EddeeEddee
-
Posts
1349 -
Joined
-
Last visited
Content Type
Profiles
Forums
Events
Posts posted by EddeeEddee
-
-
2 hours ago, spiritof66 said:
To me, it's pretty simple. Going on the limited information that's available, I'm pretty sure Georgia Angelos controls the ownership of the Orioles since she has a power of attorney to act for Peter Angelos, who still owns a majority of the team. She is very, very unlikely to sell while Peter Angelos is alive, since the sale would trigger an enormous capital gains tax that Peter would have to pay, diminishing the size of his estate. Maybe some event could induce her to sell and take the tax hit, but I can't imagine what it would be.
When Peter Angelos dies, that capital gains exposure will disappear. But upon Peter's death, there will be hundreds of millions in federal estate taxes and Maryland taxes to be paid by his estate, perhaps over time. (That estate tax liability could be deferred if Peter's will or trust leaves the team to Georgia, but it's pretty clear from Louis's lawsuit that the team is being left to his sons.) Again, the available information is limited, but in my view unlikely that the Angeloses will be able to pay those taxes without selling their interest in the Orioles. The higher the value of the team is, the worse the problem becomes -- higher estate taxes with no more cash to pay them, unless the Angeloses sell off part of their interests to raise cash. The Angeloses presumably have income from their investments and real estate holdings, but they have no source of ongoing business income other than the Orioles.
Even if they could scrape together the cash needed to pay these taxes, the Angeloses and the Orioles would be left in a financially weak position, unable to spend competitively (or to withstand losses from another disaster like the pandemic). That's exactly the kind of economically marginal ownership that MLB wants to avoid. In addition, the Commissioner and many of the owners loathe Peter Angelos, don't care for John's politics, are very angry over the lawsuit that Peter began and John now has pursued for several years, and have enough sense to realize that John and Lou are a couple of nitwits with no real business experience who've never succeeded at anything. It's inconceivable to me that the owners would approve of John and Lou as long-term owners of the Orioles, though I recognize that that word may not mean what I think it it does. In fact, I believe MLB and the Angeloses have already reached a deal in which MLB has agreed to permit the current peculiar ownership situation to remain in place (rather than force a sale that would cause the Angeloses to incur the capital gains hit) and the Angeloses have agreed to sell their interests shortly after Peter's death. That would explain why the Angeloses have prepared for a near-future sale of the team by engaging investment bankers and avoiding long-term contracts.
One other thing. Most prospective buyers of businesses make offers determined largely by their estimates of what cash flows (after expenses are met) the business will generate under their ownership (that is, after getting rid of managers they don't think much of, making other improvements and cost savings, and exploiting opportunities to combine the business with others) and the assessment of the current value of those estimated future cash flows. It's more complicated than that, but that is usually the core factor.
For most professional sports teams -- I'm not aware of any exceptions, but there may be some -- the bidder's value of future cash flows serves as a sort of baseline but typically gets overwhelmed by other factors. Very wealthy people, or groups of them, offer to pay prices for sports franchises that far exceed what a normal business valuation would lead them to pay. Why are they willing to pay so much?
The wealthy people or groups that succeed in buying pro sports franchises are looking for more than a financial return. They also are looking to buy all kinds of financial rewards: sitting in the owner's box, being interviewed by the media and quoted in the newspapers even if they have nothing to say, going to owners' meetings, being regarded as civic heroes for moving or not moving, proving to the world how much they know about the sport, hoisting a trophy on national TV. etc., etc. There's a limited number of opportunities to buy assets that provide these rewards, and an unsuccessful bidder may wait years before getting another opportunity -- at which point the prices are likely to be much higher. It's true that most of these rich people don't want to think they're throwing hundreds of millions of dollars away by spending much more than they think a franchise's expected cash flows are worth. Historry gives them comfort about that. While my information is out of date by a decade or so, I'm pretty sure this hasn't changed. Buyers of sports franchises depend on what's called the One More Schmuck assumption -- that is, when it's time to sell, there will be aggressive buyers eager to become sports franchise owners, and they'll pay plenty for that privilege. To make up the numbers, suppose a bidder believes a franchise will generate cash flows with a value of $900 million. That bidder might be willing to offer $1.6 billion in part because he believes that in five years, if the team has a good stadium to play in and hasn't been a complete financial or on-field disaster, he (or his heirs) will be able to sell for $2 billion or more to another guy (or group) that really wants to own a pro sports team.
