|
|
|||
|
|
|||
• Wrigley Rooftop Directory
|
Vine-Line Tidbits, December 2004Tuesday, November 30, 2004My Vine-Line came in the mail today, and after a quick squeal of excitement (it was a bad day) I realized that it was Vine-Line after all, and probably wouldn't contain anything too Earth-shattering.
My first quick read through seems to support that idea... so the highlights. -->>> The Roster tracker on page 4 has a few changes. Mark Grudzielanek has been moved out of the 'players under contract section' and moved to the 'filed for free agency' section (following the Cubs declining their option). Similarly, Neifi Perez has been bumped up from the 'eligible for free agency' to 'signed' as he is now signed through the 2005 season. The 'signed' section does not include Glendon Rusch, but I'm sure it will next month. -->>> On page 5, the 'By the Numbers' section tells readers that Wrigley Field and the surrounding property had an estimated value of $2.25 million on Dec. 6, 1927. -->>> Also on page 5, we learn that the person who sorts the Cubs mail is named Randy Skocz, and that he has worked for the Cubs for 19 years. He says he gets about 400-500 letters a day, and routes them to current and former players. According to Skocz, Ernie Banks and Ryne Sandberg are the most popular. He sends a box full of things to Banks every month and a half, and one to Sandberg every month. We also learn that November and December are the slowest months of the year. -->>> On page 7, Managing Editor Lena McDonagh (no... I don't think so since its spelled John McDonough) informs loyal Vine-Line readers that the magazine will be increasing subscription rates beginning January 1. The increase is the first in 5 years and appears to be pretty modest. Turning to page 41, I put together this rate table:
I would say the rate increases are pretty reasonable.  -->>> Also on page 7, A response to a letter to the editor lets all Cubdom know that they can order a replica of the "win flag" by calling 1-800-248-9467. The flag is 3 foot by 5 foot and costs $35. -->>> Pages 24 and 25 have a collage of photos labeled '2004 Cubs Outtakes' and includes 23 pictures of smiling Cubs personnel in various settings. -->>> On page 37, there is a nice bio of Jon Leicester. In one of the sidebars we learn that "Jon's surname is pronounced Lester and is British in origin, stemming from England's East Midland's region, where the city of Leicester sits in the county of Leicestershire." -->>> And finally on page 45, the crossword puzzle theme is "Cubs Rookie Record Holders." So the question is: Who tied a Cubs rookie record for saves in 1976? Its 6 letters. For an extra bonus, #50 down: "Ex-Phillies president; also founded sporting goods company. 5 letters. More Vine-Line Tid-bits Please!
Posted by Byron at 12:46 AM
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
FREE AGENT ADVICE FORM TO: [Club Official] You have requested advice regarding a ___-year contract for [Player's name], a free agent Player. Based exclusively on the comparable Player contracts signed to date and listed in Section I below, [Player's name] value would appear to be between $____ and $____ on a contract of [length requested by Club]. Obviously, the value of a free agent Player is ultimately determined by market forces, the most fundamental of which are the supply of such Players and the demand for those Players. Moreover, the potential value of a free agent Player to one Club may be different from the same Player's value to another Club. Given this, the amount that your Club is willing to pay a free agent may appropriately differ from the value range supplied above. I. Relevant Comparables
II. Other Factors
As a reminder, you are not permitted to share this advice, or even the fact that you have received advice on [Player's name] from the Office of the Commissioner with another Club. Likewise, the Office of the Commissioner will not disclose to any other Club the fact that we have provided this advice to you. Moreover, this advise is strictly advisory and is intended to assist you in formulating contract offers that you deem appropriate. As has always been the case, advice from the Office of the Commissioner cannot interfere with a Club's obligation to act in its own individual interest in the free agent market. In fact, you are required to act in your individual interest in deciding what contract terms to offer a free agent player. Feel free to give us a call if you have any questions concerning this advice. |
I find this form to be incredible, not the form of course, but the fact that the Office of the Commissioner of Baseball has set up a forum for teams to ask how much they should pay a player. Yes, I read the form and all of the text is legalese. The real point of this form is for the OCB to 'recommend' salary ranges to the teams.
