Of Credit Swaps and Starting Pitching

[Bring Back the Stein]

Does anybody have enough knowledge of the principal owner's and the other owners' portfolios to give a good sense of how the Sam Zell Recession is going to affect the Brewers and payroll in 2009?

 

I've seen generic "bad economy" references in various posts, but I don't know how much liquidity our Papa Pesos has to gird for going after the Peavys of the world.

 

For Alan Selig, the Brewers were basically his whole nut, so that's why he had to resort to the strange equity-retiring practices that were, for the most part, hidden from view. What gives with Attanasio and his biz?

[endaround]

Attanasio has never been one to take money from himself and spend it on the team. He's made huge profits so far. The worry is declining attendance and season ticket renewals, not the hedge Attanasio has against market risk.

[JJHardy7]

Attanasio has never been one to take money from himself and spend it on the team. He's made huge profits so far. The worry is declining attendance and season ticket renewals, not the hedge Attanasio has against market risk.

 

I think most of Mark's money comes from his business...which is finance related. I don't think it will cripple the payroll, but I also don't think it will go up. I'm sure Mark has reserves from his business, but given the market and the markets that other owners in the finance world face I do think it may be a 'down' year for some free agents.

 

end - I don't get your first sentence. Are you saying he's not one to take money from his Brewers investment? I guess I'm not clear on what you're saying and apologize if I'm missing something. Or are you saying he's not investing his 'own money' and using his business to finance the team. Again, I might be missing your point, but I'm just not getting it.

[thebruce44]

I know (or know of) several of the less public owners besides Mark. The economy is hitting their outside investments and businesses the same way it is hitting everyone else. The difference is that they of course have larger pockets to absorb the recession.

 

How that effects their spending towards payroll, I couldn't say. While they wont sink all their money into the team, it is obviously a labor of love and I am sure Mark and the other investors would take a loss if it meant another smart shot at the playoffs. We are very lucky to have the ownership team in place that we do, as they are just as good of fans as we all are.

[rluzinski]

What end is saying is that the Brewers are self sufficient ATM. Just about every baseball owner tries to convince the public that they lose money every year. I think it's a bunch of bologna. Of course, the recession will most likely cut into the Brewers' profits, so it could effect player salary.

 

Also, Mark A. only owns a portion of the Brewers. Does anyone know what percentage he does own?

[TSack27]

Also, Mark A. only owns a portion of the Brewers. Does anyone know what percentage he does own?

Probably something they like to keep a bit discrete as there doesn't appear to be much readily available info on-line to share. But this older update from a since disconnected JSOnline story still appears pasted on a few other sites. I don't recall stories of any other investment changes over the past year, so looks like Mark's ownership group controls at least 75% of the team, but I can't help you with his percentage within that group.

 

"L.A.-based Ares Management co-Founder & Managing Partner Tony Ressler and Leonard Green & Partners Managing Partner Jonathan Sokoloff were announced as investors in the Brewers' ownership group, "bringing to 12 the number of" identified investors in the team, according to Don Walker of the MILWAUKEE JOURNAL SENTINEL. Team officials said that "well over 75% of ownership of the team is controlled by a subset of the ownership group" headed by Principal Owner Mark Attanasio. Walker notes Attanasio is joined in that subset by the Lubar family of Milwaukee and "four former owners in the Selig ownership group who rolled over their holdings" -- Chicago-based Madison Dearborn Chair & CEO John Canning Jr., Marcus Corp. Chair & CEO Stephen Marcus, Hometown Property Management President and AHL Milwaukee Admirals Owner Harris Turer and Uihlein/Wilson Architects President David Uihlein Jr. Ressler's brother, CIM Group Principal & Founder Richard Ressler, is also a member of the ownership group (MILWAUKEE JOURNAL SENTINEL, 4/27)."

[JohnBriggs12]

Trillions of dollars in wealth have been lost in this country just since September. The exposure of the major banks and hedge funds to money lent in mortgages to people that didn't have the ability to pay them, has had a ripple effect across the board.

 

To think that any baseball owner is immune to the effects is dreaming. Some will feel it more than others but all are affected. Throw in the fact that much of baseball's revenue comes from stadium naming rights from banks getting federal assistance and the potential for loss of revenue is great. Then there is the lurking effect unemployment is going to have on attendence. Don't think Brewers are affected? How many of you got emails pushing the Holiday 4-pack? Last year those sold quickly.

