The plunge in oil prices and the resulting decline in production have put a dent into the wealth of Texas Rangers co-chairman Ray Davis.
According to Forbes magazine, Davis has lost $1.25 billion in the past year, leaving his estimated worth at $1.75 billion.
Yeah, Davis is doing just fine.
So are the Rangers, who Davis said have seen an increase in full-season ticket equivalencies ahead of the 2016 season and are operating at a profit.
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The genesis of the money may have come originally from oil and gas. But that doesn’t mean that we’re going to move the payroll up and down based on the price of oil.
Rangers co-chairman Ray Davis
And the price of a barrel of West Texas crude has had no impact on the Rangers’ budget, and won’t going forward.
“The genesis of the money may have come originally from oil and gas,” Davis said Wednesday. “But that doesn’t mean that we’re going to move the payroll up and down based on the price of oil.”
Davis gave his first interview on the club’s finances since helping purchase the club in August 2010. The session with the media came before the Rangers opened their Cactus League schedule with 6-2 victory over the Kansas City Royals.
Colby Lewis and Nick Tepesch tossed two scoreless innings apiece, and prized prospect Nomar Mazara went 3 for 3 with a three-run homer, four RBIs and two runs scored only two days after the Rangers signed Ian Desmond to play left field in a move that likely will send Mazara to Triple A to open the season.
Nevertheless, Mazara is 6 for 6 so far this spring including his 3 for 3 Monday in the Rangers’ intrasquad game.
“They’re big-leaguers, they play at a high level and they have nasty stuff,” said Mazara, who took former Rangers pitcher Ross Ohlendorf deep in the ninth inning. “I just went out there and did my job.”
Nomar Mazara was rated as the No. 21 prospect in the game by Baseball America, joining teammates Joey Gallo (No. 10) and Lewis Brinson (No. 16) in the top 25.
Davis’ budget summit centered on finding room to add players like Desmond. But he also spoke about the decision to place additional netting above the dugouts at Globe Life Park for fan safety and suggested that the Rangers are closing in on land for a new academy in the Dominican Republic and on a new home for their High A minor league affiliate.
That all cost money, too, from an ownership group that includes several prominent members who made their fortunes through oil and gas.
Bob Simpson, the other co-chairman, hit the jackpot when XTO Energy was sold to ExxonMobil and serves as the chairman of MorningStar Partners. Ownership committee chairman Neil Leibman is the CEO of Summer Energy Inc.
But their personal dealings are separate entities from the Texas Rangers Baseball Club, which Davis said is operating at a profit despite not clearing 2.5 million fans in 2015 and entering 2016 with a payroll just north of $157 million.
Davis said that the ownership group can add more salaries this season at the July 31 trade deadline if a player or two can help the Rangers reach their ultimate goal. But they will add only if general manager Jon Daniels clearly presents the need to do so.
“What can they do to bring us a world championship?” Davis said. “That’s what it’s all about.
“Does that mean we’re not going to be fiscally responsible? Sure we are. If we’re going to be a viable franchise long term, we’ve got to be fiscally responsible. So, we’re not going to go crazy.”
The free-agent signing of Desmond on Monday fits the need scenario. The Rangers felt as if they needed a more reliable option in left field with Josh Hamilton’s left knee becoming more of an issue than Daniels and the front office had forecast in the off-season.
Had Hamilton’s health been more of an issue in December than in February, perhaps they could have pursued free agents Justin Upton or Yoenis Cespedes.
1.75 Estimated worth, in billions, of Rangers co-chairman Ray Davis, who made his money in oil and gas pipelines but said that falling oil prices are not affecting the Rangers’ finances
“When it looked like there was a question with Josh’s knee, there weren’t any free agents out there and we didn’t want to give up any of our prospects,” Davis said. “I’m talking about when we had to make a decision because of Josh. There was a need, we needed to fill a need, and we wanted to put the strongest team we could on the field.”
But don’t expect the Rangers to turn into the free-spending New York Yankees, Los Angeles Dodgers or Chicago Cubs. The Rangers are operated as a business, not a bunch of rich guys’ hobby, and their GM apparently knows how to burn through a checkbook.
“I found out the hard way that Jon will spend whatever money we give him,” Davis said.
Despite Daniels’ spending habits, a long line of ballpark improvements and slumping attendance since the Rangers drew more than 3 million fans in 2011 and 2012, Davis said that the Rangers are in the black.
Season-ticket sales have climbed to more than 16,600, following a sharp decline after the 65-97 2014 season, with a month to go until Opening Day. Optimism is high that attendance will surpass the 2,491,875 in 2015 and possibly the 2,718,733 in 2014.
A boost at the gate — not the price of oil — will help the Rangers balance their budget and keep flexibility in the payroll.