Forbes: Sox Worth $692M

[hogan873]

Don't you think that $23M could have gotten them a division title if it was used last year?

No, not without identifying where that money would have been spent. For a big chunk of the season, there wasn't a glaring need except for third base, and what third baseman could have been had for the right amount of money? Just about everything fell apart at the end. So unless that $23 million could have been spent on keeping the team healthy and reduced their fatigue, what could they have done with the money to ensure a division title?

[witesoxfan]

There's no point to being in the middle as they have been. Bump the payroll and compete for the division.

 

The White Sox slashed payroll dramatically last year and still had the 11th highest opening day payroll in all of baseball. They spent quite a bit more than that previously and had been consistently in the top 10 for the previous 5 years.

 

They have not been in the middle spending wise, so this statement is flat wrong.

[southsider2k5]

The White Sox slashed payroll dramatically last year and still had the 11th highest opening day payroll in all of baseball. They spent quite a bit more than that previously and had been consistently in the top 10 for the previous 5 years.

 

They have not been in the middle spending wise, so this statement is flat wrong.

 

They also had a cut in profits year over year as well.

[LittleHurt05]

No, not without identifying where that money would have been spent. For a big chunk of the season, there wasn't a glaring need except for third base, and what third baseman could have been had for the right amount of money? Just about everything fell apart at the end. So unless that $23 million could have been spent on keeping the team healthy and reduced their fatigue, what could they have done with the money to ensure a division title?

 

The Sox easily could have bought Alex Rodriguez's contract if JR wasn't so greedy & cheap. 3B problem solved with a proven late season performer.

[NorthSideSox72]

This team still has a top 10 or close payroll, year after year, despite drawing crowds usually in the bottom half of baseball... they've increased their international and draft spending dramatically... and cut ticket (and parking) prices by a large chunk for this season. And they know they will take a hit this year with the Red Line construction.

 

But, yeah, clearly they are being cheap.

 

Also, as someone else mentioned, OI is not profit. Those are not the same. NI is closer, but also still not the full picture. You don't really know how much money this club made in profit, other than, it wasn't a very huge one.

 

And by the way, even if the Sox were operating as some sort of NFP or a co-op, they'd still want to set their budget with a small positive net flow target. They can only predict the season's revenues within a certain level of precision, with significant downside risk against guaranteed money contracts. So the only smart thing to do is leave that margin, then once the season/FY is over, plow it back or do whatever with it, if it is there.

 

[SoxFan562004]

I've never understood the Sox are cheap as the arguments posters have made above show this team does spend, but I've also never understood the "we're poor" thing from the Sox either.

 

Wow, I know it's not a pure/simple math equation since ownership has changed and JR has bought more stakes over the years, but JR and his group bought them for what, 20m?

 

Maybe this isn't the right thread to bring this up in, but is there a hint of a succession plan for when JR passes away if he doesn't sell prior? Not to be macabre, but JR is getting older, is there an heir apparent? I honestly think with it being in the 3rd major media market and the prices thrown around for other teams sold and the groups lined up wanting to own an MLB team, if the White Sox went up for sale today they'd beat the $692

[Marty34]

The Sox aren't cheap, they're comfortable. Comfortable promoting from within, putting together a team that is above average, and comfortable with the profit they make. Nobody gets on their case to spend more money because the perception in the media based solely on ticket sales is the Sox don't have any money. It's a nice position for a large market owner to be in. No pressure.

[Eminor3rd]

What if I'm wrong? They could easily afford another $30M on this payroll.

 

Why the hell would it make sense for them to operate at a loss of $8m-$12m?

[Marty34]

Why the hell would it make sense for them to operate at a loss of $8m-$12m?

 

You're assuming they would not be a better team, draw more fans, and make a postseason.

[NorthSideSox72]

You're assuming they would not be a better team, draw more fans, and make a postseason.

No, the only one making an assumption is you - that they WOULD draw more fanst and make a postseason more often. Maybe they would, maybe not, we're talking about baseball here. And we aren't talking about going from an Astros payroll to a Dodgers payroll here either. Those results are FAR from guaranteed.

 

And what happens when they spend the money and DON'T make it? Now you are not only losing that $10M, they are losing even more in successive seasons.

 

[Eminor3rd]

You're assuming they would not be a better team, draw more fans, and make a postseason.

 

You're assuming we know more about their finances than they do.

[southsider2k5]

You're assuming we know more about their finances than they do.

 

And what the team can do with that money.

[witesoxfan]

They went above and beyond anything they'd spent in 2011 and that was a disaster. That was the calculated risk you talked about, and it cost them money, which is why they cut costs last year. You can only do that so often and remain operational.

[ScottyDo]

Marty, what you're always advocating is adding extreme risk in the hopes that you will get extreme rewards. Operating at a loss in the hopes that the attendance gain is enough to offset it is an extreme risk financially, and your alternative plan is to proceed with a complete teardown which carries extreme risks in its own right. Numerically, if risks and rewards are even in magnitude, you'd need greater than a 50% shot at the upside to even CONSIDER using the plan. In reality, a wise and risk-averse organization would need much better odds than that.

 

Which makes me ask: what's your paradigm here? Because I can name you a dozen teams that have failed to rebuild after a teardown in a timely fashion, or that have failed to compensate for a spending spree with increased ticket revenues. How many can you name that have succeeded in these endeavors? Which among them is your ideal performer?

