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Harper to Phillies 13yr/330 mil

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32 minutes ago, caulfield12 said:

The Cubs, but coming out of 2016...now it’s pretty close to even (if if if the Sox sign Machado or Harper), but I’m referring more to which team is better positioned for the future compared to something subjective or fuzzier than which franchise has the most fans or popularity or media coverage.

There’s a dent in the Cubs’ armor right now, and the Theo/Cubs’ Way myth isn’t what it was at the end of 2016.  The Cubs still have 2-3 years left to ride that wave, but it’s looking like the projected Cubs’ dynasty is far from a foregone conclusion.  The Madden Magic has faded as well.   It’s always easier to win that first time than to repeat, because the motivation isn’t going to be quite the same, everyone gets distracted by things off the field, pitchers get worn down, the media starts to become a bit more critical because the fans become increasingly demanding when prices go so high.

We’ll see how many fans have the appetite to pay $5 extra per month for the Marquis channel or whatever they’re currently calling it...

I agree on your take re: the future trajectory of the two franchises. I would only add that the Cubs team, as the flagship of their diverse assets, drives a greater number of revenue and asset appreciation sources than Sox. For JR, he has to focus on the financial (P&L) impact of of a $300M investment more than Ricketts, due to the far better operating performance of the Cubs. 

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4 minutes ago, Look at Ray Ray Run said:

 

A made up Forbes number does you know good. The sox operating income doesnt go to zero by spending 30 million more - that's not how that works. 

Why cant he make disparaging remarks about the Cubs owners financial standing? 

Is this a serious remark? Made up number? Relationship of operating expenses to operating income? Enlighten me Einstein. 

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2 minutes ago, Look at Ray Ray Run said:

I'd rather be JR because I'd have bought something for 30 million that is now worth 1.5 billion. Rickets on the other hand spent pretty much all he's worth on the team. 

Haven’t all the recent speculation/s since the legalized sports gambling bill passed put it at closer to the $2.0-2.1 billion range?

As far as the Cubs go, unless they’re suddenly in the vicinity of $200 million per season just for their regional broadcasting rights, it’s a no go...and that Dodgers’ deal is currently weighing down the big market deals because they overpaid by so much that it has become a disaster for both sides (because an entire generation of fans will have been blocked out for 20 years).

It’s not like Harper is going to move the needle more than 10-15%.

With the White Sox or Padres, the positive (immediate) return is going to be closer to 50% if not higher...tv ratings, attendance, ad rates, more promotional events/giveaways leading to high attendance and more tickets sold, etc.

The Cubs objectively just don’t have much room to grow compared to the position the White Sox are in.

If we’re going to argue that cash flow from the development around the ballpark is raking in hundreds of millions in free cash flow that can be reallocated to Harper instead of debt payments, sure...anything is possible.  But ownership groups tend to be more risk averse than individual owners, and Heyward/Darvish/Chatwood are hard to overlook, as well as another diminished asset in Addison Russell they haven’t quite figured out what to do with.

 

 

 

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Can you guys stop calling each other geniuses and Einstein’s? 

Actually yeah just stop. If you don’t you will take a break for a bit here. 

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5 minutes ago, caulfield12 said:

Haven’t all the recent speculation/s since the legalized sports gambling bill passed put it at closer to the $2.0-2.1 billion range?

As far as the Cubs go, unless they’re suddenly in the vicinity of $200 million per season just for their regional broadcasting rights, it’s a no go...and that Dodgers’ deal is currently weighing down the big market deals because they overpaid by so much that it has become a disaster for both sides (because an entire generation of fans will have been blocked out for 20 years).

It’s not like Harper is going to move the needle more than 10-15%.

With the White Sox or Padres, the positive (immediate) return is going to be closer to 50% if not higher...tv ratings, attendance, ad rates, more promotional events/giveaways leading to high attendance and more tickets sold, etc.

The Cubs objectively just don’t have much room to grow compared to the position the White Sox are in.

If we’re going to argue that cash flow from the development around the ballpark is raking in hundreds of millions in free cash flow that can be reallocated to Harper instead of debt payments, sure...anything is possible.  But ownership groups tend to be more risk averse than individual owners, and Heyward/Darvish/Chatwood are hard to overlook, as well as another diminished asset in Addison Russell they haven’t quite figured out what to do with.

