Jump to content
  • Welcome to AngelsWin.com

    AngelsWin.com - THE Internet Home for Angels fans! Unraveling Angels Baseball ... One Thread at a Time.

    Register today to join the most interactive online Angels community on the net!

    Once you're a member you'll see less advertisements. Become a Premium member and you won't see any ads! 

     

IGNORED

Jeff Passan: Why Aren't Contracts Going Up?


Recommended Posts

54 minutes ago, Dochalo said:

I actually enjoy that part of it.  I'd like to take it a step further and have teams put out public financial statements.  I think that level of transparency would at least level the playing field with the highly publicized player contracts.  

 

45 minutes ago, Kevinb said:

It would definitely be interesting to see the reaction from fans when they found out how much the owners make yearly. 

The Atlanta Braves are a publicly run company, their books are open and they make a lot of money.

Link to comment
Share on other sites

@floplag I agree there perception is when someone signs a big contract ticket prices go up etc. but in reality the ticket prices go up just like prices in general go up things cost more and the owner wants more money. I don’t fault the owner for that it’s the cost of doing business. Utilities go up annually just to continue to do business you have to raise prices. Like rent. It’s easy to blame the players for getting more money. But whatever the players are getting imagine what the owners are getting and they can write off a ton more than the players. 

Link to comment
Share on other sites

4 minutes ago, floplag said:

No, we dont see where the owners are, then again we dont see much about corporate CEOs and such and those we do are vilified.  But at the end of the day, does it really matter?  I dont think anyone wants to be the next team to give a 250M contract, let alone 300 or 400.    
I think fans are tired of a day at the ballpark turning into a second mortgage. 
Admitting they can give one player, one, that much money opens the floodgates to a myraid of questions about ticket prices, concessions, parking and a lot of other stuff thy really dont want to talk about. 
MLB has worked the exemption about as far as it can go. At some point there will be pushback.  
Its just my opinion mind you.

Pujols though, idk man i beleive he wont play out the entire term.  Hes never struck me as the greedy type.  Hes gonna get the money either way, spread out over more years in personal services than on field play but i dont think he leaves anything on the table just because he isnt playing any longer.  Might be the most overpayed hitting coach in the game in 20 for example but that doesnt count against the cap. 

every last bit of what Albert is paid counts against the cap in the years it has already been allocated.  So, regardless of whether he bails early and defers some money, the cap hit will be 24m in each of 19, 20, and 21 even if he doesn't play.  

If he gives up money by retiring, then it's a different story.  Let's say he retires after 2020 and gives up 30 mil.  To that point we'd have paid him 210m but we'd have taken a cap hit of 216.  So we'd actually get a cap credit in 2021 of 6m.  If he retires after this year and gives up the remaining money, we'll have paid him 181m but the cap hit taken would have been 192m.  So we'd get 11m is cap credit spread over 2020 and 2021.  If he retires after this year and agrees to take half the remaining money, then the total contract would be worth 210.5.  And we'd have paid 192m in cap hit.  So we'd owe an additional 18.5m in cap hit over the following two years.  

Link to comment
Share on other sites

7 minutes ago, Dochalo said:

every last bit of what Albert is paid counts against the cap in the years it has already been allocated.  So, regardless of whether he bails early and defers some money, the cap hit will be 24m in each of 19, 20, and 21 even if he doesn't play.  

If he gives up money by retiring, then it's a different story.  Let's say he retires after 2020 and gives up 30 mil.  To that point we'd have paid him 210m but we'd have taken a cap hit of 216.  So we'd actually get a cap credit in 2021 of 6m.  If he retires after this year and gives up the remaining money, we'll have paid him 181m but the cap hit taken would have been 192m.  So we'd get 11m is cap credit spread over 2020 and 2021.  If he retires after this year and agrees to take half the remaining money, then the total contract would be worth 210.5.  And we'd have paid 192m in cap hit.  So we'd owe an additional 18.5m in cap hit over the following two years.  

I like math, a lot, but I hate this.  

Link to comment
Share on other sites

17 minutes ago, ettin said:

 

The Atlanta Braves are a publicly run company, their books are open and they make a lot of money.

operating loss of 51m in the first quarter with an OIBDA of (35m).  

operating income of 35m in Q2 with an OIBDA of 63m

operating income of 45m in Q3 with and OIBDA of 72m

I assume they'll show a loss in Q4 for 2018.  It was (68m) in 2017.  Probably will be a little less than that due to playoffs etc.    

so their OIBDA will be highly positive but they'll likely still show an operating loss.  

in 2017 they showed an operating loss of 113m with an OIBDA of 2m.   

