Its irrelevant in terms of signing Beltran. $1M a year wasn't going to make or break the Beltran deal.
So are you saying that if the Astros had offered $1,000,000 per year MORE than the Mets, he would have still signed with the Mets?
Do you really think that the Mets were going to get outbid? Their final contract price was an increase on their already highest-paying offer.
Probably not, but that wasn't my question. pgabriel said that $1,000,000/year wouldn't make or break any Beltran deal. My contention is that it would. I believe had any number of teams offered $1,000,000/year more than the Mets, that's where Beltran would have gone. In his own words "It's a business".
I say you take the option.. They were going to pay him 7 million. plus the 700k buyout right? so it's 7.7 mil and an option for another year.. vs just giving him 9.0 mil for one year?
are you aware of ANY owner that spends outside of his baseball revenues? i realize that would be hard to show..but i wonder if any admits to doing that. maybe colangello, but he ran up debt doing it, right?
I would postulate that no owner, absolutely none, does that. But it would be hard to demonstrate or disprove. It just makes absolutely no business sense to do so.
Every owner who claims a net loss on the season (many owners do so) is, be definition, spending outside his revenues. So McLane was spending outside his baseball revenue when the Stros played in the Dome, according to his own account. And extra spending does make sense if there's a projected long-term payoff, such as increased playoff revenue or increased ticket sales / TV deal / marketing in the future with a winning ballclub. And then again, to alot of owners a sports club is an expensive toy, and they want to win.
1. not necessarily. one can spend more than one takes in without borrowing from another stream of revenues to do so....you get that financed elsewhere. i don't know how he handles that, personally. 2. there are very, very few owners in pro sports today that still treat these things as toys without consideration to revenues and expenses...particularly few in baseball. and, not coincidentally, the free-spenders are the ones with the largest revenue streams.
Maybe it's late in the day, maybe it's the legal research I'm doing, maybe it's because it's a Monday, but how exactly is 'getting it financed elsewhere' any different from 'spending outside baseball revenues'? If you get a loan and spend the money, that's spending money other than your income. I don't understand the nuance as to what difference it makes whether he's spending his own, non-baseball revenue or borrowing from some other source. Both are "spending outside of baseball revenues", to use your phrase.
what are you, a lawyer? i meant that his value in other fields of business is not related. that he may be taking out loans to meet obligations for his team...but not borrowing from other revenue streams he has elsewhere. make sense??
you doubt that sports owners lose money on their franchises?? do you mean that you doubt their revenues are lower than their expenses...or do you mean you doubt it because it doesn't factor in the increasing value of the underlying asset?
madmax.. I don't know if its from taking a sports econ class with a very respected sports economist or my personal bias. but I am very reluctant to believe in general that owners are losing money. Businessmen don't operate that way, and I believe very few treat them as toys. In most cases, I believe the revenue does exceed the expenses. But even if it didn't the thing we focused on in class etc is the fact that the franchise values are going up so much.. so they are "investing" in a team, which will get them a high return at a later date. It's pretty easy to make it look like your expenses are higher, but they don't tell the whole story. For instance, the Yankees could easily show they are losing money on their team. But on the other hand, they have an entire tv station that is making profits, that wouldn't be there without the team. In other words, often times having a sports teams allow an owner to operate another businesss where you can put profits, and it looks like you are losing money when really you are gaining a lot off of the side business you open.
I took some sports economic classes as well...and a sports law class in law school. And I'm not convinced. It is different from sport to sport, for sure. I'm not asserting that NFL teams, which share revenues like crazy, are losing money. I'm less likely to say it about NBA teams as well. But in baseball...I'm more likely to see the problem and say it. There is almost no doubt in my mind that the Astros were not a profitable busienss when they were in the Dome. Hell, they were in freaking receivership for a while. As the Astros raised payroll in the late 90's, I don't believe those were offset by rising revenues. I think these "businessmen" get in over their head. They make some money and see this as an opportunity for lots of different reasons...fun is among those reasons. Fame is as well. Most of these guys have tremendous egos. There was a time when, I think, most (or at least many) owners did not expect revenues to meet expenses. It was definitely a toy. That time has seen its day, I think, for the most part. The Yankees would have to reach big time to show that they are losing money. The media deal is so integral to the team that everyone who considers value of a franchise takes that into consideration. In NY, in particular, it's paramount. I don't think the Astros are worth $350 million or whatever Forbes said, because I don't think they'd sell for that right now. And while I agree that the appreciation in value of the franchise is not taken into consideration, it's not of much concern to the guy who is making less per year than he's taking in. And ultimately, those two things are not independent of each other. If you can show revenues aren't meeting expenses, you're going to have a helluva time getting an optimum value of your franchise when it comes time to sell. And if the entire value of your asset isn't realized until it's sold, that takes off a lot of the allure as well.
Exactly. McLane does not use his grocery business (I know he sold it, but I don't know his current business) to finance the Astros' payroll, nor he should be expected to. That is business suicide.
I'm much more likely to believe NHL teams, when they say they are losing money. Just because their willingness to lockout for an entire year, makes me think they aren't earning much profit. If the Astros did lose money in the dome it was because they knew they'd make more money now. I certainly can't believe they are losing money now. If teams were losing this much money, I think they'd open the books.. Interestingly enough, I've also come to doubt the economic impact of a superbowl on a city
