Max Scherzer

[LDF]

Isn't his agent Boras? Another reason to think there is. 99.999999% chance he signs with another team.

 

exactly that is why I am surprise at first when I heard of sox interest.

but then again, we are talking about Hahn. he will want Scherzer to get

the max in yrs, so it is 1 contract.

 

has anybody heard of some org asking several fa's to consider 3 yrs contracts.

I heard it on the radio down here, but for the life of me I don't know they might

be talking about. I read that maybe Tomas may get a 3 yr contract. I wonder

who the player may be. it was not clear and pretty static some I am wondering

if it was their announcer idea, I don't know.

[LDF]

lol. This isn't Finance 101. This is an established business with a long history of doing the same thing over and over again. The next time they go into the season with an expected loss will be the first one.

 

but it is an interesting thought. with these major players in there prime,

they may go all in. (I know I posted this before)

 

as I said, maybe just maybe JR will take this chance.

[Dunt]

Another reason to consider Scherzer: what happens if Sale does eventually blow out his elbow? A rotation of Sale-Scherzer-Quintana-Rodon-Noesi is much more capable of absorbing that blow than Sale-Quintana-Noesi-Danks-Bassitt/Rodon.

[Chicago White Sox]

lol. This isn't Finance 101. This is an established business with a long history of doing the same thing over and over again. The next time they go into the season with an expected loss will be the first one.

Yeah, clearly you didn't take Finance 101. The rule applies to all businesses, especially the White Sox. Provide a product your customer actually wants or they will have no reason to buy it from you. This means investing in the quality of your product, or in the White Sox's case, trying to build a team that can actually win next year.

 

If the front office can convince Sox fans they're serious about being competitive next year, Sox fans will buy more tickets and the incremental revenue will offset payroll the increase. That will be their basis for increasing payroll and there will be no expected loss. This will all be factored into their budget, which is forward looking, not based solely on history. What happened the year they added Dunn and went "all-in"? Why didn't they have an expected loss that season?

 

I know you think because you read some Forbes valuation article that you're an expert of their financials, but based on everything that's been communicated this offseason I think you're completely in the wrong on this subject. Last year's payroll is not reflective of what they can spend this year or going forward.

[Bigsoxhurt35]

This is a PR blurb. Nothing more. We're not signing him to a 6 year 170 million dollar deal or whatever he wants.

[LDF]

Another reason to consider Scherzer: what happens if Sale does eventually blow out his elbow? A rotation of Sale-Scherzer-Quintana-Rodon-Noesi is much more capable of absorbing that blow than Sale-Quintana-Noesi-Danks-Bassitt/Rodon.

 

here is another option. how bout Lester, wouldn't he be able to do just as well??

[Eminor3rd]

If the front office can convince Sox fans they're serious about being competitive next year, Sox fans will buy more tickets and the incremental revenue will offset payroll the increase. That will be their basis for increasing payroll and there will be no expected loss.

 

Ok so, I don't know what Max Scherzer's contract is going to be, but let's assume, conservatively, that it'll cost $25m next year.

 

I'm not even sure what the average ticket price for a Sox game is, but let's assume that it's $20. Reasonable?

 

Per cap. Let's say $10. Might be a little low but people forget that labor cost increases with attendance, so margin is a bit lower too. $10 after adjustments for the sake of easy math.

 

So for the Sox to break even on Max Scherzer's salary next year, from a revenue standpoint, by "energizing the fan base," then Max Scherzer would have to generate 833,333 additional tickets completely by himself. The Sox TOTAL attendance last year was 1.6 million.

 

You can adjust my guesses however you like, but the number at the end is still unrealistic.

[southsider2k5]

Yeah, clearly you didn't take Finance 101. The rule applies to all businesses, especially the White Sox. Provide a product your customer actually wants or they will have no reason to buy it from you. This means investing in the quality of your product, or in the White Sox's case, trying to build a team that can actually win next year.

 

If the front office can convince Sox fans they're serious about being competitive next year, Sox fans will buy more tickets and the incremental revenue will offset payroll the increase. That will be their basis for increasing payroll and there will be no expected loss. This will all be factored into their budget, which is forward looking, not based solely on history. What happened the year they added Dunn and went "all-in"? Why didn't they have an expected loss that season?

