Will There Be a 2020 Season?

[Dick Allen]

Another day another owner  saying what a crappy business owning a baseball team is. Then sell the team. Half the owners aren't even trying to win, if not more. If it is so crappy, get out. There is someone willing to give you a couple of billiion for your trouble.

[greg775]

6 minutes ago, Dick Allen said:

Another day another owner  saying what a crappy business owning a baseball team is. Then sell the team. Half the owners aren't even trying to win, if not more. If it is so crappy, get out. There is someone willing to give you a couple of billiion for your trouble.

I agree. I wonder how this long layoff is going to affect the health of players, especially if we have to wait til next February for the resumption of spring training. Play ball now, owners.

[Big Hurtin]

21 minutes ago, Dick Allen said:

Another day another owner  saying what a crappy business owning a baseball team is. Then sell the team. Half the owners aren't even trying to win, if not more. If it is so crappy, get out. There is someone willing to give you a couple of billiion for your trouble.

Please tell me it was Reinsdorf ?.

[Dick Allen]

14 minutes ago, Big Hurtin said:

Please tell me it was Reinsdorf ?.

Cardinals owner. JR has mentioned what a tough business it is several times though. All these poor broke bastards.

[ptatc]

34 minutes ago, Dick Allen said:

Cardinals owner. JR has mentioned what a tough business it is several times though. All these poor broke bastards.

It is a bad "business" as they make little to no profit. They will make money in the long term as the value of the franchise appreciates (although if both sides keep this up it may no longer be the case). They need to have other sources of income because they don't get it from the team. Most don't own a team for short term profit though. there is the prestige of owning the team.

Edited June 9, 2020 by ptatc

[Flash]

43 minutes ago, ptatc said:

It is a bad "business" as they make little to no profit. They will make money in the long term as the value of the franchise appreciates (although if both sides keep this up it may no longer be the case). They need to have other sources of income because they don't get it from the team. Most don't own a team for short term profit though. there is the prestige of owning the team.

One consequence of the pandemic could be the devaluation of professional sports franchises. Without predictable gate and concession revenue, owners don't have obvious levers to cut expenses. As in any business, if revenue is declining, valuations will follow.  

[ptatc]

19 minutes ago, Flash said:

One consequence of the pandemic could be the devaluation of professional sports franchises. Without predictable gate and concession revenue, owners don't have obvious levers to cut expenses. As in any business, if revenue is declining, valuations will follow.  

No doubt.

[Dick Allen]

1 hour ago, ptatc said:

It is a bad "business" as they make little to no profit. They will make money in the long term as the value of the franchise appreciates (although if both sides keep this up it may no longer be the case). They need to have other sources of income because they don't get it from the team. Most don't own a team for short term profit though. there is the prestige of owning the team.

C’mon man. No way these guys hold on and hold on if they aren’t making money. JR is in his 40th season,  They refuse to show the players their books. They showed them their local TV contracts but redacted just about every number. If they are making nothing, they would have nothing to hide.

[Y2Jimmy0]

2 minutes ago, Dick Allen said:

C’mon man. No way these guys hold on and hold on if they aren’t making money. JR is in his 40th season,  They refuse to show the players their books. They showed them their local TV contracts but redacted just about every number. If they are making nothing, they would have nothing to hide.

Exactly. Bill DeWitt Jr purchased the cardinals for $150 million in 1995. They'd sell for $3 billion tomorrow. 

[ptatc]

4 minutes ago, Dick Allen said:

C’mon man. No way these guys hold on and hold on if they aren’t making money. JR is in his 40th season,  They refuse to show the players their books. They showed them their local TV contracts but redacted just about every number. If they are making nothing, they would have nothing to hide.

That's what Boras said.He and the players know the profit margin is very thin from year to year.

[ptatc]

10 minutes ago, Y2Jimmy0 said:

Exactly. Bill DeWitt Jr purchased the cardinals for $150 million in 1995. They'd sell for $3 billion tomorrow. 

