Has a KW mid-season move backfired more than Rios?

[Dick Allen]

I don't know how obvious the pattern has to be for you to recognize what it is, especially for someone who goes on and on about being a 20 year season ticket holder. The organization does not take financial risks if they can be avoided. However, the organization will step outside of that mode of operation if it sees an impact player that can be acquired at a reduced price, whether that be in terms of cash or players. The organization will also step up the degree of risk it will assume if it sees an opportunity to make the postseason.

 

Otherwise, the organization will operate in a fiscally responsible manner.

 

I don't think KW means literally when he says they have no money that they have no money. It means things are tight and the budget is basically accounted for. If you want to interpret that as meaning there are no funds available, nor are there any funds available in the future, nor will there ever be, that is your prerogative, but that doesn't make Kenny a liar either.

Who have they gone out on the limb for, breaking budget to acquire in the past? And if they don't take financial risks if they can be avoided, taking on $115 million worth of contracts with no money left in the budget, would be a huge financial risk.

Edited September 13, 2009 by Dick Allen

[Dick Allen]

Or Jerry being the business man that he is recognized that there was going to be a time that the prices on these players dropped a lot, because the economy was going into the dumper and he knew there were going to be franchises in trouble. So instead of going after some guys for one year fixes, he waited to see if he could find guys that could be a part of the franchise for years to come.

That may very well be, but then he shouldn't be pissed about Peavy and Rios not helping win this year, although there is still a chance. I think they would have to get it down to a 2 or 3 game deficit before the final 9 games for it to be realistic. He also stated when contacted about trading for Peavy a second time, his initial response was "no thank you".

[BlackBetsy]

Who have they gone out on the limb for, breaking budget to acquire in the past?

I don't know if they ever "broke the budget," but the Albert Belle signing in 1997 was the largest contract ever awarded in MLB at that point (5 years $55 million with a break after 2 years, which Belle happily exercised).

 

The Sox are happily profitable thanks to Comcast, WGN, a national fund that pays them $40 + million per year, 2+ million attendance and a sweet stadium deal.

[beck72]

I don't know if this adds to the conversation, but it was interesting:

 

On B&B last week, Boers said that "his guy" with the Sox (who is rarely wrong about anything, BTW) told him that JR is pretty pissed off about how poorly the Sox have played after being told that Rios and Peavy would be enough to make the playoffs. That's what prompted the attempted sell off on Aug. 31 and the "blame me" stuff from Ozzie. I think there is a lot riding on a playoff spot for this team.

I could see JR being pissed. But Peavy wasn't going to be ready for a month. And Rios alone wasn't the missing peice. Making the playoffs for 2009 rested on the offense and defense being more consistent, with additional rest, growth, etc, and the pitching staying strong. So far, the offense hasn't fully responded. That is on Dye, PK, Carlos, etc.

 

Peavy and Rios were mostly for 2010. Kenny could sell the deals to possibly improve this year's team [and hence, improve the attendance- though Peavy was known not to be ready for at least a month from the deadline] and make the Sox set for 2010 and beyond.

[Dick Allen]

I could see JR being pissed. But Peavy wasn't going to be ready for a month. And Rios alone wasn't the missing peice. Making the playoffs for 2009 rested on the offense and defense being more consistent, with additional rest, growth, etc, and the pitching staying strong. So far, the offense hasn't fully responded. That is on Dye, PK, Carlos, etc.

 

Peavy and Rios were mostly for 2010. Kenny could sell the deals to possibly improve this year's team [and hence, improve the attendance- though Peavy was known not to be ready for at least a month from the deadline] and make the Sox set for 2010 and beyond.

The 5 year $60 million committment he has to Rios probably is reminding him of Julio Cruz.

[iamshack]

Who have they gone out on the limb for, breaking budget to acquire in the past? And if they don't take financial risks if they can be avoided, taking on $115 million worth of contracts with no money left in the budget, would be a huge financial risk.

 

Again, from my post:

 

However, the organization will step outside of that mode of operation if it sees an impact player that can be acquired at a reduced price, whether that be in terms of cash or players. The organization will also step up the degree of risk it will assume if it sees an opportunity to make the postseason.

 

As for specific players, I'm thinking many of the additions we have made in the second half of seasons over the past 5 years. Additionally, many of them we are still committed to or have recently traded.

1) Jon Garland

2) Jose Contreras

3) Mark Buehrle

4) Javy Vazquez

5) Paul Konerko

6) Jermaine Dye

 

[BlackBetsy]

The 5 year $60 million committment he has to Rios probably is reminding him of Julio Cruz.

That Julio Cruz deal didnt even come close to the dent the Rios contract is making.

 

Baseball teams were wildly profitable in the 80's based on the low salaries they were paying. Remember the minimum salary in 1987 was something like $67,500. You could field a team for $8-$10 million comfortably. That's less than the MLB teams were getting from the national fund during that period.

