Abreu rumor

[Steve Bartman's my idol]

Got any historical or otherwise sources for that?  I have the annual Forbes reports which have shown year, after year, after year, after year, that whatever profit the Sox make in one year, the payroll goes up by that amount the next year.  If they post a loss, the payroll gets cut by that amount.  Look it up.  If you have a better source than a World reknowned financial magazine who does analysis of the worlds biggest companies, please let me know.

<{POST_SNAPBACK}>

The current Sox ownership paid something like $25-30 million for the team; it is currently valued at more than $300 million. Is $300 million more than $30 million?

I'm not sure...evidently I'm bad with numbers.

[Steve Bartman's my idol]

And the Post King steps in with a royal owning.

<{POST_SNAPBACK}>

No one's been schooled yet!

[Balta1701]

The current Sox ownership paid something like $25-30 million for the team; it is currently valued at more than $300 million. Is $300 million more than $30 million?

I'm not sure...evidently I'm bad with numbers.

So, your advice then would be for the ownership group to sell the team, and use the money gained from selling the team to pay Mr. Abreu's added contract.

 

I can't see any problem with that idea, can anyone else?

[witesoxfan]

I don't get it. Who cares if the Sox go over the budget? That shouldn't really be our concern at all. If they can do it, then I say do it. If they can't, then the case is moot anyway.

 

If you like operating your organization like the Marlins, sure.

 

They of course spend over their budget for a couple years, trying to win it all...which does happen to work...and then due to them spending over their budget, they financially f*** themselves and have to trade anyone making money. You think the Marlins just spontaneously decided to rebuild this year for the hell of it? Lowell, Delgado, Lo Duca, Pierre, Beckett, Castillo, Mota, not being able to resign Burnett, Gonzalez, Conine, Jones, Encarnacion...and I still may be missing some.

 

Assuming I did my easy math and research correctly, the Marlins traded away just over $44 million in contracts this offseason...that doesn't include any signings to the team, but I would guess that they are around $35 mill under their payroll from last year. If you like that type of philosophy, then the Sox should trade for Abreu in a New York minute.

 

So to answer another question of yours...yes, I'd be mad if the Sox traded for Abreu, as it either likely means a lot more talent is being given up to cover the later years of Abreu's contract, or that the Sox won't be able to resign Buehrle. Resigning Buehrle almost has to be priority #1 right now.

[Frank the Tank 35]

Gentlemen, you guys are so focused on ripping Steve and any semblance of an Abreu rumor apart, let's not forget that we'd be trading away AT LEAST Contreras who is owed ~$9. So at the VERY most we'd be adding, what $4 mil to next year's salary? It would be the following year that the real salary would be added. If we don't win it all again this year or at least get deep into the playoffs, we CAN trade away players if need be, correct? That's still an option, right? I say I'm leaning to just loading up this year for another run, if we don't make it we can shed some salary. All our players have reasonable contracts.

[Steve Bartman's my idol]

So, your advice then would be for the ownership group to sell the team, and use the money gained from selling the team to pay Mr. Abreu's added contract.

 

I can't see any problem with that idea, can anyone else?

<{POST_SNAPBACK}>

One word...LEVERAGE!

 

The Sox can always borrow against future value to make up for any deficits!!!

[Steve Bartman's my idol]

Gentlemen, you guys are so focused on ripping Steve and any semblance of an Abreu rumor apart, let's not forget that we'd be trading away AT LEAST Contreras who is owed ~$9.  So at the VERY most we'd be adding, what $4 mil to next year's salary?  It would be the following year that the real salary would be added.  If we don't win it all again this year or at least get deep into the playoffs, we CAN trade away players if need be, correct?  That's still an option, right?  I say I'm leaning to just loading up this year for another run, if we don't make it we can shed some salary.  All our players have reasonable contracts.

<{POST_SNAPBACK}>

[Dick Allen]

Gentlemen, you guys are so focused on ripping Steve and any semblance of an Abreu rumor apart, let's not forget that we'd be trading away AT LEAST Contreras who is owed ~$9.  So at the VERY most we'd be adding, what $4 mil to next year's salary?  It would be the following year that the real salary would be added.  If we don't win it all again this year or at least get deep into the playoffs, we CAN trade away players if need be, correct?  That's still an option, right?  I say I'm leaning to just loading up this year for another run, if we don't make it we can shed some salary.  All our players have reasonable contracts.

Depending on trading players a year or 2 in advance to lower payroll is a very risky proposition. If these players fell flat on their faces, their giant contracts would be impossible to move. Then you get the double whammy. A bad team, that no one wants to pay to see, and a payroll you can't decrease unless you dump core players like Buerhle and Konerko which would only alienate the fan base, particularly the bandwagon jumpers who wouldn't hesitate to jump back off.

