Trade Market for Z

[SouthSideRyan]

I understand the pitiful economy, but these owners write off all of these multi-million contracts and any other kind of loss. As bad as the economy is, just watch the line form when one of these franchises goes up for sale. None of these owners "lose" money on their franchises and most make a gigantic return on their investment.

 

Kramer, is that you?

 

When Zell purchased the Tribune, the Cubs were reported to be worth $1B, they sold for much less two years later.

 

The Tribune bought them for $20 million in the 80's, so they turned a pretty good profit on their investment. Also, what the Cubs were reported to be worth is different than what they were really worth.

 

I'm sure the people who are paid to evaluate what these things are worth were wrong, and sports franchises managed to gain value while everything else in the world was losing it's worth. You should know.

[Backtobanks]

I understand the pitiful economy, but these owners write off all of these multi-million contracts and any other kind of loss. As bad as the economy is, just watch the line form when one of these franchises goes up for sale. None of these owners "lose" money on their franchises and most make a gigantic return on their investment.

 

Apparently you don't understand the pitiful economy. Do you think all of these owners have a ton of money available to throw at Matt Holliday, Jason Bay and the like, but are crying foul so their team can suck this year while they pocket all the cash instead?

 

The one example you used was one of the biggest market teams in the entire league (the Mets).

 

How much the team might be worth today or tomorrow doesn't really have anything to do with having available money to increase the budget to field a winning team. Throwing money around isn't necessarily the recipe for success anyway. Just ask Jim Hendry. It's quite possible some of these other team owners are tired of watching teams like Florida and Tampa and San Diego put teams in the playoffs with much smaller payrolls. Couple in the tough economic times, and now seems like a great time to change the philosophy of spending on scouting and coaching and drafting to build your team rather than buying someone else's castaways.

 

I agree that throwing money around doesn't make sense, but the bottom line is that teams don't have to win to make money. In fact we just had a discussion showing that the most cost-efficient teams are small market teams. As for the owners crying foul over Holliday, Bay, etc., they will reach into their pockets and pay them in the end. If a team has a decent supporting cast, it doesn't make financial sense to pay a FA $16-$18 million per year over someone making $4-$6 million, but the fact that they do end up paying proves that they do have the cash to pay for what they want. According to reports, 2 mid-market teams (Cards and Orioles) are offering over $100 million for Holliday. I think most of the FA signings have been for more money than the players are worth.

Edited December 30, 2009 by Backtobanks

[jersey cubs fan]

I'd like to go back to the "they just write it off" discussion. That's always a fun one.

[Backtobanks]

Owners of MLB franchises are extremely successful business men who are worth hundreds of millions of dollars. Do you think they would invest in and hold onto an investment that loses tens of millions of dollars? If you believe that, do you believe there isn't a gigantic tax write-off? These guys aren't idiots.

[SouthSideRyan]

Throwing blind faith in a "businessman"'s ability to make money is a pretty surefire way to lose your own. I don't doubt that there's creative accounting going on to help some owners cry poor, but to say no owner could possibly lose money (just write it off!) and to say Zell turned a profit is looney.

[Guest]

Throwing blind faith in a "businessman"'s ability to make money is a pretty surefire way to lose your own. I don't doubt that there's creative accounting going on to help some owners cry poor, but to say no owner could possibly lose money (just write it off!) and to say Zell turned a profit is looney.

Zell turned a healthy profit on the Cubs and still owns .05 of them. To think oterwise is looney.

[SouthSideRyan]

Throwing blind faith in a "businessman"'s ability to make money is a pretty surefire way to lose your own. I don't doubt that there's creative accounting going on to help some owners cry poor, but to say no owner could possibly lose money (just write it off!) and to say Zell turned a profit is looney.

Zell turned a healthy profit on the Cubs and still owns .05 of them. To think oterwise is looney.

 

I typed too fast for my brain there, I don't recall what Zell paid for the Cubs, (it wasn't the 1B # that B2B believes wasn't true or something) he may have made a profit

[Backtobanks]

Throwing blind faith in a "businessman"'s ability to make money is a pretty surefire way to lose your own. I don't doubt that there's creative accounting going on to help some owners cry poor, but to say no owner could possibly lose money (just write it off!) and to say Zell turned a profit is looney.

Zell turned a healthy profit on the Cubs and still owns .05 of them. To think oterwise is looney.

 

I typed too fast for my brain there, I don't recall what Zell paid for the Cubs, (it wasn't the 1B # that B2B believes wasn't true or something) he may have made a profit

 

 

Jersey Cubs Fan is the one who stated $1 billion, not me. I'm the one pointing out that these owners are making plenty of money and poor mouthing all the way to the bank.

