Peavy ready for bounce back season

[Dick Allen]

This franchise is worth what, maybe $400-$500 million, and takes in enough revenue to be profitable with about a $100 million payroll.

 

A sudden loss of $150 million 1 year would require ballooning the team's debt from about 10% of team value to about 40% of team value in 1 year. Financially that wouldn't be totally catastrophic, teams do survive with higher debt loads than that, but that dramatic of an erosion of financial position would be more than enough reason for the remaining members to act to remove him.

 

2-3 years of those kind of losses would put the team in bankruptcy.

As I stated, I was exaggerating to make a point. In the end, its JR's call what the payroll will be.

[southsider2k5]

I doubt it would be that high, but JR's partners have been hit with cash calls in the mid to late 80s and there were nothing done. I even wonder if something could be done unless they could prove he has some diminished mental capabilities. JR put the entire deal together, and while at first he owned at most 10% of the team, its been floated that his percentage has increased significantly over the years. I do think the Fannings own the biggest piece. At least they did.

 

Things are way different than they were 25 years ago.

[Balta1701]

As I stated, I was exaggerating to make a point. In the end, its JR's call what the payroll will be.

Remember though, if the Chairman is not a majority shareholder, and as some are saying not even a plurality shareholder, then he only serves in that position at the pleasure and discretion of the other shareholders.

 

Those shareholders are very unlikely to tolerate a sustained period of losses in the value of the asset that they hold. Taking on debt to pay higher payrolls would do exactly that; the only way to do higher payrolls sustainably would be to have higher revenues to match, and revenues are going the wrong way.

[southsider2k5]

Remember though, if the Chairman is not a majority shareholder, and as some are saying not even a plurality shareholder, then he only serves in that position at the pleasure and discretion of the other shareholders.

 

Those shareholders are very unlikely to tolerate a sustained period of losses in the value of the asset that they hold. Taking on debt to pay higher payrolls would do exactly that; the only way to do higher payrolls sustainably would be to have higher revenues to match, and revenues are going the wrong way.

 

Which is exactly why there was a move to cut salaries this year, and JR favorite Mark Buehrle moved on.

[Dick Allen]

Remember though, if the Chairman is not a majority shareholder,

That doesn't matter. He put the group together with the power to make the decisions. If he didn't have that power, he wouldn't have put the group together, or would have put together a different group to give him the power. There isn't one shareholder who would even considering trying to force JR out. In fact the majority of shareholders have wanted to sell the team over the years, but JR said no.

Edited February 6, 2012 by Dick Allen

[Balta1701]

That doesn't matter.

Yes it does. The board still has rights, but in the position of a majority shareholder, he would be able to make policy for his organization without input from the board and would be able to override their decisions. This is not the case.

[southsider2k5]

That doesn't matter. He put the group together with the power to make the decisions. If he didn't have that power, he wouldn't have put the group together, or would have put together a different group to give him the power. There isn't one shareholder who would even considering trying to force JR out. In fact the majority of shareholders have wanted to sell the team over the years, but JR said no.

 

I have never seen or heard that before. Have any kind of proof?

[Dick Allen]

Yes it does. The board still has rights, but in the position of a majority shareholder, he would be able to make policy for his organization without input from the board and would be able to override their decisions. This is not the case.

He can override any board request, and has on several occassions, some being correct and some not working out so well. Truth be told, although JR does listen to his partners, they, at least according to Stern, have no "rights" . His is the final decision, and its worked out well for all of them.

[Balta1701]

He can override any board request, and has on several occassions, some being correct and some not working out so well. Truth be told, although JR does listen to his partners, they, at least according to Stern, have no "rights" . His is the final decision, and its worked out well for all of them.

But he can only do so with the understanding that if he goes too far, the board can remove him.

[Dick Allen]

I have never seen or heard that before. Have any kind of proof?

Lee Stern was on Chicago Tribune Live about a year ago, and they were talking Sox and Bulls. Apparently JR offered Stern as big of percentage of the Bulls as he wanted, but he passed or took a very small percentage, I can't remember which, but Stern is now kicking himself for that decision. He also talked about many Sox partners thinking selling was a good option but JR said no, so no it was.

