2013-14 MLB Hot Stove thread

[Starman]

Might as well start this here:

http://espn.go.com/mlb/story/_/id/9733964/eric-wedge-tells-seattle-mariners-return-next-season

Weird move by Wedge. He hadn't exactly burned up the league in Seattle, after not exactly burning up the league in Cleveland. I am not sure teams are going to be busting down his door with managing job offers.


I am sure Wedge probably would have loved a long-term extension, but hey -- the team hadn't really done squat since he took over.

Assuming the story is fairly legit and the M's really were willing to bring him back in 2014, I think if I were him I would have said, "There are only 30 MLB managing jobs and for the moment I have one of them. All I really have to do probably to get re-upped next year is go .500; if I take a job with some other bottom-feeder I might not sniff .500 for five years (although I'll get ****canned after two)."

Of course, if he comes back next year and comes out of the gate 12-27 he gets whacked, but at least he cashes the extra year of salary.

 

[heyabbott]

Do the Dodgers give Cano 10 years? If the Yankees don't and the Mets can't, and the Red Sox don't need to, who will give JayZ the credibility he needs as the front man for an agency?
The Cubs?

 

[LongTimeListener]

Giants re-sign Hunter Pence for five years, $90 million.

Seems like an overpay, but someone who can provide power and handle right field in that park is a big deal.

 

[RickStain]

The Cubs?

Not a chance. They are tied up in the complicated debt-fueled ownership agreement and trying to renovate Wrigley Field.

 

[Starman]

The Cubs?

Not a chance. They are tied up in the complicated debt-fueled ownership agreement and trying to renovate Wrigley Field.

Ah yes. The poor threadbare revenue-poor Chicago Cubs.

 

[RickStain]

Ah yes. The poor threadbare revenue-poor Chicago Cubs.

The team doesn't have the money.

The Ricketts family has the money. The Cubs were sold under a special agreement that saves the Tribune a bajillion in capital gains taxes and the prevents Ricketts' family from putting their own money into the team.

They do have a decent amount of revenue, but it's a lot less than it was a few years ago, and they are paying for renovations to Wrigley Field this offseason.

 

[LongTimeListener]

Really? What is that condition? I am not doubting it, I am just curious.

 

[RickStain]

Really? What is that condition? I am not doubting it, I am just curious.

The sale conditions?

It's complicated, but basically, the Ricketts family formed a family trust and the trust borrowed the money from their father's fortune in order to buy 95% of the team from the Tribune with the agreement that only the interest on the debt could be paid for the next 10 years, not the principle. The family trust setup precludes the team from deficit spending in any given fiscal year.

IANAaccountant, but somehow the combination of those things saved Sam Zell a bunch of money in taxes, and protects Daddy Ricketts from risking any money on the deal (it was the kids' idea to buy the team, not his).

The downside for those of us who aren't rich team owners is that the team itself is financially hampered by not being able to deficit spend *and* having to eat the interest payments each year. Combine that with lowered attendance every year because of the team is awful and the money that is being spent to begin renovations on Wrigley Field, and that's why payroll is down $50m from its peak a few years ago. I mean, they aren't the Astros or anything, but going from $145m to $95m is pretty steep.

It won't start to go back up until the renovations are done, a new TV deal is in place, or the team actually gets good and attendance goes back up.

 

[LongTimeListener]

Ah. Sam Zell being evil again.

So the family isn't legally allowed to just throw more money into the trust? That's a huge deal. Makes me wonder why there was so much talk of Pujols or Fielder heading there. It's almost like sportswriters all went with the same erroneous assumption.

 

[RickStain]

Yes, the sales agreement precludes them from throwing their money into the trust, because if they did it would lose the tax benefits for Zell. And because the patriarch doesn't want to.

This all happened in 2009, when the team was coming off two straight division titles and in the middle of an 83-78 year. Tom Ricketts (son/team president/the kid who spearheaded the family's attempts to buy the team) had the following plan:

1) Keep being at least not-terrible so the team still draws 3 million a year
2) Convince the city of Chicago and the state of Illinois to fund a large expansion of Wrigley Field, including a jumbotron and significantly increased signage, and use that increased revenue to help offset the debt payments.

Unfortunately for him (and also because he's kind of inept at this local politics stuff), the city flat-out laughed in his face when he tried to get them to pay for the expansion. Four years later, he's been bargained down from asking for $300m to buying the city $20m worth of stuff just for the permission to renovate and use the signage (that he was counting on the extra revenue from) to pay for the renovations. And it *still* hasn't gotten started yet because they are worried the rooftops might sue if their view is blocked and can't get an agreement with them in place.

In the meantime, the team fell apart in the last days of Jim Hendry, and then Theo Epstein came in and began to fulfill his lifelong dream of building a team from the ground up using the farm system (some of that lost payroll, though not even a majority, has been diverted to other areas like draft pick signings, international free agent prospect signings, and a new team facility in the Dominican Republic), so the team is even worse now and attendance keeps dropping. The team is in a bit of a death spiral.

 

[YankeeFan]

They do have a decent amount of revenue, but it's a lot less than it was a few years ago, and they are paying for renovations to Wrigley Field this offseason.

It's unlikely they will get anything major done this off season:

When the Ricketts family announced details in January of its plan to pay for Wrigley Field renovations, the outlook they unveiled for the creaky stadium was as sunny as Anthony Rizzo's long-term future in the middle of the batting order: A new home clubhouse, renovated bathrooms, new ballpark restaurants and outfield ads to raise money.

