KW: "Three year plan or window"

[Balta1701]

The gate is minor to all the revenues coming from tv deals. Beginning in 2014, each team got an extra $25M per year alone from national tv deal(Roughly $52M per year). And according to fangraphs, the Sox get $450K for every game broadcast on their network (plus they have an equity ownership). While not all games are on comcast, I'm going to just be lazy and assume they did (and any difference for the other games would probably be a rounding figure of +/- $5M) but that would equate to $72.9M on TV revenue for local deal (I will say this seems high but nothing compared to deals like the Angels signed (thought relatively relevant example given 2nd largest team in a major market, albeit they have better draw, etc).

 

That means with just tv deal you are talking $125M / yr. According to a link from statistica (no idea how valid), Sox took in $43M in gate revenue last year (by far the lowest in a long time) and that gives you revenues of $168M (excluding radio rights, which I presume are small and random advertising + merchandising). The Sox also, according to forbes, had operating income of ~32M (I say this with a grain of salt cause they are totally guessing here) but bottom line, you take out your G&A expenses (which probably get largely off-set from the merchandise / advertising / etc) and you could easily justify a net even profit base with a $150M payroll (I'm leaving in $18M for minor league and international + buffer for G&A not covered by those smaller costs).

 

Oh and lets not forget the valuation of the club continues to go up. Sox can do what they want, but even with horrifically low gate sales, they can support a payroll much larger then today's (based upon my very rough math and by now means do I say this is exact).

I still think that by far the most important number in that list is the $32 million. Their operating income last year based on the Forbes estimates was about $30 million, and then suddenly we saw a payroll increase of just about that amount. We've played this game for years and it actually works out quite well, the Forbes numbers generally do track the White Sox payroll.

[Chisoxfn]

Every other time this season someone has been proud of a player turning it around (Beckham, the whole bullpen, Danks) a few weeks later we were back to noting how terrible they had been.

Beckham is a bad starter and a solid bench player. We know that. Any talk otherwise was nonsense. Danks is mediocre to bad and has proved that as well in his post-injury career. Melky has a historical trend of being an above average hitter so conclusions reached over a short term period were as dumb as people jumping to alternative conclusions based upon 1 Danks start or 5 Gordon Beckham games (they were completely against good, large sample sizes).

 

And this bullpen is what it is, we have a very good closer, some solid pieces and a lot of unreliable guys. But that said, bullpens in general are statistically sporadic so to expect otherwise when most of our relievers are not what i'd call "high" profile relievers, would again be misleading. We bought high on Duke who probably isn't as bad as he has been but clearly had a fluky year last year (in his favor and Sox bought on arm release / other things negating longer term history of suckitude).

[Balta1701]

Melky has a historical trend of being an above average hitter so conclusions reached over a short term period were as dumb as people jumping to alternative conclusions based upon 1 Danks start or 5 Gordon Beckham games (they were completely against good, large sample sizes).

Am I allowed to note again the large, important exception to the entire "historical trend" or can I just call it implied and be done?

[Chisoxfn]

I still think that by far the most important number in that list is the $32 million. Their operating income last year based on the Forbes estimates was about $30 million, and then suddenly we saw a payroll increase of just about that amount. We've played this game for years and it actually works out quite well, the Forbes numbers generally do track the White Sox payroll.

Depends on how Sox treated Abreu's cost but the revenues are a great basis to go on and much more verifiable then the forbes number. I could also look at Forbes valuations and say that when teams have been sold they have been horribly inaccurate. I suppose someone could go back and look at Forbes numbers from a few years ago vs. some of those franchises who had financials leaked and see how close they were.

 

Also, operating revenue could be misleading as it depends on what they include / exclude. Should be simple but again, could be more complicated.

[Balta1701]

Depends on how Sox treated Abreu's cost but the revenues are a great basis to go on and much more verifiable then the forbes number. I could also look at Forbes valuations and say that when teams have been sold they have been horribly inaccurate. I suppose someone could go back and look at Forbes numbers from a few years ago vs. some of those franchises who had financials leaked and see how close they were.

 

Also, operating revenue could be misleading as it depends on what they include / exclude. Should be simple but again, could be more complicated.

This is also another topic that has been discussed a lot. The White Sox franchise value has skyrocketed over the last decade, as has most professional sports teams. If the White Sox wanted to they could use that increasing value to lose $20 million or so every year and still turn out ok. They have made it clear they will not regularly cash in equity on the team in order to fund payroll. We've had a number of posters get angry about their refusal to do so in the past, but that's that.

