Tom Boswell Tells It Like It Is !
by wxguy on Jun 5, 2009 9:00 AM EDT
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PrintIn today's Washington Post, Friday, 5 June, Thomas Boswell, has taken off the kid gloves and let's the Lerners have it.
Boswell, an outstanding sports writer, does it respectfully, but directly. I quote,"...When the problems go this deep, the causes should be sought at the top, not the bottom. Accountability doesn't lie with a pitching rotation full of rookies, or a bullpen built on tissue-thin resumes and prayer.... But now the blame---and the solutions, if any--surely must lie at the top with the billionaire Lerner family and team president Stan Kasten." ( I would disagree that the problem is Stan Kasten) Boswell closes with, " The reasons for that damage, like any hopes for the future, start not with relievers, coaches or even managers. They start right at the top. And can only be fixed there."
We have maintained over the past couple of years that the problem has always been at the top. My conspiracy mindkeeps asking why the Lerners are doing this? My theory, given the Lerners' real estate and development background, is that they purchased a team (Think a parcel of land or a building complex.) and now they spend as little as possible to develop it, knowing that inflation will eventually cause the item to appreciate in price. They then sell the building/team to some sucker at a much higher price in about 5 years or so, and make a nice little profit. To hell with the folks who live near, or in the development. The alternative conspiracy theory is that MLB never wanted to be in DC, because it is too close to Congress, the body who controls the holy grail of business, the Anti-monopoly laws which baseball guards so closely. What do you think about my theories?
Finally, I wonder when we will hear from the Lerner's concerning this inferior product they are selling. This team they own is a disgrace to major league baseball, and something one would not expect of the Lerner 's generally quality development. I predict that soon we will hear from them indicating that the fans aren't supporting the team and they may have to sell or move the team. The team's marketing stinks! From the where are the Nats on TV game, to the weakest radio network in baseball, to little, if any, real contact with area groups, to overpriced tickets,etc.,etc.
Have we passed the point of no return???
wxguy
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The Lerners may be in DC, but they seem like absentee owners to me. Too bad the fans couldn’t vote on who gets the club.
Anyone still around from the Senators' era? Did opposing team's fans fill up RFK back in the day?
Vivian Jaffe: "Have you ever transcended space and time?"
Albert Markovski: "Yes. No. Uh, time, not space... No, I don't know what you're talking about."
by Patrick Reddington on Jun 5, 2009 12:30 PM EDT reply actions
Neither you nor Bosewell understand business
Profits on sports teams are lower than most other businesses. Currently this franchise is worth less than the after interest cost of the franchise (read the Forbes article). If this team was bought as an investment the Lerners are pretty stupid folks. No you buy a Sports Franchise so your name can be in the media and because your a super competitve person who wants a direct competition with other egocentric dudes. Making a profit is essential to some owners who live off the teams (steinbrenners), but for most its just bragging rights. Owning a baseball team is fantasy baseball for the egocentric. It rarely makes you big money. Almost no owner has any kind of appreciable jump in his wealth from a team. Just in his ego and celebrity.
On the other hand, they are safer investments than most. so you can preserve wealth with a sports franchise fairly well. Run wisely you can enrich your grand kids. But, the key is to be wise with your money and not just throw it around like you and others seem to think is the key to build a franchise. Money does not win, great management with enough resources wins. Winning teams are built through wisely run drafts and trades. Free agency has never been the primary way to build a winning team. You tweek in free agency.
Now in my opinion thia frachise looks better for 2011 and the 5 to 10 years afterwards than any other in the business right now. We just need to get 2-3 years of experience under our current starters with solid coaching, and our rotation is set for the long haul. Ryan Zimmerman will win an MVP as soon as this team wins. So to complain about the Lerners just makes Boswell and others look bad. Because they are wrong.
"What you know is often the enemy of what you can learn" Bill James
reply to PhDBrian
Dear PhDBrian,
I guess I am dumb because I only have a MS in atmospheric physics, and have been a life long baseball player and fan.
The fact of the matter, most all major league baseball teams are profitable when you crank in the tax loop holes. Otherwise the Players Association would have no basis for their salary demands at contract time. Did you ever hear about player salary depreciation?
This is the same sort of rubish that you hear about when you say the corporate taxes in America are the highest in the world. Maybe the tax rate on paper is that high but when you did deeper you find that only the effective tax rate is only about 16% after the tax loop holes are applied, and only 50% of corporations actually paid taxes last year. It’s called cooking the books.
When was the last time you heard of a franchise being sold at a loss???
The Lerners act like absentee landlords. They not shown any interest in making the Nats a winner.
They are not kidding anyone, except maybe you.
In other words, “Show me the money”!
wxguy
I dont think the Lerners are absentee landlords....just careful
I think theyve had some bad advice on some players but are doing what they think is the most cost effective way to build the franchise. Sure they have made some mistakes on the back of Bowden…but I dont think they would be ansentee landlords if they bid for Texeria. Dunn was a decent free agent purchase…but I think some fans expect a degree of Yankee buying on the market and thats not possible for all teams.