Great post. I can't imagine the league not trying to pressure the Angelos family to sell right after the inevitable passing of the patriarch. There's too much bad blood between the league and the family.
-
10 hours ago, Frobby said:
You can’t really compare the profit a team makes in a year, or even in 10 years, to the profit earned on a sale of a team. When prospective buyers are deciding what they is willing to pay, they are asking themselves this question (with a bit of simplification): how much profit do we think this team will throw off every year on average, how much risk is involved, and what is the likely long-term rate of inflation? So let’s say they think the team will generate $100 mm/yr. and inflation will run at 3%. They’ll run a calculation of what that income stream, into perpetuity is worth after the inflation adjustment: $100 mm for year 1, $97 mm for year 2, $94.1 mm for year 3, etc. and sum all that together. Then they’ll discount that number pretty heavily for risk, because it’s not like you’re buying a US treasury bond.
On everyday inflation (like the Consumer Price Index or whatever most generally measures inflation) I'm not really convinced because I can't see how a prospective owner of an MLB team would consider everyday inflation a major issue because it always goes up and down for any business. And inflation can be an opportunity as much as a cost, depending on the business, at least for awhile -- an opportunity to jack up ticket prices, concessions and merchandise prices as well. The biggest cost for a business owner is usually labor. In fact, for a major league owner I suspect the inflation I'm really worrying about is the inflating salaries of players. If the Orioles had a league average payroll then they would not have made any profit last season -- instead would have been well in the red.
But these owners are so wealthy I suspect the traditional fiscal and quarterly business cycles that normal CEOs and business owners worry about are not at the forefront of their minds. These guys have already made their money. An MLB baseball team is somewhere between a toy and long term investment. Now if baseball teams start to fall in value because of falling TV revenue or whatever reason, then everything changes.
But if I'm about to inherit a team from my dad, I have to think I'll become much wealthier selling the team than trying to eke out a profit each year trying to depress the salaries, raising ticket prices and hoping gambling and maybe something else new will add some kind of additional revenue. Especially now I'd say sell while you can before the overall economy and baseball economy face the music.
-
10 hours ago, Frobby said:
You can’t really compare the profit a team makes in a year, or even in 10 years, to the profit earned on a sale of a team. When prospective buyers are deciding what they is willing to pay, they are asking themselves this question (with a bit of simplification): how much profit do we think this team will throw off every year on average, how much risk is involved, and what is the likely long-term rate of inflation? So let’s say they think the team will generate $100 mm/yr. and inflation will run at 3%. They’ll run a calculation of what that income stream, into perpetuity is worth after the inflation adjustment: $100 mm for year 1, $97 mm for year 2, $94.1 mm for year 3, etc. and sum all that together. Then they’ll discount that number pretty heavily for risk, because it’s not like you’re buying a US treasury bond.
On everyday inflation (like the Consumer Price Index or whatever most generally measures inflation) I'm not really convinced because I can't see how a prospective owner of an MLB team would consider everyday inflation a major issue because it always goes up and down for any business. And inflation can be an opportunity as much as a cost, depending on the business, at least for awhile -- an opportunity to jack up ticket prices, concessions and merchandise prices as well. The biggest cost for a business owner is usually labor. In fact, for a major league owner I suspect the inflation I'm really worrying about is the inflating salaries of players. If the Orioles had a league average payroll then they would not have made any profit last season -- instead would have been well in the red.
But these owners are so wealthy I suspect the traditional fiscal and quarterly business cycles that normal CEOs and business owners worry about are not at the forefront of their minds. These guys have already made their money. An MLB baseball team is somewhere between a toy and long term investment. Now if baseball teams start to fall in value because of falling TV revenue or whatever reason, then everything changes.
But if I'm about to inherit a team from my dad, I have to think I'll become much wealthier selling the team than trying to eke out a profit each year trying to depress the salaries, raising ticket prices and hoping gambling and maybe something else new will add some kind of additional revenue. Especially now I'd say sell while you can before the overall economy and baseball economy face the music.
-
31 minutes ago, Can_of_corn said:
It's profitable to own a team as an ongoing endeavor. How much profit did this team generate last year? If they sell do you think they can reinvest into something else as profitable?
The Orioles -- and most sport franchises owned for many years -- tend to have far more value upon selling the team than they do in their ability to generate income and cash from year to year. They are currently valued at about $1.7 billion according to Statista -- around a 1000 % increase over the $173 million Angelos and his partners paid for the team 30 years ago.
