analgin wikipedia enandrofin tofranil drug information cholesterol levels for women fluconazole 150 milligrams meds from india diovan side effects valsartan diovan potassium levels in food chart compra cialis 5 mg lotrisone clotrimazole for ringworm erexin spray foam januvia medication and weight loss prevacid dosage formsprigily lilly cialis 10mgrezeptfrei norvasc amlodipine side effects protonix without prescription wintomylon bulaklak neurontin side effects what is neurontin used for lopressor medications that cause sun sensitivity iv benadryl zofran and toradol for migraines cialis prices canada celebrex side effects in women epharmacy usa deficiency of the kidney doxycycline no presecription naproxen side effects risk cyrux pastillas anticonceptivas viagra online indonesia kamagra hong kong elocon cream 0.1 side effects over the counter gabapentin buying cialis online reviews zyban side effects wellbutrin triamterene hctz 37 5 25 mg tb alendronate sodium 70 mg tab sales of levita viagra popular british websites aciphex coupon coupon requip starter pack discontinued indomethacin 25mg uses medrol order duroval sildenafil cheapest canada drugs online pharmacy mirtazapine for dogs glucophage side effects medication cialis purchasing cialis 100 mg strength clindamycin for dogs antibiotic how long to start working parcopa discontinued ralph atenolol drug medication cleocin hcl dosage medex viagra protonix 40 mg treatment mail order prescriptions order aciclovir from canada amikacin ear drops for dogs seroquel and weight gain treatment online cialis without a prescription cialis 2 5 side effects of peritol pills cipro online no prescription aggrenox vs plavix vs coumadin lamisil spray china pharmacies no prescription doxycycline for dogs price pfizer animal health products clozapine dosage for schizoaffective disorder grifulvin v 500mg information clearing acyclovir 800mg medication side effects finasteride purchase overnight vpxl carprofen 100mg prices metazole 5 mg viagra without pres differin cream 0.1 reviews buy lamisil without prescription skelaxin muscle relaxer reviews cheap female viagra online software house international logo tricilest composition of functions doxycycline 100mg x180 pills cheap fursomide viagra tablets in bangalore bactrim ds side effects and interactions with other drugs kann man kamagra in der apotheke kaufen buy caverta flomist wikipedia onadron ampulla is elimite over the counter duvadilan side effects pregnancy zovirax sale in canada flomax 0.4 mg what is it for imiquimod side effects orlistat tablets usa lilly icos cialis colchicine 0.6mg tablet norlevo pill viagra blogs bay prednisone glucophage 850 mg tablet for sale z pack zithromax for sale 1 mg prednisone no scrip pinamox suspension anxiety and depression after surgery doxazosin mesylate side effects tamoxifen breast cancer preventative finasteride generic 1mg overstock drugstore septra side effects cialis soft depakote side effects weight gain coversyl side effects in men novolog patient assistance programs imitrex nasal spray dosage buy viagra online legitiment reductil diet pill reviews praziquantel dosage for fish duetact 30 2mg procalisx reviewed and approved is sun pharma finasteride agood brand cordarone 200 mg prices buy triamterene online xlpharmacy scam overseas rxdrugs no proscription pfizer news articles forzest review safe black market viagra buy mifepristone canada cheap doxepin online usa comprar viagra en puerto rico finasteride side effects doctor betacin 25mg fentanyl effexor withdrawal symptoms and help buy levothyroxine online apotik yang menjual cytotec albendazole single dose side effects cialis samples for physicians cipro canadian customer best prices cialis canada buy domperidone online new healthly man xalatan eye drops storage fedx viagra overnight chewable viagra pills for sale viagra soft no prior prescription kako se koristi kamagra gel indian pharma cooper online levamisole dewormer goats generic ed drugs online propecia hair loss reviews hytrin medication for bph mesalamine 400 mg ec tab avapro 300 mg alternatives canadian pharmacy online viagra tretinoin gel 0.01 reviews terbinafine hcl cream side effects catafast dosage calculations can i get high on trazodone epanutin medication identification levitra online amex ceftin and alcohol use blueforce viafra printable viagra coupons online pharmancy levitra 5mg rezeptfrei 10 mg lipitor for sale pennsylvania pa clomid for sale uk adalat cc nifedipine purchase prednisone