Thursday Notes: Old Money, New Money, and the Unlikely Prince
January 12, 2012 at 3:12 pm | Posted in Alan Casden, Josh Macciello, Prince Fielder | 70 CommentsWe have another potential new name in the Dodger bidding war and an update on another, and holy good lord, could these two guys not possibly be more different. First, Bill Shaikin in the Times brings us the news that developer Alan Casden is throwing his hat in the ring. Sound familiar? It should – he tried unsuccessfully to purchase the team from FOX in 2003.
Casden’s name has been submitted to MLB for consideration, according to a person familiar with the process. Casden, whose net worth is estimated at $1.2 billion by Forbes, has not returned calls from The Times.
In 2003, Casden proposed buying the Dodgers, moving them to a new downtown ballpark and tearing down Dodger Stadium to build housing on the site.
“They knock down stadiums all the time,” Casden told The Times then. “Dodger Stadium is not an antique. It’s not Frank Lloyd Wright. It’s a nice place to play baseball, but there are far better.”
Casden offered about $450 million to buy the Dodgers from Fox — more than McCourt paid — but the bid stalled amid MLB concerns over an investigation into illegal campaign contributions to city politicians.
Oh, that’s just lovely. You can put him down with Time Warner and Stephen Cohen at the head of the “DO NOT WANT” list.
At the absolute opposite end of the spectrum, ESPN’s Ramona Shelburne brings us an outstanding look at mystery man Josh Macciello. The entire article is fantastic and well worth a click, but here’s the main attraction:
“No, I always have to prove it,” he said, when I asked if people believe him when he says he’s a billionaire. “They ask for confirmation and we give them the claims showing that we own [the mines] and the actual assay and geologists reports that support that claim that’s been going on since 1999.” Then he corrects me on something.
“It’s not like Josh Macciello has billions in his bank account,” he said. “I am chairman and CEO of a company that’s partnered up with another company, and through those two companies we acquired several gold mines that are worth billions of dollars.
“Had it been five years ago we wouldn’t have been as fortunate, but due to the economy and where gold prices are now and where they’re projected to be in the next five years, we’re very blessed to be in the position we’re in, to be able to say we have billions of dollars of assets.”
Macciello says he intends to use those gold mines as collateral to finance his bid for the Dodgers.
I find Macciello fascinating, and I’ve at least begun to believe his intentions are real. (Even though, as a web snob, his new website joshfordodgers.com infuriates me because it’s all one background image.) Shelburne delves into a guy with an interesting past who really appears to be doing this for the love of the team, not as an investment, and that’s not something many of the rest of these guys can say. If by some miracle he got the team, you’d have to think that his policies would be incredibly fan-friendly and beyond entertaining in every way. I have to be honest, there’s a not insignificant part of me that’s really pulling for him.
Except.. well, look at that quote above. You could really replace “Macciello” and “gold mines” with “McCourt” and “parking lots”, couldn’t you? We had a discussion in the comments earlier this week that no one was going to simply write a check for $1.5 billion, and that’s absolutely true; no matter what, there’s going to be some amount of debt and loans involved in this. To a certain extent, that’s fine; to do it nearly entirely on that, well, we’ve seen that movie before. It didn’t end well.
Speaking of completely unlikely scenarios hinging on ownership… Prince Fielder. As long as he’s unsigned, people are going to speculate that he’ll end up with the Dodgers somehow, and that’s understandable. The thing people need to understand, however – and I point this out because I’ve been asked about it more than once – is that if Fielder somehow lands in Los Angeles, it’s not going to be because of a new owner. It’s going to be because of Frank McCourt. Spring training starts in about five weeks, and McCourt isn’t obligated to choose a winning bidder for about six weeks beyond that, and then it’ll take at least a month for the transfer of power. While it may be the new owner who would be paying the overwhelming majority of Fielder’s contract, there’s just no way that they’ll be in power soon enough to make it happen. (I was asked on Twitter by Jerrold [@JFK03] about the parallel of incoming Giants owner signing Barry Bonds in 1992, which is a good comparison, except Bonds signed on December 8 that winter. This process is just too far behind in the offseason.)
I bring this up because two prominent writers have brought up two complete opposing viewpoints on whether McCourt should bother signing Fielder before he’s gone. (When asked about it today, McCourt refused to comment.)
Buster Olney, ESPN:
If McCourt signed Fielder now, the expenditure wouldn’t be beyond the means of the franchise. And while a $25 million annual salary for a first baseman might seem like a lot of money to the average person, remember who is bidding for the team. A $25 million annual expenditure to someone with access to $100 billion is equivalent to five ATM charges for someone making $50,000.