[witesoxfan]

Gentlemen, you guys are so focused on ripping Steve and any semblance of an Abreu rumor apart, let's not forget that we'd be trading away AT LEAST Contreras who is owed ~$9.  So at the VERY most we'd be adding, what $4 mil to next year's salary?  It would be the following year that the real salary would be added.  If we don't win it all again this year or at least get deep into the playoffs, we CAN trade away players if need be, correct?  That's still an option, right?  I say I'm leaning to just loading up this year for another run, if we don't make it we can shed some salary.  All our players have reasonable contracts.

 

Abreu's no-trade clause could come into effect in this situation. Also, the fact that even if the Sox were to look into trading him, $33 million over 2 years is a lot of money for a player.

[Frank the Tank 35]

And there is a HUGE point.  After this year, the odds are the revenue wont grow so much that we can afford to payback a deficit.  Considering we just won our first world series title in 88 years, its safe to say that we shouldnt expect another one.  Meaning that this year could very well be our most profitable in years.  But that also means that eventually the revenue stream will go back down a bit.

 

So next year will probably be one of our most profitable years ever in terms of revenue meaning that the FOLLOWING year (2007) is when the "re-investment" is due according to Forbes. If 2007 is when we'd take the bulk of the hit for an Abreu contract, it looks like it lines up directly with the year that we should be able to afford the most salary.

 

(Be back later to continue this engaging discussion )

[Frank the Tank 35]

Depending on trading players a year or 2 in advance to lower payroll is a very risky proposition. If these players fell flat on their faces, their giant contracts would be impossible to move. Then you get the double whammy. A bad team, that no one wants to pay to see, and a payroll you can't decrease  unless you dump core players like Buerhle and Konerko which would only alienate the fan base, particularly the bandwagon jumpers who wouldn't hesitate to jump back off.

 

You gotta take some risks if you want to win it all. We caught lightning in a bottle last year where a lot of things broke right for us on top of that great pitching.

[Balta1701]

So next year will probably be one of our most profitable years ever in terms of revenue meaning that the FOLLOWING year (2007) is when the "re-investment" is due according to Forbes.  If 2007 is when we'd take the bulk of the hit for an Abreu contract, it looks like it lines up directly with the year that we should be able to afford the most salary.

 

(Be back later to continue this engaging discussion  )

But the problem is...we've already massively increased our investment for next year, from something like $75 million last year to something like $95 million next year (and I think that's even more if you count the buyouts for Thomas and Everett). This reduces the profitability next year if the team is profitable, and in fact makes it far more likely that we'll lose money (what happens if, God forbid, Buehrle or Konerko were to get hurt and we miss the playoffs?)

[Frank the Tank 35]

Abreu's no-trade clause could come into effect in this situation.  Also, the fact that even if the Sox were to look into trading him, $33 million over 2 years is a lot of money for a player.

 

Is that written in the contract? I don't recall if it was or not... just that it had been rumored that Abreu would want that option picked up if he was to waive his no-trade. I've also read that he'd best buds with Ozzie, so that could help. I do agree that the 2008 season salary could be a big sticking point/ roadblock.

[southsider2k5]

The current Sox ownership paid something like $25-30 million for the team; it is currently valued at more than $300 million. Is $300 million more than $30 million?

I'm not sure...evidently I'm bad with numbers.

 

I don't know about bad with numbers, but obviously are really bad with accounting.

 

You do know the difference between operating profits and capital gains right? Just because your house goes up 50,000 in value, doesn't mean your bank account instantly goes up by $50,000. You don't realize a dime of those gains until you sell the asset, and unless I mistaken the Sox are still owned by the same ownership group that they have been for the last 25 years or so. The only money the Sox have, is the money that they take in. Capital gains, are just that, capital gains. The only other way the Sox have to utilize those capital gains towards payroll is if they take out a loan against them, which only reduces their income in future seasons by forcing them to pay interest against said loan.

 

And by the way, yes, school is in session.

[Steve Bartman's my idol]

I don't know about bad with numbers, but obviously are really bad with accounting.

 

You do know the difference between operating profits and capital gains right?  Just because your house goes up 50,000 in value, doesn't mean your bank account instantly goes up by $50,000.  You don't realize a dime of those gains until you sell the asset, and unless I mistaken the Sox are still owned by the same ownership group that they have been for the last 25 years or so.  The only money the Sox have, is the money that they take in.  Capital gains, are just that, capital gains.  The only other way the Sox have to utilize those capital gains towards payroll is if they take out a loan against them, which only reduces their income in future seasons by forcing them to pay interest against said loan.