Of course they don't disclose the actual operating expenses 

 

Link to comment
Share on other sites

12 hours ago, Kevinb said:

I agree I think there is that point where there is going to be a limit. I just don't think any of the owners are actually close to it. There is a reason they put a "luxury tax" into an effect they can't help themselves. The cap is more for the owners and making sure they play nice then it is for the players. The owners can depreciate a ton of assets, their teams keep going up in price, and live rights are just sky rocketing. With all the agreements they get from cities and stadiums paid for etc. There is a reason billionaires are lining up every time one of these assets goes up for sale. 

Depends on when they bought their teams -- Arte bought the Angels when the RDA was under the 50/5 rule -- meaning, 50% of the money's spent could be depreciated over 5 years, or in bulk after the 5th year.   In 2004 the RDA went to what it it's currently at 100/15..  meaning they can depreciate 100% of their costs  over 15 years.   I think some of why you aren't seeing as much spending going on is because we aren't seeing franchises changing hands as often as they used to.   Owners are keeping their teams longer than in the past ...  not saying it's the hard and fast reason why but it likely is a factor for some teams.

Link to comment
Share on other sites

1 minute ago, Inside Pitch said:

Depends on when they bought their teams -- Arte bought the Angels when the RDA was under the 50/5 rule -- meaning, 50% of the money's spent could be depreciated over 5 years, or in bulk after the 5th year.   In 2004 the RDA went to what it it's currently at 100/15..  meaning they can depreciate 100% of their costs  over 15 years.   I think some of why you aren't seeing as much spending going on is because we aren't seeing franchises changing hands as often as they used to.   Owners are keeping their teams longer than in the past ...  not saying it's the hard and fast reason why but it likely is a factor for some teams.

Another thing we forgot to mention is the payout the owners get for expansion. It’s why all these leagues talk about expansions or moving around. Spanos of the Chargers and Kroenke have to be the rest of the owners a fee for moving. Seattle getting an NHL team ha stop pay over 500 million to the league which gets distributed to all the owners  

 

Link to comment
Share on other sites

3 hours ago, Inside Pitch said:

Depends on when they bought their teams -- Arte bought the Angels when the RDA was under the 50/5 rule -- meaning, 50% of the money's spent could be depreciated over 5 years, or in bulk after the 5th year.   In 2004 the RDA went to what it it's currently at 100/15..  meaning they can depreciate 100% of their costs  over 15 years.   I think some of why you aren't seeing as much spending going on is because we aren't seeing franchises changing hands as often as they used to.   Owners are keeping their teams longer than in the past ...  not saying it's the hard and fast reason why but it likely is a factor for some teams.

is it only the purchase price of the team?  I thought they could also depreciate individual contracts as well.  Like if your farming company buys a new tractor that you can now depreciate.  

 

Link to comment
Share on other sites

4 hours ago, Dochalo said:

every last bit of what Albert is paid counts against the cap in the years it has already been allocated.  So, regardless of whether he bails early and defers some money, the cap hit will be 24m in each of 19, 20, and 21 even if he doesn't play.  

If he gives up money by retiring, then it's a different story.  Let's say he retires after 2020 and gives up 30 mil.  To that point we'd have paid him 210m but we'd have taken a cap hit of 216.  So we'd actually get a cap credit in 2021 of 6m.  If he retires after this year and gives up the remaining money, we'll have paid him 181m but the cap hit taken would have been 192m.  So we'd get 11m is cap credit spread over 2020 and 2021.  If he retires after this year and agrees to take half the remaining money, then the total contract would be worth 210.5.  And we'd have paid 192m in cap hit.  So we'd owe an additional 18.5m in cap hit over the following two years.  

IF he gives it up, i suspect they might find a way to get it back to him or at least much of it in a post baseball contract that doesnt count as player related is what im suggesting.  

Link to comment
Share on other sites

6 hours ago, Dochalo said:

As Lerner said about their offer to Harper of 10/300.  They went straight to the finish line.  I think someone else might creep up to the 330 range so Bryce can go over the Stanton deal and boras can say it's the biggest contract in major league history which I see being important to them.  Machado will fall in somewhere below that.  I think in the 270-300 range.  

This is reasonable and has convinced me. 10/300 for Machado (or maybe 9/270), 10/330 for Harper.

I still think Trout gets at least 10/400.

Link to comment
Share on other sites

55 minutes ago, Dochalo said:

is it only the purchase price of the team?  I thought they could also depreciate individual contracts as well.  Like if your farming company buys a new tractor that you can now depreciate.  

Yes, they can ...they can list contracts as costs/assets both acquired in the purchase and as maintenance of said purchase...  Selig famously claimed (and depreciated), 95% of his costs in purchasing the Pilots was player contracts when in reality it was a ridiculously low figure.    Bud was the biggest shark in the tank and pretty much everything done under his watch was done to line ownership's pockets 

Edited by Inside Pitch
Link to comment
Share on other sites

5 hours ago, Dochalo said:

operating loss of 51m in the first quarter with an OIBDA of (35m).  

operating income of 35m in Q2 with an OIBDA of 63m

operating income of 45m in Q3 with and OIBDA of 72m

I assume they'll show a loss in Q4 for 2018.  It was (68m) in 2017.  Probably will be a little less than that due to playoffs etc.    

so their OIBDA will be highly positive but they'll likely still show an operating loss.  

in 2017 they showed an operating loss of 113m with an OIBDA of 2m.   