You could call the signing of Fielder a financial pimple, in the big picture, if not for the fact that it could actually make the Dodgers more attractive, more valuable.
The Dodgers might be able to get Fielder for seven years and $175 million, or maybe eight for $192 million. Add Fielder to their lineup, and they could contend for the NL West championship in 2012. They would sell more tickets, draw higher ratings and give the next owners a little more leverage in negotiating that next television contract. Fielder would be to the Dodgers what Shaquille O’Neal was to the Lakers.
McCourt probably flinches reflexively at the idea of spending money these days given the amount of debt he has and considering how many lawsuits he’s been involved in. But signing Fielder now would be a smart investment, some gasoline to throw onto what should already be an extremely hot bidding war for the Dodgers.
It’s a great opportunity. McCourt should jump on it. Right now.
Shaikin, LA Times:
If the Dodgers signed Fielder for, say, $150 million, that would add $150 million to the liabilities a new owner would assume. That could persuade a prospective buyer to lower his bid accordingly.
As you can imagine, I tend to agree with Shaikin on this. While Olney’s points are valid, we’ve been talking a lot this week about just how much money the Dodgers are expected to go for – by all indications, it’ll be record-shattering. I find it hard to believe that a franchise which might already come close to doubling the previous MLB sale record would get an even further boost by adding Fielder; as Shaikin suggests, it might actually lower the price. Besides, if you’re willing to toss more than a billion dollars into purchasing a baseball team, you almost by definition have a large ego. I’m thinking that a new owner would prefer to be the one seen as rescuing the team and bringing in big stars, not inheriting someone that McCourt brought in.
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Josh has surpassed the Magic group as my #1 choice. But only because he follows me on twitter.
Comment by Dave Pomerantz— January 12, 2012 #
I think he means well, but there certainly are alarming similarities between his situation and McCourt’s, circa 2003 (financing a large purchase based on the current value of real property, having to finance a disproportionately large percentage of the purchase price, etc.). I guess he hasn’t shown to be as litigation happy as Frank, which is definitely a plus. Also, if he’s a true fan, that gives him a lot of points in my book.
Comment by Jeff— January 12, 2012 #
Who cares about financial issues? HE FOLLOWS ME ON TWITTER! ME! @DavePomerantz!
Comment by Dave Pomerantz— January 12, 2012 #
Yeah, that probably disqualifies him in my book :)
Comment by The Dude Abides— January 12, 2012 #
You’re quite right, my apologies, good sir!
Comment by Jeff M.— January 13, 2012 #
Can somebody explain to me what Twitter is.
Comment by Ned Colletti— January 13, 2012 #
Nice try, Ned… but we know you’re on there. We all saw you admit it this week.
Comment by Dave Pomerantz— January 13, 2012 #
I read all your tweets, Ned. You’re hilarious.
Comment by Jeff— January 13, 2012 #
I think Fielder would just about pay for himself next year with all the hype and hope he would bring to fans.
Comment by Derek_TC— January 12, 2012 #
Macciello is only interested in the Dodgers because a solid gold house and a rocket car are not available.
Comment by Josh S.— January 12, 2012 #
With respect to Fielder, the best historical comparison is actually Vladimir Guerrero. The last time he came on the market as a major impact player, it was 2004 when McCourt was taking over the Dodgers.
Even if timeline isn’t a problem, where exactly would he play? James Loney at $7MM/yr would be a pretty damned expensive non-hitting bat off the bench.
Comment by Greg— January 12, 2012 #
I’m sure Loney gets traded if Fielder is signed. Might also see James in LF.
Comment by AA— January 12, 2012 #
I think a main difference between Macciello and McCourt is that Macciello owns gold mines that are worth billions. McCourt only had one Boston parking and allowed Fox to lend him money in exchange for a favorable extension on the TV deal.
Comment by andrebeingandre16— January 12, 2012 #
. “A $25 million annual expenditure to someone with access to $100 billion is equivalent to five ATM charges for someone making $50,000.”
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Who the hell are these people?
Comment by badger3— January 12, 2012 #
This Josh guy seems extremely close to ashton kutcher’s character on Two and a Half men. just sayin
Comment by Bob— January 12, 2012 #
you must be a masochist.