 

And by the way, yes, school is in session.

<{POST_SNAPBACK}>

BUT...if I wanted to borrow money against the value of the house, it has increased by $50K!

 

The value of the team can/will only increase...history has shown that baseball teams do not go down in value.

 

Here's where I'm coming from...I tasted championship ball last year and want to taste it again (and again). IF we can improve, we should. If we can repeat, we should AT ALL COSTS!

Edited January 23, 2006 by Steve Bartman's my idol

[southsider2k5]

You gotta take some risks if you want to win it all.  We caught lightning in a bottle last year where a lot of things broke right for us on top of that great pitching.

 

Jim Thome

Konerko 5 years at $60 million

Javier Vazquez

$20 million increase in payroll...

 

I think we already took some risks.

[RockRaines]

So next year will probably be one of our most profitable years ever in terms of revenue meaning that the FOLLOWING year (2007) is when the "re-investment" is due according to Forbes.  If 2007 is when we'd take the bulk of the hit for an Abreu contract, it looks like it lines up directly with the year that we should be able to afford the most salary.

 

(Be back later to continue this engaging discussion  )

Yes, just about the year when we owe our young starting pitching their new deals. Abreu or Mark Buehrle?

 

Accroding to the ownership we are already a bit over our budget, adding that much more money is NOT going to happen.

[Dick Allen]

Is that written in the contract?  I don't recall if it was or not... just that it had been rumored that Abreu would want that option picked up if he was to waive his no-trade.  I've also read that he'd best buds with Ozzie, so that could help.  I do agree that the 2008 season salary could be a big sticking point/ roadblock.

I think I read it in one of Ken Rosenthal's articles or one of the articles in a Philadelphia, Boston or Baltimore paper. But it did state Abreu would only waive his no trade if his option was picked up.

[Balta1701]

One word...LEVERAGE!

 

The Sox can always borrow against future value to make up for any deficits!!!

This only makes sense if, as I pointed out above...several things happen. First of all...they can grow the revenue in the future to make up for the losses this season. This is simply unlikely, as if the break-even point this year is somewhere around $95 million, that means we'd basically have to start selling out the stadium every single game, and have revenue from several playoff games, just to turn a profit in the future. You just can't magically make seats appear, and increasing the ticket price will drive attendence back down.

 

The other option then, would be cost-cutting in the future. This would almost certainly have to be achieved by reducing the costs of the players in the future, as again, there's almost no other revenue that can be added. Now, if our minor leagues cannot provide say another BMac or Buehrle for the next 5 years, or we trade away youth to get a guy like Abreu, then we're in the situation of having basically no choice but to save money by putting people on the field who simply will not win ballgames. This will then probably drive people out of the ballpark, meaning that the quality of play on the field will decline even further.

 

Without some new revenue stream...going into a deficit to pay for a guy like Abreu will almost certainly mean that we will have a worse team on the field a few years from now, and it may very well destroy the gains in attendence and salary created by spending the money on the big name right now.

[Kyyle23]

BUT...if I wanted to borrow money against the value of the house, it has increased by $50K!

 

And its so easy to compare borrowing against your house to pay off a debt below 50,000 to borrowing against a 300 million dollar business to pay an athlete who may or may not give you the return you desperately need to pay back your debts, isnt it?

 

You dont have to tell us you arent a math major, we already know.

[RockRaines]

No one's been schooled yet!

The fact that you dont know it yet speaks volumes. I wouldnt argue chemistry because I know nothing about it. This is the approach you should take in this matter.

[Steve Bartman's my idol]

The fact that you dont know it yet speaks volumes.  I wouldnt argue chemistry because I know nothing about it.  This is the approach you should take in this matter.

<{POST_SNAPBACK}>

It'll be a cold day in Hell when I can get schooled by you, "professor".

[Kyyle23]

It'll be a cold day in Hell when I can get schooled by you, "professor".   

There is a report going around that there is a blizzard in Iraq, now that you mention it

[southsider2k5]

BUT...if I wanted to borrow money against the value of the house, it has increased by $50K!

 

And your future earnings are reduced by the interest rate you are paying, which is exactly what has gotten teams like Florida and Arizona into trouble. That is exactly why the Sox are a contender every year, and those teams are contenders for a couple of years, and then sell the farm to dwell in the cellar when they are so far in debt that they are forced to make cutbacks. You can't operate at a deficit every year forever. Eventually the IRS either won't let you take losses anymore, or you have to file for bankruptcy. This isn't the US government we are talking about here, it is a business. The money has to come from somewhere.

[RockRaines]

There is a report going around that there is a blizzard in Iraq, now that you mention it

 

Some people dont know when to stop.