online milnacipran drug information erlamycetin tetes mata cendo cholesterol guidelines for women how to make sildenafil citrate asacol hd 800 mg who is the manufacturer beprogel scalp med xanax dosage for dogs viagra sans prescription percocet 10/325 mg cefalexina 500 mg dosage congestive heart failure torsemide vs furosemide buy generic cialis online canada tryptizol drug interaction skelaxan no prescription kamatra sumatra enalapril side effects for dogs viagra online order buy cialis online mastercard lidocaine viscous 2 dose nolvadex pills online name of viagra for women i prinzide zestoretic side effects topamax side effects hair loss buy celexa without prescription pristiq absetzen rimonabant drug buy medrol wellbutrin buying with master card valium withdrawal symptoms hydrodiuril manufacturers therapy management corporation louisiana australia drug were to buy januvia coupon 50 off amoxicillin dosage chart for kids levothyroxine to buy in uk zentel worm medicine for adults for sale egas eindhoven strattera reviews avodart bestellen motilium no rx mobic 7.5 jasmine tridevil frumil 5/40 cardizem side effects diltiazem lamictal withdrawal symptoms rash oracea reviews acne casodex side effects bicalutamide 50 awc conadian pharmacy promo code glucophage and pregnancy success stories expiry of viagra pills cozaar generics 120mg generic viagra india sominex sleep aid coupons zetia medication reviews orth american pharmacy nitrazepam prospect capital corporation percocet 512 information oxycodone minocycline 100 mg capsules acne thalidomide babies pictures birth defects advair inhaler dosages peritol dermatitis seborreica mygra sildenafil extended release depakote and weight gain zinoxime 750 amzocor rogaine for eyebrows oprah depakote er side effects canadian pharcharmy online trazodone overdose long term effectstretinoin thyroxine medication for dogs viagra overnight shipping usa discount cialis viagra pinamox 250mg is how many grams diclofenac pot 50 mg tablet mylandiclofenaco norlevo torrinomedica zyvox 600 mg foods to avoid inderal retard mitis gyogyszer permethrin insecticide and cats where to buy metformin online doctor viagra alphagan p 0.1 eye drops healthy male viagra for cheap cephalexin black market australia dose of nifedipine for preterm labor sertraline hcl high zyvox prescription assistance program order cipro 500 mg tablets alli canada pharmacy arthritis symptoms in hands and fingers tussionex cough syrup for sale stromectol scabies how fast does it work buy doxycycline for chlamydia doxycycline shoppers drug mart buy cialis pay with paypal std online pharmacy shipping worldwide ivermectin side effects for dogs comment se procurer du viagra no prescription alesse buy birth control without prescription do you need a prescription of strattera 5mg lavitra canadian pharmacy acyclovir philippines buy cialis get viagra free sumycin medication canadian online pharmacy buy permethrin do low cost viagara pills work tamsulosin flomax classification canadian pharmacy femara aspirin dosage pyridium over the counter dosage girls viagra praie rx in canada metformin and alcohol medication levitra canada drug store india buy proventil online cardizem dosage available oxybutynin medications xanax overdose treatment sinequanone meaning of flowers alli diet pill cheap genetic viagra using mastercard online viagra from canada orlistat canada gupisone prednisolone 20mg doghaldol spiriva handihaler capsule coupons yasmin no rx does teva 5312 500 treats stds adipex reviews doctor adipex p bevispas medication for anxiety pyridium medication cost cheap tadalafil usa once daily cialis reviews toradol online cost of generic doxycycline viagra before surgery flomax medication valium 5mg compared to xanax viagra for sale in nz clomid online no prescription order chlamydia pills cheap medications aldactone medication indications sildenaflex viagra alternative atenolol atenolol side effects medication forum pharmacuticles from canada liposafe gnc store lifta tadalafil flomaxtra sr zantac 150 otc side effects atacand candesartan cilexetil inderal medication for anxiety trileptal oxcarbazepine for nerve pain 102 over the counter ativan thuoc renapril 5mg valium vitamix reviews consumer reports what is carafate suspension for dogs best prices for legal levitra cytotec misoprostol inserted vaginally cabaser dosing insulincabgolin blacl market viagra buy zoloft onlne no pre cheap no prescription meds amoxil antibiotic nexium walmart price doxycycline discount