In most industries, I believe this would be bordering on illegal. However, baseball happens to be the proud owner of an anti-trust exemption, and is free to act like a monopoly.
This type of document probably exists in other industries, but it would be filled out by an independent consultant. To me, this is similar to the NYSE or NASD putting out a memo declaring they think XYZ stock should be trading at $X dollars. In my opinion, the very fact that the Commissioner's office is the binding force between owners makes this memo inappropriate. Furthermore, there is a reason that the exchanges don't recommend prices, its because it can't be done reliably by an involved party.
The logical counter-argument is that the memo is simply facilitating communication of salary data and injury history to interested parties. This is fine with me, because the players union makes a practice of making all player's contracts public. The union did this originally because players would negotiate with their GM saying something like "I'm just as good as Bob, so I should get paid what Bob gets paid."
According to John Helyar in "Lords of the Realm" (maybe the best baseball book ever... a great gift for Christmas ), the GM would then wait a day, call the player back and tell him that Bob made $40,000 and so the player should be happy with the $45,000 he was being offered. Of course, Bob was making $80,000, but the lack of verifiable salary ranges were doing two things: creating inefficient markets, and slowing the growth of salaries.
After making all the salary information public, the players association was able to let players know what they were really worth, and this contributed to the rapid increase in player salaries.
So why is it wrong for the Commissioners office to do the same thing as the players union? Its not. The problem with the form is that the Commissioners office apparently decides who the player is comparable to. It is the Commissioners office deciding which are the other free agents who should be setting the market, and it is the Commissioners office writing a number on a piece of paper telling the owners what they think the player is worth. In the good old days, the Commissioners office was supposed to be an independent office with the bests of interests of baseball in its protection.
These are decisions that need to be made by the teams. I think the OCB should simply have a dossier on each player that teams can request. That way if the Cubs think J.D. Drew's past salary, health, and role are important in deciding their offer to Carlos Beltran, they make that decision, not someone in the Commissioners office.
In my opinion, the free agent advice forms are more than just advice... its loaded advice... and it leads down the road to an ugly word...
Collusion.
| | 
Al Yellon reports that the Cubs 2005 ticket prices have increased again.
Similar to last year, there are three ticket price levels in 2005, value, regular, and prime. Al says the Cubs told season ticket holders there are 6 value dates, 35 regular dates, and 40 prime dates. In 2004, there were 8 value dates, 45 regular, and 28 prime dates.
| Comparison of 2004 and 2005 Value, Regular, and Prime Dates | Year | 2004 | 2005 |
| Value | 8 | 6 |
| Regular | 45 | 35 |
| Prime | 28 | 40 |
He also reported the ticket prices for each seating section. In the table below, I have included the 2004 ticket prices and the percentage change.
| Value Date ticket prices | |||
| Seat Type | 2004 | 2005 | %Change |
| Club Box (Infield) | $23 | $30 | 30.4% |
| Club Box (Outfield) | $18 | $20 | 11.1% |
| Field Box (Infield) | $18 | $20 | 11.1% |
| Field Box (Outfield) | $16 | $19 | 18.8% |
| Terrace Box (Infield) | $14 | $18 | 28.6% |
| Terrace Box (Outfield) | $14 | $16 | 14.3% |
| Upper Deck Box (Infield) | $14 | $18 | 28.6% |
| Upper Deck Box (Outfield) | $14 | $16 | 14.3% |
| Terrace Reserved (Infield) | $10 | $11 | 10.0% |
