O's one of nine teams in violation of MLB debt service rules

[weams]

You don't think ANY of them care? Like the one that was just forced to give away a third of their team for possibly nothing? Or the one that is likely going to be taken over by MLB in another two-three weeks?

Because it COULD have an effect on the ability of the team to improve in the future.

Like the one that was sold at a bankruptcy sale, like the one in the city with the highest unemployment and tickets sold for a dollar. Like the middle large market town with four aces and a top five payroll. Like the one that draws so few fans that every time the team wins a world series, ALL of its players are gone the next year. Like the one that Overspent in the last three drafts in a town that has never supported a major league team...

Like the One that has not won a title for One Hundred and Two years...thats owners were forced to sell because of their own Person Bankrupcy. Yeah..those are our people.

[pacman59]

If the Forbes numbers are correct they likely refinanced the debt, and put more paper on the Orioles.

With MLB value guarantee it would not be difficult to increase the debt substantially.

Might be a good way to cash in now and do some estate planning by Angelos.

[scOtt]

Trea at his evil lair posting away on the HO...

Fixed that for you...

[Birds of B'more]

It's a big deal for the Orioles' investors and potential investors.

Which could be a sign that a sale of the team in the near future is far from imminent. While PA does have a guaranteed sale price from MLB, I would think when the time comes he'd prefer a bigger return than that.

[scOtt]

Which could be a sign that a sale of the team in the near future is far from imminent. While PA does have a guaranteed sale price from MLB' date=' I would think when the time comes he'd prefer a bigger return than that.[/quote']

I'm not a business guy, so bear with me. Would it make that much difference? IIRC ML's debt rules were put in place after AZ (or was it Texas?) went bankrupt. I thought these debt rules were MUCH higher than industry standard.

[Frobby]

I don't doubt they're required to disclose to MLB. MLB has no obligation to make that information public.

And I'm sure they adhere to GAAP, but there are still tactics within GAAP that enable the reporting of such financial information to reflect what the public would perceive as closer to the black/red...whichever benefits one's agenda.

Again, I'm not implying that the Orioles are engaging in this practice, but it's a plausible theory.

Scottie, I don't know this for a fact, but I have to believe that MLB has requirements for how the accounting is done, that go beyond GAAP. If they are going to have revenue sharing, they have to demand a high degree of consistency among the various teams as to how they do their reporting.

[Birds of B'more]

I'm not a business guy, so bear with me. Would it make that much difference? IIRC ML's debt rules were put in place after AZ (or was it Texas?) went bankrupt. I thought these debt rules were MUCH higher than industry standard.

I'm sure if the team was for sale a serious bidder would get to have a fair look at the books and get a much better picture than we have as to the financial health of the franchise. Still, just being on that list certainly can't help a franchise's valuation.

[Stotle]

Scottie, I don't know this for a fact, but I have to believe that MLB has requirements for how the accounting is done, that go beyond GAAP. If they are going to have revenue sharing, they have to demand a high degree of consistency among the various teams as to how they do their reporting.

I would assume they have a group of accounting firms from which teams can select for purposes of audit. I also would assume they are fairly explicit as to what does and what does not need to be included in the financial snapshot of the organization.

[scottbbfm]

OF all the topics here, this is probably the one we are LEAST qualified to answer - but here's my thought:

The Nats and O's are both on here. We've never heard them have an issue meeting payroll - so I'm thinking it has something to do with how the MASN accounting is treated. Remember the O's and Nats are in a unique position on this. Perhaps the MASN revenue bypasses the income statement and goes directly to equity in other comprehensive income, in which case it wouldn't be included in EBITDA. Plenty of capital to cover, but based on the MLB calculation, it seems worse than it is.

[TradeAngelos]

OF all the topics here, this is probably the one we are LEAST qualified to answer - but here's my thought:

The Nats and O's are both on here. We've never heard them have an issue meeting payroll - so I'm thinking it has something to do with how the MASN accounting is treated. Remember the O's and Nats are in a unique position on this. Perhaps the MASN revenue bypasses the income statement and goes directly to equity in other comprehensive income, in which case it wouldn't be included in EBITDA. Plenty of capital to cover, but based on the MLB calculation, it seems worse than it is.

Regional networks are not included and are looked at as a completely seperate entity. MASN has nothing to do with the Baltimore Orioles earnings/debt report, and is not factored in. You really think all the money Angelos extorted from MLB and the Nats is in there?? Of course it isn't.

And if anyone thinks a private billion dollar company can't make the books say almost whatever they want I have some oceanfront property to sell you in Nebraska. Really, I do. I swear.

[BaltimoreTerp]

http://www.suntimes.com/sports/baseball/cubs/5763413-417/cubs-debt-situation-figures-to-affect-free-agent-plans.html

Perspective on the Cubs situation. They are likely in a completely different situation than the Orioles because of their sale, but it is more reason for why we should care about this.