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Theo Epstein Resigns; Hoyer Stays

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13 hours ago, South Side Hit Men said:

Anyone think on Leap Year Day Kenny Williams would be the only Chicago Sports Team President less than a year later, Hahn and Bowman the only GMs.

Bears President is Ted Phillips and he is going no where.  

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1 hour ago, southsider2k5 said:

Jerry has never been the majority owner of the White Sox.  In fact he was never even the person who owned the largest portion of the team, though it is possible he has become so, though not clear.  Somehow he worked into the position of being the final sayso on the team, despite his minority ownership share.  The last estimate was he owned 19% of the team, after putting in 4 to 5% at the onset.

This is just no where near the same thing. Reinsdorf owns 40% of the Bulls and 19% of the White Sox, but 19% of an MLB team today would cost over 300 million dollars. When Reinsdorf invested in the team, he put up a small amount of money comparatively but his stake was substantial. Theo could put up, at best, 1% of the cost if he invested 20 million of his 25 million networth.

No one is going to give an owner total control after putting up 1% of the investment. Although Jeter put up 25 million to be the head of the Marlins group; although it says he put up 4% which would be equal to roughly 50 million so who knows.

Edited by Look at Ray Ray Run

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14 minutes ago, Look at Ray Ray Run said:

This is just no where near the same thing. Reinsdorf owns 40% of the Bulls and 19% of the White Sox, but 19% of an MLB team today would cost over 300 million dollars. When Reinsdorf invested in the team, he put up a small amount of money comparatively but his stake was substantial. Theo could put up, at best, 1% of the cost if he invested 20 million of his 25 million networth.

No one is going to give an owner total control after putting up 1% of the investment. Although Jeter put up 25 million to be the head of the Marlins group; although it says he put up 4% which would be equal to roughly 50 million so who knows.

Jerry put up 4% of the purchase price when the White Sox purchase happened.

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4 minutes ago, southsider2k5 said:

Jerry put up 4% of the purchase price when the White Sox purchase happened.

Where do you see that? I know he bought out a couple partners, but I didn't think he bought out 15%. I remember hearing his stake was close to 3 million initially, and he bought out about 5% since then.

Edited by Look at Ray Ray Run

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2 minutes ago, Look at Ray Ray Run said:

Where do you see that? I know he bought out a couple partners, but I didn't think he bought out 15%. I remember hearing his stake was close to 3 million initially, and he bought out about 5% since then.

https://www.chicagotribune.com/sports/whitesox/ct-xpm-2013-07-28-ct-spt-0728-white-sox-chicago-sports-20130728-story.html

image.png

 

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I believe the ownership structure is in the form of a general partnership with limited partners. The same structure he used back in his Balcor days.

jerry is the general partner and runs the show and his limited partners are the main ownership investors but have little to no say in the operations. 
 

if he is up to 40% then I’m guessing he has bought out some of the limited partners over time. Otherwise that sounds high based on how I remember it.

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21 minutes ago, southsider2k5 said:

Jerry put up 4% of the purchase price when the White Sox purchase happened.

Is this true? The Sox were purchased for 12 million in 1980. JR only plunked down 500,000?

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17 minutes ago, southsider2k5 said:

I mean he says right there that it's significantly understated.

I'd guess he owned 10-15% at offset and as I heard he bought out about 5% over time putting him around 20% today.

And Theo would be capable of putting up 1%.

Edited by Look at Ray Ray Run

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TBH I think in a relatively distributed ownership group a lower stakes person like Theo being brought on to make decisions could be attractive to getting more minority owners in who may feel they aren't at the whims of the biggest shareholders decisions and instead have the org in the hands of a "baseball guy". Or, a wealthy person whose interested may be very competitive, and see this as a way to have a leg-up where they have an owner well connected in league and with a lot of relationships.

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16 minutes ago, Look at Ray Ray Run said:

I mean he says right there that it's significantly understated.

I'd guess he owned 10-15% at offset and as I heard he bought out about 5% over time putting him around 20% today.

And Theo would be capable of putting up 1%.