Comment by crushinator— January 13, 2012 #
Mike, I have to disagree about your last contention. I doubt the average fan will care who signed Prince as long as he is here. Look at McCourt, he got a lot of credit for the Dodgers getting to the playoffs on players acquired or drafted by Dan Evans’ regime. Does the average fan give Dan Evans any credit? Not very likely. Sure, we know better, but if Magic or Macciello or Dennis Gilbert owns the team and Prince is signed by McCourt, it will still be credited to the new owner.
Of course, that is me trying to convince myself that McCourt, for once, will do the right thing. Mind you, the other side of the coin – Frank not giving two squirts for the Dodgers or their fans – is Frank saying no even though I tend to think that adding Prince will add to the franchise’s value. Or at least moreso than Jim Loney.
Comment by grabarkewitz— January 12, 2012 #
The primary reason McCourt has not acquired Fielder and never would without a go-ahead from the winning bidder is that the cost of Fielder would have been subtracted from FRANK’S take from the Dodger sale; iow the bids would be lowered by the amount Fielder would get for the length of his contract. Frank is in this sale for the money, not to be the fans’ friend! He tied up Kemp because he had to ASAP to keep the value of the team what it would be with Kemp secured, knowing the next owner would want that before bidding.
That’s why Colletti was all about lowering payroll by $20 million. This season’s payroll will be subtracted from the bids. That’s $20 million more to pay off F***k’s bills off the top.
Comment by Native Angeleno— January 13, 2012 #
Just to throw a wrench into the discussion and since I’ve been thinking about this for a while now, based on the extremely poor timing of the exchange of power…what if the potential new owner(s) that McCourt is considering choosing actually saw that the Dodgers need a big bat and saw that Fielder is currently available and requested McCourt make the signing before it’s too late? This would be assuming he had it whittled down to one group soon enough. I don’t see why the new owner couldn’t have his people look at the team and see the glaring hole in the offense and want to do something about it immediately.
Plus they could have McCourt make it public knowledge at the time the team is sold, like a “we discussed it during negotiations and both sides felt this was best for the team to make a big splash at first base” and make both sides look good with McCourt leaving on a positive note while the new owner comes in looking like a savior of the 2012 season. Probably somewhat far fetched, but had someone told me the Dodgers would be where they are right now, I’d have thought it was far fetched back before the McCourt era as well.
The deferred salary would be a nightmare, but I have to imagine there is still some slim chance this could happen. Personally, I’d rather the new owner take their time and assess the situation properly and clean house before making any bold moves, but you never know…some people like to come in and make a big splash right out of the gate and with the hell Dodgers fans have been put through, it probably wouldn’t be an unwelcome concept by most.
Comment by Wil— January 12, 2012 #
this is surely some hard hitting journalism. if you google this guy, most every site is related to poker. if you go to his company website, which is all clearly bullshit, it says nothing essentially, and even less about mining interests. if you google the name of his ‘co-chairman’ you’ll find someone with the same name (maybe not the same person, but it’s a pretty unique name) who was charged with credit card fraud as part of a crime ring in NEVADA several years back.
i love that everyone wants to believe his everyman story, but he seems shady. dig deeper.
Comment by iggy— January 12, 2012 #
Kind of have to agree. if it turns out this is 100% legitimate and he comes in as a savior to the Dodgers, shame on me for doubting, but all indications are that this guy is either full of it or achieved his fortune in a way that would make McCourt look like John Wooden.
Though, for what it’s worth, thelfp dared him to donate $5000 to a local food bank to prove he’s not just trying to get attention, and it appears as though he followed through on it.
Comment by Paul— January 12, 2012 #
$5000 does not a billionaire make. had he met the challenge with a 100k donation, it would have said something. $5000 that will be undoubtedly be written off as publicity. i’m telling you, if a real journalist would do some digging on this guy, they’d come up with a much better story.
Comment by iggy— January 12, 2012 #
From Shaikin on 12/27:
“I’ve encouraged Steve(Cohen) to buy the Dodgers,” Geffen(David) said in an interview. “I think it would be good for Los Angeles and good for the Dodgers. Steve has the resources to make the team all it can be.”
Said Broad(Eli) in a statement: “He’s a person of integrity and may well have more financial wherewithal than anyone bidding. He’s a lifelong baseball fan, and from all I know, I believe he would be a responsible owner of the Dodgers and would be satisfied with nothing less than eventually winning the World Series.”
Cohen explored bidding this year for a minority share of the New York Mets. If he were to buy the Dodgers, he probably would invite local investors, but for now he would be bidding against such local icons as Magic Johnson and Peter O’Malley for a team whose fans appear wary of another out-of-town owner.
