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Fact vs. fiction: Analyzing Diamondbacks owner Ken Kendrick's spending habits

Jesse Friedman Avatar
March 7, 2022

When Major League Baseball made its “best and final” collective bargaining proposal to the MLB Players Association on Tuesday, not all owners were on board. According to The Athletic’s Evan Drellich, there were four detractors: Angels’ owner Arte Moreno, Reds owner Bob Castellini, Tigers owner Chris Ilitch and Diamondbacks owner Ken Kendrick.

Of course, the MLBPA unanimously voted against the offer anyway, and the opposition of four owners wasn’t enough to prevent the proposal from making it to the players’ table — it would take eight opposers to make that happen.

Suffice it to say that Diamondbacks fans weren’t surprised to see Kendrick in that group.

For Diamondbacks Twitter, hating on Kendrick is just another day at the office. But while Kendrick’s antics have spun fans the wrong way on multiple occasions, a deep dive into the numbers reveals that his spending is roughly on par with the rest of the league.

Before I get into the numbers, I should mention that the animosity toward Kendrick is understandable. Fans want baseball back — Kendrick effectively voted against it. Fans wanted Diamondbacks employees fairly compensated during the pandemic — Kendrick cut or furlouged 25 percent of his staff and was one of the last MLB owners to restore full pay to his remaining employees. Fans wanted Kendrick to just stay out of trouble — he issued threats and called former attorney general Grant Woods an “arrogant asshole” in an unwarranted email after Woods criticized him on Twitter. The list goes on.

Despite the long list of irksome storylines Kendrick has found himself in, fans don’t need to like him. They don’t pay to watch him at the ballpark. In fact, if Kendrick is making the necessary financial commitments to keep the franchise afloat, they might even forget about him.

The general consensus is that Kendrick hasn’t done that either. Heck, he didn’t pay Paul Goldschmidt. That’s all you need to know, right? For the moment, let’s have the numbers do the talking.

Diamondbacks Opening Day payroll (in millions of dollars) via Cot’s Baseball Contracts, 2001-19

Based on the graph, it’s not particularly surprising that Kendrick’s tenure as the Diamondbacks’ primary owner began in 2004. It was the first time the payroll dipped below $80 million since the team’s inaugural season.

Kendrick’s spending cuts were warranted, though. Despite bringing Arizona its first pro championship, predecessor Jerry Colangelo was ousted after reportedly racked up roughly $353 million in losses and $254 million in salary deferrals. The Diamondbacks were in dire financial distress, and Kendrick stepped up to right the ship.

That wasn’t going to be a one-year task. We don’t know exactly how long it took, but reports indicate that the Diamondbacks did not fully pay off their Colangelo-era debts until roughly 2014. With that in mind, let’s look at the Diamondbacks’ average annual payroll with Kendrick at the helm, compared to the league average.

Diamondbacks payroll vs. league average payroll (in millions of dollars) via Cot’s Baseball Contracts, 2004-19

At first glance, we notice that Kendrick’s spending has been largely performance-based. When the team exceeded expectations, the following year’s payroll generally spiked — see 2012 and 2018 for clear examples of this. Likewise, when the team underperformed, the following year’s payroll generally plummeted — see 2011 and 2015 for examples of this. Obviously, Kendrick is not the only owner who operates this way.

It’s also easy to see that the Diamondbacks have spent less than league average on payroll every year under Kendrick, though they did come close in 2014 and 2018. In that sense, fans’ frustrations are justified. The Diamondbacks generally spend less than other teams, despite playing in the fifth-most populous city and the 11th-most populous metro area in the country.

Unfortunately for the Diamondbacks, Phoenix’s booming growth hasn’t necessarily translated to ticket sales or TV ratings. We can’t fairly evaluate Kendrick’s spending until we factor in team revenue. Let’s look at the team’s annual payroll again, this time plotted alongside annual revenue.

Diamondbacks Opening Day payroll and annual revenue (in millions of dollars) via Statista, 2004-19

This may look egregious at first glance. Why does Kendrick spend such a small portion of his revenue on payroll? It’s a fair question — and it’s somewhat impossible to answer, given that MLB teams generally don’t open their books.