Of course they don't disclose the actual operating expenses 

 

It was my understanding they signed a new TV deal but maybe I was wrong.

Link to comment
Share on other sites

8 minutes ago, Inside Pitch said:

Yes, they can ...they can list contracts as costs/assets both acquired in the purchase and as maintenance of said purchase...  Selig famously claimed (and depreciated), 95% of his costs in purchasing the Pilots was player contracts when in reality it was a ridiculously low figure.    Bud was the biggest shark in the tank and pretty much everything done under his watch was done to line ownership's pockets 

so they can depreciate 16m per year of the pujols contract or accelerate it to over the life of the contract.  An entire 1yr deal could be depreciated in that year.  

I wonder if Arte can take a salary from the Angels which would decrease earnings and then because of the depreciation expense, the Angels show a net operating loss.  Then he probably gets some sort of K-1 from the ownership group corp which would show the operating loss which he could then use to offset any taxes he would pay on his income from the Angels.  That has to be illegal.  

Link to comment
Share on other sites

21 minutes ago, Dochalo said:

so they can depreciate 16m per year of the pujols contract or accelerate it to over the life of the contract.  An entire 1yr deal could be depreciated in that year.  

I wonder if Arte can take a salary from the Angels which would decrease earnings and then because of the depreciation expense, the Angels show a net operating loss.  Then he probably gets some sort of K-1 from the ownership group corp which would show the operating loss which he could then use to offset any taxes he would pay on his income from the Angels.  That has to be illegal.  

I highly doubt that's illegal. Everything is shown to look like they lose to write stuff off. I imagine his radio station isn't making much money I would bet it's actually losing money. A little write off thing I have heard the CEO of a company I do a lot of business with does and I found it incredible. For starters the guy just makes bank, but all of his cars he buys he buys at charity auctions. Which is a donation so he can write off every purchase of every car he has. Second thing is the guy buys really valuable art gets it appraised for priceless, in the tax code priceless can be worth up to $5 million, then donates said pieces of art to different charities etc and writes off $5 mil. Everything in the world of business be it business owners or players is all about maximizing your income to the highest potential. These owners have accountants and cpa's working for them. Think back to the Marlins deal that got the city to fund the entire stadium, at least from what I can remember, claiming they were cash poor. In actuality they were just raking it in and scammed the city/county out of hundreds of millions of dollars. All of it was completely legal. 

Link to comment
Share on other sites

39 minutes ago, Dochalo said:

so they can depreciate 16m per year of the pujols contract or accelerate it to over the life of the contract.  An entire 1yr deal could be depreciated in that year.  

I wonder if Arte can take a salary from the Angels which would decrease earnings and then because of the depreciation expense, the Angels show a net operating loss.  Then he probably gets some sort of K-1 from the ownership group corp which would show the operating loss which he could then use to offset any taxes he would pay on his income from the Angels.  That has to be illegal.  

Arte bought the team In 2003....  So, pretty sure he was part of the 50/5 rule....   This is where we are now.   https://www.greenberglawoffice.com/roster-depreciation-allowance/

 

Edited by Inside Pitch
Link to comment
Share on other sites

5 minutes ago, Inside Pitch said:

Arte bought the team In 2003....  So, pretty sure he was part of the 50/5 rule....   This is where we are now.   https://www.greenberglawoffice.com/roster-depreciation-allowance/

 

Much better article...   https://sabr.org/research/roster-depreciation-allowance-how-major-league-baseball-teams-turn-profits-losses.  

Link to comment
Share on other sites

4 hours ago, Kevinb said:

For starters the guy just makes bank, but all of his cars he buys he buys at charity auctions. Which is a donation so he can write off every purchase of every car he has.

Sorry but you are wrong on that one. The car purchased has a value so regardless of the amount given to charity he still received a vehicle of value and is unable to claim the money he spent was a charitable donation if the value is equal to or exceeds the amount paid. I've been to several auctions where the buyer bailed out when he realized only the seller gets the donation credit. 

Link to comment
Share on other sites

38 minutes ago, Blarg said:

Sorry but you are wrong on that one. The car purchased has a value so regardless of the amount given to charity he still received a vehicle of value and is unable to claim the money he spent was a charitable donation if the value is equal to or exceeds the amount paid. I've been to several auctions where the buyer bailed out when he realized only the seller gets the donation credit. 

bingo 

Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

×
×
  • Create New...