 

I know you think because you read some Forbes valuation article that you're an expert of their financials, but based on everything that's been communicated this offseason I think you're completely in the wrong on this subject. Last year's payroll is not reflective of what they can spend this year or going forward.

 

The Sox will not set themselves up to lose money.

 

The rest of it is all imaginary and fiction.

 

Besides, ask the fans... it doesn't matter what is spent in free agency, only that we win multiple years in a row. Or at least that is the latest excuse I have heard on the bandwagon.

[Balta1701]

I bet he's already getting fitted for a Cardinals jersey. But yeah, he'd be great to have. He'd make the Sox a force.

The Cardinals signing him would be as completely out of character as the White Sox signing him would be.

[LDF]

Yeah, clearly you didn't take Finance 101. The rule applies to all businesses, especially the White Sox. Provide a product your customer actually wants or they will have no reason to buy it from you. This means investing in the quality of your product, or in the White Sox's case, trying to build a team that can actually win next year.

 

If the front office can convince Sox fans they're serious about being competitive next year, Sox fans will buy more tickets and the incremental revenue will offset payroll the increase. That will be their basis for increasing payroll and there will be no expected loss. This will all be factored into their budget, which is forward looking, not based solely on history. What happened the year they added Dunn and went "all-in"? Why didn't they have an expected loss that season?

 

I know you think because you read some Forbes valuation article that you're an expert of their financials, but based on everything that's been communicated this offseason I think you're completely in the wrong on this subject. Last year's payroll is not reflective of what they can spend this year or going forward.

 

with all due respect, I like what you are writing about, but I have to counter what

you are saying here.

 

Finance 101 about the rules of business is all fine and dandy. I have always argued this

point the many past discussion.

 

however when dealing with the sox org and how they come across, there policy comes from

JR. it always appears that he will spend what the previous yr profit from the fan base allows

him to do.

 

Hence this yr entering the offseason. the sox org mention how the fan base with the season

ticket holder wasn't there to allow them to spend but up to 90 in salary.

[Balta1701]

Yeah, clearly you didn't take Finance 101. The rule applies to all businesses, especially the White Sox. Provide a product your customer actually wants or they will have no reason to buy it from you. This means investing in the quality of your product, or in the White Sox's case, trying to build a team that can actually win next year.

 

If the front office can convince Sox fans they're serious about being competitive next year, Sox fans will buy more tickets and the incremental revenue will offset payroll the increase. That will be their basis for increasing payroll and there will be no expected loss. This will all be factored into their budget, which is forward looking, not based solely on history. What happened the year they added Dunn and went "all-in"? Why didn't they have an expected loss that season?

 

I know you think because you read some Forbes valuation article that you're an expert of their financials, but based on everything that's been communicated this offseason I think you're completely in the wrong on this subject. Last year's payroll is not reflective of what they can spend this year or going forward.

I think they did have an expected potential loss the year they signed Dunn and I think they did wind up losing money that year IIRC, or at the least were very close to it. They did so because they were hoping that selling playoff tickets in conjunction with season tickets the next year would make up for that potential loss. That's not an incorrect thought line if your team is in a position where 1 player can potentially be the difference between making and missing the playoffs and its a good explanation for why big ticket FAs are so often overpaid - they are being paid based on their ability to make a big difference during that 1 year period.

 

That year's white sox are also a prime example of what can go wrong with that line of thinking - it destroyed the ability of the team to be major FA players to fill holes for the next 3 years.

[Dunt]

here is another option. how bout Lester, wouldn't he be able to do just as well??

 

You already have potentially 4 lefties, why sign another?

[LDF]

If the front office can convince Sox fans they're serious about being competitive next year, Sox fans will buy more tickets and the incremental revenue will offset payroll the increase. That will be their basis for increasing payroll and there will be no expected loss. This will all be factored into their budget, which is forward looking, not based solely on history. What happened the year they added Dunn and went "all-in"? Why didn't they have an expected loss that season?

 

this is a good point. the sox in the past has always used that as a crutch but today

fans are a lot smarter and can see thru all that. esp when the magazines come

out and tell the whole financial wealth of the org.

[LDF]

You already have potentially 4 lefties, why sign another?

