A Realistic View at 2020: Part I

[Elktonnick]

I don't know the details of the bankruptcy you're referring to, but McCourt bought the Dodgers for $430 million in 2004 and sold for $2 billion in 2012.

 

The value has now grown to $3.2 billion.

 

 

"The Los Angeles Dodgers underwent a period of turmoil in management in 2011 and 2012 that began when Major League Baseball seized control of the team from owner Frank McCourt on April 20, 2011 and ended when the team was sold to new owners on May 1, 2012.[1]

Baseball Commissioner Bud Selig announced that the takeover was due to concerns over the team's finances, and a loss of confidence in the ability of owner Frank McCourt to run the team.[2] Selig announced his intention to appoint an overseer to supervise the day-to-day financial management of the Dodgers. In June, as the Dodgers struggled to meet payroll, Selig rejected a TV contract that would have pumped money into the organization. This led to the Dodgers filing for bankruptcy, and being forced to negotiate a loan with the MLB to keep the club operating.

After a year of negotiations and court proceedings, the dispute ended with the sale of the team to Guggenheim Baseball Management LLC.[3]

[Bellhorn04]

"The Los Angeles Dodgers underwent a period of turmoil in management in 2011 and 2012 that began when Major League Baseball seized control of the team from owner Frank McCourt on April 20, 2011 and ended when the team was sold to new owners on May 1, 2012.[1]

Baseball Commissioner Bud Selig announced that the takeover was due to concerns over the team's finances, and a loss of confidence in the ability of owner Frank McCourt to run the team.[2] Selig announced his intention to appoint an overseer to supervise the day-to-day financial management of the Dodgers. In June, as the Dodgers struggled to meet payroll, Selig rejected a TV contract that would have pumped money into the organization. This led to the Dodgers filing for bankruptcy, and being forced to negotiate a loan with the MLB to keep the club operating.

After a year of negotiations and court proceedings, the dispute ended with the sale of the team to Guggenheim Baseball Management LLC.[3]

 

Having read a little about this now, it appears the bottom line is that McCourt was an idiot, but still made a killing selling the team after being forced to do so.

[moonslav59]

First of all I don't believe there were hundreds of sales over the past century. But over the past hundred years several franchises have lost tons of money and were forced to move due to declining attendance and financial problems. The vaunted LA Dodgers were bankrupt five years ago and were under a MLB mandate to reduce debt before the new ownership group took over. So it does happen perhaps more frequently than one realizes.

 

I just read, MCCourt made $2 billion on the sale.

 

https://www.forbes.com/sites/mikeozanian/2013/06/15/how-frank-mccourt-made-2-billion-from-the-los-angeles-dodgers-and-team-remains-saddles-with-debt/#6ecbc57a1249

[Elktonnick]

I just read, MCCourt made $2 billion on the sale.

 

https://www.forbes.com/sites/mikeozanian/2013/06/15/how-frank-mccourt-made-2-billion-from-the-los-angeles-dodgers-and-team-remains-saddles-with-debt/#6ecbc57a1249

 

And the team is still saddled with debt.

[moonslav59]

And the team is still saddled with debt.

 

That wasn't your point.

 

My guess is the current owner will make a killing when selling, too.

 

Forbes estimates the $2B turning into $2.8B.

[Elktonnick]

That wasn't your point.

 

My guess is the current owner will make a killing when selling, too.

 

Forbes estimates the $2B turning into $2.8B.

It isn't price it is net worth. Inherent in the price paid for the Dodgers was assumption of hundreds of millions in debt. The value is also in the real estate especially the parking lots estimated at hundreds of million of dollars. The economics aren't that simple as the value of the franchise alone. The value of the land makes up a substantial portion of that 2 plus billion dollar figure.

[moonslav59]

It isn't price it is net worth. Inherent in the price paid for the Dodgers was assumption of hundreds of millions in debt. The value is also in the real estate especially the parking lots estimated at hundreds of million of dollars. The economics aren't that simple as the value of the franchise alone. The value of the land makes up a substantial portion of that 2 plus billion dollar figure.

 

That's very true in this particular case, but he did not lose money on the whole deal.

[Elktonnick]

That's very true in this particular case, but he did not lose money on the whole deal.

 

That may have more to do with McCourt's business acumen. Just be thankful that he was unsuccessful in his attempt to buy the Red Sox

[moonslav59]

That may have more to do with McCourt's business acumen. Just be thankful that he was unsuccessful in his attempt to buy the Red Sox

 

Indeed!

[moonslav59]

Winter Action from soxprospects.com...

 

Marco Hernandez had a very solid week, going 5 for 13 with a double, two RBI, and two runs. His week included a 4-for-6 showing at the plate on Thursday.

 

Jeremy Rivera was on fire this past week, going 8 for 16 with a pair of two-baggers, three runs, two RBI, two walks, and just two strikeouts.

 

Hector Velazquez appeared in a pair of games and logged just 1 1/3 innings, allowing three runs (zero earned) on one hit with one strikeout and two walks. These two outings were the first two relief outings for Velazquez this winter.