| Terrace Reserved (Outfield) | $10 | $10 | 0.0% |
| Upper Deck Reserved (Infield) | $6 | $6 | 0.0% |
| Upper Deck Reserved (Outfield) | $6 | $6 | 0.0% |
| Bleacher | $15 | $15 | 0.0% |
| Regular Date ticket prices | |||
| Seat Type | 2004 | 2005 | %Change |
| Club Box (Infield) | $40 | $50 | 25.0% |
| Club Box (Outfield) | $36 | $40 | 11.1% |
| Field Box (Infield) | $36 | $40 | 11.1% |
| Field Box (Outfield) | $32 | $38 | 18.8% |
| Terrace Box (Infield) | $28 | $36 | 28.6% |
| Terrace Box (Outfield) | $28 | $32 | 14.3% |
| Upper Deck Box (Infield) | $28 | $36 | 28.6% |
| Upper Deck Box (Outfield) | $28 | $32 | 14.3% |
| Terrace Reserved (Infield) | $20 | $22 | 10.0% |
| Terrace Reserved (Outfield) | $20 | $20 | 0.0% |
| Upper Deck Reserved (Infield) | $14 | $14 | 0.0% |
| Upper Deck Reserved (Outfield) | $14 | $14 | 0.0% |
| Bleacher | $26 | $28 | 7.7% |
| Prime Date ticket prices | |||
| Seat Type | 2004 | 2005 | %Change |
| Club Box (Infield) | $50 | $60 | 20.0% |
| Club Box (Outfield) | $44 | $50 | 13.6% |
| Field Box (Infield) | $44 | $50 | 13.6% |
| Field Box (Outfield) | $40 | $46 | 15.0% |
| Terrace Box (Infield) | $36 | $42 | 16.7% |
| Terrace Box (Outfield) | $36 | $38 | 5.6% |
| Upper Deck Box (Infield) | $36 | $42 | 16.7% |
| Upper Deck Box (Outfield) | $36 | $38 | 5.6% |
| Terrace Reserved (Infield) | $26 | $30 | 15.4% |
| Terrace Reserved (Outfield) | $26 | $27 | 3.8% |
| Upper Deck Reserved (Infield) | $17 | $18 | 5.9% |
| Upper Deck Reserved (Outfield) | $17 | $17 | 0.0% |
| Bleacher | $35 | $35 | 0.0% |
The Cubs have not announced ticket prices on their most expensive ticekts yet (the dugout level seats, and the mezzanine boxes).
The weighted average of all the announced ticket price changes increased 13.1% for value dates. The average ticket price is $14.90 up from $13.17.
The weighted average of all the announced ticket price changes increased 13.0% for regular dates. The average ticket price is $29.19 up from $25.82.
The weighted average of all the announced ticket price changes increased 11.8% for prime dates. The average ticket price is $36.69 up from $32.83.
Finally, the weighted average of all announced tickets and dates is $31.83 up from $27.00, a 17.9% increase.
A few notes about the above figures: These are not the actual average ticket prices. The above analysis only includes the tickets with newly announced prices. There are 119 family section tickets, 107 group section tickets, 213 dugout level tickets, and 1,059 mezzanine box tickets that are not included.
If you assume the ticket prices for the unannounced seats remain unchanged, the average ticket price will be $34.96, up from $29.93 last year (16.8% increase).
However, the more likely scenario is a 15% increase in mezzanine level prices, no change in dugout level prices (currently $50 for value, $100 for regular, and $150 $250 for prime), and changes in the family section and group section equal to the bleachers... which gives us an average ticket price of $35.45 (an 18.4% increase).
This is a table of the Cubs average ticket prices from TMR's FCI from 1992-2004, plus my projections in 2005
| Year | Avg. Ticket Price | % Change | Record |
| 1991 | $10.10 | N/A | 77-83 |
| 1992 | $10.87 | +7.6% | 78-84 |
| 1993 | $11.74 | +8.0% | 84-78 |
| 1994 | $13.12 | +11.8% | 49-64 |
| 1995 | $13.17 | +0.4% | 73-71 |
| 1996 | $13.12 | -0.4% | 76-86 |
| 1997 | $14.63 | +11.5% | 68-94 |
| 1998 | $14.42 | -1.4% | 90-73 |
| 1999 | $17.46 | +21.1% | 67-95 |
| 2000 | $17.55 | +0.5% | 65-97 |
| 2001 | $21.17 | +20.62% | 88-74 |
| 2002 | $24.05 | +13.6% | 67-95 |
| 2003 | $24.21 | +0.67% | 88-74 |
| 2004 | $28.45 | +17.53% | 89-73 |
| 2005 | $32.60 | +14.5% | ??? |
| |
Its about 5 a.m. and I'm tired... I have a project due in my finance class at 4 p.m. and I still have 5 or 6 hours of work left on it. So what am I doing writing? Great question!