virectin consumer complaints sildenafil nebenwirkungen digoxin toxicity treatment viagra online stores methotrexate need to buy from india abilify weight gain patients zovirax no prescription canada commander viagra en ligne salzarex pharmacy schools cialis soft tabs mastercard arthritis foundation walk fosamax side effects osteoporosis pfizer animal health spin off ciprobay ciprofloxacin classification diroton 5mg ambien allopurinol 100mg information buy carvedilol cheap no prescription m361 pill is it strong buy cheap orlistat 120 mg in usa allegra d side effects doctor claravis treatment for acne viagra online ratings maxalt migraine dose clavaseptin for cats baclofen pump implant mri vitamix vs blendtec consumer reports viagra performance anxiety rythmol drug interactions can i buy brand cialis on line milanuncios perros fosamax generic date map of abana river viagra and afib zyrtec side effects benadryl for infants and toddlers astelin nasal spray azelastine hydrochloride trazodone for insomnia treatment mupirocin cream used for alphagan 0.2 viagra mexico pharmacy mexican pharmacy ships to us provera 10mg online no prescription canadian drug store no script where can i purchase nexium viagra 1 800 promethazine dm syrup lamotrigine overdose symptoms side effects of altace 10 mg keflex 500mg cephalexin for dogs mirapex medication diane 35 and yasmin pharma online drug 24h reviews doxycycline mexico lopressor generic form flexeril generics coupons for viagra buy sildenafil 100mg buy viagra from canadian pharmacies colchicine side effects alcohol zyban wellbutrin side effects cialis 10mg uk black market predisone benadryl ingredients label tablete za mrsavljenje ananas buy legit viagra generic cialis free sample salbutamol inhaler dosage venlafaxine 37.5mg tab teva usa long term effects of low dose accutane generika levitra deutschland clavaseptin 50mg trazodone pravastatin sodium 40 mg what is it for ventolin without an rx voltaren 75mg uses meclizine 12.5 mg tablet side effects tamsulosin hcl 0.4 mg capsule what is it for etodolac 400 mg get you high amiloride hctz glipizide er 5 mg tablet viamedic complaints against companies toradol 60 mg injection side effects diazepam side effects for dogs unisom overdose suicide is bactroban over the counter medicine cheap ed pills best price for cialis 5mg warfarin diet foods coumadin xanax bars side effects tramadol side effects medications mayo clinic cycline enterprise rental cars pfizer viagra online cheap prostata agrandada y dura garlic clove picture cyrux dosis de amorcytotec rapidtabs legal free relafen 500 mg bid amoxicillin dosage farmaci generici cialis buy cialis without pescription lialda coupon for 2014 finpecia 1 mg for sale was laguna beach scripted reisen aktuell fanegada conversion betneval lotion lidoderm patch clomid serophene medicationssertralina tizanidine side effects medications samonas sound therapy reviews clenbuterol cycle dosage chart lortab 5/325 street value can you buy phenergan online paracetamol tablets medicine salbutamol nebulizer medication side effects overniight meds tadalafil cipla online canadian pharmacy viagra echeck how to buy generic proscar anxiety medications fosamax dosage soft chew generic viagra usa no presciption navidoxine drug testing cheap levitra for sale viagra dal canada bioxetin pregnant vardenafil hcl 20mg generic cialis reviews thuoc amoxicillin rapidtabs legal aid mircette side effects mood suprax cefixime capsule 400 entocort medication retina a no presciption indocin 25mg capsules dilantin levels therapeutic dicyclomine hydrochloride bentyl is nolvafien the same as nolvadex levaquin antibiotic levofloxacin buy viagra boots getpharma uk daily mail mirapex medication info antibiotics and birth control pill medstore online pharmacy reviews amoxicillin canada nasonex nasal spray side effects acne clenbuterol cycle cefaclor capsules dose tryptizol dosage for melatonin veagra compro 100 mg clozapine for dogs no rx dosage celexa side effects celexa weight gain pharmacy express belize city belize omifin en hombres catafast 50mg anavar chloroquine autophagy buy alli at canadian pharmacy xeloda colon cancer liver chlamydia symptoms in women bying cialis non prescription buy viagra super active buy cheap doxycycline generic evista availability cialis canadian pha esomeprazole sodium for injection albuterol nebulizer side effects in children zestril side effects lisinopril
Home Pete Toms Is Selig to Blame for Franchise Debt Problems in MLB?

