was an “executive” – 50 person company; thus the “quote marks” – so I was living in the No-Pay Zone. Worse, I was the only person other than the President who could make financial transfers and authorizations, and I had to co-sign all checks over a certain amount, so I think I might have had some sort of shared liability for payroll tax if we’d come up short. (The things you do in and for a small company…)

As for the Dodgers, all I can say is that it’s a good thing that Manny Ramirez isn’t on the team any longer.

I can only imagine the look on Manny’s face when he realized that he might not get paid for his work.

Even when the Red Sox were paying him millions and millions and millions of dollars each year, once he decided that there was a greener pasture outfield elsewhere, Manny figured out a way to get there. That meant completely dogging it on the field – and I do mean dogging it; you really don’t see all that much goldbrickin’ in professional sports, but Manny had it mastered – so that the Red Sox wouldn’t exercise their option to keep him around for the final two years of his contract, which was locked in at some paltry amount. (Can’t remember exactly, but I believe it was between $15M and $20M per.) ManRam figured he’d do better on the open market, and managed to get himself traded to the Dodgers, who subsequently signed him to a deal for more than the Red Sox would have paid him. Multiple teams and a couple of failed drug tests later, Manny is no longer playing. But I can just imagine the look on his face if he learned he was going to get a pay packet with an IOU in it.

Meanwhile, I have a hunch there’s another McCourt-Dodgers post in my future.

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The McCourts have been a Pink Slip topic before. Here’s a link to my post on their hiring psychic healer Vladimir Shpunt to help the Dodgers get their mojo back.  And some folks wonder why the Dodgers are having a hard time making payroll…

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