“I don’t think it matters one way or the other,” Geffen said. “What you really need is an owner who has the resources to win, the drive to win and who cares more about winning than he cares about money. Where he lives makes absolutely no difference.”
Comment by a— January 12, 2012 #
And the point is?
Comment by RS— January 12, 2012 #
Right. I’m not gonna hope for this iffy, dubious guy on the sayso of David Geffen. What does he know other than his opinions Cohen would be great? And isn’t Geffen himself a cutthroat capitalist?
The value of a local guy is that he would know Dodger traditions and what their needs are from a fan’s pov. I don’t trust these out-of-towners who have no passion for the Dodgers, like McCourt never did. If they get one i’ll start worrying, and watching.
Comment by Native Angeleno— January 13, 2012 #
Geffen and Cohen are buddies. I don’t count his opinion on this for much.
Comment by Dave Pomerantz— January 13, 2012 #
I don’t agree with your thinking on McCourt being the necessary one to pull the trigger on Fielder, which is not going to happen until and unless the new owner gives him that go-ahead. Reason: He has laid out a prospectus of what the Dodgers entail at the time of the bidding. Note, Ned finished filling his junk drawer with new very old players, and secured the big fish Matt Kemp, before the bidding started: No coincidence. The bidders that way know precisely what they’re bidding on. McCourt isn’t going to screw up the bidding by adding Fielder, before or now. Colletti has gvien them a team that’s signed into next year, essentially, so they don’t have to scramble to fill the roster with 20 more new people next winter if they don’t want to. So the cupboard is not bare, tho not balanced nutritionally.
One aspect of this we’ve all been glomming on to too much, i think, is the dates McCourt has to do this and that by. The new owner has to be identified by April 1, and the paperwork transferring the Dodgers to him/them needs by completed by April 30, which by then McCourt will get his cut and pay his ex her $130 million.
But those dates are deadlines, not the earliest times he is ALLOWED to complete the sale. In fact, with every day that goes by, he’s being billed by his lawyers, and the bankruptcy court process is costing him, and everyone else. The very job of the bankruptcy judge is to get the creditors paid pronto, not at the end of a deadline, and get the bankrupted entity, the Dodgers, out of his court whole and sound.
So it behooves McCourt to identify the winning bidder ASAP, like at the end of this month, whenever he’s firmly decided who it is, which shouldn’t take long to figure out since F***k is in this for the money and the high bid should take it, like the winning hand in a game of poker with a billion dollars in the pot. You don’t need to pause and think it over when the high bidder shows his hand, he takes the pot instantaneously. So the process is arranged to get it all done as soon as the principals can sign off on it. All those preliminary things have now been signed off on. The only decision left for McCourt would be to weigh the bids between ones for the team alone versus bids for both the team and the land. Once he’s figured that out—and perhaps cut a deal with the Alan Casden types in the bidding, to develop the parking lot with the new owner as partner, which we all should dread—the process could end and the next owner could be announced as early as, possibly, the Super Bowl, or early Feb. The judge could get the Dodgers out of his court before they play the first game in spring training. F***k wouldn’t cut the check to Jamie till April 30, but that’s her problem and won’t be ours, glory halleluyah, any longer.
I’m here to tell ya that’s it’s completely possible, that if the new owner has been firmly identified as soon as the end of the month, and he relays the desire to McCourt to complete a deal for Fielder, with a representative of his at a meeting of Boros and Colletti, that Prince could, after all, become a Dodger before pitchers and catchers arrive in Glendale on app the 15th of February. It would help explain why Boros has not signed Prince to another team already. Where does Boros practically live? Behind the plate at Dodger Stadium. He might be there this season to watch his Prince play, night after night. IF the new owner wants a big headline right out of the box, and doesn’t want to go with Loney, who will make for somewhat attractive trade bait.
How sweet it would be for Matt Kemp to get his dream bud hiting next to him, having taken him from Milwaukee where Ryan Braun ‘stole’ Kemp’s MVP. A modicum of revenge. We would immediately be tabbed as the overwhelming favorites to win the West. The new owner would have competitively answered Arte Moreno’s trumpets announcing Albert’s arrival the next county over. It would be one hell of a good first impression.
(Where we go from there with the guy is the $6.4 billion question.)
Comment by Native Angeleno— January 13, 2012 #
Sounds doable. A group of young lawyers I know are saying the same thing.