Here's the team's operating income since 2002, also according to Statista.
https://www.statista.com/statistics/829611/baltimore-orioles-operating-income/
The last couple years have been pretty good, but the team mostly lost money between 2016 and 2020. Who knows how accurate this is since sports franchises are nearly always privately owed? I wouldn't be surprised if the Orioles have been a bit more profitable than these numbers suggest but nowhere near the $1.5 billion profit the team could bring in a sale. And it may be the Angeloses should not waste too much time deciding to sell if cable viewership continues to decline -- replaced by who knows what. Sports franchises could very well go through a value correction just like everything else in this economy.
-
Adley Rutschman has more ABs than any catcher in baseball this year (just ahead of Salvador Perez). Even though about 25% of those ABs have come as a DH or PH, it seems like he needs a bit more rest. It's the toughest position in baseball, and he's playing more than just about any other catcher even though he hasn't played a full season in the bigs yet.
It seems like most top catchers are a bit cooler at the plate this year. Sean Murphy is the only starting catcher that is really raking right now.
-
2 hours ago, Aristotelian said:
I just voted as well. I don't see how Adley doesn't get in. Only other candidate is Heim and I don't see him beating Adley in the popularity contest.
They have Mateo at SS. Then flip a coin between Gunnar and Urias for 3B I guess, DH it is.
I could not pull the trigger for Hays. I went Judge Trout Mullins in OF. Arozarena should beat beat Mullins. Hays should be behind Yoshida as well.
Salvador Perez is also having a very good year as AL catchers go. He's more than just a sentimental favorite, hitting 12 HRs with a .794 OPS right now. Still, I agree, it's hard to imagine Adley not getting in whether as the top vote getter at catcher or a back up.
-
I was surprised when I found out MN traded him for a package led by Pablo Lopez. Lopez is good but Arraez looks like he is Tony Gwynn good. So far it looks like a steal for Miami.
-
The NL Central isn't as bad but is very strange. Currently every NL Central team has a negative run differential except the team in last place -- St Louis -- with a run differential of +1.
-
1
-
-
Too small a sample size, but he's raking as a DH.
https://www.baseball-reference.com/players/split.fcgi?id=hendegu01&t=b&year=2023#all_defp
He just needs more experience. Those Top 100 lists should never be taken too literally; some players on the lists are very advanced already while others are ranked highly more on future potential.
-
1 hour ago, Moose Milligan said:
That should be 2 WAR by my count.
Exactly!
-
3 hours ago, ArtVanDelay said:
Stairs?
Stairs looks like he's given up the stairs in favor of the elevator.
-
2
-
-
33 minutes ago, Baltimorecuse said:
I've watched the O's since I moved here 25 years ago. I remember one good pitching staff in that span. I believe pitching is two thirds of baseball. Look at the bottom half of teams and then look at their ERA. You don't even need Pythagoras.
Yes, well said. My fandom goes back to the 70s when the Orioles were the team all others looked to as the exemplary approach to pitching. It was even called "The Oriole Way". Now it's The Rays everyone would like to model when it comes to pitching. How do they do it? They make it look so easy. I like Elias, but there just are not enough quality arms on this team.
-
1
-
-
37 minutes ago, Can_of_corn said:
Means already had a setback.
Yeah, that's what I was referring to.
-
I'm definitely more concerned about the pitching. I'm not sure the team has a realistic strategy when it comes to improving the pitching on this team. There's just not enough depth of promising pitchers, partly due to this team preferring to draft top position player prospects, but also no bold trades to get a Pablo Lopez type pitcher. And obviously there's an avoidance of higher tier pitching free agents, which goes way back. Even if Grayson Rodriguez were pitching great right now we'd still be concerned with the lack of depth when other young pitchers struggle, or someone like John Means has a setback, or someone else goes down with an injury.
On the hitting, I don't think the hitting slump should be a huge cause for concern right now. Every team goes through hitting slumps, arguably our best position player (Mullins) is hurt, and we also know that most of our position player future is still in the minor leagues.
-
Not that the O's were ever in on him, but those who said he was too much of a health risk were certainly right.
-
14 hours ago, Sanity Check said:
To get Shane Bieber for the rest of this year and for 2024 ((he's a free agent thereafter, and will likely go that route) and Jose Ramirez (signed through 2027).....
We give up Grayson Rodriguez, Drew Rom, Jordan Westburg and Colton Cowser.
With Bieber, you've got your ace for the next year and a half, and the proven production of Jose Ramirez for 4 and a half years.