The valuation of the franchise is very different than the profit from revenue. This is what Boras said as to why the players shouldn't give in to the owners. The owners profit margin is thin but they gain asset valuation which is not shared with the players. The owners don't make money util they sell and don't share this with the players. So they players need to get their money from the overall revenue each year including this year so they shouldn't cut the owners a break this year.

Edited June 9, 2020 by ptatc

[Dick Allen]

5 minutes ago, ptatc said:

The valuation of the franchise is very different than the profit from revenue. This is what Boras said as to why the players shouldn't give in to the players. The owners profit margin is thin but they gain asset valuation which is not shared with the players. The owners don't make money util they sell and don't share this with the players. So they players need to get their money from the overall revenue each year including this year so they shouldn't cut the owners a break this year.

A business that doesn’t make money doesn’t go from being worth $150 million to $3 billion in 25 years. Boras was just talking about how Ricketts has the cash registers ringing all game day throughout his neighborhood, and he is correct. That is why no fans hurts him a bit more than others, but when they are there, he is having no problem paying down his debt, even with his bloated payroll.

[ptatc]

Just now, Dick Allen said:

A business that doesn’t make money doesn’t go from being worth $150 million to $3 billion in 25 years. Boras was just talking about how Ricketts has the cash registers ringing all game day throughout his neighborhood, and he is correct. That is why no fans hurts him a bit more than others, but when they are there, he is having no problem paying down his debt, even with his bloated payroll.

He also said that they know most teams run on those margins after paying all of the expenses including loans and such. They do make their money when they sell but is very little profit in the short term.

[Dick Allen]

5 minutes ago, ptatc said:

He also said that they know most teams run on those margins after paying all of the expenses including loans and such. They do make their money when they sell but is very little profit in the short term.

"Remember, games cannot be played without you," Boras wrote to his clients. "Players should not agree to further pay cuts to bail out the owners. Let owners take some of their record revenues and profits from the past several years and pay you the prorated salaries you agreed to accept or let them borrow against the asset values they created from the use of those profits players generated."
 

He says they make record profits on baseball. Their loans are for outside stuff like Ricketts buying up Wrigleyville, and that has nothing to do with the players. He is using his profits on the baseball operation to pay down his loans on his rooftops, his bars, his hotel, and doesn’t think the players should give him a break on that, since ultimately, when the loans get paid down, he won’t be sharing the profit with the players.

If it is such a tight business, the owners should show the player unredacted books. They would probably get some concessions. But they absolutely refuse. Kind of like a certain someone with his taxes.

Edited June 9, 2020 by Dick Allen

[ptatc]

55 minutes ago, Dick Allen said:

"Remember, games cannot be played without you," Boras wrote to his clients. "Players should not agree to further pay cuts to bail out the owners. Let owners take some of their record revenues and profits from the past several years and pay you the prorated salaries you agreed to accept or let them borrow against the asset values they created from the use of those profits players generated."
 

He says they make record profits on baseball. Their loans are for outside stuff like Ricketts buying up Wrigleyville, and that has nothing to do with the players. He is using his profits on the baseball operation to pay down his loans on his rooftops, his bars, his hotel, and doesn’t think the players should give him a break on that, since ultimately, when the loans get paid down, he won’t be sharing the profit with the players.

If it is such a tight business, the owners should show the player unredacted books. They would probably get some concessions. But they absolutely refuse. Kind of like a certain someone with his taxes.

"Owners are asking for more salary cuts to bail them out of the investment decisions they have made," Boras said. "If this was just about baseball, playing games would give the owners enough money to pay the players their full prorated salaries and run the baseball organization. The owners' current problem is a result of the money they borrowed when they purchased their franchises, renovated their stadiums or developed land around their ballparks."

I guess the owners would be in a good position if they didn't need to borrow money to buy the team, or renovate the stadiums or anything else. The profit you refer to is before they pay any debt. The primary point remains that after all operating costs including paying the loans there isn't much overall profit. They do see the profit when they sell but not much in the short term.