[witesoxfan]

There is always a time and place to overpay, whether by money or players, to try and compete. With the Sox current positioning, that time was not now. There are some building blocks in place, but it is an older team without a true identity moving forward - even 2 years from now, there are going to be several contracts off the books that the team will look drastically different than it does going into this year. And while you can say this is generally true, I believe that you could realistically see 9 completely different players as starters in the lineup in 3 years. I don't see that as likely - I think Flowers, Viciedo, and De Aza will still likely be here at the very least - but it's still very possible. There aren't many teams you can say that about. Spending any more significant money could have very easily been a waste.

 

There was no reason to tear it down either because this team could easily win the division this year too. I don't see that as likely either, but again, it's very possible.

 

Going to either extreme would not have been smart. It rarely is.

[Eminor3rd]

There is always a time and place to overpay, whether by money or players, to try and compete. With the Sox current positioning, that time was not now. There are some building blocks in place, but it is an older team without a true identity moving forward - even 2 years from now, there are going to be several contracts off the books that the team will look drastically different than it does going into this year. And while you can say this is generally true, I believe that you could realistically see 9 completely different players as starters in the lineup in 3 years. I don't see that as likely - I think Flowers, Viciedo, and De Aza will still likely be here at the very least - but it's still very possible. There aren't many teams you can say that about. Spending any more significant money could have very easily been a waste.

 

There was no reason to tear it down either because this team could easily win the division this year too. I don't see that as likely either, but again, it's very possible.

 

Going to either extreme would not have been smart. It rarely is.

 

Additionally, you (Marty) presume that there are always great buys available on the market. The first part of the 21st century is littered with the corpses of teams that decided to spend on whatever was available because it was "time." (See Rockies/Hampton, Dodgers/Pierre, Marlins/Bell, etc.). There may not have been anything on the market that Han was comfortable investing in at market rates this year.

[Marty34]

They went above and beyond anything they'd spent in 2011 and that was a disaster. That was the calculated risk you talked about, and it cost them money, which is why they cut costs last year. You can only do that so often and remain operational.

 

2011 was not a financial disaster. The Sox have done a great job making the public believe they have no money.

[Eminor3rd]

2011 was not a financial disaster. The Sox have done a great job making the public believe they have no money.

 

Reinsdorf said they lost money. Why are you so confident he's lying?

[NorthSideSox72]

2011 was not a financial disaster. The Sox have done a great job making the public believe they have no money.

Show us.

 

Show us where you have seen, in the past few years, the Sox trying to make people believe that. At worst, I've see Hahn and/or KW say they have a budget to work within (like ALL teams do), but that there is flexibility there for special circumstances. As far as I can tell, "the public" is only you, because only you seem to believe they are saying that.

 

[NorthSideSox72]

Reinsdorf said they lost money. Why are you so confident he's lying?

That's the other part - these numbers are partially estimated, and don't show the whole picture. Jerry says they lost money, and they may have. Or maybe they made $20M, or more. We don't know. Jerry hasn't said the Sox have no money, he's said they make a little some years, and lose a little others, and that they lost last year. And Hahn/KW say they have flexibility, but only to a point.

 

[Marty34]

Reinsdorf said they lost money. Why are you so confident he's lying?

 

You don't say you made money and cut payroll. I believe Forbes numbers.

[Marty34]

Show us.

 

Show us where you have seen, in the past few years, the Sox trying to make people believe that. At worst, I've see Hahn and/or KW say they have a budget to work within (like ALL teams do), but that there is flexibility there for special circumstances. As far as I can tell, "the public" is only you, because only you seem to believe they are saying that.

 

You can't spend $1 when you have $0.50.

[witesoxfan]

2011 was not a financial disaster. The Sox have done a great job making the public believe they have no money.

 

It's also difficult to make people believe you have no money when you spend $100-110 million on payroll each year. Why do you interpret anything that managements says or does as them suggesting they have no money/lost money?

 

If you want to appease your fan base - which the Sox have done to the best of their abilities - you don't cut payroll by $30 million.

 

You don't say you made money and cut payroll. I believe Forbes numbers.

 

The Sox also have no problem spending money when there is money to be spent. Danks extension last year, Peavy and Keppinger contracts this year, Sale's extension. I have a tendency to believe the White Sox when, generally, anything over the past 5-10 years that has shown up in Forbes has been put back into the team. When they haven't done as well, they've cut payroll. When they have done well, they've added. People on message boards with no hard sources suggesting that ownership is poor and lying does not sway me.

[southsider2k5]

You can't spend $1 when you have $0.50.

 

So now tell us when he said it, and what the financial circumstances were when he said it. Context is very important here, and as usual, only a small, deliberate, part of the story is being told here.

[Marty34]

Marty, what you're always advocating is adding extreme risk in the hopes that you will get extreme rewards. Operating at a loss in the hopes that the attendance gain is enough to offset it is an extreme risk financially, and your alternative plan is to proceed with a complete teardown which carries extreme risks in its own right. Numerically, if risks and rewards are even in magnitude, you'd need greater than a 50% shot at the upside to even CONSIDER using the plan. In reality, a wise and risk-averse organization would need much better odds than that.

 

Which makes me ask: what's your paradigm here? Because I can name you a dozen teams that have failed to rebuild after a teardown in a timely fashion, or that have failed to compensate for a spending spree with increased ticket revenues. How many can you name that have succeeded in these endeavors? Which among them is your ideal performer?

 

I don't know what the optimal solution is. I know it was disappointing to see the Sox finish 3 games behind the Tigers while having operational income of $22.9M.