I sincerely think that this management believes that they want to get 80% of the team developed from drafts/farm system and then plug the rest with free agents. Ive heard Rizzo mention that he thinks the offsense if fixed…only the pitching needs work. I would expect the bullpen to be ‘bought’ this winter as they start to improve. I do believe the management that this took a while to break…and its going to take a while to fix. Its sad and very frustrating, but I think if our young pitchers start to work out, we’ve got a decent shot.
"Baseball is like church. Many attend; few understand."
So because I have an M.B.A. and nearly a PH.D. in Finance your going to call me knowledgable about Physics?
If not, then why would you assume you know more about a harder subject than your own at the Ph.D. level than I could know about your subject? Suffice it to say you are not stupid, you just do not understand accounting at a doctorial level. Problem is you seem to think you do and probably vote accordingly.
The marginal tax rate on corporate america is the second highest in the world. We use the same basic accounting rules as most of the world. So we are playing by nearly the same rules and charging our guys far more when they pay. I could cite for you published academic papers on the evils of corporate taxtation that go back to the 1930s and still get published today. Most talk about the direct relationship between employment and corporate taxation. thereoetically the only way to fully employ a society is through zero corporate taxation. The higher your corporate tax rate the higher your unemployment. It is an absolutely factual thing to say. Now If you want to screw rich people then raise capital gains, dividends taxes, and start a wealth tax (the best way to redistribute wealth is by taxing wealth). Corporate taxation mearly takes jobs to where the tax is lower.
The only deductions available to all corporations in the US are to write of all legitimate expenses. Legitimate expenses include depreciation on equipment which for any rapidly growing firm should lower than their effective tax really low. The other big write off is for deductions on interest. If a company borrows money it can write off its interest payments. As a result the ultimate financing structure of a firm includes enough borrowing to make taxation zero. That is how most firms get around taxation they borrow until the tax rate falls to zero. This is not a healthy practice in my mind.
We could talk about loopholes somewhere else, but suffice it to say 90% are the government trying to tell a firm to behave in a certain way and Obama has nearly doubled them. Such as the tax loophole on Green cars. If you make a hybrid car you get a tax deduction on all research and not just on part of the research. Or the pension benefit. Companies can write off pension benefits to employees when taken and not when incrued. Or carbon reduction tax: A company that finds a way to lower its carbon footprint gets a tax break for the degree of change. Etc. These wont go away anytime soon.
The after tax, interest, inflation changes in currency, and expenses, Nintendo was at a loss on the Seattle Mariners. The tribunes real return on the cubs was 1% better than inflation ( a return almost anyone could beat in their sleep).
Most franchises turn a real net profit just one or two percent points better than inflation. Remember the owners borrow heavily to buy these firms at interest rates of around 6%. I could go into a very long list of expenses that franchises spend, but suffice it to say the owners do not change their financial class because they own a team. Teams are steady cash cows, not dot com wealth explosions. Profit margins are very solid, but not enormous. Owners do well, but not ungodly. And it is very hard to lose money on a team, but it has been done.
"What you know is often the enemy of what you can learn" Bill James
I would have thought owning a team is quiet capital intensive and have a high risk profile
I wouldnt want one if i wanted to make lots of money… far too risky. But I am risk adverse.
"Baseball is like church. Many attend; few understand."
The biggest money in sports comes from Stadium ownership not team ownership
That is why a team worth $200,000 can play in stadiums worth upwards of $600,000 to a billion and a half. That is also why a city like NYC wants to own two major baseball parks and spends $3 billion dollars to get them. The steinbrenners could have paid to build a new stadium themselves. It would not have been as nice a stadium, but they would have made more money onit than the team. However, the city took on the project because they want tthe returns. Stadiums pay as well our better to cities than lotteries do for states.
"What you know is often the enemy of what you can learn" Bill James
Reply to PhDBrian
I’m sorry PhDBrian but George Steinbrenner spent $1billion plus for the new Yankee Stadium.
It was not funded by the city. The only costs to NYC were street improvements and a new subway station.
Please check your facts. The city also does not spend$250 million on player salaries. Steinbrenner does!
wxguy
according to this article
the City spend over a billion dollars on Yankee stadium
"What you know is often the enemy of what you can learn" Bill James
This article says the cost to the Yankees was $325 million
http://www.baseballprospectus.com/article.php?articleid=4732
"What you know is often the enemy of what you can learn" Bill James
this article written in Jan says the city has funded 1.4 billion for yankee stadium
"What you know is often the enemy of what you can learn" Bill James
My conspiracy mindkeeps asking why the Lerners are doing this? My theory, given the Lerners’ real estate and development background, is that they purchased a team (Think a parcel of land or a building complex.) and now they spend as little as possible to develop it, knowing that inflation will eventually cause the item to appreciate in price. They then sell the building/team to some sucker at a much higher price in about 5 years or so, and make a nice little profit.
I don’t see that making sense. If the owners sell the team at a higher price solely because of inflation, they haven’t actually made any money.
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