Holiday Hangover

Judging by the number of hits and comments, you guys are either ridiculously bored or still passionate about the Cubs...or just like to argue. I find myself rather indifferent after the holiday break, the Cubs instilling no confidence in me that they know what they're doing and seemingly content to blame the entire failure of 2009 on Milton Bradley and injuries.

I did score my usual swag of Cubs gifts for Christmas. The Angel Fan Wife got me this 1984 Cubs cap, plus I got a new Cubs jersey to add to my collection and various other Cubs-themed knick knacks that always seem to find my stocking including a Cubs-themed Connect Four. I tried to teach the G Twins how to play, but they seemed more interested in making pretty patterns with the red and blue pieces and then releasing the support bar from the bottom so all the tiles came crashing down.

Fun little sidenote about the G twins and living in a split household. Back during the playoffs while the Angels were making a little run, they were of course on the TV a lot. A few days after getting eliminated by the Yankees, I was watching another game and one of my daughters asked where the Angels were. I explained that they lost in the playoffs and that there season was over. Her little lip started to quiver, she whimpered "It's ooover...why?" and the sobbing began. Sadly, that probably won't be the last time she cries about baseball.

Here's the update to the Free Agent Frenzy contest. One person got Rich Harden right (for 10 pts), another Jason Bay(for 8 pts) and a third person got DeRosa to the Giants (for 5 pts).

Here's a link to an All-Decade Team at The Blue Workhorse. Corey Patterson is on it and I don't think it's meant to be sarcastic.

Stop by and wish Aisle 424 a happy birthday, one of the finer new Cubs blogs to emerge in my opinion.

A detailed look into how the Ricketts are financing their loans.

Ken Rosenthal predicts the Cubs will sign Ben Sheets.

May the New Year bring love, joy, peace and a pennant for the Cubs.

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Comments

Ben Sheets? Just in case you missed it.
http://msn.foxsports.com/mlb/story/010410-Ros...

thnks...just added it.

At the beginning of the off season I thought I read Ben Sheets wanted some ridiculous money considering his injury history and being out of commission in '09. If he signs with the Cubs (and I'm not totally opposed to it), I hope it's a smallish, one-year redemption contract. He can rake next year, not this year.

Pirates sign Neal Cotts, per MLB TradeRumors...

Judging by the our web hits and comments, you guys are either ridiculously bored or still passionate about the Cubs...or just like to argue.

I would guess it's a little bit of all three... at least for me.

"Passionate" might also be a euphemism for "hopelessly addicted".

...Whatever that's supposed to mean. Meanwhile, I'm going to refresh and hope Arizona Phil posted something positive about some 17-year old future Cubs hot shot.

I totally disagree

In the article about Ricketts' financing of the Cubs:

"This is A-grade paper"...

Somewhere, an executive at Standards & Poors shudders and remembers saying the same thing about mortgage-backed securities.

Hey, thanks for the link and birthday wishes, Rob!

I blame the failure of 2009 on Aaron Miles. Of course - you can't eliminate the injury problems completely, so Miles and injuries. Oh, and also the bullpen. But that is all: Aaron Miles, injuries, and the bullpen.

And Soto being all fat and useless. That really wasn't an injury so you have to count it separately. And the middle infield consisting of the Lollipop Guild, so I blame: Aaron Miles, injuries, the bullpen, fat useless Soto, and the Lollipop Guild, but that is all.

Plus the excruciating sale process. And racists in the bleachers. And Lou losing his edge. But that is all I blame: Aaron Miles, injuries, the bullpen, fat useless Soto, the Lollipop guild, the sale process, racists in the bleachers, and Lou losing his edge.

And Milton Bradley.

424 gives you a nice view down the line, but I always preferred the straight-toward-the-dish view from 420. Heh heh.

I could have sat right behind the plate in 422 when I bought my package in 1998, but I would have been in the last row and under the press box. So I chose slightly closer to the field, and out from beneath the press box with the sightline almost straight down the third base line.