 

 

 

I would imagine Cubs investors view the real estate appreciation along with media rights, etc. as all part of the business which is driven by the Cubs. It could be ancillary assets are held differently based upon a host of issues but ultimately the rising tide (Cubs performance) lifts all boats. Doubt if it matters to Ricketts...all spends tha same.

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3 minutes ago, shipps said:

Can you guys stop calling each other geniuses and Einstein’s? 

Actually yeah just stop. If you don’t you will take a break for a bit here. 

Yes. Apologies

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15 minutes ago, Flash said:

I agree on your take re: the future trajectory of the two franchises. I would only add that the Cubs team, as the flagship of their diverse assets, drives a greater number of revenue and asset appreciation sources than Sox. For JR, he has to focus on the financial (P&L) impact of of a $300M investment more than Ricketts, due to the far better operating performance of the Cubs. 

We’ve gotten zero information about the new rights deal, other than it’s an extension just for five years, 2020-2024.

I’m willing to bet that there’s a clause in there that increases it should the Sox sign Machado or Harper.  

The reason is logic.  Why would the White Sox accept a much lower deal that they had no reason to commit to before the end of the 2019 season unless they were fairly confident in getting one of those two?

It’s not like their position would appreciably change if they failed to sign him, because losing the Cubs, the station still needs to offer April though September live sports programming.

The fact of the matter is that something like 90%+ of teams over the last twenty years who had Baseball America farm systems ranked #1-5 made the playoffs at least once in the following 3-5 years.  That’s a compelling reason alone that argues for a better future return for the network in terms of ratings.

 

https://www.mlb.com/news/white-sox-are-perfect-for-harper-or-machado/c-302543664

Richard Justice already argued this articulately, if not inspirationally...

Edited by caulfield12

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8 minutes ago, Flash said:

Hang up and listen to this genius...notwithstanding all of the other appreciating and income producing assets the Cubs flagship brand drives and just focusing on the limited data that Forbes has access to, Sox operating income last year was $30M and Cubs was $100M. Assuming an additional $30M (whale) in payroll for each team and a corresponding hit to operating income, WS operating income goes to zero and the Cubs, even assuming a $15M luxury tax hit, falls to $55M. The only question Ricketts has to ask is 'will the additional expenditure pay off in increased revenue or asset appreciation?' On the other hand, the question JR has to ask is 'what size capital call do I need to make to my fellow investors?'

As to your questions about how the Ricketts family manages their finances, why on earth does anyone give a rats ass? Do yourself a favor and refrain from making disparaging remarks about things you have a superficial understanding of. You are a passionate Sox fan but a business genius you're not. 

This is one of my favorite posts of all time.  You literally rip on me for using the “limited data Forbes has access to” (which I’m not doing) and then you proceed to use Forbes’ operating income estimates to make your entire argument.  Second, I must question your business acumen when you only use operating profit and claim financing doesn’t matter.  See when you have this thing called debt, you also have this thing called interest.  Servicing their debt load eats always at their earnings / cash flow from operations.  And how do you think the Cubs have been paying for the Wrigley renovations, their new spring training facility, all the rooftops, their boutique hotel, their triangle building, etc.  Yeah, that shit isn’t free bro and how the Cubs finance those expenditures is extremely fucking important and impacts their cash flow position.

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We need Manny and Harper resolved soon.  People are so bored that this site is bordering on unreadable lately because almost every thread turns into a pissing contest.

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1 minute ago, Chicago White Sox said:

This is one of my favorite posts of all time.  You literally rip on me for using the “limited data Forbes has access to” (which I’m not doing) and then you proceed to use Forbes’ operating income estimates to make your entire argument.  Second, I must question your business acumen when you only use operating profit and claim financing doesn’t matter.  See when you have this thing called debt, you also have this thing called interest.  Servicing their debt load eats always at their earnings / cash flow from operations.  And how do you think the Cubs have been paying for the Wrigley renovations, their new spring training facility, all the rooftops, their boutique hotel, their triangle building, etc.  Yeah, that shit isn’t free bro and how the Cubs finance those expenditures is extremely fucking important and impacts their cash flow position.