[jersey cubs fan]

Throwing blind faith in a "businessman"'s ability to make money is a pretty surefire way to lose your own. I don't doubt that there's creative accounting going on to help some owners cry poor, but to say no owner could possibly lose money (just write it off!) and to say Zell turned a profit is looney.

Zell turned a healthy profit on the Cubs and still owns .05 of them. To think oterwise is looney.

 

I typed too fast for my brain there, I don't recall what Zell paid for the Cubs, (it wasn't the 1B # that B2B believes wasn't true or something) he may have made a profit

 

Zell took a bath on his entire Tribune ownership stake, which included the Cubs. He bought the company when the Cubs were valued by most at $1B, and sold them for less. You'd have to do some really funny accounting to say he made money on that investment.

[Backtobanks]

Throwing blind faith in a "businessman"'s ability to make money is a pretty surefire way to lose your own. I don't doubt that there's creative accounting going on to help some owners cry poor, but to say no owner could possibly lose money (just write it off!) and to say Zell turned a profit is looney.

Zell turned a healthy profit on the Cubs and still owns .05 of them. To think oterwise is looney.

 

I typed too fast for my brain there, I don't recall what Zell paid for the Cubs, (it wasn't the 1B # that B2B believes wasn't true or something) he may have made a profit

 

Zell took a bath on his entire Tribune ownership stake, which included the Cubs. He bought the company when the Cubs were valued by most at $1B, and sold them for less. You'd have to do some really funny accounting to say he made money on that investment.

 

But he didn't buy the Cubs seperately for $1 billion and then sold them for less. Also, I would question the value of the Cubs being $1 billion in the marketplace at that specific time. Every article that I read said that the value of the Cubs could be as much as $1 billion.

[jersey cubs fan]

Throwing blind faith in a "businessman"'s ability to make money is a pretty surefire way to lose your own. I don't doubt that there's creative accounting going on to help some owners cry poor, but to say no owner could possibly lose money (just write it off!) and to say Zell turned a profit is looney.

Zell turned a healthy profit on the Cubs and still owns .05 of them. To think oterwise is looney.

 

I typed too fast for my brain there, I don't recall what Zell paid for the Cubs, (it wasn't the 1B # that B2B believes wasn't true or something) he may have made a profit

 

Zell took a bath on his entire Tribune ownership stake, which included the Cubs. He bought the company when the Cubs were valued by most at $1B, and sold them for less. You'd have to do some really funny accounting to say he made money on that investment.

 

But he didn't buy the Cubs seperately for $1 billion and then sold them for less. Also, I would question the value of the Cubs being $1 billion in the marketplace at that specific time. Every article that I read said that the value of the Cubs could be as much as $1 billion.

 

No, he didn't, but he bought a company that owned the Cubs and that investment plummeted in value, as did his own net worth. You can talk about write-offs all you want, but there is a tremendous financial risk at stake here and some people are without question losing money.

[CUBZ99]

 

But he didn't buy the Cubs seperately for $1 billion and then sold them for less. Also, I would question the value of the Cubs being $1 billion in the marketplace at that specific time. Every article that I read said that the value of the Cubs could be as much as $1 billion.

 

No, he didn't, but he bought a company that owned the Cubs and that investment plummeted in value, as did his own net worth. You can talk about write-offs all you want, but there is a tremendous financial risk at stake here and some people are without question losing money.

 

Zell's purchase of the Tribune was not your typical case study in major league baseball ownership. He bought a company that happened to own the team, and then tried to flip the team. We have no idea how much Zell valued the Cubs portion of the purchase, nor how much the Cubs were worth when Zell bought them. Everyone knew that the price was going to be high, but until there were actual bidders everything was just speculation.

 

Ownership of a major league baseball team has been very profitable for most of the owners and is generally seen as a safe investment. Not only do they get to depreciate the value of the franchise and retain all of/if not most of the profit every year for the first 15 years, when they do sell they only pay the long term capital gains tax, which is substantially less than income tax.

 

Also, they do enjoy the ability to write-off items for gain, but in the Ricketts case, I don't see how writing off anything would help them considering the amount of depreciation they will be entitled to take.

[Backtobanks]

 

But he didn't buy the Cubs seperately for $1 billion and then sold them for less. Also, I would question the value of the Cubs being $1 billion in the marketplace at that specific time. Every article that I read said that the value of the Cubs could be as much as $1 billion.

 

No, he didn't, but he bought a company that owned the Cubs and that investment plummeted in value, as did his own net worth. You can talk about write-offs all you want, but there is a tremendous financial risk at stake here and some people are without question losing money.