Like Shoot to Thrill - An AC/DC Tribute on Facebook!

An authentic tribute of AC/DC that covers the best of the Bon Scott era and the best of Brian Johnson's material

Who's Online?

We have 817 guests online

Atom RSS

Is Selig to Blame for Franchise Debt Problems in MLB? PDF Print E-mail
User Rating: / 3
PoorBest 
Pete Toms Article Archive
Written by Pete Toms   
Monday, 21 February 2011 18:28

Baseball and moneyMLB is prospering. Despite the recession, revenues have grown to almost $7 billion annually. The two most recent franchise sales, the Rangers and Cubs, saw both fetch staggering amounts. Like him or not, the biz of MLB under commissioner Selig has been a spectacular success for both owners and players. (I’ll leave the debate of whether Selig has transformed the role of Commissioner into COO, and the merits of that, to others more philosophical) Much of Selig’s success has resulted from his unification of the owners. While his critics decry MLB ‘s clandestine process of transferring ownership of franchises to FOBs (Friends of Bud), Selig long ago ended the inter-ownership battles that contributed greatly to baseball’s lengthy and harmful labour interruptions. But while the biz of MLB has continued to flourish despite the financial meltdown, some individual franchises have been left in vulnerable positions due to the debt problems of their owners. When Hicks Sports Group, a holding company of former Rangers owner Tom Hicks, defaulted on debt payments it led to the Rangers franchise eventually filing for bankruptcy. More recently, the well documented personal financial problems of the Mets owners Fred Wilpon and Saul Katz, along with those of Dodgers owner Frank McCourt, have led to speculation that both those franchises might also become ensnarled in bankruptcies. LWIB saw commissioner Selig criticized in the media for allowing franchises to become burdened by the broader financial problems of their owners. In fairness to Selig, ownership of an MLB franchise is typically more complicated than it was as recently as the 90’s. Franchises are but one part of a business model that is also dependent on both media and property development rights. The exponential growth in franchise values, which Selig deserves some credit for, also has resulted in clubs comprising an ever greater share of their owners’ overall financial worth. Going forward, some say it is essential and imminent, that MLB will attempt to implement new rules to protect franchises from the debt troubles of their owners. Whether or not the owners will be amenable to these proposals is a potentially sensitive matter. So, lets have a look at what is being said, starting with Josh Kosman’s report LWIB for the NY Post that some wonder if the Mets situation is the Rangers redux.

Banks that provided roughly $400 million in loans to the New York Mets are starting to unload some of that debt at a discount, a sign that creditors are getting nervous about the team's finances, The Post has learned.

Potential buyers are bidding around 90 cents on the dollar for the debt, sources said. At least one creditor has bought a debt slice at a discount with the approval of Major League Baseball, which must sign off on any buyer of the team's loans, said one source.

"This tells me the original lenders are scared," a source close to the situation said.

AND

One source said MLB is holding up trading in the loans because of concerns that vulture investors will snap up the debt and force the team into bankruptcy -- just like they did last year to the Texas Rangers.

"[MLB] is being very difficult," the source added.

SELECT READ MORE TO SEE THE REST OF THIS ARTICLE

In light of the rampant speculation surrounding the financial health of the Mets and Dodgers (obviously, two of MLB’s crown jewel franchises), LWIB Ben Klayman of Reuters wrote a piece titled Baseball needs to strike out owners' debt issues. Within the piece, both on and off the record sources directly blamed MLB (Selig) for allowing the Mets and Dodgers to become exposed in their owners’ debt problems.

The off-the-field struggles and heavy debt loads of so many major-market teams' owners have some industry observers questioning the league's stewardship.

"It's either an unfortunate set of circumstances or it demonstrates a consistent failing at Major League Baseball to monitor the ownership of its clubs on an ongoing basis," said Marc Ganis, president of consulting firm Sportscorp Ltd and an adviser to Tribune Co in its 2009 sale of the Cubs.

Baseball, like many sports, saw fans and corporate backers trim spending during the recession, but owners suffered as well. Many are businessmen who used debt to invest and got in over their heads, putting the fates of their profitable teams in question.

"It's not the teams that are distressed, it's the ownership," said a sports banker, who asked not to be identified discussing team finances.

AND

"An issue that will be on the table in 2011 will be upstream holding company debt. There's no doubt about that," said a senior baseball official, who asked not to be identified discussing financial matters usually addressed by Selig.

