Where is the missing money $$$$$

[Mayor McCheese]

Where is the missing money $$$$$

On Orion's Belt.

[Ripken]

Based on what some scouts have told me, the window is opening on our starting pitching and the only thing that we might lose before two years is a catcher.

Despite my enormous frustration with the payroll/PA, I do believe ^this quote^ fully. I absolutely believe CD will get extended along with Hardy if they want him (maybe they think Schoop/Manny/Flaherty is the future infield). I think Matt goes, and only Matt from the core, because he simply will not be worth the money he'll get for the production. They will ride him into the ground for two years and let him walk (unless we really tank a season... then I could see him being traded mid-year). I still think the future is bright and that has a lot to do with DD/Buck. Still frustrating as hell to sit through numerous off seasons like this though...

[hoosiers]

They have to pay for draft picks and international signings. Minor Leagues, Coaches, Ticket Reps, Management, SPring training, Doctors, Training staff, equipment, advertising. Do you know anything about how a business is run? Look at the leagues with salary caps and check their percentages of revenue that go to players. I dont' think any of the leagues have more than 50 percent.

And the owner is entitled to profit as well.

This is why the Camden Chat article is such a poor one.

There are plenty of indications that the Os are making a lot of $ and that there is additional payroll capacity, but to just throw out that $100M with a seeming ignorance of the very real costs of putting together a major league baseball organization ..... makes it difficult to believe this article was published.

[weams]

This is why the Camden Chat article is such a poor one.

There are plenty of indications that the Os are making a lot of $ and that there is additional payroll capacity, but to just throw out that $100M with a seeming ignorance of the very real costs of putting together a major league baseball organization ..... makes it difficult to believe this article was published.

The Orioles are in violation of the debt rules. If Angelos chose to use the MASNCASHMONEY to pay that debt, they could. But wouldn't that just be another loan to Angelos?

[atomic]

[/b]How do you know this is not happening?

Because I read things like "people in the warehouse" think that this player or that player isn't worth acquiring after it was rumoured the Orioles were trying to acquire the player. I am pretty sure DD has to get Angelos' approval for any move over a couple million dollars. It is my opinion and it is back up by prior GM's of the team. Until DD leaves the team and publishes a memoir or gives an in-depth interview on the subject we won't know. But I dont know too many 80+ year olds who suddenly change their ways.

[weams]

Because I read things like "people in the warehouse" think that this player or that player isn't worth acquiring after it was rumoured the Orioles were trying to acquire the player. I am pretty sure DD has to get Angelos' approval for any move over a couple million dollars. It is my opinion and it is back up by prior GM's of the team. Until DD leaves the team and publishes a memoir or gives an in-depth interview on the subject we won't know. But I dont know too many 80+ year olds who suddenly change their ways.

Who starts those rumors?

[atomic]

Who starts those rumors?

Same guys that say the Orioles denied them. MASN writers say the Orioles are interested in such and such player and then a few days later they report the warehouse doesn't think the player will help the team. I would ask their sources but I doubt they would tell me.

[weams]

Same guys that say the Orioles denied them. MASN writers say the Orioles are interested in such and such player and then a few days later they report the warehouse doesn't think the player will help the team. I would ask their sources but I doubt they would tell me.

Ah. Yeah. People who get paid to talk rumors. Got it. You think they are right? Either time? I bet Brady Anderson knows. Dan knows. Buck knows. You think any of them ever say anything to the press that is not for publication?

[NJ BIRD FAN]

Because I read things like "people in the warehouse" think that this player or that player isn't worth acquiring after it was rumoured the Orioles were trying to acquire the player. I am pretty sure DD has to get Angelos' approval for any move over a couple million dollars. It is my opinion and it is back up by prior GM's of the team. Until DD leaves the team and publishes a memoir or gives an in-depth interview on the subject we won't know. But I dont know too many 80+ year olds who suddenly change their ways.

Translation: you don't know anything really.

[hoosiers]

The Orioles are in violation of the debt rules. If Angelos chose to use the MASNCASHMONEY to pay that debt, they could. But wouldn't that just be another loan to Angelos?

The Orioles issue with the debt rule needs to be explained. My uneducated guess is that the debt exists for some personal tax issue for the owners as opposed to running annual deficits - which would imply everyone is wrong about the team's finances.

[mdbdotcom]

The Orioles are in violation of the debt rules. If Angelos chose to use the MASNCASHMONEY to pay that debt, they could. But wouldn't that just be another loan to Angelos?

It would be a loan from one Angelos business to another. Hopefully, with more favorable terms than they have now.

[theocean]

The Orioles issue with the debt rule needs to be explained. My uneducated guess is that the debt exists for some personal tax issue for the owners as opposed to running annual deficits - which would imply everyone is wrong about the team's finances.

While the debt rule is indeed mysterious, maybe this can shed some light. Disclaimer, I did a lot of math, I'm a graphic designer and it made my brain hurt and could be totally wrong:

This article, from 2011, reveals that the Orioles are/were one of nine teams in violation of the debt rule, which "generally limit a team's debt to 10 times its annual earnings, although Selig has wide latitude to enforce those rules."

