Pre-Winter Meetings Best Course of Action

[Marty34]

You're making the case for Chairman Reinsdorf selling.

[southsider2k5]

You're making the case for Chairman Reinsdorf selling.

 

http://finance.yahoo.com/news/6-free-onlin...-120015557.html

[Harry Chappas]

Only person in a better position if the White Sox sell are the sellers, not the fans or the buyers. If you do not think this is the case look up north where the debt on that team is stifling.

 

Now if papa ameritrade wants to give sonny Ameritech some Ameritrade assets, you have a different story.

 

What can happen is the White Sox can leverage some worth in the hopes that such leveraging (increased spending) will increase cash flow, which I think is Marty's point, this was the All In mantra, it did not work so they are pulling back somewhat since that failed experiment, and while not blowing things up like the ivy covered genius squad they are modeling their plan differently.

 

[southsider2k5]

Only person in a better position if the White Sox sell are the sellers, not the fans or the buyers. If you do not think this is the case look up north where the debt on that team is stifling.

 

Now if papa ameritrade wants to give sonny Ameritech some Ameritrade assets, you have a different story.

 

What can happen is the White Sox can leverage some worth in the hopes that such leveraging (increased spending) will increase cash flow, which I think is Marty's point, this was the All In mantra, it did not work so they are pulling back somewhat since that failed experiment, and while not blowing things up like the ivy covered genius squad they are modeling their plan differently.

 

But they are worth two billion dollars!

[Marty34]

http://finance.yahoo.com/news/6-free-onlin...-120015557.html

 

Are you advocating Chairman Reinsdorf sell the team? I mean you're making a good case that's he's undercapitalized.

[southsider2k5]

Are you advocating Chairman Reinsdorf sell the team? I mean you're making a good case that's he's undercapitalized.

 

I am arguing that expecting someone to have their payroll based simply on their net value is one of the dumbest thing that a baseball fan can say.

[Eminor3rd]

I think we should look at the Sox as a billion dollar business and not a mom and pop outfit.

 

That has nothing to do with being willing to waste money. Guess how they became a billion dollar business? By not wasting money.

[NorthSideSox72]

1. What Jerry Reinsdorf the individual has financially is irrelevant to the team's budget.

 

2. The valuation of the team as a business has next to nothing to do with what money they can or will spend.

 

[Eminor3rd]

That to me is the most difficult thing when hou really aren't developing your own guys. In free agency, there may be better guys available next year or the year after but things can change. They might not be as desirable in a year or two, and other teams may have a need and depending on who they are, drive the price up. If the Yankees or Dodgers really needed a firstbaseman, does anyone really think the Sox would have gotten Abreu? Timing plays a huge role, and a lot of it is just luck.

 

Great post

[Marty34]

I am arguing that expecting someone to have their payroll based simply on their net value is one of the dumbest thing that a baseball fan can say.

 

You're the one saying they should sweat $10M not me.

[Eminor3rd]

You're the one saying they should sweat $10M not me.

 

lol what? No, YOU are making the claim that $10m should mean nothing to them. The null hypothesis is the established fact that making money is important to private businesses with shareholders.

[witesoxfan]

You're the one saying they should sweat $10M not me.

 

If you have $10,000 in your checking account, do you ever just say to yourself "I don't need anything but I may as well spend $100 today?"

[southsider2k5]

You're the one saying they should sweat $10M not me.

 

You are the one basing cash flow on net valuation.

[NorthSideSox72]

It should also be noted that when Forbes values a team... say the White Sox at $900M or so... they are NOT using book value. This is not assets minus liabilities, or even just naked assets. It is valuation to market, meaning, what is the team WORTH, which is assuredly much more than their net book value. You cannot spend money that something is worth, that you do not have.

 

So Marty's argument is even more silly than it seems on its face. Not only can a company not spend money based on it's accounting value, they CERTAINLY can't spend money it MIGHT generate if it sold itself.

 

[Marty34]

You are the one basing cash flow on net valuation.

 

Let's just say we disagree about how to run a business.

[Dick Allen]

It should also be noted that when Forbes values a team... say the White Sox at $900M or so... they are NOT using book value. This is not assets minus liabilities, or even just naked assets. It is valuation to market, meaning, what is the team WORTH, which is assuredly much more than their net book value. You cannot spend money that something is worth, that you do not have.