Despite the front page becoming increasingly stale, I have been working hard. Whats that you say? You're working hard but you don't have anything to show for it?
Yup, thats the price of technical improvement. I have probably spent about 16 hours the last three days working on the background of thecubdom.com and goatriders.org... and I have nothing to show for it.
So what's that have to do with the Cubs? Actually a lot. The Cubs have had trouble getting their hard work to pay off for them in the last few days. As you'll notice from the previous couple of posts, I was pretty excited about having Dave O'Brien come call games for the Cubs... but after John McDonough was finished negotiating, ESPN wouldn't let O'Brien out of the final year of his contract. While I think thats bush league, I'm not going to criticize ESPN because O'Brien signed the contract, and would have collected his pay even if ESPN decided to fire him... life is a two way road.
Still, although ESPN wouldn't allow O'Brien out of his contract, I am still hopeful the Cubs can work something out for a year, and then bring O'Brien on full time next year. I wonder if its possible to have Dan Roan or someone else fill in while O'Brien is working his ESPN games. It might be distasteful... but I think O'Brien would be worth it over the long run.
Also of note, in the nothing to show for it column, Troy Percival signed with the Tigers yesterday... before he even met with the Cubs, who had worked to set up a meeting today. While it takes another closer off the market, I view it as a pretty positive move for the Cubs. Percival was signed to a 2 year $12 million contract... and I couldn't stomach the Cubs giving Carlos Beltran's money to Troy Percival... but we still need a viable arm at the end of the bullpen... and there frankly aren't really any out there.
I did see a rumor that the Cubs are talking to the Brew Crew about Danny Kolb... and that might make sense.
Anyhow, its about time to get back to the finance project... as for nothing to show for it? Well folks, this is my first post completely using the movable type system... can you tell the difference... (I hope not :) )
| |
| Excerpt From: O'Brien needs ESPN, Mets OK By: Ed Sherman, Chicago Tribune, Nov. 15, 2003 |
All that stands between Dave O'Brien and the job as television voice of the Cubs is approval from ESPN and the Mets. O'Brien has agreed to contract terms that will enable him to join analyst Bob Brenly in the television booth for 2005, according to sources. He declined to discuss his situation Monday because it has yet to be completely resolved. |
Updates to follow, just as soon as I get out of class.
UPDATE: 6:47 in the P.M.
So much for an update after class, I got busy doing other things and didn't really get a chance to further develop my ideas. That said, I am thrilled to see that Dave O'Brien will be getting the Cubs broadcasting job. I think the Cubs made a royal mistake in allowing the Chip Caray and Steve Stone situation to get out of hand as they did. However, as Mayor Daley and his teams of structual engineers can attest, the Cubs are pretty good at doing patch jobs.
With Bob Brenly doing color and Dave O'Brien calling the games, I think the Cubs have a premier team working their local games, and I'm hoping that the Tribune company is considering putting more of their games on WGN. (Yeah, I know its unlikely because of the Comcast deal, but I can be hopeful.) Anyhow, both broadcasters will need to earn the respect of fans, but I think they will, and I'm hoping this booth stays together for years to come.
Finally, in site news, please pardon the dust. TheCubdom will be going through some fairly substantive changes in the near future. I am in the process of upgrading from blogger (which is down way too often for my tastes) to movable type. This will improve the comment handling on my site, and hopefully help me work out some of the archive problems I am having. This upgrade may take some time, and so if I am not regularly posting for the next two weeks, know this: I am working behind the scenes here... and probably at home for Turkey.
Also, I will be making a big announcement in the next few weeks with regards to the "Goat Riders of the Apocalypse."
| |
It looks like Omar Vizquel is the first free agent to switch teams this winter. Omar, the longtime Indian, was treated to a royal Mark Grace-ing by the Cleveland ball club. However, of note to me is that Vizquel signed with the Giants and not the White Sox, who were supposedly the front runners for Vizquel.