 

And yes, their estimates for the value of the teams are based on the financials, they're not treating them as a "luxury good" which is how many of the people buying them are actually treating them, so their numbers for franchise value keep being way too low.

[Chisoxfn]

Am I allowed to note again the large, important exception to the entire "historical trend" or can I just call it implied and be done?

You could have 2 years ago but then he followed up a down year with a very good year and you could point to potential evidence (none of us know for sure) of an injury which significantly impacted his play in that down year. Nelson Cruz was busted too...doens't mean he isn't still a good offensive player to this day. Heck, he's been better since he was busted.

 

Clearly the roids were always a risk but Melky also had good line drive rates / contact rates as well, which were further indications of his early season struggles being more to do with bad luck or even potentially a league adjustment period. Did he have his struggles that went with the bad luck (absolutely cause at the end of the day I'm sure mentally he was fatigued when he looked at the numbers he was producing and probably was pressing). Now Alexei on the other hand, his secondary stats and eye test are causes where I wouldn't blame someone to say he's done.

 

I'd also say Sox best chance of getting anything is to hope he has some form of a hot streak between here and the deadline. I also don't have an appreciation for any "off" the field issues that might be impacting Ramirez (which has happened in the past).

 

[Balta1701]

You could have 2 years ago but then he followed up a down year with a very good year and you could point to potential evidence (none of us know for sure) of an injury which significantly impacted his play in that down year. Nelson Cruz was busted too...doens't mean he isn't still a good offensive player to this day. Heck, he's been better since he was busted.

 

Clearly the roids were always a risk but Melky also had good line drive rates / contact rates as well, which were further indications of his early season struggles being more to do with bad luck or even potentially a league adjustment period. Did he have his struggles that went with the bad luck (absolutely cause at the end of the day I'm sure mentally he was fatigued when he looked at the numbers he was producing and probably was pressing). Now Alexei on the other hand, his secondary stats and eye test are causes where I wouldn't blame someone to say he's done.

 

I'd also say Sox best chance of getting anything is to hope he has some form of a hot streak between here and the deadline. I also don't have an appreciation for any "off" the field issues that might be impacting Ramirez (which has happened in the past).

First point - he was in Torotno last year, so "league adjustment period" is hard to understand.

 

Secondly, I did the exercise last week. I don't have the software to do a full statistical case, but his hits this year are generally falling shorter in the OF than his hits last year. There are definitely a couple clouds of hits in front of each OF that he produced last year which are simply missing this year and his OF hit clouds have moved more shallow. It's generally consistent with him no longer being able to drive the ball over the head of the OF and as a consequence the OFs gradually playing him more shallow, thus taking away hits. This was a major part of the criticism of his game when he was non-tendered by the Braves after washing out in New York, that he never developed a power stroke (not even HR power, extra-base power) and as a consequence the OFs didn't have to respect the ball over their heads, only the balls in the gap.

[southsider2k5]

The gate is minor to all the revenues coming from tv deals. Beginning in 2014, each team got an extra $25M per year alone from national tv deal(Roughly $52M per year). And according to fangraphs, the Sox get $450K for every game broadcast on their network (plus they have an equity ownership). While not all games are on comcast, I'm going to just be lazy and assume they did (and any difference for the other games would probably be a rounding figure of +/- $5M) but that would equate to $72.9M on TV revenue for local deal (I will say this seems high but nothing compared to deals like the Angels signed (thought relatively relevant example given 2nd largest team in a major market, albeit they have better draw, etc).

 

That means with just tv deal you are talking $125M / yr. According to a link from statistica (no idea how valid), Sox took in $43M in gate revenue last year (by far the lowest in a long time) and that gives you revenues of $168M (excluding radio rights, which I presume are small and random advertising + merchandising). The Sox also, according to forbes, had operating income of ~32M (I say this with a grain of salt cause they are totally guessing here) but bottom line, you take out your G&A expenses (which probably get largely off-set from the merchandise / advertising / etc) and you could easily justify a net even profit base with a $150M payroll (I'm leaving in $18M for minor league and international + buffer for G&A not covered by those smaller costs).

 

Oh and lets not forget the valuation of the club continues to go up. Sox can do what they want, but even with horrifically low gate sales, they can support a payroll much larger then today's (based upon my very rough math and by now means do I say this is exact).

 

Oh Gage, of all people, you should know better then equity=cash.

[Dick Allen]

Oh Gage, of all people, you should know better then equity=cash.