[southsider2k5]

Lee Stern was on Chicago Tribune Live about a year ago, and they were talking Sox and Bulls. Apparently JR offered Stern as big of percentage of the Bulls as he wanted, but he passed or took a very small percentage, I can't remember which, but Stern is now kicking himself for that decision. He also talked about many Sox partners thinking selling was a good option but JR said no, so no it was.

 

So are we still talking about in the 80's here, or in recent times?

[Dick Allen]

So are we still talking about in the 80's here, or in recent times?

I was under the impression it was between the strike and the early 2000s. Before the WS win.

[Jordan4life_2007]

Damn. DA is taking on 2k5 and Balta at the same time? His post-count will be 25,000+ by the end of the day.

Edited February 6, 2012 by Jordan4life

[NorthSideSox72]

Damn. DA is taking on 2k5 and Balta at the same time? His post-count will be 25,000+ by the end of the day.

It is also an utterly pointless battle. DA has shown for years that, on anything regarding Jerry Reisndorff, he is not going to deal in reality. JR is king of his Sox world, omnipotent and cheap.

 

 

[southsider2k5]

It is also an utterly pointless battle. DA has shown for years that, on anything regarding Jerry Reisndorff, he is not going to deal in reality. JR is king of his Sox world, omnipotent and cheap.

 

You left out greedy.

[Dick Allen]

It is also an utterly pointless battle. DA has shown for years that, on anything regarding Jerry Reisndorff, he is not going to deal in reality. JR is king of his Sox world, omnipotent and cheap.

Cheap shot, incorrect, and for the record, I like JR, and have only called him cheap one time when he had his boys cry poor and raised ticket prices while lowering payroll in 2009 awhile holding season ticketholder non refundable playoff money. He eventually "found" some money that year for Peavy and Rios. Seems they weren't tapped like we were lead to believe. Other than that, I've actually defended him more often than not.

[ptatc]

He can override any board request, and has on several occassions, some being correct and some not working out so well. Truth be told, although JR does listen to his partners, they, at least according to Stern, have no "rights" . His is the final decision, and its worked out well for all of them.

No he can't. He is the managing partner. He runs the day to day operations but the board needs to agree with the large issues. The example of selling the team wasn't the fact that JR said no so it wasn't going to happen. It was that some not all of the members wanted to sell and JR was one of the ones who wanted to keep it and his group of voters were the majority.

 

You can make the case that the majority of the voters may agree with him and he runs it like Daley ran ran the city council but this only happens as long as he has the majority of the voters on his side.

 

He cannot override a vote of the board.

[Dick Allen]

No he can't. He is the managing partner. He runs the day to day operations but the board needs to agree with the large issues. The example of selling the team wasn't the fact that JR said no so it wasn't going to happen. It was that some not all of the members wanted to sell and JR was one of the ones who wanted to keep it and his group of voters were the majority.

 

You can make the case that the majority of the voters may agree with him and he runs it like Daley ran ran the city council but this only happens as long as he has the majority of the voters on his side.

 

He cannot override a vote of the board.

Do you have a copy of their bylaws? I'm just relaying what a partner went on the record with.

[southsider2k5]

Do you have a copy of their bylaws? I'm just relaying what a partner went on the record with.

 

He actually said a majority of the board voted to sell the team?

[Balta1701]

He actually said a majority of the board voted to sell the team?

More specifically, a "Voting majority" (i.e. a majority of the shares, not of the people present in the room).

[southsider2k5]

More specifically, a "Voting majority" (i.e. a majority of the shares, not of the people present in the room).

 

Obviously implied there.

[joeynach]

b

I am not the only Sox fan outraged that Mark is gone.

You guys sometimes fail to realize some people actually do agree with me on some of these issues.