(def: Mark Grace-ing (v) -- veteran, and fan favorite run out of town by an ungrateful ball club looking to go younger... and cheaper.)
Vizquel's signing also begins to establish the market for this year. He signed a 3 year, $12.5 million deal with the Giants, giving them another over the hill veteran. Don't get me wrong, (because I really like Omar and don't think he is done), but the Giants needed to be getting younger. On the other hand, a $4 million per year shortstop is perfectly in-line with what you expected from a San Francisco ball club worried about making their stadium payments. (The Story from ESPN.com)
Tomorrow is a big day! According to the Cubs Calendar, Its Dusty's second Cubs anniversary.
|
November 15th, 2002 - Dusty Baker Hired as Cubs Skipper. After guiding the San Francisco Giants to their first World Series since 1989, Giants owner Peter McGowan decided not to bring Dusty Baker back to San Franscisco. All of Cubdom rejoiced because Jim Hendry had waited to sign Dusty, passing up other candidates such as Bob Melvin, Ned Yost, Ken Macha, and Fredi Gonzalez. (Hendry also declined to pursue Ryne Sandberg who mentioned that he would be interested, much to my heart's sadness, and my brain saying "Thank God."). |
Of course, any mention of Dusty Baker is sure to bring forth the same emotional differences in Cubdom as mentioning George W. Bush in the real world. For some reason, both individuals are highly controversial.
As for me, I like Dusty Baker. I think some of his in-game decision making is poor (to say the least), but I can't and won't argue with results. I have never played Major League Baseball, much less Minor League Baseball. I've watched a ton and a bucket of games on the tellie, and been to a goodly number in person. However, I am not an expert... but one needs to look no further than a .541 career winning percentage (.546 with the Cubs) as a manager to realize that Dusty is at minimum a top-tier manager.
A few more reasons I think Dusty is a good manager?
Those are the Cubs managers I remember... and aside from Popeye (Zimmer) and Riggleman (who I thought was a good manager, saddled with poor players)... they were pretty much brutal. Not to mention, Dusty comes out on the plus side on any comparison.
As far as current managers around the Bigs that I would trade Dusty for straight up? (Heck I'd even throw in Neifi Perez!)? (The order may be debatable except for Bobby Cox.)
Sure, Dusty doesn't manage in a manner blessed by those 'enlightened sabermaticians,' but neither do most managers in baseball. The Cubs organization is not a Billy Beane disciple, and so I don't expect the organization's field manager to behave like he is reporting to Beane... Epstein, DePodesta, or Riccardi. Dusty needs to behave like he is reporting to Jim Hendry and Andy MacPhail, and judging from the state of the organization (compared to the early and mid '90s), I'll take the good with the bad.
So, Congratulations Dusty on a second complete year with the Cubs, give your dog an extra milk-bone this winter, and read 'moneyball' while you are at it. Like every other manager, you have lost a game or two... which means you've got some warts, but this corner of Cubdom appreciates you.
Now, lets win a World Series next year! (p.s. All of the manager stats came courtesy of baseballreference.com)
| |
Cubs Convention Ticket Solicitation: Hi folks, I tried calling the Cubs on Monday to get Cubs convention tickets, but was unable to get through before the tickets were sold out in record time. I am hoping some of my readers will have an extra ticket. I will pay $100 for 1 Cubs Convention Pass. If you have an extra one, please email me: byron@thecubdom.com
In news regarding the Cubs broadcast booth... its looking good for me.
Brenly & O'Brien cont. |
| Excerpt from: It Might be, it could be O'Brien: ESPN voice top Cubs Candidate By: Ed Sherman, Chicago Tribune, Friday, Nov. 12, 2004 |
O'Brien has emerged as the leading candidate to team with Bob Brenly as the Cubs' play-by-play voice on television, according to industry sources. He received permission from the Mets to begin talks with the Cubs on Wednesday. Indications are a deal could be finalized early next week. ... However, it sounds as if it will take a major snag to keep O'Brien from coming to Chicago. He still has a year left on his deal with the Mets and ESPN, but it is unlikely either party would stand in his way. ... "It has been an interesting week," O'Brien said. "I'm sure they are talking to some good people. It will be a phenomenal opportunity for whoever gets the job." |
| |
No, its not a law firm, but it sure sounds like one. Rather, those are two of the names that continue to spill out of the Tribune company's newspaper regarding the Chicago Cubs television booth. (It is also who I would like to have working the games.)
