The move was something of a stunner. On March 26, the Arizona Diamondbacks reached agreement with a free-agent pitcher the Texas Rangers wanted but were not willing to pay: left-hander Jordan Montgomery.
The Rangers and Diamondbacks were opponents in the 2023 World Series. Both enjoyed a boost in revenues from their deep playoff runs. Both had their regional television futures disrupted because of their agreements with the bankrupt Diamond Sports Group. But to hear the teams’ respective owners tell it, the Diamondbacks were in better position to sign Montgomery, even though the Rangers generally carry higher payrolls.
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Montgomery, 31, agreed on March 26 to a one-year, $25 million contract with a vesting player option for 2025, the value of which could escalate to $25 million. He will begin his season at Triple A and make his first start on Sunday. His deal stipulates he will be in the majors no later than April 19.
Rangers owner Ray Davis, in a recent interview with the Dallas Morning News, cited potential competitive-balance tax penalties and the team’s uncertain local television future as deterrents to signing Montgomery, who played a major role last October in helping the franchise win its first World Series.
Diamondbacks owner Ken Kendrick, on the other hand, cited three main factors, all stemming from the team’s unexpected success in 2023, in explaining his decision to authorize the Montgomery contract:
Increased revenues from the Diamondbacks’ 17-game playoff run
Kendrick would not share an exact figure, but the Diamondbacks likely received in the range of $30 million, based on the amount distributed to players from 60 percent of the gate receipts for specified playoff games.
“Those revenue streams were not planned for in our budget,” Kendrick said. “They were found money.”
Increased season-ticket sales
Kendrick said the Diamondbacks’ season-ticket base is up about 30 percent from last season, the number rising from around 10,000 to around 13,000. The team also raised ticket prices across the board, contributing to higher per-game revenues.
“When you have a winning team, people will pay a little more to see it,’ Kendrick said. “We didn’t go crazy, but we did have some price increases.”
Though the Rangers’ exact season-ticket numbers are unavailable, Kendrick said they started from a higher base, in part because they opened a new ballpark in 2020. In theory, they had less room to grow. But the Rangers also are hosting this year’s All-Star Game, an event that generally spurs season-ticket purchases.
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Increased single-game sales
Teams generally begin selling tickets for individual games around Feb. 1. Tracking those sales through February and March, Kendrick said the Diamondbacks knew their numbers would be “way, way greater than they were a year ago.”
The attendance from the team’s first seven home games against the Colorado Rockies and New York Yankees reflected the greater enthusiasm. The Diamondbacks’ average crowd was 35,137, a figure they exceeded at the same point only once in franchise history — in 1998, their first year of existence.
“We could reasonably forecast where the year might go,” Kendrick said. “Some of it is speculative, to be fair. Most of it isn’t. And we determined, well, we can spend more on this team.”
Even before signing Montgomery, the Diamondbacks invested a combined $136.5 million in free-agent left-hander Eduardo Rodriguez and outfielders Lourdes Gurriel Jr., Joc Pederson and Randal Grichuk. They also added $11.3 million in 2024 salary by trading for third baseman Eugenio Suárez.
The team’s $168 million cash payroll ranks only 15th in the league, but is a franchise record by more than $36 million and an increase of $44 million from the end of last season. The Diamondbacks, however, are still an estimated $21 million under the $237 million luxury-tax threshold. (Luxury-tax payrolls are calculated from the average annual values of each player’s contract.)
The Rangers are in a different position.
They paid the luxury tax for the first time last season, though their penalty was a relatively small amount, $1.8 million. At their current luxury-tax number of $248.6 million, signing Montgomery for $25 million would have pushed them over the second threshold, resulting in a penalty of nearly $13 million.
The addition of Montgomery also would have moved the Rangers within $4 million of the third threshold, possibly compromising them in the 2025 draft. Teams that exceed that the third level have their highest draft selection moved back 10 spots, unless they are picking in the top six, in which case the second-highest choice is moved back instead.
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Davis, in his interview with the Morning News, referenced his team’s regional sports network uncertainty as another hindrance to their offseason, saying, “It’s a terrible position to be in. We didn’t put ourselves in this position. We’re scrambling to try to know what our broadcasting revenue is going to be for ‘25 and beyond.”