In the context of the article he is arguing TODAY's ownership share is understated at 14% (at that time)

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This may be very naive, but I've never understood ownership structure and their motivation. Say JR owns a plurality but not a majority, so there are a bunch of other owners out there. We *only* hear JR's name out of all of the owners, and he's THE defacto owner popularly. Everyone assumes he makes the decisions and it's his team.

I've been led to believe (rightly or wrongly) than owning a baseball team is also not a money-making venture after all of these owners cry poor. 

Why would minority owners want to own a portion of the team if they don't get a say in team decisions, don't get their name out there as the owner, and supposedly lose money or make very little? I know the easy answers are "power, clout, bragging rights, because they can", etc., but it just always surprises me that people want to throw around tens of millions of dollars for...... reasons.

Edited by MiddleCoastBias

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11 minutes ago, bmags said:

TBH I think in a relatively distributed ownership group a lower stakes person like Theo being brought on to make decisions could be attractive to getting more minority owners in who may feel they aren't at the whims of the biggest shareholders decisions and instead have the org in the hands of a "baseball guy". Or, a wealthy person whose interested may be very competitive, and see this as a way to have a leg-up where they have an owner well connected in league and with a lot of relationships.

If you get into a group like Oakland there is a TON of money to be made in appreciation alone.  Put a baseball guy out front to take the bullets and make the moves, let him fight for a stadium, threaten to the move the team, etc.  Let him also pick the baseball people and look at getting the team over the top.  Even if he isn't a big share owner, I can see how someone would see the value in having a guy like Theo get all of the public abuse, while sitting in the background making assloads of money off of his work.

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2 minutes ago, MiddleCoastBias said:

This may be very naive, but I've never understood ownership structure and their motivation. Say JR owns a plurality but not a majority, so there are a bunch of other owners out there. We *only* hear JR's name out of all of the owners, and he's THE defacto owner popularly. Everyone assumes he makes the decisions and it's his team.

I've been led to believe (rightly or wrongly) than owning a baseball team is also not a money-making venture after all of these owners cry poor. 

Why would minority owners want to own a portion of the team if they don't get a say in team decisions, don't get their name out there as the owner, and supposedly lose money or make very little? I know the easy answers are "power, clout, bragging rights, because they can", etc., but it just always surprises me that people want to throw around tens of millions of dollars for...... reasons.

During the time that JR has owned the Sox, their value has gone from $19 million to 1.65 billion, or a return of about 8600%.  The return in the SP500 over the same time is about 3000%.

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They may not be decision makers, but they certainly still have influence, get to hang out where they want, go to games, get all the hot goss, meet the players, get rings, get to celebrate...

and they will make back their investment and then some.

Seems pretty fun.

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4 minutes ago, southsider2k5 said:

During the time that JR has owned the Sox, their value has gone from $19 million to 1.65 billion, or a return of about 8600%.  The return in the SP500 over the same time is about 3000%.

So you're telling me that these owners have lied to me and that they DON'T lose money every year?? 🤔

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10 minutes ago, MiddleCoastBias said:

So you're telling me that these owners have lied to me and that they DON'T lose money every year?? 🤔

Both can be true.  There is a difference in having an asset appreciate in value, and making money off of said asset.  Think of it as your house.  Your house generates no revenue at all during a year, yet its value goes up.  You don't actually HAVE that money until you sell though.

That isn't to say these guys aren't making money on an annual basis, but that is a different conversation.

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53 minutes ago, MiddleCoastBias said:

This may be very naive, but I've never understood ownership structure and their motivation. Say JR owns a plurality but not a majority, so there are a bunch of other owners out there. We *only* hear JR's name out of all of the owners, and he's THE defacto owner popularly. Everyone assumes he makes the decisions and it's his team.

I've been led to believe (rightly or wrongly) than owning a baseball team is also not a money-making venture after all of these owners cry poor. 