 

Zell's purchase of the Tribune was not your typical case study in major league baseball ownership. He bought a company that happened to own the team, and then tried to flip the team. We have no idea how much Zell valued the Cubs portion of the purchase, nor how much the Cubs were worth when Zell bought them. Everyone knew that the price was going to be high, but until there were actual bidders everything was just speculation.

 

Ownership of a major league baseball team has been very profitable for most of the owners and is generally seen as a safe investment. Not only do they get to depreciate the value of the franchise and retain all of/if not most of the profit every year for the first 15 years, when they do sell they only pay the long term capital gains tax, which is substantially less than income tax.

 

Also, they do enjoy the ability to write-off items for gain, but in the Ricketts case, I don't see how writing off anything would help them considering the amount of depreciation they will be entitled to take.

 

Thanks for explaining my point. There might be a few owners losing money, but the vast majority are making a ton of money. TV rights and MLB merchandising provide the majority of the cash.

[KingCubsFan]

 

But he didn't buy the Cubs seperately for $1 billion and then sold them for less. Also, I would question the value of the Cubs being $1 billion in the marketplace at that specific time. Every article that I read said that the value of the Cubs could be as much as $1 billion.

 

No, he didn't, but he bought a company that owned the Cubs and that investment plummeted in value, as did his own net worth. You can talk about write-offs all you want, but there is a tremendous financial risk at stake here and some people are without question losing money.

 

Zell's purchase of the Tribune was not your typical case study in major league baseball ownership. He bought a company that happened to own the team, and then tried to flip the team. We have no idea how much Zell valued the Cubs portion of the purchase, nor how much the Cubs were worth when Zell bought them. Everyone knew that the price was going to be high, but until there were actual bidders everything was just speculation.

 

Ownership of a major league baseball team has been very profitable for most of the owners and is generally seen as a safe investment. Not only do they get to depreciate the value of the franchise and retain all of/if not most of the profit every year for the first 15 years, when they do sell they only pay the long term capital gains tax, which is substantially less than income tax.

 

Also, they do enjoy the ability to write-off items for gain, but in the Ricketts case, I don't see how writing off anything would help them considering the amount of depreciation they will be entitled to take.

 

Thanks for explaining my point. There might be a few owners losing money, but the vast majority are making a ton of money. TV rights and MLB merchandising provide the majority of the cash.

I doubt that owners make "a ton" off of sports teams. if that were the case, why wouldn't more businesses buy sports teams? Most of the buyers are people who are already rich. Teams tend to derive their value more from the ability to resell them at a higher price and the people who are willing to buy them.

[Backtobanks]

 

But he didn't buy the Cubs seperately for $1 billion and then sold them for less. Also, I would question the value of the Cubs being $1 billion in the marketplace at that specific time. Every article that I read said that the value of the Cubs could be as much as $1 billion.

 

No, he didn't, but he bought a company that owned the Cubs and that investment plummeted in value, as did his own net worth. You can talk about write-offs all you want, but there is a tremendous financial risk at stake here and some people are without question losing money.

 

Zell's purchase of the Tribune was not your typical case study in major league baseball ownership. He bought a company that happened to own the team, and then tried to flip the team. We have no idea how much Zell valued the Cubs portion of the purchase, nor how much the Cubs were worth when Zell bought them. Everyone knew that the price was going to be high, but until there were actual bidders everything was just speculation.

 

Ownership of a major league baseball team has been very profitable for most of the owners and is generally seen as a safe investment. Not only do they get to depreciate the value of the franchise and retain all of/if not most of the profit every year for the first 15 years, when they do sell they only pay the long term capital gains tax, which is substantially less than income tax.

 

Also, they do enjoy the ability to write-off items for gain, but in the Ricketts case, I don't see how writing off anything would help them considering the amount of depreciation they will be entitled to take.

 

Thanks for explaining my point. There might be a few owners losing money, but the vast majority are making a ton of money. TV rights and MLB merchandising provide the majority of the cash.

I doubt that owners make "a ton" off of sports teams. if that were the case, why wouldn't more businesses buy sports teams? Most of the buyers are people who are already rich. Teams tend to derive their value more from the ability to resell them at a higher price and the people who are willing to buy them.

 

If you're making a solid profit every year, enjoying tax breaks, and your investment is appreciating yearly, I would say you're making tons of money. The owners prove that when all of a sudden they "find" $100 million to pay someone like Holliday. It's all a game between Boras and the owners. When you look at the owners that are in trouble financially, it's usually their problems outside of MLB that are messing them up.

[indycub]

Hendry will probably wait a couple years until Cabrera starts to resemble Bartolo Colon. Then he will trade Z and all of our top prospects away for him. And a 7 year 200 million dollar contract extension will follow.