 

you are correct, but think outside the box and to hell with the left right concept.

 

you will be investing in a pitcher who is a #1 capable SP. if that is what the market

leave you, just make the best of it.

[LDF]

I think they did have an expected potential loss the year they signed Dunn and I think they did wind up losing money that year IIRC, or at the least were very close to it. They did so because they were hoping that selling playoff tickets in conjunction with season tickets the next year would make up for that potential loss. That's not an incorrect thought line if your team is in a position where 1 player can potentially be the difference between making and missing the playoffs and its a good explanation for why big ticket FAs are so often overpaid - they are being paid based on their ability to make a big difference during that 1 year period.

 

That year's white sox are also a prime example of what can go wrong with that line of thinking - it destroyed the ability of the team to be major FA players to fill holes for the next 3 years.

 

didn't someone posted last wk that the sox did loose money that yr. but that

yr everything that could go wrong, did. wasn't it the sox brass who was trying to

make 1 last push for a WS before rebuilding?

[Balta1701]

didn't someone posted last wk that the sox did loose money that yr. but that

yr everything that could go wrong, did. wasn't it the sox brass who was trying to

make 1 last push for a WS before rebuilding?

A BIG part of that was also the chairman trying to keep ozzie/save ozzie's job.

[LDF]

A BIG part of that was also the chairman trying to keep ozzie/save ozzie's job.

 

again you are prob right. I can't remember that yr,

 

damn it is a b**** getting old.

[Dick Allen]

I think they did have an expected potential loss the year they signed Dunn and I think they did wind up losing money that year IIRC, or at the least were very close to it. They did so because they were hoping that selling playoff tickets in conjunction with season tickets the next year would make up for that potential loss. That's not an incorrect thought line if your team is in a position where 1 player can potentially be the difference between making and missing the playoffs and its a good explanation for why big ticket FAs are so often overpaid - they are being paid based on their ability to make a big difference during that 1 year period.

 

That year's white sox are also a prime example of what can go wrong with that line of thinking - it destroyed the ability of the team to be major FA players to fill holes for the next 3 years.

According to Forbes, they made a profit every year since they last lost money in 2001 when Jose Canseco was a White Sox. They then lost a few million in 2013. The cumulative profit was $189 million over that time.

Edited November 12, 2014 by Dick Allen

[LDF]

According to Forbes, they made a profit every year since the 2001 season feature Jose Canseco. The cumulative

 

you are right in that but forbes doesn't break down the operational profit and lost

with ref to season ticket holders and ticket sales. they are talking about the whole

bottom line.

[Dick Allen]

I think they did have an expected potential loss the year they signed Dunn and I think they did wind up losing money that year IIRC, or at the least were very close to it. They did so because they were hoping that selling playoff tickets in conjunction with season tickets the next year would make up for that potential loss. That's not an incorrect thought line if your team is in a position where 1 player can potentially be the difference between making and missing the playoffs and its a good explanation for why big ticket FAs are so often overpaid - they are being paid based on their ability to make a big difference during that 1 year period.

 

That year's white sox are also a prime example of what can go wrong with that line of thinking - it destroyed the ability of the team to be major FA players to fill holes for the next 3 years.

According to Forbes this year's total not available yet:

10.7 million profit 2011

22.9 million profit 2012

2.7 million loss 2013

 

They didn't make the $26 million and $27 million profit Forbes claims they made the 2 seasons before Dunn, but they did alright, especially since breaking even is the goal.

[LDF]

According to Forbes this year's total not available yet:

10.7 million profit 2011

22.9 million profit 2012

2.7 million loss 2013

 

They didn't make the $26 million and $27 million profit Forbes claims they made the 2 seasons before Dunn, but they did alright, especially since breaking even is the goal.

 

that for the break down.

 

I am surprise that they had a lost in 2013.

[Dick Allen]

that for the break down.

 

I am surprise that they had a lost in 2013.

They did lose 99 games. An extra 500-700 people a game through the turnstiles a game probably makes that at least break even considering ticket, and other revenue. The $25 million in extra TV money and lower payroll will make 2014 profitable. JR already admitted to that.