[elrockinMT]

KW says he makes moves with th future in mind. So in the case of Rios, who we also all know KW has wanted for sometime just like he wanted Junior Griffey, th move was made for THIS year and BEYOND. But, poor ALex has really stumbled. I felt bad for him when he scorched oe on Saturday only to have the CF we really wanted (Hunter, make areal good fiving cathch to rob him of extra bases. When things go bad they really go bad. Rios is realy bad right now, but I am sure 2010 will be different.

[Dick Allen]

Again, from my post:

 

However, the organization will step outside of that mode of operation if it sees an impact player that can be acquired at a reduced price, whether that be in terms of cash or players. The organization will also step up the degree of risk it will assume if it sees an opportunity to make the postseason.

 

As for specific players, I'm thinking many of the additions we have made in the second half of seasons over the past 5 years. Additionally, many of them we are still committed to or have recently traded.

1) Jon Garland

2) Jose Contreras

3) Mark Buehrle

4) Javy Vazquez

5) Paul Konerko

6) Jermaine Dye

 

None of the above extensions added anything to the payroll in-season. Just give me some examples that busted the current (at the time) payroll except technically Konerko, but it was after a WS and money was aplenty. It would have been hard to play the $.50 card then.

Edited September 13, 2009 by Dick Allen

[southsider2k5]

That Julio Cruz deal didnt even come close to the dent the Rios contract is making.

 

Baseball teams were wildly profitable in the 80's based on the low salaries they were paying. Remember the minimum salary in 1987 was something like $67,500. You could field a team for $8-$10 million comfortably. That's less than the MLB teams were getting from the national fund during that period.

 

Tickets also didn't cost $50, parking wasn't $23, beer wasn't $7, and there weren't sponsors for everything. The entire cost structure is different.

[iamshack]

None of the above extensions added anything to the payroll in-season. Just give me some examples that busted the current (at the time) payroll except technically Konerko, but it was after a WS and money was aplenty. It would have been hard to play the $.50 card then.

 

How does the fact that the extensions didn't affect the payroll in-season somehow mean they were budgeted for?

[Dick Allen]

How does the fact that the extensions didn't affect the payroll in-season somehow mean they were budgeted for?

 

JR doesn't give them the budget figure for next season until after this one is over.

 

Didn't you say they don't have budgets, they just fit contracts in? The fact is many obligations expire and many are easier to rid yourself of in the offseason. Plus you give Garland an extension. He goes from $6 million or so to $8-9 million, you are finding space for $2-3 more , not the amount you owe Rios and Peavy. Next year its not so bad with all the money coming off the books. This year, they spent money they said they didn't have whether you want to admit it or not. Money didn't suddenly pop up. Remember KW commenting about the attendance for the Dodgers series? The Boston series was worse and they know the advanced sale and have a pretty good understanding of what realistically to expect as a walk up. Using one of your tactics, isn't it even slightly possible they did have money to spend this year and spent it on Rios and Peavy?

Edited September 13, 2009 by Dick Allen

[BlackBetsy]

Tickets also didn't cost $50, parking wasn't $23, beer wasn't $7, and there weren't sponsors for everything. The entire cost structure is different.

True. But my guess is that profit as a % of revenue was much higher in say 1986 than it is today.

 

Here's an interesting link to TV revenue (I think this is the combined TV figure) http://eh.net/encyclopedia/article/haupert.mlb

 

They have average salary of $410k in 1986, meaning the average team spent $10.6 million on payroll. At $6.21 per ticket x average attendance of 1.79 million, average ticket revenue is $11.0 million.

 

TV revenue logged in at $12.4 million per team. Let's assume that includes the revenues from the cable royalty fund.

 

I'll assume food/beverage/parking net income (i.e., price of food and parking minus costs) of $2 million per team. That's fairly conservative.

 

Let's assume $500k in net income from licensed merchandise. Again, fairly conservative.

 

So we have revenues of $11.0 + $12.4 million = $22.4 million. Salary cost of $10.6 million. Let's assume the team pays rent or stadium maintenance costs of $1 million per year and pays its non-baseball staff another $2 million (that's 70 employees at $30k per year...remember this is 1986). Baseball staff and minor leaguers are maybe $4 million per year more (this is wildly high - 150 minor leaguers making $20k per year plus $1 million to GM + scouts).

 

$22.4 million minus $17.6 million expenses (10.6 + 1 + 2 + 4) = $4.8 million profit. Add back in $2.5 million net income for the food beverage parking and licensed merchandise and you are talking about a business with $7.3 million in profits per year.

 

Given that the Sox were purchased for $20 million in 1980, you can see that it was a pretty profitable operation in the 1980's.

[Dick Allen]

True. But my guess is that profit as a % of revenue was much higher in say 1986 than it is today.

