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Angels Finances - This could get ugly


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This is the last season Albert Pujols will be even remotely affordable. Next season he’ll make $23 million, and receive a $1 million dollar increase every year after that.

 

Josh Hamilton will make the same as this year ($17.4 million), but in 2015 he’ll make $25 million and in 2016 and 2017, he’ll make $32 million.

 

Who structured this crap? We take two guys who are already over 30, and the older they get, the more they get paid?

 

Vernon Wells will look like a relative bargain by the time we reach the end of these two deals.

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The structured Pujols with the payroll being more flexible in the future. With Hamilton, I think someone was brain dead.

The article states Moreno is a businessman, but I'm getting the feeling more and more that the Angels are a personal play toy for Moreno. I hope I'm wrong.

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The article states Moreno is a businessman, but I'm getting the feeling more and more that the Angels are a personal play toy for Moreno. I hope I'm wrong.

 

I'm afraid that you aren't. Too much has happened that doesn't make sense from either a business or baseball perspective.

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I'm wondering the same thing DickNanes.  I know the money doesn't kick in until quite a bit later, 2016 if I'm not mistaken.  But I do believe they could be playing with a larger payroll currently because they know there's an influx of money coming.  Because of leaked documents we know the Angels lost money in 2010 and 2011 with higher payrolls.  

 

Thus I expect the angels to operate with a payroll around 140-145 million in 2013. The fact that they knocked it down to 137 million is quite a unique design on part of Dipoto.  But you have to think that if the Angels really lost that much money in 2010 and 2011, Arte Moreno more than wants to recuperate some of that.  It's probably a significant reason why Tony Reagins was canned and why Pujols and Hamilton were brought in.  

 

A successful team and World Series victories most certainly offer an influx of money. 

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I've come to the conclusion that Arte is no genius. Buying all that billboard space on the 10 fwy was a no brainer.

 

Great guy with solid intentions. Not a financial wizard.

Problem is Arte knows billboards/advertising, as that's where he made his money, and I believe grossly overestimated the importance of having "big name" players like Pujols to help sell tickets. (just look at that ridiculous "11 world series appearances..." billboard)

 

That pot-committed him to "win now" and signing Hamilton was a panicky move to push all in. Too bad the other teams in the AL West called and have us beaten.

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Just a sad thought.  But could it be, the Angels don't want to offer Trout, and for that matter Trumbo and Bourjos a long term contract, is because of the tax situation?  You sign Trout to a $200/10 year contract, even if 2014 is for $2 million, it still counts as a $20 million hit for tax purposes.  

 

Because of Hamilton and Pujols, I can't see any way to get under the tax if you sign Trout to a long term deal.  And yet, the more you wait, the more likely he will test free agency.  

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Just a sad thought.  But could it be, the Angels don't want to offer Trout, and for that matter Trumbo and Bourjos a long term contract, is because of the tax situation?  You sign Trout to a $200/10 year contract, even if 2014 is for $2 million, it still counts as a $20 million hit for tax purposes.  

 

Because of Hamilton and Pujols, I can't see any way to get under the tax if you sign Trout to a long term deal.  And yet, the more you wait, the more likely he will test free agency.  

The Angels could offer Trout a long term extension before the 2015 season. That's when the wells money will go off the books. Doing so would ensure that the Angels are over the tax in 2015, 2016, and 2017. They *might* be able to pinch pennies and get under after Hamilton leaves. 

 

Extending Trout now though would be a bad idea as that would be 5+ consecutive years over the cutoff instead of 3+ consective year. Tax rates go up drastically for teams that are over in multiple consecutive years so the difference in tax liability for those two scenarios would be huge.

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The Angels could offer Trout a long term extension before the 2015 season. That's when the wells money will go off the books. Doing so would ensure that the Angels are over the tax in 2015, 2016, and 2017. They *might* be able to pinch pennies and get under after Hamilton leaves. 

 

Extending Trout now though would be a bad idea as that would be 5+ consecutive years over the cutoff instead of 3+ consective year. Tax rates go up drastically for teams that are over in multiple consecutive years so the difference in tax liability for those two scenarios would be huge.

 

It's even going to be tough in 2014.  I have it estimated at $152 million, and the cap is $189.  