Attendance was down. Sure they lost a couple of sponsorships. But Gold Coast tickets wasn't paying $5 million a year for naming rights, and neither was Bacardi. They did gain a sponsor for the Stadium Club.

Edited November 12, 2014 by Dick Allen

[Chicago White Sox]

Ok so, I don't know what Max Scherzer's contract is going to be, but let's assume, conservatively, that it'll cost $25m next year.

 

I'm not even sure what the average ticket price for a Sox game is, but let's assume that it's $20. Reasonable?

 

Per cap. Let's say $10. Might be a little low but people forget that labor cost increases with attendance, so margin is a bit lower too. $10 after adjustments for the sake of easy math.

 

So for the Sox to break even on Max Scherzer's salary next year, from a revenue standpoint, by "energizing the fan base," then Max Scherzer would have to generate 833,333 additional tickets completely by himself. The Sox TOTAL attendance last year was 1.6 million.

 

You can adjust my guesses however you like, but the number at the end is still unrealistic.

Wow, if you think the value of a ticket sold is equal to its selling price then I don't know what to say. For each ticket sold, factor in parking, factor in food & beverage, factor in merchandise & souvenirs. Those factors are probably equal to the price of admission on average.

 

And a 50% OP rate on these incremental ticket sales? You realize how much fixed costs there are at a baseball stadium right? Maybe you need a little more security and vendors, but it will be very insignificant in the grand scheme of things. The additional sales would be almost all profit.

 

And most importantly, your Scherzer example ignores our other payroll commitments and what our projected revenues will be without him. Saying "here's last year's ticket sales, adding $25M would require x" is ridiculous. We have $50M or so in payroll commitments at the moment. We could add Scherzer right now and come in below last year's payroll number. So what exactly are you adding Scherzer on top of? What can we afford without him? I never once said if we had a $100M payroll that we could add Scherzer and the deal would pay for itself. That's stupid. All I said was if you can convince the fans you're serious about next year, they will buy more tickets and you should be able to afford a higher payroll. You can argue how much of an impact it would have, but the concept itself is factual. "Energize the fanbase" as you mockingly said and you will sell more tickets.

[BlackSox13]

Another way to look at it is...

 

Scherzer will cost at least 25M per year to pitch 33 games. I would rather spend that 25M on two players such as Headley who improves the defense, provides a much needed LH bat and if healthy helps the team in 150+ games and Miller who would immediately be the closer in an absolutely horrible Sox bullpen that is in dire need of help.

 

For a team with as many holes to fill as the Sox have, spending a minimum of 25M per year on a starter that can only help the team win in 33 of 162 games played is a piss poor dumb idea no matter how you slice it.

Edited November 12, 2014 by StRoostifer

[Eminor3rd]

Wow, if you think the value of a ticket sold is equal to its selling price then I don't know what to say. For each ticket sold, factor in parking, factor in food & beverage, factor in merchandise & souvenirs. Those factors are probably equal to the price of admission on average.

 

And a 50% OP rate on these incremental ticket sales? You realize how much fixed costs there are at a baseball stadium right? Maybe you need a little more security and vendors, but it will be very insignificant in the grand scheme of things. The additional sales would be almost all profit.

 

And most importantly, your Scherzer example ignores our other payroll commitments and what our projected revenues will be without him. Saying "here's last year's ticket sales, adding $25M would require x" is ridiculous. We have $50M or so in payroll commitments at the moment. We could add Scherzer right now and come in below last year's payroll number. So what exactly are you adding Scherzer on top of? What can we afford without him? I never once said if we had a $100M payroll that we could add Scherzer and the deal would pay for itself. That's stupid. All I said was if you can convince the fans you're serious about next year, they will buy more tickets and you should be able to afford a higher payroll. You can argue how much of an impact it would have, but the concept itself is factual. "Energize the fanbase" as you mockingly said and you will sell more tickets.

 

That's what "per cap" means.

 

The sox aren't going to sign Scherzer. It would be a bad business decision.

 

If you think that "showing the fans you're serious" will drive attendance, you haven't been paying attention to the white sox and attendance over the past ten years. Attendance will increase when there is a winner, and not before. If you think adding Scherzer to a 74 win team will do that, then we disagree on a different level altogether.

Edited November 12, 2014 by Eminor3rd