But, that list also included the Frank McCourt Dodgers, the post-Maddoff Mets, the Cubs, the Tigers, the Marlins, the Phillies, the Rangers, and the Nationals. So some of those teams were in bad financial situations - but the Rangers, Phillies, and Tigers sure were spending. Two years later, the Dodgers, although with new owners, have a huge payroll.

If you check out the MLB agreement on Page 208 http://mlb.mlb.com/pa/pdf/cba_english.pdf, it defines the Debt Service Rule as:

"The Rule. No Club may maintain more Total Club Debt than can reasonably be supported by its EBITDA. A Club’s Total Club Debt cannot reasonably be supported by its EBITDA if Total Club Debt exceeds the product of that Club’s EBITDA during the most recent year multiplied by the EBITDA Multiplier applicable to that Club."

EBITDA means a team's earnings for it's fiscal year, before interest, taxes, depreciation and amortization. In 2011, it was $25.5 million.

So the formula for the Debt Rule is [EBITDA] x [EBITDA Multiplier] = [>Total Club Debt]. The EBITDA Multiplier is 8, but if you have incurred debt for a stadium pr renovations in the last ten years, the club can use a multiplier of 12.

So, doing the math: [25.5] x [8] = 204m or [25.5] x [12] = 306m.

From that rough estimating, we can guess that at best, in 2011, the Orioles had $205m of debt, but I imagine that the renovations to the park for the 2012 season were probably paid for in 2011 and might get them a multiplier of twelve.

Here are the 2011 numbers for the other, competitive teams violating the debt rule:

Phillies: [EBITDA: 8.9M] x [8/12] = $71.2 / $106.8M

Rangers: [EBITDA: 22.6M] x [8/12] = $180.8M / $271.2M

Tigers: [EBITDA: -29.1M] x [8/12] = $232.8M / $349.2M

Nationals: [EBITDA: 36.6M] x [8/12] = $292.8M / $439.2

Then there is the MASN-CASH-MONEY. According to Forbes (Link), the Orioles own 87% and the Nationals own 13%. Currently the Orioles and Nationals are before a MLB Arbiter regarding shares of the network. Angelos is willing to give the Nationals a 20% increase - which would be $35 million a year. However, the Nationals want more than $100m annually.

So, if $35 million a year accounts for 20% of the MASN pie - that roughly means the entire pie is worth $175 million. Which is really nothing at all, considering the multi-billion dollar deals teams are making with Fox Sports. And that is not even counting the money that goes back into MASN to keep it running. It has expenses too. Plus, let's just say, if a MLB arbiter is possibly about to decide to to cut the stake 50/50, Angelos can't hit the red button and send piles of endless cash that doesn't exist from the MASN vault straight into the warehouse.

So, I think we can gather this:

1. MASN is kind of a liability. I almost get the feeling they could make more signing a Fox Sports Deal then possibly split a small pie with the Nationals, which certainly looks like what might happen, if Angelos' is willing to allow a 20% increase for the Nationals to a 33% stake as his starting offer. Is MASN just mismanaged? The DC/Baltimore Metro Area is pretty big, it has to bring in more money than it does.

2. Last year, the O's revenue was $206m. While a different league, NFL owners said during the lockout that 50% went to players and the other 50% went to debt, stadium, staff costs, training facilities, etc. I imagine that MLB is similar and the Orioles rumored payroll is $100m, which is about right.

3. Angelos is 84 and not immortal. He either has to be planning now to sell the team or give it to his sons. Either way, that is a huge tax bill and perhaps Angelos is positioning profit from the team to pay it. It's expensive to die.

4. Clearly, the debt rule violation hasn't stopped the other teams above from spending, so that in and of itself does not seem to be an issue, unless the Orioles have some sort of obscene debt crisis, which I really doubt.

5. There are so many expenses that we don't even think about - like when Duquette claims some player in June for $500k, we all go "Aw cool, whatever, cheap, low-cost, depth move." That's still a lot of money. I'm debating now to get a Little Caesers $5 pizza against Pizza Hut, so that's my life right now.

5. Just a thought - I was talking to my grandpa the other day. He's 92 and big Baltimore sports fan. We were talking about the Ravens season and his kids, my uncles, were expressing frustration the Ravens didn't make the playoffs. And my grandfather wisely said, "It was an enjoyable season. Winning isn't the only reason the games are played." And he's right. We have a homegrown team right now that is competitive, fun to watch, with what it seems to be some pretty good people who are active in the community. This isn't some bought machine like the 96/97 teams or what the Dodgers have of mega-millionares. Winning is fun, sure. But, I was six when the Orioles were last good in 97 and I can hardly remember it. I didn't grow up loving baseball because of winning. I grew up loving baseball because of the game, the experiences I have with family and friends watching it, and playing it through school and pickup games now. Let's not lose focus of that.

[spiritof66]

And the owner is entitled to profit as well.