[oldsox]

14 minutes ago, ptatc said:

"Owners are asking for more salary cuts to bail them out of the investment decisions they have made," Boras said. "If this was just about baseball, playing games would give the owners enough money to pay the players their full prorated salaries and run the baseball organization. The owners' current problem is a result of the money they borrowed when they purchased their franchises, renovated their stadiums or developed land around their ballparks."

I guess the owners would be in a good position if they didn't need to borrow money to buy the team, or renovate the stadiums or anything else. The profit you refer to is before they pay any debt. The primary point remains that after all operating costs including paying the loans there isn't much overall profit. They do see the profit when they sell but not much in the short term.

How does Boras know that?  And how does it apply to all 30 owners?  He's one biased SOB.  Capable, yes, but biased to the point his statements are so one sided that they are meaningless.  Another might say that he is full of s--t.  Borrowing money for capital expenditures makes sense at today's interest rates, but the public doesn't see those figures anyway.  He's an empty suit when he blabs about things like this.

[Dick Allen]

17 minutes ago, ptatc said:

"Owners are asking for more salary cuts to bail them out of the investment decisions they have made," Boras said. "If this was just about baseball, playing games would give the owners enough money to pay the players their full prorated salaries and run the baseball organization. The owners' current problem is a result of the money they borrowed when they purchased their franchises, renovated their stadiums or developed land around their ballparks."

I guess the owners would be in a good position if they didn't need to borrow money to buy the team, or renovate the stadiums or anything else. The profit you refer to is before they pay any debt. The primary point remains that after all operating costs including paying the loans there isn't much overall profit. They do see the profit when they sell but not much in the short term.

What he is getting at is the debt is taken on to make more money. It would be like asking your high performing employees at one business to take pay cuts because you bought a new house and it turned into a money pit, and wanted them to bail you out. People don’t pay billions for businesses that don’t make money. Lenders don’t loan billions of dollars to purchase things with razor thin profit margins. It’s pretty obvious owning sports teams is very lucrative, even before they sell.

[oldsox]

3 minutes ago, Dick Allen said:

What he is getting at is the debt is taken on to make more money. It would be like asking your high performing employees at one business to take pay cuts because you bought a new house and it turned into a money pit, and wanted them to bail you out. People don’t pay billions for businesses that don’t make money. Lenders don’t loan billions of dollars to purchase things with razor thin profit margins. It’s pretty obvious owning sports teams is very lucrative, even before they sell.

Yes.  Any owner can pay himself any salary or bonus he wants ----- millions, even. This might create a paper loss for the team.  Irrelevant.  Public does not see this stuff, which is why no public company will own a team.

[caulfield12]

https://books.google.com/books?id=YkYlDwAAQBAJ&pg=PA416&lpg=PA416&dq=how+many+MLB+owners+borrowed+money+to+buy+their+franchises?&source=bl&ots=7M9YHMdRMt&sig=ACfU3U0jRWcNCSqmUjvhuUBY618PPNFwBQ&hl=en&sa=X&ved=2ahUKEwjdr9L-7_XpAhUHa80KHYuzDI0Q6AEwAXoECAoQAQ#v=onepage&q=how many MLB owners borrowed money to buy their franchises%3F&f=false
 

Read page 416 on debt.  Ricketts is the poster boy.   MLB changed the debt rules dramatically in 2005, paving the eventual path for him with gold-plated bricks.

They have nobody to blame but themselves (shakes head, reflecting on the deregulation and “moral hazards” that led to the Great Financial Crisis at exactly this same time, where mortgage companies completely ignored credit histories/salary information in order to sign contracts and make higher commissions.)

Edited June 9, 2020 by caulfield12

[caulfield12]

11 minutes ago, Dick Allen said:

What he is getting at is the debt is taken on to make more money. It would be like asking your high performing employees at one business to take pay cuts because you bought a new house and it turned into a money pit, and wanted them to bail you out. People don’t pay billions for businesses that don’t make money. Lenders don’t loan billions of dollars to purchase things with razor thin profit margins. It’s pretty obvious owning sports teams is very lucrative, even before they sell.

