Jeff Moorad: Performance-enhancing management for the Arizona Diamondbacks

The Arizona Diamondbacks are fresh from a season during which they led the National League in victories, racking up 90 on the way to winning the National League West Division title. The team, which debuted in 1998, won the World Series in its fourth season, but at a high cost. Worsening finances and a record losing season followed. General Partner and CEO Jeff Moorad talks about the Diamondbacks' new game plan, which includes winning on the field and on the balance sheet.

The Arizona Diamondbacks sported a new uniform color last season that the team called "Sedona Red." Red has been part of the Diamondbacks organization off the field as well, on its financial books in its early seasons. The team, which debuted in 1998, won the World Series in its fourth season, the fastest any expansion team has ever done so.

But the club paid for that success, running up huge bills by deferring players' compensation. The Diamondbacks are winning again — but they are doing it with more financial discipline. "We're not going to spend more than we have, which unfortunately has been done here in the past," General Partner and CEO Jeff Moorad said Tuesday at the Economic Club of Phoenix meeting at the Camelback Inn.

Return to glory

Last year the Diamondbacks led the National League in victories, racking up 90 on the way to winning the National League West Division title. Then they won in the first round of the playoffs before being swept by Colorado in the National League Championship Series. The Diamondbacks are privately held and don't reveal financial information, but executives said last week that the team was profitable in each of the last three years.

But it's no secret the team lost mountains of money in its early years. In 2004 the team's finances worsened on its way to a 111-loss season, the most losses in a baseball season in almost 40 years. Key investors ousted managing general partner Jerry Colangelo and decided to install Moorad as CEO. Ken Kendrick became managing general partner of the franchise.

The other side

Moorad had an extensive background in baseball, but he'd never worked for a team. Since the early 1980s Moorad had worked as a sports agent, or "sports lawyer" as he preferred at the time. Moorad teamed with legendary agent Leigh Steinberg, often considered the model for Tom Cruise's character in "Jerry McGuire." Both men served as advisors for the film and appeared in it. Steinberg was known for representing NFL quarterbacks.

Moorad helped with pro football players and eventually built a substantial base of baseball clients that included Manny Ramirez, Eric Karros, Ivan Rodriguez, Mo Vaughn, Shawn Green, Raul Mondesi, and Darren Erstadt. After 20 years of negotiating for athletes he began to troll for a second career. He was a member of Young Presidents Organization in Orange County, California. He found it was a good place to share his thoughts.

"In sports agent business you're not sharing with your competitors or indeed with your peers. At all," he said. "Because indeed they are competitors. And you can't share. You can't share anything. Especially a thought of insecurity, which I guess is part of all of our lives at some point." Moorad came to a conclusion about his professional life. "What I was really missing was a role as a principal," Moorad said.

"I played the derivative role as an agent for all these years and I loved it. I wouldn't trade those 20 years for anything." Moorad realized he wanted a different role in sports. His maternal grandfather had run a minor league baseball team in Moorad's hometown of Modesto, Calif. Moorad began to wonder about being involved in running a baseball team. "Could anybody ever cross over?" he said.

"I wasn't sure. I learned a long time ago you're usually better off asking for forgiveness than asking for permission. Sure enough, in that setting I made a decision. You know, if I went to baseball, to baseball owners and the commissioner, I'm not sure that they'd really understand that it was a good idea. Thankfully it all coincided with an opportunity here in Arizona."

Joining up

The partners in the Diamondbacks had heard through mutual friends that Moorad was interested and reached out to him. Baseball took a while to approve the deal. "Eventually, the lords of baseball decided, 'ah maybe he's serious about this,"' Moorad said. Moorad hired Derrick Hall, a former Los Angeles Dodgers executive and an Arizona State University graduate, eventually promoting him to president.

After the 2005 season, the Diamondbacks brought in Josh Byrnes as general manager. In baseball, the general manager is the person most responsible for acquiring players. Byrnes had been the assistant general manager with the Boston Red Sox when they ended their 86-year drought of World Series titles.

Talent on and off field

After their debacle of 2004, the Diamondbacks improved to a 77-85 record in 2005. They were one game better in 2006. In 2007, the Diamondbacks became just the third team in baseball history to go from losing 100 games or more to making the playoffs in just three years. Josh Byrnes and his baseball operations staff deserve much of the credit, Moorad said.

"Occasionally we look over at his group and we guess that there's probably as many as six general managers working on the baseball ops side," Moorad said. "Three or four don't know it yet, but they are definitely going to be general managers. There are already a couple who've been asked to interview for jobs around baseball."

"The point is, it is the best and the brightest. My philosophy, which mirrors Josh's, mirrors Derrick's, is to hire the best of class talent. Whoever they are, wherever they are." Then the key is to let them do what you hired them to do and hold them accountable, Moorad said. The attendance has gone up the last two seasons. But the playoff-bound Diamondbacks of 2007 (average of 28,593 per game) still didn't draw as well as the last-place Diamondbacks of 2004 (31,005).

Still there are hopeful signs. The team had its best season ticket renewal rate, 93 percent, since the season after the Diamondbacks won the World Series, "To be honest, I think a couple years ago there was some degree of confusion in the community, 'Which way are the Diamondbacks going to go?'" Moorad said. "Well I think at this point our vision is very clear. Our path is still to be defined.

But we think it's a path that is really going to take this to consistent success. "If we maintain our commitment to the community in terms of giving back. At the same time take care of season ticket customers and all the fans that come down to the ballpark. Give them a quality experience when they come, in addition to winning games on the field in a consistent way, then we're accomplishing some of that community trust object we've defined for ourselves."

State of the game

Moorad's remarks came on the day baseball Commissioner Bud Selig was testifying before Congress about steroids and other performance enhancing drugs. "A number of you have asked me about steroids and the controversy that kind of swirled around us in the off-season. It didn't touch the Diamondbacks in a significant way," he said. "Some past players of course had some identification. The reality is I think it's a cloud that is going to lift.

I think maybe it already has begun to." Moorad said he believes baseball has done a good job cleaning up the problem. Even with the steroids, the game is healthy financially, he said. "The industry this past year hit $6 billion for the first time. When I got involved in the early '80s it was struggling to get to $1 billion. So it's six times that now. Obviously the average players' salary has grown dramatically. The players are doing well. The teams, the owners are doing well."

Bottom Line:

• The Diamondbacks are trying to win these days with an eye toward the bottom line. In early years of the franchise the team found success, but later paid for its free-spending ways.
• Moorad was a successful player agent who decided he needed to play another role, one where he could build something.
• A baseball team needs to find available talent on and off the field in order to succeed.
• Despite trouble with the on-going steroid problems, baseball is achieving record revenue that was unthinkable a generation ago.