Why would minority owners want to own a portion of the team if they don't get a say in team decisions, don't get their name out there as the owner, and supposedly lose money or make very little? I know the easy answers are "power, clout, bragging rights, because they can", etc., but it just always surprises me that people want to throw around tens of millions of dollars for...... reasons.

Before I address, thanks @Harry Chappas , I forgot Ted (and I’m am assuming RP goes).
 

You are confusing two aspects of ownership. One is who is elected Managing Partner by all ownership interests. JR is the managing partner, elected by the other partners to run the day to day business on their behalf. There very well may have been owners with equal or more shares / percentage of ownership at  the time of the purchase. However, Jerry was elected to manage the day to day affairs, and receive separate compensation for his labor, in addition to shared profits enjoyed by all minority owners on a pro-rata share basis.
 

Theo would likely be an owner with limited capital, but would earn substantial compensation in addition to his passive partnership profit participation. JR used total compensation across both entities to buy out other owners over the past four decades.

The other is the term “profits” or gains. There are three types of gains or losses all owners share while owning a ball club.

Net Profits / Losses owners claim as baseball revenue: These include a substantial portion of revenue, and all expense, including expenses not subject to cash outlays such as depreciation on capital assets such as players, stadiums, etc. This is the information owners may disclose, typically in a manner most advantageous to them (we lose barely make money). It also includes the depreciation losses that they use to reduce their taxes paid, though they are not depleting their cash.

Profits owners do not claim as baseball revenue, but are still real: For example, MLB media, auxiliary revenue such as parking lot income, television revenues (for team owned networks and the MLB network), and other revenue. Owners owned equal share in profits of MLB media at an equal 1/30 share. They are required to pay taxes on realized income. However, for the sake of what they communicate to players and fans, this is revenue they do not “count” when declaring whether they “lost” money.

Another good example is the Cubs (Marquis) or Sox (1/3 NBCSC) counting a contractural payment to the club for broadcast rights as the sole revenue for the ball club, but realizing profits on both the ball club and the television stations they own. 

To summarize these two sets of profit, for the sake of what they disclose and pay tax on, owners overstate losses and understate income whenever it suits them (player negotiations, IRS filings, media disclosures). 

Forbes does the best they can with information available and projections of what is not available, to provide the best information they can of total profits realized by baseball owners.

Capital Gains: This is the overall net increase or decrease in the value of the club. These gains are tax deferred and not realized until a minority owner sells. This is similar to increases you may experience as an individual for ownership of your home, stocks or mutual funds. Prices go up and down, but you don’t receive cash, or pay tax, until you sell. You can borrow on these assets to an extent, but otherwise you can’t receive cash (unless you rent your house, and one also received interest and dividends from investments) until you sell.

This is an extra component owners do not “share” with players when they talk “revenue sharing”, but yet another example of profits they do realize and benefit on when they sell, and that they can also leverage when borrowing while they own the team.

Hope this helps explain why owners can cry poor and say they lose money, but are in reality totally full of shit in nearly all cases. Even during COVID / no fan seasons, they didn’t earn what they typically do across the board, but they did not lose anywhere close to what they are crying, and in some cases, still may have profited.

Edited by South Side Hit Men
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It would be similar to owning golf courses which lose money year after year, but you use the losses to offset gains from other investments and pay very little taxes.  Meanwhile the land the golf courses sit on is appreciating in value every year and you wind up with a fortune when you sell.  Smart.

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5 hours ago, South Side Hit Men said:

Before I address, thanks @Harry Chappas , I forgot Ted (and I’m am assuming RP goes).
 

You are confusing two aspects of ownership. One is who is elected Managing Partner by all ownership interests. JR is the managing partner, elected by the other partners to run the day to day business on their behalf. There very well may have been owners with equal or more shares / percentage of ownership at  the time of the purchase. However, Jerry was elected to manage the day to day affairs, and receive separate compensation for his labor, in addition to shared profits enjoyed by all minority owners on a pro-rata share basis.
 

Theo would likely be an owner with limited capital, but would earn substantial compensation in addition to his passive partnership profit participation. JR used total compensation across both entities to buy out other owners over the past four decades.