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I'm really not all that worried. Between their own TV money, revenue sharing and the national TV contracts, the Halos will be clearing $150 million in revenue before selling a single ticket, beer or t-shirt, as shown here

http://www.awfulannouncing.com/2013/may/how-mlb-splits-your-tv-dollars.html

 

The luxury tax is a legitimate concern, but I don't think it is a big enough to concern to start worrying about it affecting their ability to keep Trout. Moreno has demonstrated a willing to spend if it means winning. I suspect that the payroll can easily approach $165 million before there are any real repercussions to the bottom line and even then, as mentioned above, this team has no debt. They probably can't afford to add any more nine figure free agents, but given how well that has worked for them thus far, that is probably a good thing. 

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So let me get this straight. In ten years Arte has made 500 million dollars on the increased value of the Angels, and he signed a 3 billion dollar tv contract, but according to this post and many others he's a lousy businessman. Oh and by the way I'm pretty sure the team has no debt.

 

 

Nearly all MLB clubs have seen similar increases in equity and TV deals,  that has nothing to do with decisions Moreno has made in particular. The Dodgers got a TV deal worth double what the Angels deal brings in. The Phillies will likely get an even bigger deal in the not distant future. Fact is that live sports as a whole has gone up in value. 

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"Jerome Williams will reach his final year of arbitration and with him posting the best numbers of his career, you can bet he will likely cost $3 million more."

 

Not trying to start anything here, but how do you figure he's putting up the best numbers of his career?  His ERA is above his career average,  WHIP is basically at his career average, and WAR is only 0.1.

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Nearly all MLB clubs have seen similar increases in equity and TV deals,  that has nothing to do with decisions Moreno has made in particular. The Dodgers got a TV deal worth double what

the Angels deal brings in. The Phillies will likely get an even bigger deal in the not distant future. Fact is that live sports as a whole has gone up in value. 

 

Which means the luxury tax will also increase in the near future

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This is just another downer Angel post the purpose of which I don't understand.  The Angels have no debt and have (on average) $150 million per year on their cable TV contract and lead the MLB in attendance.  But it seems that a lot of posters here enjoy accentuating the negative.  While it's true the team is performing at a level far below expectations, it does not mean the team is not is solid financial condition.

 

Party on.

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I'm really not all that worried. Between their own TV money, revenue sharing and the national TV contracts, the Halos will be clearing $150 million in revenue before selling a single ticket, beer or t-shirt, as shown here

http://www.awfulannouncing.com/2013/may/how-mlb-splits-your-tv-dollars.html

 

The luxury tax is a legitimate concern, but I don't think it is a big enough to concern to start worrying about it affecting their ability to keep Trout. Moreno has demonstrated a willing to spend if it means winning. I suspect that the payroll can easily approach $165 million before there are any real repercussions to the bottom line and even then, as mentioned above, this team has no debt. They probably can't afford to add any more nine figure free agents, but given how well that has worked for them thus far, that is probably a good thing. 

 

You also have to remember.  I think it's 30% of the tv revenue goes to the league for sharing.  Concessions are also shared, unless sold at the stadium.  And the Angels make very little on food/drink sales.  The biggest income that Angels will see is tickets and TV.  

 

And while the TV deal is good.  I have a feeling that a bunch of it may need to go to finance the new stadium, if they decide to go that route in 3 years.

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I think the Luxury Tax is a foreseen conclusion.  It doesn't matter what they do really, the Angels will likely be operating over the tax threshold from here out.  But I think the Angels will continue to increase their payroll to keep up with inflation within baseball.  160+ million should happen next season, three years down the road we could see 170 million.  

 

But I think the biggest legitimate worry I have, is Arte willing to spend this much on a team that doesn't win?  I mean what's it going to take?  In my mind, two legit #2/3 SP, Garrett Richards pitching up to his abilities and either signing another LHRP or Maronde/Sisk/Roth pitching well in a loogy role.  That's a lot that needs to happen and it would likely take a payroll that's higher than what Arte is willing to spend right now. 

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You also have to remember.  I think it's 30% of the tv revenue goes to the league for sharing.  Concessions are also shared, unless sold at the stadium.  And the Angels make very little on food/drink sales.  The biggest income that Angels will see is tickets and TV.  

 

And while the TV deal is good.  I have a feeling that a bunch of it may need to go to finance the new stadium, if they decide to go that route in 3 years.

 

That $150 million figure I quoted includes them giving up their chunk of TV revenue for sharing, it is all detailed in the link in my comment. It is actually a pretty good overview for anyone who is curious to see just how MLB slices up the TV revenue money.

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