Ed Sherman wrote an article this morning indicating that Bob Brenly will be the new color man in the WGN radio booth, and then ended the article saying:
| Excerpt From: Brenly to be Cubs' Analyst, Play-by-Play man still to be named By: Ed Sherman, Chicago Tribune, November 9, 2004 |
With Brenly in the fold, the Cubs now turn their attention to finding Caray's replacement. Among the candidates under consideration are Florida's play-by-play voice Len Kasper. Dave O'Brien, formerly with Florida and now with ESPN, said the Cubs have contacted him but he has yet to meet with the team. O'Brien also calls games for the New York Mets. |
Last week, Sherman wrote:
| Excerpt From: Too Late for Cubs' Brass to call Costas By: Ed Sherman, Chicago Tribune, November 5, 2004 |
As for Caray's replacement, the Cubs are said to have visited with Len Kasper, the voice of the Florida Marlins for the last three years. They also are said to be interested in Dave O'Brien, who did the Marlins' games before moving to ESPN. |
So why did I title this post "Brenly & O'Brien" rather than "Brenly & Kasper," an equally lawyerly sounding title? Well, because I want O'Brien. (And since its my Birthday... I'd appreciate it if my wish was granted.) This past June, when the 'Chip Caray might be leaving town' rumors started, I wrote:
| From: "Just Sayin..." June 2nd, 2004 By: Byron Clarke |
Because I live out of the Chicago market, but not far enough away to watch the games live on the internet, I watched the game on ESPN. (About half the country is in the official black out zone, but can't get Fox Sports Net games on cable.) I have finally figured out the solution to the Cubs TV broadcasting issues. Chip Caray, whose contract runs through this year, should be replaced (I had been waffling on this point because I didn't have a replacement in mind.) Your new broadcaster should be... Dave O'Brien. Watching the game today, I just wanted to have he and Rick Sutcliffe call all the games. WGN could do it too, pull a three man booth with O'Brien calling games and Stoney and Sutcliffe doing color. |
That said, I have never heard Kasper call a game, so I'm not real qualified on this point... but in case John McDonough drops by my site wondering what I think... I'd prefer O'Brien. As for Brenly, good move... I think most everybody will agree to that. And the best part about Brenly? He's not Joe Carter!
I knew this was out there, I just couldn't find it: I also wrote this about Dave O'Brien on June 15.
| From: "Thank You Jimmy" Comment #13 By: Cubdom Byron - June 2nd, 2004 |
I have been pushing for Dave O'Brien (who called the game last night for ESPN and is typically paired with Sut.) He is a good play by play man, and doesn't try to force a personality that isn't there. He is a bit low key which would work great with Stoney, and his voice isn't irritating like many play by play men. On top of that, he comes off as very knowledgable about the games, without using lingo like he just learned it (Chip.) My friend Chris thinks the Cubs are going to move Pat Hughes in to the TV booth and bring up Andy Mazur who currently calls half an inning a game for WGN radio. He is probably more likely to be right, but I don't want to see them break up Pat & Ron. I think Pat is the only one keeping Ron bearable. Just like Stoney saving the booth in the last few years of Harry Caray. We all love the glasses, but lets not forget Andrew Cunanan, the serial murderer that always appeared in the game when Will Cunane pitched... or the myriad of other Harryism's we loved him for. |
| |
I don't have much to say today, but I got a bit caught up in the commenting over at TCR, and I wanted to post here what I posted for comment #107 here.
|
I am apparently about a day late on the Barry vs. Sammy argument, but since John Hill is the only one who alluded to Chad's comment (#72) how I would have answered it: "The more you are willing to swing, the more pitches in the zone you will see. Sosa gets more hittable pitches cause pitchers try to get him out. That leads to Sosa seeing more mistakes in the zone. That leads to more homers. If bonds was will to swing at pitches just off the plate, pitchers would be throw him more pitches."The reason Barry doesn't swing at balls outside of the zone is because he is a team player who wants a world series title. Barry knows his extra IBB's and OBP lead to more runs. A comparison of 'Runs not accounted for by the home run' from 1997-2004:
Posted by: Cubdom Byron at November 8, 2004 12:11 PM |
| |
... the Dodgers are considering a trade which would exchange Shawn Green (& possibly Darren Dreifort) for Sammy Sosa. In fact, its in black & white and password protected black & white. Its all over the internet too... here, here, here, and here.