It’s also why it’s extremely difficult if not impossible for lowly deca millionaires/ultra high worth celebs like A-Rod and JLo to put together a competitive bid.

Edited June 9, 2020 by caulfield12

[oldsox]

1 minute ago, caulfield12 said:

It’s also why it’s extremely difficult for lowly deca millionaires like A-Rod and JLo to put together a competitive bid.

Probably pillow talk.

1 minute ago, caulfield12 said:

It’s also why it’s extremely difficult for lowly deca millionaires like A-Rod and JLo to put together a competitive bid.

 

[ptatc]

15 minutes ago, Dick Allen said:

What he is getting at is the debt is taken on to make more money. It would be like asking your high performing employees at one business to take pay cuts because you bought a new house and it turned into a money pit, and wanted them to bail you out. People don’t pay billions for businesses that don’t make money. Lenders don’t loan billions of dollars to purchase things with razor thin profit margins. It’s pretty obvious owning sports teams is very lucrative, even before they sell.

All of these are assumptions on your part. The sports franchise world may or may not work like the real world as many posters have said. They may be lending knowing there will be a payoff when its sold. They may know that the owner will put everything back into the club and loans so there is money to pay but no net profit.

It sounds to me like he is acknowledging they run the razor thin margin but it is by their own actions so the players shouldn't give them a break. Everything they do is to increase the value of the asset and the players dont share in that asset.

[Dick Allen]

18 minutes ago, ptatc said:

All of these are assumptions on your part. The sports franchise world may or may not work like the real world as many posters have said. They may be lending knowing there will be a payoff when its sold. They may know that the owner will put everything back into the club and loans so there is money to pay but no net profit.

It sounds to me like he is acknowledging they run the razor thin margin but it is by their own actions so the players shouldn't give them a break. Everything they do is to increase the value of the asset and the players dont share in that asset.

He is saying the baseball operation is making a huge profit and that many owners are using that profit to finance other things. Why should Cubs players take a cut because Ricketts isn’t generating any money at his Hotel Zachary? According to Boras, the owners make enough money without fans to fund players salaries. Whether that is true or not I have no idea, in fact, I kind of doubt it. But, I think owners should take the loss. They take the extra profit when it’s there. Prorated salaries seems fair to me.

Edited June 10, 2020 by Dick Allen

[ptatc]

1 minute ago, Dick Allen said:

He is saying the baseball operation is making a huge profit and that many owners are using that profit to finance other things.

Other things to improve the club,stadium and fan experience. Thus once those profits are put back into the organization, there are no profits.i think we are saying the same thing it's just  i read no profits because the owners put it all back into the organization and you read profits because they have money to make these improvements.

I that case I agree that if they didnt renovate the parks or do things around the park to improve the fan experience, they would have a profit for the shareholders to experience. However as it stands Boras acknowledges that the owners are in a tight financial situation because they put all of their profits back into the organization. 

[Dick Allen]

8 minutes ago, ptatc said:

Other things to improve the club,stadium and fan experience. Thus once those profits are put back into the organization, there are no profits.i think we are saying the same thing it's just  i read no profits because the owners put it all back into the organization and you read profits because they have money to make these improvements.

I that case I agree that if they didnt renovate the parks or do things around the park to improve the fan experience, they would have a profit for the shareholders to experience. However as it stands Boras acknowledges that the owners are in a tight financial situation because they put all of their profits back into the organization. 

They are used to A. Eventually lead to more profit. And B. Increase the value of their asset. Why should players pay for that?  What they do with their baseball profit should have nothing to do with players.  If you owned a business and decided to go gambling and lost your ass, how do you think telling your employees they will have to take a pay cut to cover your losses going to go over?Ricketts didn’t need to buy Wrigleyville. He did.  But that shouldn’t be on Brizzo and Javy Baez to take a cut because a pandemic made the revenue at his outside business go to near zero.The owners negotiated prorated salaries, and we have known for some time there would be no fans at stadiums at least for the vast majority of games.

Edited June 10, 2020 by Dick Allen