 

So Marty's argument is even more silly than it seems on its face. Not only can a company not spend money based on it's accounting value, they CERTAINLY can't spend money it MIGHT generate if it sold itself.

How about if you use their revenues? We really have no idea how accurate Forbes is, but it has been SOP for the White Sox to say every dime that comes in goes out, then say they are at their budget limit, only to add payroll later. Maybe it is silly to base a teams' ability to add payroll based on their Forbes value, but it is equally as silly to base it on what the team is telling you.

[Eminor3rd]

Let's just say we disagree about how to run a business.

 

If you are advocating throwing $10m around willy-nilly simply because your business is worth a lot, I'd say that you disagree with practically everyone on how to run a business.

[Balta1701]

How about if you use their revenues? We really have no idea how accurate Forbes is, but it has been SOP for the White Sox to say every dime that comes in goes out, then say they are at their budget limit, only to add payroll later. Maybe it is silly to base a teams' ability to add payroll based on their Forbes value, but it is equally as silly to base it on what the team is telling you.

The one thing I will say is that the Forbes numbers have seemingly done a really good job over the last few years of predicting where the White Sox total payroll will wind up. When Forbes says they lose money, they cut back on payroll, when Forbes says they made money we see a payroll increase the next year. They've seemed to be good estimates of money balance to within $10 million or better.

[bigruss]

How about if you use their revenues? We really have no idea how accurate Forbes is, but it has been SOP for the White Sox to say every dime that comes in goes out, then say they are at their budget limit, only to add payroll later. Maybe it is silly to base a teams' ability to add payroll based on their Forbes value, but it is equally as silly to base it on what the team is telling you.

No, it still isn't that silly.

[Balta1701]

If you are advocating throwing $10m around willy-nilly simply because your business is worth a lot, I'd say that you disagree with practically everyone on how to run a business.

(There's a mortgage-backed security joke buried in here that I'm struggling to put together).

[Dick Allen]

The one thing I will say is that the Forbes numbers have seemingly done a really good job over the last few years of predicting where the White Sox total payroll will wind up. When Forbes says they lose money, they cut back on payroll, when Forbes says they made money we see a payroll increase the next year. They've seemed to be good estimates of money balance to within $10 million or better.

According to Forbes, they usually make between $10 million and $20 million a year, so if it is $10 million that is being argued about, if they did add it, I don't think any checks would bounce.

[NorthSideSox72]

According to Forbes, they usually make between $10 million and $20 million a year, so if it is $10 million that is being argued about, if they did add it, I don't think any checks would bounce.

Oh come on, you work in accounting, right? That is net income. There are shareholders involved, and that is a pretty small margin as a %, so you can't cut it in half or by 100% and expect that to go over.

 

They have a simple model, and the flexibility goes plus/minus into net income after player-related payroll, and that is estimated based on all other predictable cost.

 

[Marty34]

Only person in a better position if the White Sox sell are the sellers, not the fans or the buyers. If you do not think this is the case look up north where the debt on that team is stifling.

 

Now if papa ameritrade wants to give sonny Ameritech some Ameritrade assets, you have a different story.

 

What can happen is the White Sox can leverage some worth in the hopes that such leveraging (increased spending) will increase cash flow, which I think is Marty's point, this was the All In mantra, it did not work so they are pulling back somewhat since that failed experiment, and while not blowing things up like the ivy covered genius squad they are modeling their plan differently.

 

The "All In" was such a lame attempt. I'm weary of this organizations half-measures that don't win anything or grow the fan base.

[oldsox]

Only person in a better position if the White Sox sell are the sellers, not the fans or the buyers. If you do not think this is the case look up north where the debt on that team is stifling.

Now if papa ameritrade wants to give sonny Ameritech some Ameritrade assets, you have a different story.

 

What can happen is the White Sox can leverage some worth in the hopes that such leveraging (increased spending) will increase cash flow, which I think is Marty's point, this was the All In mantra, it did not work so they are pulling back somewhat since that failed experiment, and while not blowing things up like the ivy covered genius squad they are modeling their plan differently.

Are the Cubs highly leveraged?

[Dick Allen]

Oh come on, you work in accounting, right? That is net income. There are shareholders involved, and that is a pretty small margin as a %, so you can't cut it in half or by 100% and expect that to go over.

 

They have a simple model, and the flexibility goes plus/minus into net income after player-related payroll, and that is estimated based on all other predictable cost.

What are you basing they don't have $10 million to take a chance on?