Klayman’s piece goes on to explain that imposing tighter rules on the non-baseball finances of league owners is easier said than done. Present and potential owners might be offended by MLB’s invasiveness which former commissioner Fay Vincent speculated could lead to more franchise ownership by large corporations. As well, franchise values could be negatively impacted by tighter rules governing owner debt.

While LWIB saw industry insiders take to the media to discredit and criticize MLB for its role, in their opinion, of allowing franchise owner debt to become the problem it is, there is speculation that somebody at 245 Park Ave. already “took the fall” last year. In December, the SportsBusiness Journal reported that the Rangers sale, eventually settled via auction brought about by bankruptcy, was a factor in the departure of the formerly most second powerful executive at MLB, Bob DuPuy. “The contentious transaction, however, sullies the image of MLB in the financial community, and is believed to play a role in the autumn departure of league President & COO Bob DuPuy.”

The SportsBusiness Journal recently published an opinion piece from NYU sports business professor Robert Boland examining what the Mets situation reveals about the more volatile state of present day pro sports ownership. Professor Boland warns that the “big 4” should expect more of the same.

The first lesson about franchise ownership drawn from the Mets situation: The margin for error for any owner has shrunk to the degree that one big mistake — trusting Madoff — combined with other decisions, made with good intention but without great success, can threaten to cost one of the more stable ownership groups in all of sports its franchise. The most unsettling part is that the Wilpons and the Mets are not alone. They have company, whether it is the seemingly impervious Los Angeles Dodgers or the perpetually challenged New Orleans Hornets, and for the strangest reasons.

AND

Perhaps the next lesson of franchise ownership is to recognize that teams can no longer be kept at arm’s length from the rest of an owner’s portfolio. They are simply too valuable now.

This folds into the third lesson: that teams are targets. Given their huge valuations, franchises will be the target of creditors, especially when they overreach trying to jump to a higher foothold. The Wilpons and Mets had seemingly done all the right things in trying to grow their business: starting SportsNet New York, signing expensive free agents and building a stadium. Yet it’s these decisions, coupled with the Madoff thefts, that have left them vulnerable.

AND

…But when Madoff’s embezzlement hit the Wilpons’ cash reserves, compromising the operational liquidity of the Mets — which had already been stretched thin by otherwise “good debt” from the new stadium, RSN and a high payroll — the fragile nature of franchise ownership in 2011 was revealed. The perfect storm may have hit the Mets, but that storm is still off the coast waiting for another team pushing the boundaries of fiscal restraint. So the next lesson may be that these crises may simply not be avoidable.

Ironically, MLB realized in the early part of the last decade that their industry had a problem with club debt. (Not the debt of its franchise owners) The 2002 CBA negotiations included changes which drastically reduced the amount of debt clubs were allowed to carry. Several years later, when the credit crisis arrived, MLB appeared prescient. In March 09, MLB CFO Jonathan Mariner told CFO Magazine:

I like to describe that era leading up to the 2002 Collective Bargaining Agreement as a time when we were financing player compensation and whatever growth we were realizing through debt. There was a lot of available debt, very cheaply priced. We put in place the most critical element of that CBA, a debt-service rule. The debt rule said that what used to be balance sheet, ratio-based debt would become EBITDA-based debt. It also said the debt cannot exceed more than ten times EBITDA.

Most people say, "ten times EBITDA, that's a pretty big leverage factor." But not if you consider that most clubs didn't even have positive EBITDA. We had a lot of work to do. But putting that rule in place basically forced clubs to focus on earnings and, as a result, slowed the pace of payroll growth. Payroll has still gone up every year for the most part, but the pace of growth is more in line with revenue growth.

I don’t know if Selig should have to accept the blame for the messes created by Hicks, Wilpon, Katz and the McCourts. I’m not saying yes or no. But it was evident LWIB that he will likely be forced to at least try to assert some control over the broader financial decisions of his owners. The owners won’t like it but that doesn’t mean it won’t happen. Ultimately they all became members of this private club called MLB because Selig favoured them over others. Over the decades that has fostered a lot of loyalty towards the commissioner and he will certainly need it as he addresses this sensitive, and important, matter.


Pete Toms is senior writer for the Business of Sports Network, most notably, The Biz of Baseball. He looks forward to your comments and can be contacted through The Biz of Baseball.

Follow The Biz of Baseball on Twitter Twitter

FacebookFollow the Business of Sports Network on Facebook

 
 
Banner

Poll

Should MLB Force Jeffery Loria to Sell the Marlins?