Luckily, I made that choice because they tore up the last couple rows of 422 and made them handicap accessible seating a few years later and I would have been relocated way down the lines.

...but I always preferred the straight-toward-the-dish view from 420. Heh heh.

Just like Geo. : )

Milton ruined 2008 also? Damn. Pretty amazing feat since he wasn't on the team. :)

his tentacles reached farther than you could imagine...

the year flipped but my internal clock didn't, so i was thinking last year was 2008...moral of the story is I'm dumb.

No problem, I do that kind of stuff all the time.

I am starting to think that 2005 is the true Hendry level of team construction and anything that happens to seem to make the team better or worse will eventually just regress to a 78 win mean.

Olney: Cards set to go seven years for Holliday.

http://sports.espn.go.com/mlb/news/story?id=4...

That would be cool. I like Holidays as much as anyone, but this is an overpriced one if I ever saw one. I am not gonna ever do the math on this one. Seven years is Hendry stupid.

8 years is Hendry stupid.

"Judging by the number of hits and comments, you guys are either ridiculously bored or still passionate about the Cubs...or just like to argue."

If I remember right, I tried to pick a fight with Real Neal, which is like trying to argue with an Ayatollah. I say that with affection, TRN.

What, no blame to the stainless steel urinals? Smokey Links aisle cart? Bud Lite roof? Torco sign? etc., etc...

If you are goimg to blame Smokey Links then I'm gonna have to bust The Pro's Pizza too.

Oh. Those and Frosty MALTS NOT "Malt Cups".

There are no such things as "Malt Cups"!

Yes! Frosty Malts with those awful-tasting wood, flat spoons.

(if that's a punch line, what's the joke?)

I refuse to eat anything with a wood spoon.

At any more than $5 million, why would the Cubs not offer arbitration to Harden? What's the "risk" that Hendry was talking about? The risk of looking dumb after botching another first-round pick?

The rumor has been confirmed, looks like it's a done deal:

http://www.thecubreporter.com/2010/01/04/holi...

No first round pick for Harden.

Beltre to Red Sox for 1/$9M with a $5M player option for next season or $1M buyout.

guess they're counting on winning a lot of 3-2 games next year...

http://blogs.dailyherald.com/node/3177

If Sheets' agent is looking of mega-millions, he won't find it with the Cubs, who are scraping together the dough to afford a veteran right-handed reliever and maybe a veteran backup outfielder.

If Sheets hasn't signed with somebody, say, by Valentine's Day, I can see the Cubs offering some sort of a deal with a low base plus incentives. But nothing's imminent, based on the talk I've had with people today and throughout the winter.

Miguel Batista? A "Jim Hendry" is calling for you on line one...

May the New Year bring love, joy, peace and a pennant for the Cubs.

I guess 3 out of 4 ain't bad, because this team sure as fuck isn't winning the pennant.

You're banking on peace?

I'm considerably more optimistic about it.

I'd bet that the training staff has Sheets as the top-rated remaining FA.

I want Ben Sheets too... I love doing ortho writeups for TCR.

Ben Sheets: Keeping doctors and trainers employed since 1978.

I joke, but that would be a high reward/medium risk transaction. He is He was such a great pitcher, if he can regain that fastball/power curve form he'd be a big deal.

Unfortunately, I think Rosenthal was just making predictions on all the free agents. This rumor isn't rooted in any fact.

After reading that article on Ricketts, I'm getting seriously concerned that this guy simply doesn't have the money to keep this team competitive. You never want an owner leveraged to the hilt just to buy the team. Owning a sports franchise needs to be a hobby for someone insanely rich (i.e. billionaires), not a financial burden for someone who needs all kinds of loans and investors to afford it. Ricketts simply doesn't have that kind of cash, and thus I'm worried he will be far too concerned with payroll and finding new revenue streams.

Damn, I wish Cuban was more polite.

Actually, I'd be surprised if there were any pro sports teams that were bought with cash, with no financing.
And the amount financed was $425 million, of the $824 million purchase price. That's not really leveraged to the hilt.