The other is the term “profits” or gains. There are three types of gains or losses all owners share while owning a ball club.

Net Profits / Losses owners claim as baseball revenue: These include a substantial portion of revenue, and all expense, including expenses not subject to cash outlays such as depreciation on capital assets such as players, stadiums, etc. This is the information owners may disclose, typically in a manner most advantageous to them (we lose barely make money). It also includes the depreciation losses that they use to reduce their taxes paid, though they are not depleting their cash.

Profits owners do not claim as baseball revenue, but are still real: For example, MLB media, auxiliary revenue such as parking lot income, television revenues (for team owned networks and the MLB network), and other revenue. Owners owned equal share in profits of MLB media at an equal 1/30 share. They are required to pay taxes on realized income. However, for the sake of what they communicate to players and fans, this is revenue they do not “count” when declaring whether they “lost” money.

Another good example is the Cubs (Marquis) or Sox (1/3 NBCSC) counting a contractural payment to the club for broadcast rights as the sole revenue for the ball club, but realizing profits on both the ball club and the television stations they own. 

To summarize these two sets of profit, for the sake of what they disclose and pay tax on, owners overstate losses and understate income whenever it suits them (player negotiations, IRS filings, media disclosures). 

Forbes does the best they can with information available and projections of what is not available, to provide the best information they can of total profits realized by baseball owners.

Capital Gains: This is the overall net increase or decrease in the value of the club. These gains are tax deferred and not realized until a minority owner sells. This is similar to increases you may experience as an individual for ownership of your home, stocks or mutual funds. Prices go up and down, but you don’t receive cash, or pay tax, until you sell. You can borrow on these assets to an extent, but otherwise you can’t receive cash (unless you rent your house, and one also received interest and dividends from investments) until you sell.

This is an extra component owners do not “share” with players when they talk “revenue sharing”, but yet another example of profits they do realize and benefit on when they sell, and that they can also leverage when borrowing while they own the team.

Hope this helps explain why owners can cry poor and say they lose money, but are in reality totally full of shit in nearly all cases. Even during COVID / no fan seasons, they didn’t earn what they typically do across the board, but they did not lose anywhere close to what they are crying, and in some cases, still may have profited.

This makes a lot of sense and makes me dislike owners even more.

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Hoyer stated the Cubs GM position remains open, they are considering outside candidates.

Could be a solid long term spot for Hahn after what has transpired this off-season.

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On 11/18/2020 at 10:36 AM, southsider2k5 said:

That article is from 2013 and Eddie Einhorn passed away in 2016.  I believe at one point Einhorn owned as much if not more of the Sox than Reinsdorf.  So its possible he bought out his interest and significantly increased his percentage at that time.

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19 minutes ago, South Side Hit Men said:

Hoyer stated the Cubs GM position remains open, they are considering outside candidates.

Could be a solid long term spot for Hahn after what has transpired this off-season.

Hahn may leave sometime, but I think Hoyer understands that GM's often don't have the final say.  They'd probably still have Jimenez if he did:

If Jed Hoyer Had Been in Charge, It's Possible He Wouldn't Have Made the Jose Quintana Trade | Bleacher Nation

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2 minutes ago, ThirdGen said:

That article is from 2013 and Eddie Einhorn passed away in 2016.  I believe at one point Einhorn owned as much if not more of the Sox than Reinsdorf.  So its possible he bought out his interest and significantly increased his percentage at that time.

Einhorn was the one who wanted to move the White Sox to Florida. When that didn't happen he sold most of his shares of the White Sox to JR. Einhorn wound up with 1%  ownership of the team. He also received a yearly salary  from JR. I think Einhorn was given the title of Vice President. He didn't do anything with the White Sox the last 16 years of his life. He disappeared from the scene after he sold most of his shares to JR.

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45 minutes ago, South Side Hit Men said:

Hoyer stated the Cubs GM position remains open, they are considering outside candidates.

Could be a solid long term spot for Hahn after what has transpired this off-season.

Jeremy Haber could be in play but it's a lateral move for Hahn. 

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