Padres got their guy - a bidder gone

[klw]

A deal looks close:
https://www.mlbtraderumors.com/2020/...vish-cubs.html

4:32pm: The trade looks to be close, Heyman tweets. Caratini would “likely” join Darvish in San Diego, though the Cubs want “some MLB experience” as part of their return.

3:04pm: The two teams are nearing agreement “on the multiple pieces” of a Darvish trade, per Kevin Acee of the San Diego Union-Tribune. The Pads “have accepted the haul they will have to send to the Cubs,” Acee writes.

2:50pm: Top catching prospect Luis Campusano is among the names that has been discussed, Nightengale reports. His inclusion in the deal would give the Cubs a replacement should they send a catcher to the Padres. Campusano would join Miguel Amaya as a potential long-term option at the position with Contreras up for free agency in two years (if he’s not traded in this or another deal first).

2:03pm: There’s “growing optimism” that the two sides will complete a deal, tweets USA Today’s Bob Nightengale, adding that an agreement could come together as soon as today.

12:28pm: The Padres are focused on more than Darvish alone, per MLB Network’s Jon Heyman and the New York Post’s Joel Sherman (Twitter link). Both suggest that the talks between the Cubs and Padres could be expanded to include one of Willson Contreras or Victor Caratini.

So not knowing the particulars it sounds like Darvish plus a catcher for X,Y, and z. As a Reds fan, would you have been okay with Gray and Barnhart for Gore plus ?

[TNRED]

Because each of these franchises are worth billions of dollars and so are the groups of people that own them lol

This franchise may be worth a billion but you can't eat equity. The value of an asset is only realized when the asset is liquidated. Billionaires also don't just have huge amounts of cash stuffed in their mattress. They have it invested in other assets. Don't confuse net worth with cash flow.

[Bourgeois Zee]

This franchise may be worth a billion but you can't eat equity. The value of an asset is only realized when the asset is liquidated. Billionaires also don't just have huge amounts of cash stuffed in their mattress. They have it invested in other assets. Don't confuse net worth with cash flow.

*Snort*

Crying poor because he can't liquidate fast enough?

Please.

Only in Cincinnati do fans actively root for the owners and not the players.

[Wonderful Monds]

This franchise may be worth a billion but you can't eat equity. The value of an asset is only realized when the asset is liquidated. Billionaires also don't just have huge amounts of cash stuffed in their mattress. They have it invested in other assets. Don't confuse net worth with cash flow.

They have the resources either way.

[757690]

This franchise may be worth a billion but you can't eat equity. The value of an asset is only realized when the asset is liquidated. Billionaires also don't just have huge amounts of cash stuffed in their mattress. They have it invested in other assets. Don't confuse net worth with cash flow.

We've been through this before. You are correct that the Reds don't have a billion dollars on hand. However, every business can leverage their assets to get cash. Most do it regularly. Considering how low interest rates are right now, and how secure a MLB franchise is, the Reds could get very friendly terms on any loan they take out.

[backbencher]

They absolutely could from 2015-2019. And until we see their books, we can’t say that they aren’t skimping on payroll.

I'll cherry pick one. Here's 2015, Reds #14 in payroll in all of MLB.

2015

Okay, now do the 20 years before that.

Why?

The Reds have the smallest media market in all of MLB. They have among the lowest ticket prices in MLB. They have no plausible claim to be called even mid-market. Any time the Reds are higher than #25 in payroll, they are boxing above their weight, at least as measured by spend. And yet the Reds do it all the time. I don't recall the Reds ever being bottom-5 in payroll. Certainly not under Castellini.

As a fanbase, we should be grateful for the current ownership's financial commitment - it is more than fans in many other cities have seen. Ownership clearly spent to win in 2020. And we must be prepared for constant turnover in the roster; baseball economics compel it.

To be clear, this is not a full-throated defense of ownership or management - only of its spending. The Reds have drafted poorly, developed talent even worse, and often end up spending their limited budget on sentimentality rather than production. They've also been unlucky. So here's to those things changing.

[Bourgeois Zee]

I'll cherry pick one. Here's 2015, Reds #14 in payroll in all of MLB.

2015




Why?

The Reds have the smallest media market in all of MLB. They have among the lowest ticket prices in MLB. They have no plausible claim to be called even mid-market. Any time the Reds are higher than #25 in payroll, they are boxing above their weight, at least as measured by spend. And yet the Reds do it all the time. I don't recall the Reds ever being bottom-5 in payroll. Certainly not under Castellini.

As a fanbase, we should be grateful for the current ownership's financial commitment - it is more than fans in many other cities have seen. Ownership clearly spent to win in 2020. And we must be prepared for constant turnover in the roster; baseball economics compel it.

To be clear, this is not a full-throated defense of ownership or management - only of its spending. The Reds have drafted poorly, developed talent even worse, and often end up spending their limited budget on sentimentality rather than production. They've also been unlucky. So here's to those things changing.