If Forbes is to believed, the White Sox have cash in the 9 figures stashed away somewhere if you add all their profits the past 20 years and deduct taxes. Boras said the other day every team has at least $120 million to play with before they sell a ticket. It probably is at least slightly overstated, but not any more than the White Sox break even every year line they used for years.

 

Do the math. Even if Forbes is correct and they make $20 million in year X, even if they raise the payroll $20 million the next year and make $15 million, they still have a pre-tax income of $35 million. And the only year Forbes has shown them losing money recently was 2013 when they lost 99 games and lost $3 million. Of course those figures included the $10 million bonus they gave Abreu after the season ended.

[Chisoxfn]

Oh Gage, of all people, you should know better then equity=cash.

Never said it did, but equity has to be considered and this team is sitting on massive amounts of book equity and reserves (again, not saying JR doesn't want to leverage it but over his run as the chairman this team, from both operating earnings and historically equity, has made massive amounts of money for ownership). I'm just saying the Sox could fully support a larger payroll then they have today. They are not "all-in" or leveraged in the current situation and they aren't in a significant mess at all. They have a flawed roster but it can be fixed and they can contend next year with the right moves. I think a lot of us said that this year was probably a year premature but as long as they didn't mortgage the next few years trying to push the starting point forward, their wasn't a lot to risk. And I think that comment still holds completely true.

 

Note: The equity sitting in the actual books from carry over income differs from all the unrealized equity that doesn't make the books given current valuation of franchise. As DA pointed out in his last post, just from historical reserves, Sox would have massive amounts of equity (which is actually as good as cash cause in this case, it should be sitting in "cash") as book equity is just assets in excess of liabilities which would really just be driven by income not spent and socked away for future periods. If you did an actual valuation and sold, they'd also record massive gains as FV is well in excess of current equity.

[Chisoxfn]

First point - he was in Torotno last year, so "league adjustment period" is hard to understand.

 

Secondly, I did the exercise last week. I don't have the software to do a full statistical case, but his hits this year are generally falling shorter in the OF than his hits last year. There are definitely a couple clouds of hits in front of each OF that he produced last year which are simply missing this year and his OF hit clouds have moved more shallow. It's generally consistent with him no longer being able to drive the ball over the head of the OF and as a consequence the OFs gradually playing him more shallow, thus taking away hits. This was a major part of the criticism of his game when he was non-tendered by the Braves after washing out in New York, that he never developed a power stroke (not even HR power, extra-base power) and as a consequence the OFs didn't have to respect the ball over their heads, only the balls in the gap.

My bad on league adjusted, was typing fast and was thinking back to his Giant season (forgot it was Toronto he was with last year). Either way, the data wasn't their to be indicative of any sort of career setting trend. I have no idea if the last 30 days are more reminiscent of the guy but I'd bet on it being in between the past 30 days and how he started the season, which would be relatively consistent with his career (and then factor in slight regression for the final year of his contract due to age, etc).

[Balta1701]

If Forbes is to believed, the White Sox have cash in the 9 figures stashed away somewhere if you add all their profits the past 20 years and deduct taxes. Boras said the other day every team has at least $120 million to play with before they sell a ticket. It probably is at least slightly overstated, but not any more than the White Sox break even every year line they used for years.

 

Do the math. Even if Forbes is correct and they make $20 million in year X, even if they raise the payroll $20 million the next year and make $15 million, they still have a pre-tax income of $35 million. And the only year Forbes has shown them losing money recently was 2013 when they lost 99 games and lost $3 million. Of course those figures included the $10 million bonus they gave Abreu after the season ended.

I'd say each team having about $120 million in revenue before ticket sales is probably accurate. The other issue though is that running the franchise isn't free. It costs money to open the door, it costs money to run the front office, to pay drafted players, etc., and those numbers don't go away even though they don't show up in the team's payroll on the field.

[Jake]

I think the 3 year plan is more like "I told Jerry that we'd be a great team again by year 3 or I'd quit my job"

[elrockinMT]

I would assume we have a plan from the front office. It only makes sense. If you look at this site posters seem to think the plan is to go undefeated and win the World Series every year and if we aren't in first place all year long then we start tearing the team apart and somehow start over for the next year. The players we have acquired in the past year or so have proven track records. They have not performed well in 2015. I think we have show signs of improvement and a wild card spot is not out of the question. No doubt we cn improve at some spots and I am betting that is part of the overall plan. You don't panic and abandon the long term plan.