I'm more concerned with having a GM who can't build a winner with the 3rd or 4th highest payroll in baseball.

You're leaving out the subordinated loans. The article says $674 million of the $845 million purchase price is debt.

As far as I can tell, the Ricketts family sold stock worth $403 million to do this deal. Of that, apparently $170 million in cash went to purchase and another $175 million went into the deal as a subordinate loan---a loan basically to themselves.

The structure of this purchase makes me wonder just what the Ricketts mean when they say they plan to plough all the profits the Cubs make back into the organization. Maybe they'll just use profits to retire these loans rather than refinance them. That will always remain an option but it's not exactly what Cubs fans are expecting.

I don't know what the average interest is on this financing package but if it's between 4 and 5% then the carrying cost is around $30 million/year. That could be paid for by reducing team salary to $110 million (I'm guessing that's the base they're working from now) in the next couple years or by increasing revenue.So far it looks like they're going the revenue increasing route...significant ticket price jumps, more advertising in the park, new income streams in the future from spring training facilities..etc.while freezing the team budget.

Based on the article, the way they're talking about selling paper, etc... it sounds like he securitized the team as a means of financing. Instead of mortgage-backed securities, they are Cub-backed securities.

Toxic assets? Time will tell...

The Cubs reportedly make a profit of around $30-$40M each year which right there would cover the interest. Any added revenues could then be put into salaries, player development, Wrigley, etc if the Ricketts were sincere in saying all the money they make in the early years will be reinvested into the team.

Just to summarize what's new this year in Cubsenomics,

Cubs go from a debt free operation, to one that owes $675 million dollars.

Debt service is approximately ($30 million)

Net Income last year approximately $30 million

10% Ticket price increase this year raises $15 million

New income probably is eaten up by 9 arb eligible Cubs.

you forgot the part where the sky falls and everyone spends a few million dollars for shoe replacement caused by running around in panic.

Not to mention it was clearly explained to him two weeks ago that there wasn't any 10% price increase. Crazy is as crazy does.

I left out the subordinate loans because, as loans to themselves, they're not really loans per se; there's no payback schedule and they're not subject to being called. MLB agrees, since the deal couldn't have been made if they were considered real debt. And they can't be paid back until the other, real loans are.

The Ricketts family may well ignore it until such time as they sell, or they may convert it to real debt once the outside lenders are paid.

Agreed,

No reason whatsoever that the Cubs can't be perennial contenders with 130-140 they spend currently on payroll.

Get a better Front office in here and it should be a moot point.

I have no idea WHAT you're talking about. Subordinate loans are loans like any other, they're just riskier because they're unsecured for all intents and purposes.

And where did you learn that they earn no interest? Riskier loans should earn more than the bank loans do.

don't think he was implying there was no interest...just that, as you noted above, they basically are loaning the money to themselves and probably aren't going to make a call for that loan if they run into problems down the line.

don't forget, the deal was leveraged per request of Sam Zell for tax purposes even if the Ricketts wanted to pay cash.

plus any business is going to be run to be self-sufficient and not require infusion from their personal bank accounts.

The McCourts pretty much borrowed all the money to run the Dodgers and it hasn't really been a big issue on their payroll

I think you're a little behind on that. Zell's problem was solved when the Trib retained a 5% interest in the team.

I'm not...

http://www.washingtonpost.com/wp-dyn/content/...

the leveraged partnership is how Zell is hoping to avoid the $300M tax bill, it's the combination of the two, not one or the other.

Zell's tax folks, however, will argue that Tribune is getting nontaxable proceeds from a leveraged partnership. They'll also argue that Tribune's guarantee of some of the partnership's borrowings makes it a true partner of the Rickettses. Hello? A debt guarantee from a bankrupt company? What's that worth? Can you spell "nothing"?

No Gila Monster...

CarrieMuskat: Report out of AZ says #cubs have dropped Gila River from list of possible spring sites. Mesa is still alive, with location off Loop 202

She's only about two weeks late with that one....

http://thecubreporter.com/2009/12/23/its-matt...

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