Waiving/non-tendering Villar: pro or con?

[thezeroes]

24 minutes ago, tntoriole said:

If Villar gets 10 million in arb, I will eat my hat.  That number which is now out there as common wisdom is absurdly high.  He will be lucky to get 8 in arbitration imho. 

The arbitration system is an either/or scenario.  Lets say the Orioles were to submit a low ball offer of $4.8 million and Villar's agent submits a $11.5 million contract offer.  The arbitrator picks either a or b if it goes to him/her. So in that case if they do not settle before the case is heard by the arbitrator Villar could possible get $11.5 Million.

[gtown]

36 minutes ago, ThomasTomasz said:

 

So if we couldn't move him now with the $7-$10 million price tag, what are the chances of getting any sort of good return at the deadline for Villar? 

The chances at the deadline are way better. As I have stated, going into a season, teams look for good value for the price. At the deadline, when you're trying to fill a hole, the two months of salary are far less important.  The selling team could also pay some of that contract for two months to get a better prospect.

[section18]

I don't think this appeared yet;

Buster Olney - ESPN

Jonathan Villar led all Orioles in WAR last season with a solid season - 24 Homers, 111 runs, 40 steals and according to this metric, he was the best baserunner in MLB by far....and he's put on waivers. Good for O's bottom line, a soulless baseball move.

[tntoriole]

1 hour ago, Enjoy Terror said:

What is the point of arguing about how much the owners spent vs how much they made? That’s not really your call on a macro level and at a micro level the argument is that Jonathan Villar isn’t worth spending $10M on.

Its like going to the grocery store and finding out the last pint of ice cream is $11 and it should be like $5. So you say no thanks we have Oreos at home, despite the fact you make a six figure household income and can afford an $11 tub of ice cream. 

All the while you’ve got this dude named Roll Tide shouting from the bleachers that you’re a greedy son of a gun because you left the store without the $11 ice cream. You can afford that ice cream you ninny, he yells, you’re just greedy oh btw, your wife hasn’t done anything impactful since you married her. But that wasn’t true, she planted a garden that Mr. Tide wouldn’t be able to see until it gets warm out again.

As most of us here would agree... I could care less how much the Angelos family spends or how much profit they make...the ONLY consideration for me is how good the product  turns out to be.   Winning is my promary criterion. So win the World series and I could give a flying hoot about how much they make or spend...but stay in last place for years, well...my money is staying in my pocket this time around.  So, while spending this or that is of esoteric interest to us as uber fans, I really judge only by outcomes...period.   

[Roll Tide]

3 minutes ago, Frobby said:

I’m not sure where you are getting the bolded number.    Per the Forbes article you cited, in 2018 the O’s had $251 mm in revenue, $161 mm in player expenses and had a $6.5 mm operating loss.    That implies they had non-player expenses of $96.5 mm or so.   I don’t know how that breaks down, but in the absence of any better source I have to accept it for discussion purposes.    You seem to be assuming major league payroll is the only expense a baseball team has, and that’s wrong.    And we don’t know how the non-major league team payroll expenses stacked up last year compared to 2018, but my bet would be they were substantially higher.    Do I expect the O’s still made a profit after their payroll cuts?    Yes, probably.    And hopefully that money gets spent on the team at the right time.    
 

 

If they just spent their national TV money and MASN published share (their number) $59 million they could afford a payroll of atleast $160 million. Thats not spending any gates, concessions, memorabilia, sponsorship money etc.

My point is they only spent half of that amount in 2019. The Forbes numbers were 2018 numbers because we know the payroll wasn;t $170+ million. So if they lost $6.5 which I don't believe by the way. Then they made a profit of $80-$100 million this season minus some lost attendance and whatever modest amount (lets just use $10 million) on Dominican fields, new executives, and other operational stuff.

That was so bad that we need to dump our best player to save an additional $3 million if thats what he got in arb.

[Frobby]

2 minutes ago, Roll Tide said:

Again .... I'd argue that showing a 6.5 million loss is not really a loss.

Here's an example

I looked at a business that has $1.5 million per year in revenue. If you looked at the tax returns and P&L they lost about $100,000 over the last three years.

Further review shows they have 2 managers making a combined $130,000. They pay an investor $50,000 per year, they write off $30,000 in equipment depreciation, have raw materials costs of nearly 40% and a terrible lease that is a $5000 a month too high.

The raw materials cost are high due to theft, poor accounting, and offering too many differing products. Not to mention skimming by ownership!

Even if you dont fix the raw materials cost the business is still making around $200,000 per year.

You seem to be mixing three points here:

1.   The business pays salaries to management that count as a cost but benefit ownership since the managers are the owners.

2.   The business has non-cash expenses like depreciation that don’t impact (at least immediately) the cash flow that the operation throws off.   

3.    The business is poorly run and could be more profitable if it was run better.   

It seems to me 1 and 3 are pretty irrelevant to our discussion.   2 could be a legit point but we have no insight into how much of the O’s expenses are non-cash expenses and what they are comprised of.    Sometimes depreciation expenses reflect economic reality, sometimes they don’t.    

 

[tntoriole]

7 minutes ago, thezeroes said:

The arbitration system is an either/or scenario.  Lets say the Orioles were to submit a low ball offer of $4.8 million and Villar's agent submits a $11.5 million contract offer.  The arbitrator picks either a or b if it goes to him/her. So in that case if they do not settle before the case is heard by the arbitrator Villar could possible get $11.5 Million.

I know how it works...given all that, there no way he gets 10 million imho.  In your scenario, his agent would be pretty foolish to submit that high... He will get 7-8 in my view. 