 

Im not that upset hes gone and I love Mark, he was always my favorite player for the last 10+ years. But that being said Im not 12 years old anymore, when one of my favorite players leaves and hes on the back end of his career where is velocity is down, his K rate is down, and hes approaching that age where performance becomes seriosly threatened and he leave so be it. Im not gonna cry and bit** and moan b/c someone I liked leaves, Im an adult, and if the reason for his departure makes sense then so be it. Hes a proverbial 12-12 pitcher with average stuff who eats innings and posts an ERA around 4.00 every year. That being said hes probably not going to get better with age, expecially as the AL seems to get deeper and deeper every year. So Mark is offered a series of 3 year contracts around $10-$12M per year, then Loria and the Marlins, in a quest to drive up the value of their franchise for prospective buyers, make overvalued bids for basically every free agent and they get Mark for 4 Years and $58M. A complete overpay by 99% of baseball analysts. No one said Mark is bad or is not beloved, we all wanted Mark back, but no one on this board looks at this team like a teenager, I want who I want because they are good and I have seen them be good in the past. The team plays within a real economy and budget based on real world factors, and smart teams know when its time to say goodbye to certain players. Its always better to be the team who know the player the most and says no more, than the team who has no clue but an open checkbook for anyone that counts toward "making a splash". Are you even familiar with the theory shared by most Sports Execs that you never play a player on how they performed in the past, you only pay them on how you reasonably expect them to perform in the future. Hence the Matt Forte arguement. But history proves time and time again, contracts that pay players based on past performance, especially as they approach their mid 30s are usually mistakes. The Marlins will regret this deal, the Angels will regret the Puljos deal, the Dodgers majorly regret the Scmidt deal, and how do you think the Giants feel about the Zito deal.

 

The White Sox have always treated their greats well, in due time Mark will be honored, a statue, a retired number, a coaching position, a job with the team, whatever, but in term of the best strategic direction for this team right now, not commiting $58M over 4 years to a 33 yr old pitcher, saving the $, taking the draft pick, and promoting some young talent to the rotation to get some big league experience is obviously the best course of action. If you want to look at the siutation like an informed fan/analyst/adult you will make friends here quickly, if you want to look at this team like a child who gets upset when their favorite players, or the few players they can recognize in a team photo depart the team then I suggest you find another message board.

Edited February 6, 2012 by joeynach

[Jordan4life_2007]

b

 

Im not that upset hes gone and I love Mark, he was always my favorite player for the last 10+ years. But that being said Im not 12 years old anymore, when one of my favorite players leaves and hes on the back end of his career where is velocity is down, his K rate is down, and hes approaching that age where performance becomes seriosly threatened and he leave so be it. Im not gonna cry and bit** and moan b/c someone I liked leaves, Im an adult, and if the reason for his departure makes sense then so be it. Hes a proverbial 12-12 pitcher with average stuff who eats innings and posts an ERA around 4.00 every year. That being said hes probably not going to get better with age, expecially as the AL seems to get deeper and deeper every year. So Mark is offered a series of 3 year contracts around $10-$12M per year, then Loria and the Marlins, in a quest to drive up the value of their franchise for prospective buyers, make overvalued bids for basically every free agent and they get Mark for 4 Years and $58M. A complete overpay by 99% of baseball analysts. No one said Mark is bad or is not beloved, we all wanted Mark back, but no one on this board looks at this team like a teenage, I want who I want because they are good and I have seen them be good in the past. The team plays within a real economy and budget based on real world factors, and smart teams know when its time to say goodbye to certain players. Its always better to be the team who know the player the most and says no more, than the team who has no clue but an open checkbook for anyone that cound toward "making a splash". The White Sox have always treated their greats well, in due time Mark will be honored, a statue, a retired number, a coaching position, a job with the team, whatever, but in term of the best strategic direction for this team right now, not matching $58M commitment over 4 years, saving the $, taking the draft pick, and promoting some young talent to the rotation to get some big league experience is obviously the best course of action. If you want to look at the siutation like an informed fan/analyst/adult you will make friends here quickly, if you want to look at this team like a child who gets upset when their favorite players, or the few players they can recognize in a team photo depart the team then I suggest you find another message board.

 

Greg just got served.

[ptatc]

Do you have a copy of their bylaws? I'm just relaying what a partner went on the record with.

I do not have a copy of the by-laws. But that is how the partnership arrangement works in general. He cannot overrule a decision by the board. I'm going by information provided by some friends within the organization. I don't know where you got your information from but that was my understanding of the situation.

[Milkman delivers]

Greg just got served.

 

It was awesome.