OMG

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13 minutes ago, Chicago White Sox said:

This is one of my favorite posts of all time.  You literally rip on me for using the “limited data Forbes has access to” (which I’m not doing) and then you proceed to use Forbes’ operating income estimates to make your entire argument.  Second, I must question your business acumen when you only use operating profit and claim financing doesn’t matter.  See when you have this thing called debt, you also have this thing called interest.  Servicing their debt load eats always at their earnings / cash flow from operations.  And how do you think the Cubs have been paying for the Wrigley renovations, their new spring training facility, all the rooftops, their boutique hotel, their triangle building, etc.  Yeah, that shit isn’t free bro and how the Cubs finance those expenditures is extremely fucking important and impacts their cash flow position.

Which is why it’s hard to argue how much free cash flow the team is actually generating.

What are the terms in years and interest rates for all those loans?

One would imagine an ownership group is going to be more likely to prioritize paying down debt...it’s exactly what the Padres are doing, but that’s eating into 10% of their potential spending (including stadium improvements and renovations the Sox don’t have to worry about.)

What is the net positive of adding another $300 million contract to Harper?   How much more can they earn with him...but what happens if he joins the list of bad contracts at the exact time you’re trying to extend your contention window and “fix” the starting rotation and bullpen?

For one thing, it guarantees that you won’t be able to keep Baez AND Bryant, if that was ever a realistic possibility in the first place...not to mention Contreras and Rizzo, along with Hendricks and Quintana.

Signing Harper would force Heyward into CF, and/or a trade of Almora/Happ.  That doesn’t make much sense either.

And it would cause Boras to lose one of his biggest bidders for another of his clients in Bryant, which isn’t ideal.

Edited by caulfield12
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Its hard to argue how much free cash flow the team is generating because its not publicly available information. Hence we don't know how easily one team (Sox) can absorb a $30M contract vs. another. The only available data comes from business publications and is specific to baseball operations.

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6 minutes ago, caulfield12 said:

Which is why it’s hard to argue how much free cash flow the team is actually generating.

What are the terms in years and interest rates for all those loans?

One would imagine an ownership group is going to be more likely to prioritize paying down debt...it’s exactly what the Padres are doing, but that’s eating into 10% of their potential spending (including stadium improvements and renovations the Sox don’t have to worry about.)

What is the net positive of adding another $300 million contract to Harper?   How much more can they earn with him...but what happens if he joins the list of bad contracts at the exact time you’re trying to extend your contention window and “fix” the starting rotation and bullpen.

For one thing, it guarantees that you won’t be able to keep Baez AND Bryant, if that was ever a realistic possibility in the first place...not to mention Contreras and Rizzo, along with Hendricks and Quintana.

Signing Harper would force Heyward into CF, and/or a trade of Almora/Happ.  That doesn’t make much sense either.

And it would cause Boras to lose one of his biggest bidders for another of his clients in Bryant, which isn’t ideal.

100% agreed Caulfield.

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1 minute ago, Flash said:

Its hard to argue how much free cash flow the team is generating because its not publicly available information. Hence we don't know how easily one team (Sox) can absorb a $30M contract vs. another. The only available data comes from business publications and is specific to baseball operations.

No, we can bro, because we know the Sox have basically zero long-term financial commitments while the Cubs have a ton of young players that are suddenly getting expensive plus potential albatross contracts in Heyward, Darvish, & Chatwood.  Why are you still arguing this?

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13 minutes ago, RTC said:

We need Manny and Harper resolved soon.  People are so bored that this site is bordering on unreadable lately because almost every thread turns into a pissing contest.

If they don’t get Machado or Harper, especially after the second player signs...it would be better just to shut down SoxTalk for a week.

It’s going from more a sense of excitement to what can be described now as a mix of fear/trepidation and just a sense of relief it all worked out in the end, but then it will convert into maybe it wasn’t the greatest idea in history if he puts up a sub 800 ops and the clubhouse chemistry is a mess with veterans and youngsters forming two cliques.

(That’s also pretty difficult to imagine, as bad as KC, Detroit and Minnesota are in the pitching department...well, the Twins are “okay,” but the overall point still remains.)