Edited July 6, 2015 by elrockinMT

[CaliSoxFanViaSWside]

I would assume we have a plan from the front office. It only makes sense. If you look at this site posters seem to think the plan is to go undefeated and win the World Series every year and if we are in first place all year long then we start tearing the team apart and somehow start over for the next year. The players we have acquired in the past year or so have proven track records. They have not performed well in 2015. I think we have show signs of improvement and a wild card spot is not out of the question. No doubt we cn improve at some spots and I am betting that is part of the overall plan. You don't panic and abandon the long term plan.

 

When the 1st year of your 3 year plan is a failure of such epic proportions things surely have to be reassessed. Now I have said in the past that the contracts given to Melky , LaRoche and Robertson and Duke are all semi short term and within that time period some of the Sox better pitching prospects and the SS Anderson and Micah and Sanchez may be ready to contribute to the Sox.

 

I'm pretty damn sure the front office expected way more than they are getting from the players at this juncture. It was imperative that the team show marked improvement in order for the plan to develop .Without Robertson saving as many games as he has the Sox could be even worse.

 

As many here have stated over the years a good closer on a terrible team is a luxury . It's great you still have hope but that's what your known for around here. But realistically the odds are practically insurmountable for the Sox to overcome. They need to hit way more home runs and extra base hits in order to offset the lack of walks and lousy batting averages and crappy defense and the inconsistency of the bullpen.

 

Houston is in 1st place because they have power up the ying yang to offset those bad batting averages and a bullpen that has been pretty good.

 

The Sox are last in extra base hits and near the bottom in HR's. It's just not going to suddenly appear out of nowhere. They also have no help coming from the minors as far as impact position players go. They have nothing to trade except pitching and some of the core pieces which they probably won't move. It would be beyond stupid at this point for management not to trade Smardzija . Even management knew that in case of disaster he would have to be moved. After all that's what rentals are for if you are not competing and it's time they faced the facts. The Sox are not going anywhere and Shark , LaRoche , Melky and maybe even Robertson may be gone soon if they get offers they think fit their "plan" .

[Eminor3rd]

I don't think that's true at all. Williams says this is Year 1 of a 3 year plan to maximize the window of opportunity with this current core. I think this past offseason absolutely resembled the team trying to do just that: signing an elite closer, trading for an ace starting pitcher, signing a slugger to bat 4th in the lineup - if those aren't "all in" type moves to try and win with this core, I don't know what is. In fact, both Williams and Hahn practically said as much after the Cabrera signing when they were gushing over Reinsdorf's so-called "competitive spirit" after he approved going over budget to sign the guy. They were as "all in" as they could get.

 

I think when they say three year plan, they actually do mean "do or die" in each year. What else could it mean if you are trying to "maximize" the window of opportunity with this core? The problem is that for the first half of Year 1, it's pretty much been all "die", unfortunately. They are going to have to work hard to find a whole bunch of better players with whom to supplement this core if they hope to win during this window of opportunity.

 

Because when you examine the cost of all of the moves they made, you'll notice that it all falls in the short-term, which is what removes the "die" component from "do or die." The reason that "all-in" has been such a costly proposition the past fifteen years is because teams have borrowed a tremendous amount of their future resources to pay for present upgrades. The White Sox very specifically did NOT do that with the latest round of acquisitions. After 2016, the only market rate contracts we'll be stuck with are Melky and Robertson at roughly $12m apiece. The long-term contracts for Sale/Quintana/Abreu/Eaton will still be in place, Avisail will still be in the throes of the arbitration process, and the way the SP market is shaping up, we may get nearly as much back for Samardjiza as we gave up in the first place. Considering the magnitude of the "upgrades" we made, we've retained an incredible amount of flexibility even just two seasons from now.

[elrockinMT]

When the 1st year of your 3 year plan is a failure of such epic proportions things surely have to be reassessed. Now I have said in the past that the contracts given to Melky , LaRoche and Robertson and Duke are all semi short term and within that time period some of the Sox better pitching prospects and the SS Anderson and Micah and Sanchez may be ready to contribute to the Sox.

 

I'm pretty damn sure the front office expected way more than they are getting from the players at this juncture. It was imperative that the team show marked improvement in order for the plan to develop .Without Robertson saving as many games as he has the Sox could be even worse.

 

As many here have stated over the years a good closer on a terrible team is a luxury . It's great you still have hope but that's what your known for around here. But realistically the odds are practically insurmountable for the Sox to overcome. They need to hit way more home runs and extra base hits in order to offset the lack of walks and lousy batting averages and crappy defense and the inconsistency of the bullpen.