I doubt Cleveland are thinking of selling now because they're only 3.5 games out of first in the AL Central believe it or not. All they need is a hot streak and they're easily competing for a playoff spot. And like someone else said Ramirez may not allow for a trade.
But I like your thinking. I do agree with others it's a bit too much to give up in that trade, but those are two players any team would love to have. Hypothetically I think the O's could trade without having to trade Grayson (who they should not give up on), but trading maybe one of Westburg/Cowser, and maybe Norby, Rom and couple other players further on down the Top 30 list.
-
21 minutes ago, ScGO's said:
Playing the match ups with mountcastle and ohearn, they could combine for a solid above average 1B
Yes, for the season Mountcastle has an OPS of 1.079 against lefties and an OPS of .571 against righties. His career OPS LHP/RHP split is fairly even (.817 vs .749), but right now he's looking kinda like a platoon player. As much as I complain about Mountcastle though I don't think he's platoon hitter. He's just struggling more against righties now for whatever reason.
-
1 hour ago, Camden Yards said:
I would like to get EROD also but I do have concerns!
1. why didn’t Boston sign him after he did well for them? Five years at 77 million seemed real reasonable.2. He walked away from the Tigers last year and didn’t talk to the team for a long time! He shows back up and said he was dealing with a family situation without giving any details!
3. Can opt out and all of sudden he is pitching great again. After he gets his next big contract does he disappear again?In Boston's defense, EdRod had a 4.74 ERA his last season with them. That may have had something to do with it.
-
4 hours ago, MCO'sFan said:
Plus, Ohtani is staying out west. It will be the Dodgers or the Angels with SF as a dark horse. I can't see anyone else signing him.
If he's really all about staying out West, I would guess Seattle probably has a shot at singing him too.
-
2 minutes ago, wildcard said:
I still think Frazier is traded in July. He is on a one year contract. Elias would trade him for a prospect. His recent surge just helps his trade value if he can maintain it. With Urias, Westburg and Ortiz available I don't see Elias holding on to Frazier all season.
Or he could trade Urias or Mateo if those players bring more value in a trade. Frazier is a big reason the O's have won the past several games. He may just be on a hot streak; but the next 6 weeks or so will tell if he's just got hot or if he's still consistently contributing.
-
6 hours ago, Billy F-Face3 said:
Similar to that notion, I have to wonder about Sonny Gray and the Twins.
The Twins are in first place and will easily be in the playoff hunt all year in that weak ass division. On top of that Sonny Gray leads the league in ERA. I think the fans would revolt if they traded Gray.
-
1
-
-
10 minutes ago, Sports Guy said:
His statcast numbers are ugly..OAA is -3.
https://baseballsavant.mlb.com/savant-player/adam-frazier-624428?stats=statcast-r-fielding-mlb
Still better than Gunnar Henderson's, Ryan Mountcastle's and Ramon Urias' OAA. Not really familiar with this stat though something tells me it's probably useful over longer periods of time.
I think it's obvious why the O's signed Frazier. They felt the young hitters could need time to transition to big league pitching. It's proved more than true with all the young hitters except Adley. Frazier came cheap for only one year and provides the steady veteran presence in the middle of the infield in the meantime and some decent pop off his bat.
-
1
-
-
Don't know if this has been mentioned in this thread yet, but according to Baseball Reference Yennier Cano leads the team in WAR -- currently at 1.9.
-
22 minutes ago, Bemorewins said:
After reading you guys' comments, responses, and reactions to me in this thread; it paints a very gloomy picture (not anyone's fault just the reality of how bad this situation may be). No wonder so many people from this community have completely abdicated their interest in the Orioles.
For a person who loves the Orioles and has been a lifelong fan through all the ups and mostly downs and wants to see the team win at least 1 World Series in my lifetime (it's 40 years and counting), all I have is hope. If I lose that what else do I have?
I hope this time is different. I hope we will do what it takes to make every reasonable effort to get the best results that we can. I hope that there is a parade on Pratt street one day, where I can finally say "all of the suffering was worth the euphoria of this moment". I don't think I have another 40+ years to wait.
So they last won it all within your lifetime -- the year you were born!
Cheer up, the organization is much stronger than it has been in years. In the short term improvements to the team can be done in the form of trades rather than long FA deals. In the long term, last year the team hired Goldman Sachs to explore the possibility of a sale. That may not happen for awhile but it's a good sign.
Does Mountcastle have any trade value?
in Orioles Talk
Posted
Right now Mountcastle has trade value as part of a package. He could be the extra piece that gets a trade done. But straight up? No, not until he improves.