The best we can do is compare the percentage of revenue Kendrick is spending on his players with that of other teams. Let’s take the 2019 Dodgers, for example. Their payroll was about $196.3 million that year. According to Statista, their revenue in 2019 was $556 million. That means they spent about 35 percent of their revenue on team payroll.

Granted, the Dodgers were coming off five straight years of lofty competitive balance tax bills from 2013-17, and they limited spending in 2018-20 as a result (you may have heard in lockout talk about how the CBT threshold effectively acts as a salary cap.) If we look at 2015 instead — the spendiest season in Dodgers history — they spent about 68 percent of their revenue on payroll.

Since Kendrick took over in 2004, the Diamondbacks have spent as little as 30 percent (2007) and as much as 53 percent (2014) of their total revenue on payroll. The following graph shows these percentages for every season under Kendrick, along with the league average.

Diamondbacks and league-wide payroll as percentage of revenue (league revenue via Statista), 2004-19

At first glance, we immediately see what players have been saying for years: players are receiving a smaller portion of league-wide revenue than they used to. It’s the fundamental reason why the MLBPA rejected MLB’s last collective bargaining offer.

We also see that the Diamondbacks allocated a below-average slice of revenue to payroll for eight consecutive years from 2005 to 2012. In doing so, the team saved roughly $100 million compared to a league-average allotment of revenue to payroll. That’s not necessarily alarming, considering the more than $250 million in deferrals left by Colangelo that figures to have been paid out during that time frame.

From 2014 through 2019, the Diamondbacks spent 43.2 percent of revenue on player payroll compared to 42.3 percent league-wide. Yes, Kendrick allocated more of his revenue to payroll than the rest of the league.

Speaking of revenue, you may be wondering: How has the Diamondbacks’ revenue increased so rapidly despite attendance figures that have effectively held steady for more than a decade?

Diamondbacks annual revenue (in millions of dollars) via Statista

The answer lies primarily in a 20-year, $1.5-plus billion television contract the team signed with then-FOX Sports Arizona in 2015 that more than doubled the club’s annual TV revenue.

“Any increase in revenues as we’ve said in the past will go directly towards our [team] so it will help our product on the field,” Hall told MLB.com’s Steve Gilbert at the time.

In reality, even after signing Zack Greinke to a six-year, $206.5 million mega-deal in December of 2015, the team’s annual payroll didn’t increase significantly until 2018, when it jumped north of $130 million on the heels of an unexpected postseason appearance in 2017. 

Kendrick maintained a similar level of spending for 2018, 2019 and 2020, as the team remained competitive. Then the pandemic came, and the 2020 team massively underperformed.

Suddenly, recent trade acquisition Starling Marte was on his way to Miami because the Diamondbacks didn’t want to pick up his $12.5-million option and fan-favorite Archie Bradley was dealt to Cincinnati. By Opening Day 2021, the payroll plummeted below $100 million.

Since becoming managing general partner in 2004, Kendrick’s willingness to spend has been almost entirely dependent on whether he felt his team had a shot. Ironically, throughout his tenure, the Diamondbacks have never made the playoffs in a season where their Opening Day payroll was above $100 million.

At the end of the day, Kendrick runs his team like a lot of owners do. His revenue is middling at best, and he spends roughly the same percentage on payroll as other owners — sometimes more, sometimes less depending on how well his team is positioned in that particular season.

Granted, saying that Kendrick spends what other owners spend and saying he spends what he should spend are two very different things. All we can say is that Kendrick probably isn’t pocketing significantly more or less cash than other owners around the game, despite what some fans seem to believe.

Speaking of fans, I don’t suspect I’m making anyone sleep much better with this analysis. Kendrick isn’t the owner whom Diamondbacks fans want, and no number of spreadsheets or graphs will change that.

Kendrick allowed the best position player in franchise history to slip away. He failed to intervene when his baseball ops people serially mismanaged the international signing process. He fought an extended war with Maricopa County that led to rumors about the team leaving town. He has shown limited vision for a franchise that is still struggling to find its identity entering its 25th season.

But at the very least, Kendrick’s spending habits appear roughly in line with his counterparts around the league. Admittedly, at a time when skepticism of MLB owners is at an all-time high, that may not be saying much.

Follow Jesse Friedman on Twitter

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