So what possible reason do I have for bringing it up here? Well three items for your consideration:
1.)
| Excerpt from: Sosa tells of dismay over batting sixth From: Associated Press reports via ESPN.com |
| "I'm going to play at least another five or six seasons, hitting 35 home runs a year," he [Sammy Sosa] said. "That would allow me to finish my career with 700 home runs." |
2.) Dodger Stadiums is one of the most difficult stadiums for right handed power hitters.
3.) Sammy has a no-trade clause.
| |
While perusing the recently updated blogs in the "Cubs Blog Army" I came across a short entry posted at 1060 West (a new member of the army), which pointed me to Bob Verdi's article in the Sunday Tribune.
In short, the article says that professional sports owners were included in the pig roast (tons of pork!) Federal Corporate Tax cut that was passed and signed recently. Apparently, Congress has changed the tax depreciation rules for professional teams back to the way it was in the 70's when Bud Selig purchased the Brewers using a federal tax write-off.
Depreciation is spreading out the cost of something over its useful life. For example, if I buy a package of hot dogs, I don't count the whole cost of the hot dogs on my first meal, I split the cost over each meal that I eat the hot dogs... this is essentially how depreciation works.
Since most people aren't familiar with the tax depreciation rules for pro-sports teams, a quick review: In the 70's, a new owner could claim virtually the full value of their franchise as a business expense. As a result, they didn't have to pay taxes on most of their income from the team for the first few years. It used to be that those savings stretched out 15 years.
Later, Congress changed two important factors. First, the expenses could only be claimed over a 5 year span, and second, only player salaries could be deducted. This change had 2 effects. The first effect was to make it a bit more difficult to buy a team with a tax rebate, and the second effect was to encourage owners to buy a team, hold on to it for the quick tax breaks, and then sell if 5-6 years later so that another wealthy individual could take advantage of the depreciation laws.
This was/is largely the cause for the many team sales beginning in the 70's. (21 of the 30 teams have been sold at least once in the past 15 years... and all 30 teams have changed hands since 1970.) Before the 70's many teams had stayed within a single family for 40, 50, and 60 years... the Cubs had a Wrigley in ownership from 1916-1981 (65 years).)
Now, it appears that Congress has changed the rules back, allowing owners to depreciate the full value of their teams over a 15 year stretch again.
So what does this mean for the Cubs? Verdi seems to think that the franchise is worth an extra 5% more after the bill became law. However, there are some problems with his reasoning. First, depreciation is a non-cash accounting entry, meaning the only cash to result from a depreciation expense is the tax that doesn't need to be paid (called a tax shield). For most U.S. companies, this is 35% of the expense. However, this money is also stretched out over 6 or 16 years depending on pre-tax bill or post-tax bill depreciation method. (As is usual with the government, a 5 year depreciation occurs over 6 years... 
half a year in the first year, and half a year in the sixth year = .5 + 4 + .5 = 5... but over 6 years).
The other factor that must be taken into consideration is this: would you rather have a dollar today or tommorrow? In finance... and trust me anyone concerned about depreciating their $100+ million sports franchise is concerned with the finances... we must discount the value of the tax rebates the teams will be receiving.
Discounting cash flows is the reverse of finding out how much will be in your savings account in 1 year. Instead of saying... I put a dollar in today, and with 5% interest its worth a 1.05, its saying... I will have $1.05 next year, how much did I put in today?