 

Here's an interesting link to TV revenue (I think this is the combined TV figure) http://eh.net/encyclopedia/article/haupert.mlb

 

They have average salary of $410k in 1986, meaning the average team spent $10.6 million on payroll. At $6.21 per ticket x average attendance of 1.79 million, average ticket revenue is $11.0 million.

 

TV revenue logged in at $12.4 million per team. Let's assume that includes the revenues from the cable royalty fund.

 

I'll assume food/beverage/parking net income (i.e., price of food and parking minus costs) of $2 million per team. That's fairly conservative.

 

Let's assume $500k in net income from licensed merchandise. Again, fairly conservative.

 

So we have revenues of $11.0 + $12.4 million = $22.4 million. Salary cost of $10.6 million. Let's assume the team pays rent or stadium maintenance costs of $1 million per year and pays its non-baseball staff another $2 million (that's 70 employees at $30k per year...remember this is 1986). Baseball staff and minor leaguers are maybe $4 million per year more (this is wildly high - 150 minor leaguers making $20k per year plus $1 million to GM + scouts).

 

$22.4 million minus $17.6 million expenses (10.6 + 1 + 2 + 4) = $4.8 million profit. Add back in $2.5 million net income for the food beverage parking and licensed merchandise and you are talking about a business with $7.3 million in profits per year.

 

Given that the Sox were purchased for $20 million in 1980, you can see that it was a pretty profitable operation in the 1980's.

I was reading an article by someone a few weeks ago talking about some of the teams whose payrolls are really becoming ridiculously low. He claimed each team gets a $35 million infusion each year from MLB from licensing agreements. There will be a team or 3 next year that will make money if they locked the doors and didn't let anyone into their games.

[iamshack]

Didn't you say they don't have budgets, they just fit contracts in? The fact is many obligations expire and many are easier to rid yourself of in the offseason. Plus you give Garland an extension. He goes from $6 million or so to $8-9 million, you are finding space for $2-3 more , not the amount you owe Rios and Peavy. Next year its not so bad with all the money coming off the books. This year, they spent money they said they didn't have whether you want to admit it or not. Money didn't suddenly pop up. Remember KW commenting about the attendance for the Dodgers series? The Boston series was worse and they know the advanced sale and have a pretty good understanding of what realistically to expect as a walk up. Using one of your tactics, isn't it even slightly possible they did have money to spend this year and spent it on Rios and Peavy?

 

Of course they have budgets. I am sure they have budgets that span the life of all existing contractual obligations. That does not mean they are all as defined as others, nor does it mean that they don't keep them fluid and flexible. These budgets also include all sorts of speculation and prediction, such as attendance, future contracts, planned price hikes, and probably even inflation.

 

I am not an accountant, nor am I an employee of the White Sox FO, but my guess is that the team has an account that is designed to cover operating expenses, such as player payroll, staff payroll, rent, travel, etc. When KW or JR refer to their available funds, they are probably refering to this account. That doesn't mean money can't be borrowed from other sources if a situation presents itself to improve the ballclub (i.e., a star player becomes available via trade because of another team's dire financial situation, etc.). However, that also doesn't mean there is money available which has been earmarked for player payroll.

 

Again, my guess is KW and JR decided to borrow money from other sources to acquire Peavy and Rios, whether those sources be planned future expenditures, in lieu of future captial improvements, etc.. If that is the case, no one is lying to you at all, DA. They are simply trying to make you and the rest of the fanbase happy by making some unforseen acquisitions that can theoretically improve the ballclub. However, you aren't elated about that like some other fans are. Instead, you want to roast them over the coals for it.

Edited September 13, 2009 by iamshack

[iamshack]

I was reading an article by someone a few weeks ago talking about some of the teams whose payrolls are really becoming ridiculously low. He claimed each team gets a $35 million infusion each year from MLB from licensing agreements. There will be a team or 3 next year that will make money if they locked the doors and didn't let anyone into their games.

 

Every team receives about $70 million from the MLB's revenue sharing program.

 

There are already teams making money before they sell one ticket, one beer, one hot dog.

 

The Marlins have been doing this since 2005.

Edited September 13, 2009 by iamshack

[Dick Allen]

Of course they have budgets. I am sure they have budgets that span the life of all existing contractual obligations. That does not mean they are all as defined as others, nor does it mean that they don't keep them fluid and flexible. These budgets also include all sorts of speculation and prediction, such as attendance, future contracts, planned price hikes, and probably even inflation.

 

I am not an accountant, nor am I an employee of the White Sox FO, but my guess is that the team has an account that is designed to cover operating expenses, such as player payroll, staff payroll, rent, travel, etc. When KW or JR refer to their available funds, they are probably refering to this account. That doesn't mean money can't be borrowed from other sources if a situation presents itself to improve the ballclub (i.e., a star player becomes available via trade because of another team's dire financial situation, etc.). However, that also doesn't mean there is money available which has been earmarked for player payroll.