 

Colin Willis had a 2-for-6 week to keep his season batting average at .450. He's 9 for 20 with three walks this winter, giving him an OBP of .522.

 

[cp176]

The fascination on this board with resetting is because the team President said they were going to. I’m not sure why you keep thinking it originated here.

 

I don’t think the plan is to lose and save money. That might happen, but we have all seen the Sox spend money and lose. However, it does look like part of the plan is to clean up at least some of the mess Dombrowski left behind...

 

you know me by now notin, i'm just fascinated in general.

[moonslav59]

On resetting...

 

The incentives for the Boston Red Sox to slip under the luxury tax line in 2020 are manyfold, per Alex Speier of the Boston Globe. Because of higher penalties for repeat offenders, Boston could save themselves close to $100MM in tax penalties over the course of the next three seasons. Of course, to do so, they’ll need to get under the $206MM tax line. Another benefit takes into account a worst case scenario. Should Mookie Betts sign elsewhere as a free agent next year, the Red Sox could improve their compensation from a pick after the fourth round to a pick after the second round. They could also miss out on a potentially hefty revenue sharing rebate that will come from the phase out of Oakland’s revenue-sharing subsidies. Oakland’s market size has been superseded by lack of revenue, thus placing them among the revenue-sharing recipients, but their free ride is coming to an end. That money will be dispersed among the large-market, revenue-sharing contributors, perhaps proportionately so. That would be a boon for the Red Sox, but they risk forfeiture of the reward if they continue to spend over the tax. Hence, the David Price auction rolls ever onward.

[Bellhorn04]

On resetting...

 

The incentives for the Boston Red Sox to slip under the luxury tax line in 2020 are manyfold, per Alex Speier of the Boston Globe. Because of higher penalties for repeat offenders, Boston could save themselves close to $100MM in tax penalties over the course of the next three seasons. Of course, to do so, they’ll need to get under the $206MM tax line. Another benefit takes into account a worst case scenario. Should Mookie Betts sign elsewhere as a free agent next year, the Red Sox could improve their compensation from a pick after the fourth round to a pick after the second round. They could also miss out on a potentially hefty revenue sharing rebate that will come from the phase out of Oakland’s revenue-sharing subsidies. Oakland’s market size has been superseded by lack of revenue, thus placing them among the revenue-sharing recipients, but their free ride is coming to an end. That money will be dispersed among the large-market, revenue-sharing contributors, perhaps proportionately so. That would be a boon for the Red Sox, but they risk forfeiture of the reward if they continue to spend over the tax. Hence, the David Price auction rolls ever onward.

 

I just read the article. Speier didn't say close to $100 mill in penalties. He said close to $100 million in payroll plus tax plus forfeited revenue sharing. But about half of it is payroll.

[moonslav59]

I just read the article. Speier didn't say close to $100 mill in penalties. He said close to $100 million in payroll plus tax plus forfeited revenue sharing. But about half of it is payroll.

 

I thought $100M in penalties seemed way too high.

[d-money]

I think this team is in a bad position going forward, but as this is MLB with insane levels of parity not seen I other sports, that can change quickly.

 

But really, for 2020, this team won 84 games last year with one good starter and a ramshackle bullpen. A lot of teams with no significant injuries won less.

 

I think they have a base, assuming a few key people stay healthy. And can be competitive in this year with the right moves. I’d prefer not dealing Betts, but I don’t think it’s a necessarily a white flag, either...

 

This all comes back to this team and their farm system. If they gonna be cutting payroll they better get some damn good prospects back.

[moonslav59]

This all comes back to this team and their farm system. If they gonna be cutting payroll they better get some damn good prospects back.

 

One side effect of these skyrocketing salaries is that many teams without large budgets will really be valuing their prospects and young players that are pre-arb or entering year 1 arb.

 

(We should, too.)

[jacksonianmarch]

The biggest method to creating a cliff is to sell off your farm system and not replace them. You can live at the fringes of the lux tax if you have your holes filled internally. The problem becomes when you have no money to fill your holes and no prospects to fill your holes. That’s when you hit a cliff. This signing clearly makes it more likely that we will have limited money eventually to sign veterans to fill our holes. If we can keep our farm producing well, then the point will be moot. If we don’t, then we will fall off a cliff

[moonslav59]

The biggest method to creating a cliff is to sell off your farm system and not replace them. You can live at the fringes of the lux tax if you have your holes filled internally. The problem becomes when you have no money to fill your holes and no prospects to fill your holes. That’s when you hit a cliff. This signing clearly makes it more likely that we will have limited money eventually to sign veterans to fill our holes. If we can keep our farm producing well, then the point will be moot. If we don’t, then we will fall off a cliff

 

I do agree, but once you commit to a window, you are more likely to make deadline deals to "seal the deal" and make you the top contender.

 

It doesn't mean you have to, but showing restraint is very difficult, especially if you have a big hole in July, and you think "this is the year."