[Backtobanks]

Hendry will probably wait a couple years until Cabrera starts to resemble Bartolo Colon. Then he will trade Z and all of our top prospects away for him. And a 7 year 200 million dollar contract extension will follow.

 

In appearance, Cabrera is getting close to Bartolo Colon. Thank god his production is better.

[Deder]

When you take contract size into account Zambrano really has no value unless he is going to a team looking for that has a lot of money and needs a pitcher to contend. He is likely overpaid for the rest of his contract which makes him hard to trade. There aren't very many teams that fit that bill. I don't think there is any way Detroit would trade Cabrera for him as an example, not unless the Cubs ate salary. The Angels might make a little sense if they get desperate.

 

As for the Cubs in 2010, the Cardinals aren't likely to repeat last year. They basically had everything go right for them. The Brewers are at best only a win or two better than last year which means a .500 team or so. The Reds could plausibly take a step up with their young hitting but I doubt they are better than an 85 win team. All the Cubs have to do is field an 85 win team and they are serious contenders for the division. I don't see a compelling reason why they can't do that.

[davearm2]

When you take contract size into account Zambrano really has no value unless he is going to a team looking for that has a lot of money and needs a pitcher to contend. He is likely overpaid for the rest of his contract which makes him hard to trade. There aren't very many teams that fit that bill. I don't think there is any way Detroit would trade Cabrera for him as an example, not unless the Cubs ate salary. The Angels might make a little sense if they get desperate.

 

As for the Cubs in 2010, the Cardinals aren't likely to repeat last year. They basically had everything go right for them. The Brewers are at best only a win or two better than last year which means a .500 team or so. The Reds could plausibly take a step up with their young hitting but I doubt they are better than an 85 win team. All the Cubs have to do is field an 85 win team and they are serious contenders for the division. I don't see a compelling reason why they can't do that.

Well said. However valuable Zambrano is as a pitcher, that's fully realized (if not moreso) in his salary.

 

If there's a team that fits the description "has a lot of money and needs a pitcher to contend" better than the Cubs minus Zambrano would, I haven't seen it.

[SouthSideRyan]

What young hitting am I worried about on the Reds now?

[Deder]

What young hitting am I worried about on the Reds now?

 

Bruce, Votto, Stubbs. They also have Dickerson and Janish getting a lot of AB and you could expect improvement probably. Certainly more young talent that could 'break out' than say the Astros or Pirates. The Reds could at least plausibly find themselves over .500 if things go their way.

[fromthestretch]

What young hitting am I worried about on the Reds now?

 

Bruce, Votto, Stubbs. They also have Dickerson and Janish getting a lot of AB and you could expect improvement probably. Certainly more young talent that could 'break out' than say the Astros or Pirates. The Reds could at least plausibly find themselves over .500 if things go their way.

 

I don't see either Dickerson or Janish really ever becoming an offensive force. Dickerson would be a big improvement over Taveras offensively though.

[Soul]

What young hitting am I worried about on the Reds now?

 

Bruce, Votto, Stubbs. They also have Dickerson and Janish getting a lot of AB and you could expect improvement probably. Certainly more young talent that could 'break out' than say the Astros or Pirates. The Reds could at least plausibly find themselves over .500 if things go their way.

 

They've had Bruce, Votto for awhile already. It hasn't lifted them yet. The question I would want answered is, why would 2010 be any different for them?

 

I don't see why anyone would be afraid of Stubbs right now. His first ~200 ABs in the majors weren't anything special: .267/.323/.439

[Deder]

Bruce and Votto are both in their 3rd year and neither played a full season last year. I don't see why you wouldn't think they couldn't improve? Generally speaking you think of anyone with 1500 or fewer PA to be a young player still.

 

When I look at the young hitters in the NL Central the most improvement I can see is probably on the Reds. Fielder and Braun are established now with 3+ years so hard to see them improving much, the Brewers don't have much else in the way of young hitting unless they get really lucky and Escobar and Gomez learn how to take walks. The Astros have Pence and that is about it. The Pirates are going to stink no matter what. The Cardinals have Rasmus and that is pretty much it. The Cubs have Soto and I guess you could say Fontenot. This is not a division with a lot of up and coming hitting in 2010.

 

Sure every team has some completely unproven minor league types that could come up and make an impact but if any team is going to see a suddenly jump offensively my money is on the reds with Bruce and Votto. They could easily be the next Braun/Fielder combo that can turn a mediocre team into a borderline playoff team.

[SouthSideRyan]

Votto OPSd 981 last year, it's hard to expect much more out of him. Stubb's minor league #s doesn't scream stud to me.

 

Paul Janish is awful.