The Rangers remain with Diamond for 2024 but cannot sell in-market streaming options. The Diamondbacks, along with the Padres, were dropped by Diamond midway through 2023. The local broadcasts of both teams, along with those of the Colorado Rockies, are now produced by Major League Baseball.
Kendrick said the Diamondbacks will generate less regional TV income than they did last season. But because the team was with Diamond for only half of last season, the difference, he said, “isn’t a significant number.” The Diamondbacks, unlike the Rangers, also could introduce their own video-streaming platform. Fans in their home territory can pay $19.99 per month or $99.99 per season to watch the team’s games.
“We have some 20,000 video streaming customers that we didn’t have last year,” Kendrick said. “That doesn’t turn the world upside down. That math isn’t compelling. But it’s a growing area for us.”
Kendrick, who became part-owner of the Diamondbacks with the inception of the team in 1995 and took over as managing general partner in 2004, said he does not profit from owning the club.
“We’ve operated, over time, on a zero cash flow,” Kendrick said. “What comes in, it goes out.”
Other owners make similar claims, which cannot be verified without teams opening their books, something that as private companies they are not obligated to do. Kendrick, though, consistently demonstrates a desire to win, according to Mike Hazen, the Diamondbacks’ general manager since Oct. 2016.
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Hazen said Kendrick did not break down the financial details for him and explain how the team’s increased revenues were translating to a higher payroll. He merely told Hazen, “Look, when we’re ready to go, I want to be able to spend. I want to be more aggressive. You kind of need to look at how you’re doing your job a little differently than when we were projected to win 74 or 75 games.”
The Diamondbacks entered the offseason seeking to add one starting pitcher, which they did by signing Rodriguez to a four-year, $80 million contract. They rounded out their roster by spending on position players, but when spring training began, a number of free agents were still available. At that point, Hazen said, Kendrick and team president Derrick Hall asked the front office, “What’s the deal here? What do you think? Should we check in?”
Hazen believes Montgomery might not have been interested in the Diamondbacks if they were coming off a less successful season. Kendrick said the Diamondbacks might not have been interested in Montgomery if he demanded a long-term deal. The Diamondbacks, who traded Zack Greinke in the fourth year of a six-year, $206.5 million contract and released Madison Bumgarner with nearly two years left on a five-year, $85 million deal, preferred a shorter arrangement.
“No disrespect to Jordan Montgomery,” Kendrick said.“We’ve done a couple of large, long-term agreements with starting pitchers. And when you look back with the benefit of hindsight, they haven’t worked as well for us as we hoped they would. We’re somewhat less willing to do that yet again.
“We hope Montgomery will be here a long time. Contractually, he’s really only obligated for one year, and maybe two. We felt that was worth the risk. We do have a very, very significantly competitive division when you look at what our competitors have done.”
The Los Angeles Dodgers guaranteed players a total of $1.4 billion during the offseason. The San Francisco Giants spent $323 million on free agents. The Diamondbacks were fourth in free-agent spending, yet the amount they guaranteed was less than 10 percent of the Dodgers’ total outlay and less than half of the Giants’ free-agent investment. Not that Kendrick was deterred.
“I think it’s more fun to compete with better teams,” he said.
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His club lost 110 games in 2021, a season that was all the worse considering that even then, the Diamondbacks were trying to win and not tanking. This season, coming off the franchise’s first World Series appearance since its 2001 title, Kendrick saw revenues rise. He saw an opportunity to sign a top starting pitcher who was lingering on the free-agent market. And when the Rangers declined to bring back Jordan Montgomery, he jumped.
It’s a risk. These things always are. But even with the Diamondbacks’ local television future in question, Kendrick was undaunted.
“Our team revenues are going to be equal to or greater than what they were a year ago, unless we fall on our face,” Kendrick said. “And if we do, shame on us.”
(Top photo of Ken Kendrick holding the Warren C. Giles Trophy after the D-Backs won the 2023 NLCS: Elsa / Getty Images)