Cincinnati's spending is almost assuredly not commensurate with its profits.

[Revering4Blue]

I'll cherry pick one. Here's 2015, Reds #14 in payroll in all of MLB.

2015




Why?

The Reds have the smallest media market in all of MLB. They have among the lowest ticket prices in MLB. They have no plausible claim to be called even mid-market. Any time the Reds are higher than #25 in payroll, they are boxing above their weight, at least as measured by spend. And yet the Reds do it all the time. I don't recall the Reds ever being bottom-5 in payroll. Certainly not under Castellini.

As a fanbase, we should be grateful for the current ownership's financial commitment - it is more than fans in many other cities have seen. Ownership clearly spent to win in 2020. And we must be prepared for constant turnover in the roster; baseball economics compel it.

To be clear, this is not a full-throated defense of ownership or management - only of its spending. The Reds have drafted poorly, developed talent even worse, and often end up spending their limited budget on sentimentality rather than production. They've also been unlucky. So here's to those things changing.

Your last paragraph sums it up perfectly. I cannot like this post enough.

[backbencher]

We've been through this before. You are correct that the Reds don't have a billion dollars on hand. However, every business can leverage their assets to get cash. Most do it regularly. Considering how low interest rates are right now, and how secure a MLB franchise is, the Reds could get very friendly terms on any loan they take out.

The Reds almost certainly call upon lines of credit to smooth their revenue stream. I'd bet that they also are among the many, many teams that have taken on debt to manage the pandemic.

This all comes at a price

But using "loans" as part of a regular strategy for day-to-day operations? That's a very different animal. And no, it's not a question of whether the Reds could secure money at low interest rates; of course they could. The question is whether you want to boost 2021 payroll by in effect stealing from available operating revenue from 2022 and all future years. That's a dangerous cycle to start.

*Snort*

Crying poor because he can't liquidate fast enough?

Please.

Only in Cincinnati do fans actively root for the owners and not the players.

Pretty sure that we all root for laundry, regardless of the owners or even the players. But understanding a business model is not rooting for anyone. TNRED's comment, "don't confuse net worth with cash flow" is spot on. Just because I drive a $20,000 car does not mean that I have $20,000 cash.

Cincinnati's spending is almost assuredly not commensurate with its profits.

Have any inside knowledge? How about publicly-available facts or even estimates to support this assertion?

Here is one of the most generous estimate of Reds revenues that I've ever seen:

276 million

The CBAs of the NFL and NBA put player costs at 46-51 percent of revenues, with a portion of those player costs allocated to matters like insurance, benefits and retirements. Tell us your assumptions and go ahead and run the numbers yourself.

[Mitri]

Preller is bonkers. Keep the super-elite prospects, don't get at all attached to anything else.

And all of the sudden the funnest team to watch in baseball has added Snell, Darvish and Kim in 24 hours.

I guess the feeling I'm experiencing is right now is what you call...jealousy?

[757690]

The Reds almost certainly call upon lines of credit to smooth their revenue stream. I'd bet that they also are among the many, many teams that have taken on debt to manage the pandemic.

This all comes at a price

But using "loans" as part of a regular strategy for day-to-day operations? That's a very different animal. And no, it's not a question of whether the Reds could secure money at low interest rates; of course they could. The question is whether you want to boost 2021 payroll by in effect stealing from available operating revenue from 2022 and all future years. That's a dangerous cycle to start.

If a team is worth a billion dollars, and keeps increasing in value by leaps and bounds every year, then borrowing say, $20M a year, really never becomes an issue. Especially as I mentioned that they will be getting extremely favorable terms on these loans.

Add in that teams that win take in more revenue and profit than those that lose, and it would be smart business to do so.

[757690]

The CBAs of the NFL and NBA put player costs at 46-51 percent of revenues, with a portion of those player costs allocated to matters like insurance, benefits and retirements. Tell us your assumptions and go ahead and run the numbers yourself.

MLB doesn't open their books like the NFL and NBA, so we have no idea what percentage of revenues goes to player costs. My guess is that it is waaaaay below what the NFL and NbA does, or else they would open their books.

[RedTeamGo!]

Only in Cincinnati do fans actively root for the owners and not the players.

Only in Cincinnati? No. This happens throughout MLB.

[757690]

Preller is bonkers. Keep the super-elite prospects, don't get at all attached to anything else.

And all of the sudden the funnest team to watch in baseball has added Snell, Darvish and Kim in 24 hours.

I guess the feeling I'm experiencing is right now is what you call...jealousy?

The Padres look good right now.

But a few years ago, they made a similar all-in run, and it went up in flames.

[Kc61]

The Padres look good right now.

But a few years ago, they made a similar all-in run, and it went up in flames.

Yeah, can’t count on those Pads. They’re no Cincinnati Reds.