Now the offseason looms with Rizzo's batting average hovering around .230 amid questions about his status as a key part of the team's rebuilding plan. And summerlong political fisticuffs over the ballpark repairs have left the team facing a different timeline than it projected at the Cubs Convention.

The team had hoped to complete the ballpark renovation project over five offseasons, but that was based on being able to begin working aggressively shortly after the 2013 season ended. That will not be the case. The Cubs have yet to apply for any of the city permits that would be required for the ballpark renovation work, team spokesman Julian Green said Friday.

http://trib.in/18btAGA

 

[YankeeFan]

It's almost like sportswriters all went with the same erroneous assumption.

Don't make me say it!

 

[Starman]

Ah yes. The poor threadbare revenue-poor Chicago Cubs.

The team doesn't have the money.

The Ricketts family has the money. The Cubs were sold under a special agreement that saves the Tribune a bajillion in capital gains taxes and the prevents Ricketts' family from putting their own money into the team.

They do have a decent amount of revenue, but it's a lot less than it was a few years ago, and they are paying for renovations to Wrigley Field this offseason.

The team's got plenty of money too. Wrigley is still packed at astronomical ticket prices and they're still getting teevee money.


Never ever ever ever ever ever ever ever believe a word of poor-mouthing poverty-pleading bull**** from billionaire professional sports team owners.

It's all part of their public relations long game: a continual monotonous drumbeat of sob stories about how broke they are, designed to subconsciously condition the public into accepting the idea of more massive tax-money giveaways. "We could afford Robinson Cano, if only ... if only ... if only ... if only the taxpayers would give us a new writeoff or kickback (or flat cash handout) worth a couple hunded mill a year. Yeah, that's the ticket!!!"

 

[RickStain]

The team's got plenty of money too. Wrigley is still packed at astronomical ticket prices and they're still getting teevee money.

Wrigley attendance is down about 700k from its peak, and the TV deal is pretty stale. Half of it comes in renewal in 2014 and the other half at the end of the decade.

Never ever ever ever ever ever ever ever believe a word of poor-mouthing poverty-pleading bull**** from billionaire professional sports team owners.

It's all part of their public relations long game: a continual monotonous drumbeat of sob stories about how broke they are, designed to subconsciously condition the public into accepting the idea of more massive tax-money giveaways. "We could afford Robinson Cano, if only ... if only ... if only ... if only the taxpayers would give us a new writeoff or kickback (or flat cash handout) worth a couple hunded mill a year. Yeah, that's the ticket!!!"

You've got your schtick down pat here, but it's misapplied in this specific situation. The Cubs aren't "poor." They are just owned by people who have taken great pains to make sure that the money they make goes into the ownership's pockets and only a limited amount can be spent on the team itself.

 

[LongTimeListener]

SF Chronicle reports that after locking up Pence, the Giants started talking contract with ... Tim Lincecum.

Boy I hope that doesn't happen.

 

[Baron Scicluna]

The team's got plenty of money too. Wrigley is still packed at astronomical ticket prices and they're still getting teevee money.

Wrigley attendance is down about 700k from its peak, and the TV deal is pretty stale. Half of it comes in renewal in 2014 and the other half at the end of the decade.

Never ever ever ever ever ever ever ever believe a word of poor-mouthing poverty-pleading bull**** from billionaire professional sports team owners.

It's all part of their public relations long game: a continual monotonous drumbeat of sob stories about how broke they are, designed to subconsciously condition the public into accepting the idea of more massive tax-money giveaways. "We could afford Robinson Cano, if only ... if only ... if only ... if only the taxpayers would give us a new writeoff or kickback (or flat cash handout) worth a couple hunded mill a year. Yeah, that's the ticket!!!"

You've got your schtick down pat here, but it's misapplied in this specific situation. The Cubs aren't "poor." They are just owned by people who have taken great pains to make sure that the money they make goes into the ownership's pockets and only a limited amount can be spent on the team itself.

In other words, they're using the typical billionaire owners' narrative )) of .... we need taxpayer money to survive!

 

[RickStain]

They tried that and got shut down, so now it's "We have to lower payroll to survive, we aren't making any profits!"

(because the "profits" are being counted as interest payments on the debt that they borrowed from themselves to buy the team).

 

[Football_Bat]

They tried that and got shut down, so now it's "We have to lower payroll to survive, we aren't making any profits!"

(because the "profits" are being counted as interest payments on the debt that they borrowed from themselves to buy the team).

Sounds like they could count the interest as a tax writeoff in one book and a profit center in the other, and claim what benefits themselves from either.

If I tried that with my money, the IRS would stick me under Gitmo.

 

[RickStain]

They tried that and got shut down, so now it's "We have to lower payroll to survive, we aren't making any profits!"

(because the "profits" are being counted as interest payments on the debt that they borrowed from themselves to buy the team).

Sounds like they could count the interest as a tax writeoff in one book and a profit center in the other, and claim what benefits themselves from either.

If I tried that with my money, the IRS would stick me under Gitmo.

There have been rumors that the IRS might look a bit closer at the sale and tell Zell he owes more taxes.

 

[LongTimeListener]

Sam Zell had a great life plan -- buy a bunch of stuff with borrowed money, don't pay it back, sell it, don't pay the taxes, hope you die before you have to reconcile it all.

It's genius, really.