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Now start counting the ways something like this can go wrong. Having never done a billion dollar deal, having seen what billionaire money launderers have done to this economy, knowing baseball owners are a tight group with tighter sphincters, and knowing Bud Selig is still around, I am forced to just wait til all the dust settles. I can’t help but think what you see now is what you are going to get on Opening Day. I could of course be wrong. I have been wrong before. Once in ’66 and again in ’80. Nothing to do with baseball, more to do with joining the Marines and getting married.
Comment by badger3— January 13, 2012 #
Your skepticism is my own as well. I’ve wondered what will, not might, happen when the paper holding together the big hedge funders collapses, and what if one of em bought the Dodgers first? Why, he might need to gut the team and live like a prince off the proceeds, the best historical example being the shlub who gutted the perennially championship quality Red Sox by selling off parts of it, including Babe Ruth, who at the time only held World Series pitching records AND the single-season home run record—imagine McCourt or a hedge fund owner selling a player who hit like Kemp AND pitched like Kershaw.
I don’t like those bidders for that reason, they’re a pack of vultures with a blood pump where a heart should be, and hold no interest in improvng any of their investments out of any sentimentality, or they wouldn’t be vulture capitalists! But MLB is composed of too many fat pigs like David Glass, who collects revenue sharing funds and puts NOTHING back in his team, and holds respect among his peers for doing so! McCourt was THEIR BOY. That’s Bud’s gang. A vulture capitalist would be welcomed into their midst.
We are all forced to sit and wait. And yes, many things could easily go wrong with any optimistic scenario. But the Fielder one i laid out has going for it many positive reasons it could happen for a new owner who had the bucks to buy the land as well as the team and have lots left over. There are such bidders. They may legitimately fear attendance might not come back, and need a big splash to put the fannies back in the empty seats. They may have the competitive drive in them, as many owners of sports teams do, to out-do the owner next door in Anaheim. They KNOW they need to put forth a product that will improve sagging ratings before they negotiate the coming big media deal.
I think we fear the winning bidder will be one who thinks and acts like McCourt. But he was a piker, and these bidders are not. As John Kennedy said to someone in awe of the family wealth, paraphrasing, “You want to see some real wealth? Check out the Rockefellers. Now THAT’S MONEY.” Yes, the winner could be bloodthirsty and sell Matt Kemp and Clayton Kershaw. But if they’re long-range thinkers, they will plan to secure the $5-6 billion Dodger Channel by putting on the field, this year, a ratings and pennant winner.
The good news is we will find out this season, relatively soon, what drives the new owners. If they get the parking lot, which would show they had the money and are smart to buy it before McCourt develops it himself, i think if they’re the kind of owner we’d like to see, their first move might be to lower the cost of parking back to what it was before McCourt rasied it, as a signal to Los Angeles he’s in synch with us and he’s going to restore the past, including Dodger glory.
Comment by Native Angeleno— January 13, 2012 #
Well said my friend.
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The vulture capitalists involved in this bidding are not people who got where they are because they had the people’s best interest in mind. However, when it comes to a professional sports team, they will need the people to make it work. B.I.S. revenue is what some call it. That stadium holds over 56,000. We know with the right moves it can be filled up. Then, like you mentioned, there is the cable contract just sitting there. If I had access to Dodger games, I would pay whatever it took. So would millions of others.
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It’s difficult for me to access the bidders. These guys don’t hang out at the same clubs I do. I just hope Selig has learned some lessons in the last few years, and, as you articulated, gets McCourt out of the way and the new owner seated quickly. As one of my professors used to say – “Get it done, the sooner the gooder.”
Comment by badger3— January 13, 2012 #
That would be “assess” the bidders of course. I have no access. Where’s the edit button around here?
Comment by badger3— January 13, 2012 #
I’ll be sure to enable it in the new version of the site!
Comment by Mike— January 13, 2012 #
Thank you, my friend. We are literally on the same page. AND share similar thoughts.
Comment by Native Angeleno— January 13, 2012 #
Is that the “new version of the site” you’ve been teasing for like a year now?
Comment by Dave Pomerantz— January 13, 2012 #
Yes. But this time it’s for real. Designs are in motion.
Comment by Mike— January 13, 2012 #
Is the whole page going to be a background image? And if so does that mean it will be a .gif?
Comment by crushinator— January 13, 2012 #
Yes. It will be just like Josh Macciello’s page.
Actually, I’m really excited about it. Aiming to have it ready by Opening Day. Lots of fun things coming… suggestions welcome, though.
Comment by Mike— January 13, 2012 #
Please excuse the accountant in me – yes, signing a contract creates a liability but there is also an asset to value. You only affect the value if the asset exceeds, or is less than, the liability.