 

Houston is in 1st place because they have power up the ying yang to offset those bad batting averages and a bullpen that has been pretty good.

 

The Sox are last in extra base hits and near the bottom in HR's. It's just not going to suddenly appear out of nowhere. They also have no help coming from the minors as far as impact position players go. They have nothing to trade except pitching and some of the core pieces which they probably won't move. It would be beyond stupid at this point for management not to trade Smardzija . Even management knew that in case of disaster he would have to be moved. After all that's what rentals are for if you are not competing and it's time they faced the facts. The Sox are not going anywhere and Shark , LaRoche , Melky and maybe even Robertson may be gone soon if they get offers they think fit their "plan" .

 

 

The idea of a plan is to give you some guidance. If you panic after a rocky start and abandon the plan then you never get anywhere. I agree we are disappointed with 2015 to this point.

[CaliSoxFanViaSWside]

The idea of a plan is to give you some guidance. If you panic after a rocky start and abandon the plan then you never get anywhere. I agree we are disappointed with 2015 to this point.

 

It's not panic. You see it year after year from other teams who surely had their own plans . You sell off pieces at the trade deadline when you're having a bad season and have holes to fill.I was hoping that for once the Sox could finish strong since the past few years they've been known for poor finishes but , alas, it's not going to happen . Shark and a few other guys are valued now by teams looking to grab the brass ring.

 

Trading them isn't panic or abandoning the plan . Any plan worth it's salt surely has contingency plans for when things don't go according to plan.

[southsider2k5]

It's not panic. You see it year after year from other teams who surely had their own plans . You sell off pieces at the trade deadline when you're having a bad season and have holes to fill.I was hoping that for once the Sox could finish strong since the past few years they've been known for poor finishes but , alas, it's not going to happen . Shark and a few other guys are valued now by teams looking to grab the brass ring.

 

Trading them isn't panic or abandoning the plan . Any plan worth it's salt surely has contingency plans for when things don't go according to plan.

 

Completely reversing course? Yeah, that is panic.

[CaliSoxFanViaSWside]

Completely reversing course? Yeah, that is panic.

 

No if it's a good plan and disaster strikes it's a contingency plan. You really think trading Shark and LaRoche is completly reversing direction ? I might agree if they got rid of every new toy they bought but I doubt that'll happen but Smardz and LaRoche are very very real possibilities.

[southsider2k5]

No if it's a good plan and disaster strikes it's a contingency plan. You really think trading Shark and LaRoche is completly reversing direction ? I might agree if they got rid of every new toy they bought but I doubt that'll happen but Smardz and LaRoche are very very real possibilities.

 

If they are on longer then a one year contract, and NOT getting a have to do it type of return, yes.

[CaliSoxFanViaSWside]

If they are on longer then a one year contract, and NOT getting a have to do it type of return, yes.

 

Ok then so you agree on Smardz should be traded but LaRoche on his 2 year deal since he doesn't have to be traded , don't trade him ? You really want him at another year older and his terrible stats against lefties in the lineup another year ? You don't think some NL team might not want to have him back in his element in the NL or the Sox don't care about that $13M owed him next year ? Getting rid of a 35 year old in decline with more than $13M owed to him at this time is panic or isn't in the Sox plans ?

 

Moving him might not get all the money owed him off the books but fine sure its a very panicky move .

Edited July 6, 2015 by CaliSoxFanViaSWside

[shysocks]

Some in the past have brought up the angle that trading all the free agents you just signed would give the organization a bad look for future free agents. I don't know how much of an effect that might have, but it is something to consider.

[CaliSoxFanViaSWside]

Some in the past have brought up the angle that trading all the free agents you just signed would give the organization a bad look for future free agents. I don't know how much of an effect that might have, but it is something to consider.

 

Might or might not have some effect. But I don't think so. Money talks for free agents for the most part . Plus they traded for Shark and I'm only advocating him and LaRoche as strong possibilities to be moved . Robertson not so much or Melky unless they think the deals are too good to pass up. Duke is also a candidate to be moved because Albers and Jennings will be back soon with Nate Jones also a possibility and Jesses Crain as a longshot possibility and possible Sept. call up of Montas or Rodon moved to the pen if he approaches his innings limit.

 

But realistically I'd be shocked if the Sox didnt trade at least one of those guys. Shark highest on the list.

[Soxfest]

Hopefully KW stepping down is part of the plan. One can only hope.