Having established our facts, we now ask: So what does this tax bill do for a prospective purchaser of the team? Well, the club's value has grown at a 12.2% annual rate since the Tribune Company bought the team in 1981 for $20.5 million. (Forbes has the team valued at $276 million). Thus, this 12.2% becomes our 'discount rate.' We also know that the Cubs 2004 payroll was approximately $90,560,000 (so says USA Today's salary database). Which would allow an owner who purchased the team before the tax law change to write off these expenses at a tax savings of approximately 35%.
Thus, before the tax law changed, a new owner would have received a current value $26 million in tax breaks.
Now that the tax law has changed, and assuming the club sold for $276 million, the new owner would be able to claim $50 million in present value tax breaks.
The difference between the two values is $24 million, or 8.7% of the franchise value.
But what does this mean for the Trib company... and more importantly for Cubs fans hoping for a higher player payroll? Nothing. The Trib Co. would have to sell the team to get the added value out of the team. The tax law change will have no impact on the team (except via the Expos... see below), and thus we shouldn't expect to see a significant change in player payroll due to the new tax rules... but there is now a better incentive for the Trib to sell... I've got $100 that I could chip in to Steve Stone's ownership group! ... Fat Chance.
So, who will benefit the most from the changes in the tax law? Not suprisingly Major Leage Baseball's very own franchise, the Expos! (Wow, you mean Bud Selig finally gives Washington D.C. its own baseball team, and Congress changes the tax law increasing the resale value of all MLB teams by about 5%! Amazing! Who'da thunk it?)
The reason the Expos will benefit most from this change in tax laws is that they will be sold this winter to the highest bidder... who just got a gigantic tax break from the Federal Government... and will be expected to pass most of that along to Montreal Expos L.P.
| Excerpt from: Montreal Expos Owner Review by: Byron Clarke, thecubdom.com May 26, 2004 |
The Montreal Expos are owned by a limited partnership, Montreal Expos L.P., which is in turn owned (I assume equally) by the other twenty nine major league baseball clubs. Further complicating the situation, limited partnerships must have a general partner which is responsible for managing the (limited) partnership. This general partnership is named Montreal Expos GP, Inc. This is a shell corporation which allows the Office of the Commissioner of Baseball to run the team. Thus, in short, all twenty nine Major League Teams own the Montreal Expos, but the team is controlled by the office of the Commissioner of Baseball (OCB). (However, the OCB of course was set up and controlled by MLB owners.) |
So how much will this mean for MLB? Well, the Expos franchise value has grown about 2.89% annually since 1991 (this is a horrible rate of return), but we are going to assume at least semi-competent management... thus I'll bump the discount rate up to a nice (arbitrary) 5%. Also, if Forbes is to be trusted, the Expos are a $145 M franchise before moving to Washington, and the new location should be worth at least $35 M to MLB (thus I will assign a pre-tax change value of $180 M to the franchise).
These assumptions lead to an additional present value of $33 million for MLB. (The tax change present value has an inverse relationship with the discount rate... and the 5% is probably low-balling it, so I also computed the savings with a discount rate of 10%, and that reduces the value by $11 million to $23 million.)
The long and the short of it? I believe the Washington Franchise will sell for about $205 - $225 million dollars. This will be an increase of about $100 million for MLB owners (who bought the team in 2002 from Jeffrey Loria for $120 M.) Each owner should pocket about $3.5 million as a result.
So, what happens when you give 29 owners an extra $3.5 million a piece? The small market clubs pocket the cash (yes Tampa Bay... I'm calling you out) and the large market teams drive up the free agent market (do you really think King George will pocket $3.5 M rather than trying to buy another title?)
Finally, throw in the $2 million per team for the XM Satellite Radio deal, and I think we can all see the free agent market gravitating back towards where it was in 2000.
Being quite capable of doing the math... super-agent Scott Boras has sensed the market pendulum swinging... and now wants a 10 year deal for Carlos (Dracula) Beltran.
| Derek Smart at the Big Red C has done a phenomenal job documenting the Beltran saga... I point you there. |
| The Legend of Dracula Beltran Sweepstakes - AL West Beltran Sweepstakes - AL Central Beltran Sweepstakes - AL East Beltran Sweepstakes - NL West Beltran Sweepstakes - NL East Beltran Sweepstakes - NL Central |
| |
|