I don't accept or understand this. If I start or buy a business, I'm not "entitled" to a profit. If I run my business successfully, I might make a profit. But even if I invest a little money, work really hard and do a really good job, I may not make a profit if the market for my product shrinks or a giant company enters the market. (The same is true if I invest in a larger business that I don't run.) I'm not "entitled" to a profit just because I've invested my life's savings and worked hard.

Why should the owners of an MLB team have that entitlement? Have the owners of the Orioles made good business decisions? Have they hired and fired management wisely? Have they made good decisions in drafting players and signing international players? Have they put a wining product on the field? Have they increased attendance and fan interest? (These are meant to be rhetorical questions.)

A team with the Orioles' demographics, competing in the AL East, can make an operating profit only if it spends a lot less than three of its division rivals can, and almost certainly will, spend. That basic fact should have been clear when they bought the team in 1993. The Rays have shown that's it's possible to compete successfully while spending much less than NY, BOS or TOR -- if you draft and develop talent really well and keep turning much of it over as it approaches free agency. If the Orioles' owners did that and operated the team as well as the Rays do, they could field a winning team and make a very nice profit, maybe $50 million per year plus this year's added TV money plus the value being created in MASN.

Of course, the Orioles have failed where the Rays have succeeded. Despite the poor job they have done running the team, and the resulting erosion of their fan base, the Orioles can make a profit by limiting their costs, particularly their player payroll. Unlike most other business owners, MLB teams can make a profit by limiting their costs, particularly their player payrolls, without facing competition from better run or better financed market entrants, due to the monopoly they have created with Congress's approval.

Many MLB teams make small operating profits or none at all. They spend what they bring in (or more) because their owners want to win, are so wealthy they don't care about leaving a few tens of millions on the table, are satisfied to build value in the team while forgoing profits, or have redirected revenues into their cable TV operations. I think we've learned by now that nothing can stop the Orioles from operating the team in a way that earns them a nice profit. But why should we acknowledge that they are "entitled" to a profit when they have proven their consistent inability to field a contending team when they operate that way?

[NJ BIRD FAN]

I don't accept or understand this. If I start or buy a business, I'm not "entitled" to a profit. If I run my business successfully, I might make a profit. But even if I invest a little money, work really hard and do a really good job, I may not make a profit if the market for my product shrinks or a giant company enters the market. (The same is true if I invest in a larger business that I don't run.) I'm not "entitled" to a profit just because I've invested my life's savings and worked hard.

Why should the owners of an MLB team have that entitlement? Have the owners of the Orioles made good business decisions? Have they hired and fired management wisely? Have they made good decisions in drafting players and signing international players? Have they put a wining product on the field? Have they increased attendance and fan interest? (These are meant to be rhetorical questions.)

A team with the Orioles' demographics, competing in the AL East, can make an operating profit only if it spends a lot less than three of its division rivals can, and almost certainly will, spend. That basic fact should have been clear when they bought the team in 1993. The Rays have shown that's it's possible to compete successfully while spending much less than NY, BOS or TOR -- if you draft and develop talent really well and keep turning much of it over as it approaches free agency. If the Orioles' owners did that and operated the team as well as the Rays do, they could field a winning team and make a very nice profit, maybe $50 million per year plus this year's added TV money plus the value being created in MASN.

Of course, the Orioles have failed where the Rays have succeeded. Despite the poor job they have done running the team, and the resulting erosion of their fan base, the Orioles can make a profit by limiting their costs, particularly their player payroll. Unlike most other business owners, MLB teams can make a profit by limiting their costs, particularly their player payrolls, without facing competition from better run or better financed market entrants, due to the monopoly they have created with Congress's approval.

Many MLB teams make small operating profits or none at all. They spend what they bring in (or more) because their owners want to win, are so wealthy they don't care about leaving a few tens of millions on the table, are satisfied to build value in the team while forgoing profits, or have redirected revenues into their cable TV operations. I think we've learned by now that nothing can stop the Orioles from operating the team in a way that earns them a nice profit. But why should we acknowledge that they are "entitled" to a profit when they have proven their consistent inability to field a contending team when they operate that way?

I respect your efforts, however how are you as a fan more entitled to a winning team then PA is entitled to a profit? Agee with him or not, PA will tell you that he is running the team correctly. According to you he is running it incorrectly. Who should he be listening to? His peers? Message board posters? Fans such as yourself must be so fatigued from complaining about how them team is run. It must take all the joy out of being a fan.

Also, the fan base has not eroded. Baltimore was never a good drawing town. Take away the the years when Camden was first built and the Orioles are a below average drawing city. Even when they had the great run in the late 60's to early 70's they were about average in attendance.

[scOtt]

Because I read things like "people in the warehouse" think that this player or that player isn't worth acquiring after it was rumoured the Orioles were trying to acquire the player. I am pretty sure DD has to get Angelos' approval for any move over a couple million dollars. It is my opinion and it is back up by prior GM's of the team. Until DD leaves the team and publishes a memoir or gives an in-depth interview on the subject we won't know. But I dont know too many 80+ year olds who suddenly change their ways.

Big Peter may be one of the worst on this, but I think that's standard practice for all 30 teams. No owner is going to give a blank check for tens of millions of dollars without so much as a look see.