Shaikin assumes that the liability exceeds the value of the asset but, with a new contract signed in a “free market”, it is fair to say that they are roughly equal and create no impingement of value. Olney’s contention is there is value creation in a signing, in part because the lack of competition means there is cheaper deal to be had. In this case, Frank is probably utterly predictable – he will reach his own conclusion on whether the signing puts a buck in his pocket, and act accordingly.
I recall reading months ago that an insider said, at $1.2 billion, Frank nets $50 million. Adding up the allegations of cash taken out of the Dodgers, what he paid for the team, what he owes Jamie, legal bills, his tax dispute, etc. that number is probably not too far off the mark. I suspect $50 million doesn’t jingle Frank’s bells loudly enough, so look to either (1) the best financial engineer or (2) the biggest and richest ego to win this thing. The bidder looking at it from a value perspective gets left in the dust.
Comment by Luke— January 13, 2012 #
> The bidder looking at it from a value perspective gets left in the dust. <
aka Mark Cuban, who by his own words will woefully underbid.
And btw, for all the talk about the Dodgers being overvalued, or that its worth is really much less, the monetary value of anything is whatever it goes for. Diamonds for example are really "worth" little, less than many gems, because there are so many of them on the market. But their value is what they're sold for, at an agreed-upon, artficial, elevated price set by diamond merchants, for whatever a buyer will spend to get one. Just like oil. The value of a gallon is something between $3.30 and $4.75 a gallon, depending on where it's sold. But its "worth" to the seller is much less, because the US government allows the illegal cartel OPEC to set its price arbitrarily, like the diamond seller, to bring in what the oil marketer desires, which is, for starters, between 60 cents and $1 profit taken off the top. Again, all the oil sellers agree on the artificial price of a barrell of it. But its value is as it's sold for.
In the case of the Dodgers, 100% of the Dodgers, which is to say the only team called the Dodgers, will be sold for something between $1.5-2 billion. So that IS the Dodgers' value, because that's its going price.
Comment by Native Angeleno— January 13, 2012 #
Heh@reference to OPEC, leaving that aside, I will agree with you on Mark Cuban. I’ve always wondered about people’s love affair with him. Cuban operates in the NBA which has a pretty firm salary cap and is a hard nosed businessman (just look at his commentary re: Hornets and their recently nullified trade with the Lakers) who has benefited mostly with a positive PR spin.
Comment by Greg— January 13, 2012 #
Mike, if McCourt signs Fielder do you somewhat forgive him for those 57 wins or do you still hate him? Does making a big move that puts the Dodgers in contention immediately excuse any of this mess?
Comment by Frank— January 13, 2012 #
*sins not wins
Comment by Frank— January 13, 2012 #
Not at all. He’s still been a scumbag for eight years. If he does get Fielder, I’ll still see it as him either hoping it’ll improve the sale price or his public image or both, not trying to help the team win.
Comment by Mike— January 13, 2012 #
“Public Image”? Wasn’t that Johnny Rotten’s back up band?
Frank cares not a rat’s ass about public image unless it is handcuffed to a dollar.
Comment by Luke— January 13, 2012 #
The reason McCourt has not gone after Fielder is that Fielder’s cost to the next owner over the life of that contract would have lowered the value of the team, would have passed the cost for Fielder onto mcCourt’s profit. If McCourt thought signing Fielder would have raised the value of the team and increased his take, he’d have signed both Fielder and Pujols. Had he done so, the price for the Dodgers would have dropped equal to the cost of their contracts. That’s why Colletti cut payroll by $20 million, that’s $20M more that in the bidding will end up in McCourt’s pocket.
Comment by Native Angeleno— January 13, 2012 #
Seems to me Fielder should be considered an asset. The players that put butts in seats are, by definition, an asset. Or am i looking at this wrong? I read a study somewhere that said these positive WAR players actually pay for themselves. Fielder batting behind Kemp. Who wouldn’t pay to see that?
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The more I think of Fielder and Bora$ just sitting there, patiently waiting, the more I believe this is a deal waiting to happen. Of course, as was previously mentioned, I have been wrong before.
Comment by badger3— January 13, 2012 #
I don’t know the answer to this, but I wonder how much damage is done to that theory by how long this is dragging on. The longer it takes to get Fielder signed, the less time the winning team has to market him in their season ticket packages.
Comment by Mike— January 13, 2012 #
Kemp’s contract is an asset because his absence would lower the value of the Dodgers to the bidders; Fielder’s contract would be an expense to the owners that McCourt would have added to the team to make the team more attractive to buy, so the bids would be lower with Fielder, his cost passed on to McCourt, but not with Kemp.