 

Dumping Happ will help, but losing Didi hurts.

[Tedballgame]

Yankees give Cole 9 years and 324M. They must be stupid! He is an opposite field fly ball pitcher so I am sure he will enjoy Yankee stadium.

[jacksonianmarch]

Losing Didi hurts if we are talking 2018 Didi. He was pretty useless last year. Torres doesn’t have his range, though, so defensively we will lose some. Hence why we need to keep Urshela there instead of Andujar

[jacksonianmarch]

Yankees give Cole 9 years and 324M. They must be stupid! He is an opposite field fly ball pitcher so I am sure he will enjoy Yankee stadium.

 

http://ksassets.timeincuk.net/wp/uploads/sites/46/2015/07/TROLL-THUMB.jpg

[jacksonianmarch]

I do agree, but once you commit to a window, you are more likely to make deadline deals to "seal the deal" and make you the top contender.

 

It doesn't mean you have to, but showing restraint is very difficult, especially if you have a big hole in July, and you think "this is the year."

 

Dumping Happ will help, but losing Didi hurts.

 

That is where you get into trouble. Desperation to keep a window open and selling long term assets for short term is where you get bitten. Cashman has been VERY reticent to do that. To this point, the deals he has been apart of are squarely in his favor. You have to know your farm system and deal off assets before they turn into pumpkins and keep the assets that are gonna be great

[Tedballgame]

http://ksassets.timeincuk.net/wp/uploads/sites/46/2015/07/TROLL-THUMB.jpg

Somebody disagrees with your thinking so you go on the attack. Typical!

[Tedballgame]

Cole is like Price. He went somewhere he didn't want to go because they gave him stupid money. Is always about the money. If the Angels had offered 324M he would be pitching there.

[moonslav59]

That is where you get into trouble. Desperation to keep a window open and selling long term assets for short term is where you get bitten. Cashman has been VERY reticent to do that. To this point, the deals he has been apart of are squarely in his favor. You have to know your farm system and deal off assets before they turn into pumpkins and keep the assets that are gonna be great

 

Yes, recently Cashman has been as you describe, but you haven't been "this close" in a while. He was a "seller" not too long ago, so it's hard to count his recent M.O. as one that will surely continue, but your point is well made.

[notin]

The biggest method to creating a cliff is to sell off your farm system and not replace them. You can live at the fringes of the lux tax if you have your holes filled internally. The problem becomes when you have no money to fill your holes and no prospects to fill your holes. That’s when you hit a cliff. This signing clearly makes it more likely that we will have limited money eventually to sign veterans to fill our holes. If we can keep our farm producing well, then the point will be moot. If we don’t, then we will fall off a cliff

 

It doesn't take much to get to the cliff. The Sox farm system in 2015 was the best in the majors, or very close to it. Two years and three trades later, there wasn't much left.

 

The thing about a good farm system is it really only probably has 5 or 6 actual MLB players in it at any given time. That's really all you need to have a great farm - a handful of players who will make MLB. Of course, it's not as easy as many think to know who those players are...

[moonslav59]

It doesn't take much to get to the cliff. The Sox farm system in 2015 was the best in the majors, or very close to it. Two years and three trades later, there wasn't much left.

 

The thing about a good farm system is it really only probably has 5 or 6 actual MLB players in it at any given time. That's really all you need to have a great farm - a handful of players who will make MLB. Of course, it's not as easy as many think to know who those players are...

 

Plus, once the Yankee top prospects graduate, the replacements may not be as good, since they will be drafting lower and have less international money to spend going forward.

 

Part of the reason their farm got so good was through trading vets for prospects. That ain't happening in this window.

[jacksonianmarch]

Plus, once the Yankee top prospects graduate, the replacements may not be as good, since they will be drafting lower and have less international money to spend going forward.

 

Part of the reason their farm got so good was through trading vets for prospects. That ain't happening in this window.

 

Our top 10 is mostly IFA signings and right now has one guy acquired in a trade, and it wasn’t a vet for prospect deal. It was Jake Cave, who was out of options, for Luis Gil. What a f***ing steal that one was

[notin]

Our top 10 is mostly IFA signings and right now has one guy acquired in a trade, and it wasn’t a vet for prospect deal. It was Jake Cave, who was out of options, for Luis Gil. What a f***ing steal that one was

 

And you will have less international money to spend on those free agents, like he said.

 

And stop with the "we didn't trade vets for prospects." Where did Clint Frazier and Gleyber Torres come from?

[Slasher9]

you know me by now notin, i'm just fascinated in general.

 

but i mean...you did actually hear/read/see that JH stated he wants to get under the LT this season?

you can put your head in the sand about it if you want but that doesnt make it not true.

is it because some of us have been stating that JH would eventually do this and some of you have insisted that $ / payroll doesnt matter?

it's ok to be wrong. it's ok to be right. it's ok to not know. but it's kind of dumb to try and say that water isnt wet......