[Frobby]

1 minute ago, Roll Tide said:

If they just spent their national TV money and MASN published share (their number) $59 million they could afford a payroll of atleast $160 million. Thats not spending any gates, concessions, memorabilia, sponsorship money etc.

My point is they only spent half of that amount in 2019. The Forbes numbers were 2018 numbers because we know the payroll wasn;t $170+ million. So if they lost $6.5 which I don't believe by the way. Then they made a profit of $80-$100 million this season minus some lost attendance and whatever modest amount (lets just use $10 million) on Dominican fields, new executives, and other operational stuff.

That was so bad that we need to dump our best player to save an additional $3 million if thats what he got in arb.

By the way, we know that MASN paid no dividends last year, so forget that source of revenue.   We know this because the Nats have brought an arbitration seeking to force MASN to pay a dividend.   Which I expect they’ll lose.   

[Roll Tide]

2 minutes ago, Frobby said:

You seem to be mixing three points here:

1.   The business pays salaries to management that count as a cost but benefit ownership since the managers are the owners.

2.   The business has non-cash expenses like depreciation that don’t impact (at least immediately) the cash flow that the operation throws off.   

3.    The business is poorly run and could be more profitable if it was run better.   

It seems to me 1 and 3 are pretty irrelevant to our discussion.   2 could be a legit point but we have no insight into how much of the O’s expenses are non-cash expenses and what they are comprised of.    Sometimes depreciation expenses reflect economic reality, sometimes they don’t.    

 

And businesses do things like bury cash and inflate expenses to show little or no profit. By the way #1 are employees and not good ones.

[Roll Tide]

Just now, Frobby said:

By the way, we know that MASN paid no dividends last year, so forget that source of revenue.   We know this because the Nats have brought an arbitration seeking to force MASN to pay a dividend.   Which I expect they’ll lose.   

Im talking about the shares paid for broadcasting the games ...not revenues

 

Read this article!!!!!!!!!!!!!!!!!! https://mlb.nbcsports.com/2019/01/07/a-warning-about-major-league-baseballs-record-revenues/

[Frobby]

3 minutes ago, tntoriole said:

I know how it works...given all that, there no way he gets 10 million imho.  In your scenario, his agent would be pretty foolish to submit that high... He will get 7-8 in my view. 

It will be academic unless Villar is traded before the non-tender deadline.   

I estimated Villar would get $8.5 - 9.5 mm.   There are some pretty good comps in that range.   
 

[Frobby]

5 minutes ago, Roll Tide said:

Im talking about the shares paid for broadcasting the games ...not revenues

I’m confused.   Shares of what?    The $251 mm cited by Forbes includes all sources of revenue except profit shares from team-owned TV networks (like MASN).   But there was no such revenue from MASN this year, because no dividends got paid.    Whatever profits MASN made, it retained rather than paying to shareholders.   

[Enjoy Terror]

2 minutes ago, tntoriole said:

As most of us here would agree... I could care less how much the Angelos family spends or how much profit they make...the ONLY consideration for me is how good the product  turns out to be.   Winning is my promary criterion. So win the World series and I could give a flying hoot about how much they make or spend...but stay in last place for years, well...my money is staying in my pocket this time around.  So, while spending this or that is of esoteric interest to us as uber fans, I really judge only by outcomes...period.   

That’s fine. You SHOULD be upset. You should hold onto your money. If the Orioles were a restaurant you wouldn’t take your family there!

I didn’t go to any games or watch them on TV this past season (cord cut). I’m not mad about it, I have much in my life to do and be passionate about. I think, personally, the on field product of this team has been terrible for 35 years save for twelve scattered winning seasons and 5 playoff teams.

I trust that Elias has a plan, and I’ve seen evidence of those things; international scouting and signings, analytics team hirings, old guard employees being removed. This is all stuff we’ve begged for. This was a fundamentally broken organization that started with the people running the show and ended on the field and permeated the culture. I am extremely excited to see the new machine start winning games, because I think it was built to win games for a long time.

The Jonathan Villar move is so “whatever” it’s hard to imagine why anyone cares who’s going to help us win 50-60 games next year. And I’ve said it before, if you’re only NOW threatening to hold onto your money because of the on field product, what exactly have you been watching for 35 years? 

 

[Luke-OH]

5 minutes ago, Roll Tide said:

Im talking about the shares paid for broadcasting the games ...not revenues

 

Read this article!!!!!!!!!!!!!!!!!! https://mlb.nbcsports.com/2019/01/07/a-warning-about-major-league-baseballs-record-revenues/

That article doesn't affect my argument. My point was comparing the Orioles "operating income" to other teams "operating income" coming from the same source. 

It seems that you have an issue with the MLB situation, not the Orioles who have spent a higher proportion of there revenue than most of the teams in the league of the last handful of years. 

[Darkhawk]

1 hour ago, Greg Pappas said:

IF Elias gets a decent (or better) return for Villar, would anyone feel differently than they do now?
Naturally most posters will be upset (understandably) if Villar nets zero return and walks away free, but the other side of this poker move is that we do get something of value. 

I was disappointed by the move but now that I understand the motive I am waiting to see how it works out before rushing to judgement.

If he is able to get a decent return, then I would have more faith that the Villar savings will go back into the team and would be impressed that Elias called other team's bluff and was willing to put all his cards on the table instead of just folding to them. That could be helpful down the road in future negotiations. 

But if he is let go for nothing there's going to be lingering questions about the motives of the team and I would want to see something positive that assuages those doubts.