 

Again, my guess is KW and JR decided to borrow money from other sources to acquire Peavy and Rios, whether those sources be planned future expenditures, in lieu of future captial improvements, etc.. If that is the case, no one is lying to you at all, DA. They are simply trying to make you and the rest of the fanbase happy by making some unforseen acquisitions that can theoretically improve the ballclub. However, aren't elated about that like some other fans are. Instead, you want to roast them over the coals for it.

 

I am an accountant, I understand the game.

[iamshack]

I am an accountant, I understand the game.

 

Then you are being even more incredibly stubborn about this than I thought was possible.

[Dick Allen]

Then you are being even more incredibly stubborn about this than I thought was possible.

No I'm not. Read your post. You are saying when they say there is no money available, there actually may be money available. Its precisely the point I've been making.

 

Regardless, the bottom line is $60 million committed to Alex Rios whether they can afford it or not, and I'm assuming his checks will clear, and regarless of the money coming off the books, at the very least it seems to be $60 million that could have been allocated towards something else. The good news is, usually when you judge a trade or move so quickly as a bust, they seem to turn themselves around after a while. Rios is better than he's played and could be a star. You have mentioned several times about how the White Sox do business. Getting a guy like Alex Rios and taking on a contract his size without even giving any money back is definitely new ground for JR and KW.

[greg775]

Peavy and Rios were mostly for 2010. Kenny could sell the deals to possibly improve this year's team [and hence, improve the attendance- though Peavy was known not to be ready for at least a month from the deadline] and make the Sox set for 2010 and beyond.

 

True, but Jerry is a fan as well as owner and the moves at the time were seen as getting us over the top this year. Go back and read all the quotes and media columns, etc. Sure it in theory sets the team up for the future, but Jerry might be mad that we didn't make any moves that helped this year. That said, he likes Oz and KW and isn't going to fire anybody over it.

If somehow we get within 4 games or so, who knows? Rios might be saving his hits for the six Detroit games. He'll be due that's for sure.

[iamshack]

No I'm not. Read your post. You are saying when they say there is no money available, there actually may be money available. Its precisely the point I've been making.

 

Regardless, the bottom line is $60 million committed to Alex Rios whether they can afford it or not, and I'm assuming his checks will clear, and regarless of the money coming off the books, at the very least it seems to be $60 million that could have been allocated towards something else. The good news is, usually when you judge a trade or move so quickly as a bust, they seem to turn themselves around after a while. Rios is better than he's played and could be a star. You have mentioned several times about how the White Sox do business. Getting a guy like Alex Rios and taking on a contract his size without even giving any money back is definitely new ground for JR and KW.

 

Oh, ok. So when you run your household on a monthly basis, do you look at your net income as your operating income, or do you use net income plus all available credit as your operating income?

Edited September 13, 2009 by iamshack

[Dick Allen]

Oh, ok. So when you run your household on a monthly basis, do you look at your net income as your operating income, or do you use net income plus all available credit as your operating income?

So JR took out a loan for Rios and Peavy? Please state your source. I think he's too wise to do something like that.

[iamshack]

So JR took out a loan for Rios and Peavy? Please state your source. I think he's too wise to do something like that.

 

You are ridiculous.

[Flash Tizzle]

I could see JR being pissed. But Peavy wasn't going to be ready for a month. And Rios alone wasn't the missing peice. Making the playoffs for 2009 rested on the offense and defense being more consistent, with additional rest, growth, etc, and the pitching staying strong. So far, the offense hasn't fully responded. That is on Dye, PK, Carlos, etc.

Peavy and Rios were mostly for 2010. Kenny could sell the deals to possibly improve this year's team [and hence, improve the attendance- though Peavy was known not to be ready for at least a month from the deadline] and make the Sox set for 2010 and beyond.

Can we stop saying this? I know believing so is convenient because it absolves Rios from being horrendous and Peavy from not pitching in early September, but it's not as if Williams was ignoring 2009.

 

I know it's an excuse because, look at in these terms -- if Rios was performing well and we were within a few games of the division lead with Peavy set to return, would people not say that Williams was thinking of 2009? Of course they would. But now that Rios has looked terrible, we're 6 out of the division, and Peavy isn't pitching, we can conveniently throw out the "[they] were mostly for 2010." Obviously they're important players for 2010 and beyond, but to ignore this season is foolish.

Edited September 13, 2009 by Flash Tizzle

[fathom]

Can we stop saying this? I know believing so is convenient because it absolves Rios from being horrendous and Peavy from not pitching in early September, but it's not as if Williams was ignoring 2009.

 

Awesome line...KW for 2009 gets a big fat F for his trades. At least his non-roster FA signings in Pods and Garcia were excellent.