Again, this is why Colletti was told to lower the payroll by $20 mill. It made the team more attractive, therefore resulting in higher bids.
So what’s an asset and what’s a cost bidders don’t want to have to pay depends on who’s selling what, exactly, and what bidders are looking for in their potential purchase.
Comment by Native Angeleno— January 13, 2012 #
Given that McCourt is one of the worst businessmen I have ever observed – if he had actually put the team first and not his place among the glitterati of Los Angeles – he would be on the verge of being a billionaire. With that in mind, I doubt his decision on Fielder is based on anything other than petty vindictiveness with the Dodger fans who had the gall to not spend money on his team.
That being said, McCourt may love money, but he also loved it when he came in as the White Knight when Fox sold the team to him. You had to go long and far to find a baseball writer who wasn’t slapping Frank on the back. Money is wonderful, but if he intends to live in Los Angeles – which is the scuttlebutt – then it would behoove him to not burn all of his bridges in this town.
Comment by grabarkewitz— January 13, 2012 #
It’s all a matter of how one defines successful. I certainly don’t know for a fact but it’s probably true that he’s got more money than most of us commenting on this here blog. Of course money is not the final arbiter of success but it is generally the most agreed upon metric.
As for burning bridges, look at all the people who’re laughing with McCourt at the owner’s meeting, these people don’t give a whit about bridges burned or whatever, they care about money and McCourt has just increased the value of all of their franchises once they’re benchmarked against what is assumed to be a new high when the Dodgers are finally sold. It will be the same thing in LA. If people can obtain some kind of financial benefit from McCourt, they won’t care that he was a horrendous owner of the Dodgers.
Comment by Greg— January 14, 2012 #
I think you overstate any emotion in this reptile greater than sheer blinding greed. I don’t think Dodger fans have ever been anything more to him than, at worst, occasionally annoying mosquitoes, if that, mere pawns, numbers on a ledger sheet that had yet to cough over every penny of their disposable income to him, in his battles with Bud to secure the big tv deal, which alone could have made him a billionaire for the rest of his life.
Comment by Native Angeleno— January 14, 2012 #
I think your point is a good one Mike, but my gut tells me, with 56,000 seats at Dodger Stadium, they won’t have any problem selling the place out, or coming close, no matter when the announcement is made. Hell, if I was in town at the time, I would be there, even if it meant sitting up with the seagulls.
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At $25M, Prince will make about 75 Grand a night, for 162 games. How many extra tickets per game will that take to cover that cost? Or, do we have to only count home games? I don’t pretend to know the formula. That’s for smarter guys than me, or guys who run blogs maybe? But, seems to me it might be easy to cover those costs. Hell, the Dodgers might make most of that in Fielder jerseys alone.
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And, won’t it be cool to see that place packed again. It can happen. It WILL happen, if the right guy is sitting in the owners box.
Comment by badger3— January 13, 2012 #
Think i read somewhere that jersey sales actually get split between all of MLB
Comment by DodgersKings323— January 13, 2012 #
I read an interesting piece in the Baseball Prospectus book “Baseball Between the Numbers”, though it may be a little outdated. It assessed the profitability of mega-contracts based on the assumption wins are what really sell tickets, so WAR is the endgame. You have to look at how much money each theoretical win costs and compare it to how much each win is increasing attendance totals. The tricky part is that each win becomes more or less valuable based on where the team is in the standings. If the team is already a lock to make the playoffs, there’s not a whole lot of return on the investment. The same goes for teams that suck even with the superstar. But for fringe teams fighting their way through a pennant race, a player like Prince just might bring in enough attendance to justify the contract. Historically, though, this situation hasn’t occurred much. Bottom line is that $100m + are risky, even if the player maintains good production.
Comment by Paul— January 13, 2012 #
While dollar amount is important, the more critical component is the length of the contract. There’s very little doubt (though greater than 0) that someone like Fielder’s WAR in the first year or two of his mega contract will justify his salary, the problem is the length that he wants. I don’t think Fielder will settle for a contract that’s less than 7 years in length. And with someone with that kind of a body type, it’s not difficult to imagine how far off the precipice his performance decline would be. At that point the team is left with an albatross of a contract without a DH position to play him.
Comment by Greg— January 13, 2012 #
Absolutely. This is why I’ve been one of the more outspoken opponents of signing Fielder, though at this point I’m so uninspired by the moves this club has made that I’d almost be happy to see it happen, just to pretend we’re still a prestigious franchise.