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19 minutes ago, Chicago White Sox said:

This is one of my favorite posts of all time.  You literally rip on me for using the “limited data Forbes has access to” (which I’m not doing) and then you proceed to use Forbes’ operating income estimates to make your entire argument.  Second, I must question your business acumen when you only use operating profit and claim financing doesn’t matter.  See when you have this thing called debt, you also have this thing called interest.  Servicing their debt load eats always at their earnings / cash flow from operations.  And how do you think the Cubs have been paying for the Wrigley renovations, their new spring training facility, all the rooftops, their boutique hotel, their triangle building, etc.  Yeah, that shit isn’t free bro and how the Cubs finance those expenditures is extremely fucking important and impacts their cash flow position.

Not ripping on you for using Forbes data...that would be to your credit. I'm ripping on you for making proclamations about affordability without any data. Thats okay because its not publicly available so you might as well make shit up. As to your tutorial on the nuances of debt financing and related impact on BS/IS, we can take it offline and I can help you.

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2 minutes ago, Chicago White Sox said:

No, we can bro, because we know the Sox have basically zero long-term financial commitments while the Cubs have a ton of young players that are suddenly getting expensive plus potential albatross contracts in Heyward, Darvish, & Chatwood.  Why are you still arguing this?

Okay...remind me how much free cashflow the Sox had in 2018? How about 2017? How much FCF are they forecasting for 2019? Same questions re: Cubs.

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2 minutes ago, aeichhor said:

 

The only way this happens is an opt out after just 2-3 years that Philly won’t meet.  The Padres don’t even want him long term, they just want the buzz of marketing and to reinject belief in the long-suffering fanbase...which they would then use (freed up cash flow) to sign all their youngsters to extensions.

Still don’t see how it’s possible with Hosmer, Myers and $27.5 million still on the books in bad money.

Think of the Padres like the 2012 Marlins, trying to make a temporary splash...

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14 minutes ago, Flash said:

Okay...remind me how much free cashflow the Sox had in 2018? How about 2017? How much FCF are they forecasting for 2019? Same questions re: Cubs.

🤔...let’s see here, the Sox have little to no debt and have a sweet lease arrangement with the IFSA to pay for stadium improvements.  Meanwhile, the Cubs’ ownership group has financed the purchased one of the team, ancillary assets, and significant maintance CAPEX via debt.  Yet you continue to use operating income as the be all end all.

And regardless, the ability to absorb a significant salary is far more dependent on a team’s long-term financial commitments relative to their theoretical payroll ceiling.  I can’t say this enough, but the Sox have zero long-term commitments and likely have a ~$150M payroll ceiling without a big jump in revenue.  The Cubs are more or less up against the luxury tax and their ownership group (a family trust and not a random billionaire owner willing to throw endless cash at his team) has shown zero willingness to blow out the 2nd or 3rd tier luxury tax threshold for the foreseeable future.  You can keep talking about all these revenue streams & “appreciating assets”, but if the Cubs doesn’t want to pay a luxury tax like most ownership groups (even ignoring their debt load) then it doesn’t really matter.

Your argument is flawed from both a business standpoint and a practicality standpoint.

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Having Bryce Harper in SD is a loss for MLB. 

Nice place, but not all that marketable and West Coast. As big of a starTrout is, if he played east he would be even bigger. 

MLB doesn’t need its biggest names playing games when most of the leagues fan base has hit their fart sacks.

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59 minutes ago, caulfield12 said:

Which is why it’s hard to argue how much free cash flow the team is actually generating.

What are the terms in years and interest rates for all those loans?

One would imagine an ownership group is going to be more likely to prioritize paying down debt...it’s exactly what the Padres are doing, but that’s eating into 10% of their potential spending (including stadium improvements and renovations the Sox don’t have to worry about.)

What is the net positive of adding another $300 million contract to Harper?   How much more can they earn with him...but what happens if he joins the list of bad contracts at the exact time you’re trying to extend your contention window and “fix” the starting rotation and bullpen?

For one thing, it guarantees that you won’t be able to keep Baez AND Bryant, if that was ever a realistic possibility in the first place...not to mention Contreras and Rizzo, along with Hendricks and Quintana.

Signing Harper would force Heyward into CF, and/or a trade of Almora/Happ.  That doesn’t make much sense either.

And it would cause Boras to lose one of his biggest bidders for another of his clients in Bryant, which isn’t ideal.

 

52 minutes ago, Chicago White Sox said:

100% agreed Caulfield.

I tip my Sox cap to you both. You guys are owning this thread. 

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