04-10-2006, 01:07 PM #1
Small-market team, big-market attitude
[size=18px]Small-market team, big-market attitude[/size]
From a beefed-up Vikings payroll to Winter Park renovations, Zygi Wilf is showing he will take a loss if it helps his team win.
Vikings Insider Kevin Seifert
Last update: April 09, 2006 Ã¢â‚¬â€œ 10:40 PM
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To the right was the Vikings' $49 million man, Steve Hutchinson, participating in offensive line drills. To the left were Fred Smoot, Jermaine Wiggins, Pat Williams and a handful of other players whose deferred bonuses have come due in the past 10 months. In every direction, of course, were a team-record 21 assistant coaches.
Zygi Wilf's largesse was evident all around Winter Park this weekend, his first minicamp as Vikings owner. After paying a premium price of $600 million for the franchise last spring, Wilf already has put out one cash call to his ownership group for expenses that include: increased player and coaching payrolls, a Winter Park renovation project and a back load of bonuses deferred from previous owner Red McCombs' era.
That cash fueled the franchise following a significant financial loss in 2005, estimated to be more than $10 million, after three years of annual profits under McCombs. And despite the promise of greater revenue sharing from the NFL's new collective bargaining agreement, Wilf is projecting another loss for 2006.
In an interview Saturday, Wilf said he was prepared to subsidize short-term losses when he purchased the team in June. And while he acknowledged that a new stadium would reverse those losses, he insisted, "I bought this team with the intent of enjoying football."
He added: "We will continue to improve our team, and that certainly will take a toll on us financially. My primary goal, as I've always stated, is to stay competitive and do what's necessary to get to the championship. But it comes at a price. It's a sacrifice that we're willing to make."
Wilf would not confirm specific numbers but acknowledged the Vikings were in the red in 2005.
"We are requiring supplemental revenues," he said, "and that gives the means to conclude that we are operating at a deficit."
Wilf has chafed at recent suggestions that the league's new collective bargaining agreement will cover his projected losses. In general, owners have agreed that the teams with the 15 highest annual revenues will contribute money to a pot that will be distributed to the league's 15 lowest-revenue teams in the first four years of the deal.
Some details remain in negotiations, and some small-market owners are concerned the plan will not bridge the gap between them and the NFL's most cash-flush teams. Most projections suggest that the Vikings, who will be the NFL's lowest producer of local revenue this year, will receive an additional $5 million to $7 million in new revenue-sharing subsidies.
At the same time, however, the new CBA raised the salary cap almost $8 million for 2006. The cap will continue to rise as Arizona, Dallas and other teams build new stadiums. In essence, the new CBA is projected to be a zero-net result for the Vikings if they continue their current spending habits.
"Revenue sharing will buffer us from further losses," Wilf said. "We're hoping that building a new stadium will allow us to become profitable. But right now, you really have to love your football. You have to love your football, because on the financial side it will become more and more difficult."
This offseason, Wilf authorized a team-record player payroll. For the first time in years, the Vikings are spending to the salary cap rather than stopping short and devising artificial means to push the excess space into future seasons. In other words, the Vikings will spend at least $102 million in cash this season on player salaries.
About $30 million of that total represents deferred bonuses from the McCombs era. But a larger portion comes from the estimated $35 million in guaranteed money and first-year salaries the Vikings committed to their 10-man free-agent class this spring.
Among other expenses Wilf has taken on:
Ã¢â‚¬Â¢ Adding six new coaching positions to the staff and some $5 million to the coaching salary budget. Last season, former coach Mike Tice entered training camp with 15 coaches and a total salary budget of less than $3 million. Wilf has pledged to bring the coaching budget to the NFL average, which is about $8 million. As of today, the Vikings have 21 assistants, and coach Brad Childress alone is making $2 million.
Ã¢â‚¬Â¢ Spending more than $2 million on Winter Park renovations, which will include additional meeting rooms, a larger player lounge and a new, 2,900-square-foot locker room.
Ã¢â‚¬Â¢ Doubling the size of the executive staff from three vice presidents to six.
McCombs spent in a similar manner during his first three years as owner before cutting back. As he watched his team take the field this weekend, Wilf pledged not to make football decisions based on his bottom line.
"We've felt we've needed to spend the money to be competitive, and we did that," Wilf said. "We will continue to do that. We know it will continue to eat away at our profitability until we're able to get into a new stadium."
Kevin Seifert Ã¢â‚¬Â¢ kseifert@startribune. com
Small-market team, big-market attitude
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04-10-2006, 01:44 PM #2
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