Comment by Paul— January 13, 2012 #
The WAR financial story you described is a small part of the equation. When you go beyond getting the fannies in the seats, drinking the beer, parking, buying the trinkets (including jerseys, pennants, Dodger caps), blabla, at the ballpark, there is the greater increased revenue from people who don’t go to games, who ratchet up the ratings watching on the tube before the tv contract is negotiated, buying the trinkets, which includes wearing Dodger caps, which cumulatively upticks bandwagon support…How can that be quantified, beyond buying the jersey with the specific player’s name on the back?
iow, guaranteed it’s much more than merely the attendance. How much more?…
Comment by Native Angeleno— January 14, 2012 #
No thanks, because he says “The best team money can buy” do not want……….but everyone is going to say that…
Comment by DodgersKings323— January 13, 2012 #
Every appraiser knows this one foundational principle from USPAP “Price does not equal Value”. The value is not in the Dodger franchise. It is in the intangible assets, the TV rights, the potential real estate development, and the ludicrous appreciation that occurs when an egotist wants to own a major league franchise like the LA Dodgers. Who would pay $1.5 billion for an investment that returns merely $30 million a year? You can get that return when investing in a 10 year US treasury obligation. Cough cough. the value occurs in 2014 with the new tv contract or Cable channel, and the subsequent real estate development.
Comment by Ken— January 13, 2012 #
Good points Ken. Gotta listen to the lawyer when he speaks. I learned that the hard way.
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But I will offer this just for thought – these billionaires buying a baseball team probably aren’t doing it to make money. This is for their ego. They already got everything else they ever wanted.
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Prince Fielder is only 27, and though he looks fat, I am told he really isn’t. The man moves very well, and should be ok through a 7 year contract. At 27, statistically his most productive years could be the next 5. If there is a problem that develops before age 34, the last two years of that deal could be handled in a DH role somewhere. I say again, the idea of Fielder hitting behind Kemp is going to fill up stadiums all over the league. Add Kershaw on the mound, and it’s a freakin’ sellout 34 times a year, no matter where it happens. And as hard as it is for an oldtimer like me to say it, I think a guy like Fielder is worth the money.
Comment by badger3— January 13, 2012 #
Fielder/Boros will not agree to a contract thqat only goes 7 years, and leaves him vulnerable and without a contract if he got hurt at the age of 34. My guess he’ll want 10 and if there’s competitive bidding for him, maybe 12.
Comment by Native Angeleno— January 14, 2012 #
12? With so many teams out of the bidding? That’s insane. He’ll end up with 8, max.
Comment by Mike— January 14, 2012 #
8 years, age 35?? I doubt Scott Boros would accept that. That’s what a free agent long-range contract is all about, securing the payday past your prime. If there’s competitive bidding for him, bet Boros stretches his contract at least 3 years past age 34. After all, Albert just stretched his to age 40, A-Rod’s runs till he’s 42, Braun got an extension to 37. 35 isn’t enough for a FA with his numbers. But if it isn’t there, he may go for a short contract, put up the numbers again for 3 years and try for a longer one then, at 30.
Comment by Native Angeleno— January 14, 2012 #
Yes, but when you buy the Dodgers, you’re buying all the intangibles too. So “the Dodgers” means all of it, the brand name, the good will, the tv money, not just the players called the Dodgers! The value of all of that is the value of the team, quantified by the cost of the team.
Comment by Native Angeleno— January 14, 2012 #
Kuroda is officially a yank :(
Comment by crushinator— January 13, 2012 #
Kuroda a Yankee. I’m surprised nobody else broke the translator news. Well done.
Comment by Real Tom— January 13, 2012 #
Deal with Yankees is between 10 and 11 Mil!!!!!??? I want to punch something. Insane.
Comment by Real Tom— January 13, 2012 #
No, you don’t want to punch someTHING, you want to punch someONE. And he wears boots and makes dumbass “veteran” signings.
Comment by Greg— January 13, 2012 #
[...] suggestion was understandable, but Bill Shaikin‘s rebuttal was reasonable, as Mike Petriello pointed out. As you can imagine, I tend to agree with Shaikin on this. While Olney’s points are valid, [...]
Pingback by Chad Moriyama – Los Angeles Dodgers Not Getting Prince Fielder & Frank McCourt Still An Asshole— January 14, 2012 #
[...] could possibly increase later if Fielder was around, but that’s no guarantee; Bill Shaikin has suggested adding a $150m+ liability could actually depress bidding.) You could argue that McCourt wants to [...]
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