 

We're living in a deflationary period. Baseball players are going to start seeing that now.

[rluzinski]

The way I read is tha 75% of the team is owned by a particular ownrrship subset, of which Mark A. is only one of them. Is Mark A. a 51% majority owner or a "I own more of the Brewers than anyone else " majority owner?

 

And of course the recession has and will continue to effect the Brewers. I and others contend that it will effect them through a decrease in franchise revenue, as oppossed to available cash through the ownership group.

 

Does the ownership group ever have to infuse cash into the franchise, even on the short term? Draft bonuses? Capital expenditures? I would think that's the exception, rather than the rule but it's just ignorant speculation on my part.

[Bring Back the Stein]

Wow. It strikes me how little we really know about the ownership group and how many of them were docked in industries and instruments docked to this crisis. It's scary until you see how many other baseball owners and ownership groups are also so heavily leveraged. Does that mean it's a level playing field, at least in how big a hit EVERY team is taking?

 

By the way, it would shock me if Attanasio controlled more than 25 or 30 percent of the total ownership.

 

This was the point when Selig wouldn't open the books. Since the public's on the hook in a sense, I think taxpayers, or at least someone representing them, should know. That said, Mark A. has been Santa Claus for me. But heck, wouldn't it be nice if some sort of publication, say, a newspaper, reported on how something like A HUGE MOTHERLOVING RECESSION was going to affect the hometown baseball team? Is that too much to ask? Yeah. Probably.

[TooLiveBrew]

I'm sure TH & AW are hard at work on that piece, BBTS. Though I wholeheartedly agree that would be a great read.

 

 

Is Mark A. a 51% majority owner or a "I own more of the Brewers than anyone else " majority owner?

 

A 'plurality owner'? http://forum.brewerfan.net/images/smilies/wink.gif

[JohnBriggs12]

I seriously doubt that Schlesinger is going to reveal any weakness in season ticket sales at this point in the process. The club is going to want to keep the impression that tickets are in great demand and they still could be for all we know. After all there still is excitement coming off a playoff run.

 

But,I'd be very wary if I were one of the many who buy season ticket packages counting on the secondary markets like Stubhub, Ebay etc. to unload the unwanted dates. The season is still a long way off, but that market could be very, very soft.

[Roderick]

For how often I see House on TV, I'm sure MA could ask his brother, Paul, for a little of that producer money if it comes down to it. http://forum.brewerfan.net/images/smilies/wink.gif

[twobrewers]

Just about every baseball owner tries to convince the public that they lose money every year. I think it's a bunch of bologna.

While you admit that this is only opinion - there is no evidence to really support that claim. In fact, some people do get to see the baseball teams finances/books - perspective buyers!

 

If baseball teams made tons of money (return on investment), the price would increase to the point that the return on investment came in line with other possible economic investments & returns. In other words, their is a good reason many owners are individual "fans" instead of huge investment firms.

 

But,I'd be very wary if I were one of the many who buy season ticket packages counting on the secondary markets like Stubhub, Ebay etc. to unload the unwanted dates.

I know several people who do significant business on Ebay and they have complained that sale prices are down around 20%. (Which has to be about the mark-up)

 

And of course the recession has and will continue to effect the Brewers. I and others contend that it will effect them through a decrease in franchise revenue, as oppossed to available cash through the ownership group.

I agree completely. Mark appears to run the Brewers as a completely seperate entity. (As he should)

 

I would think the older players on the verge of retiring will suffer the most. Craig Counsell maybe had 5 - 10 million stashed away for retirement. Now he might only have 2 - 5 million. That would certainly make some one consider playing another year. (Durham)

 

Of course, maybe this is also the best time to bet on the economy. I am sure all of the Brewers without long term contracts feel nervous as well - all while Braun laughs watching highlights of his HR against the Cubs. With that in mind, maybe this is the best time to lock up players to long term contracts (or sign free agents *Dunn*) while they worry about the economy.

 

(I bet Corey Hart would sign that contract he turned down in a heart beat today.)

 

One last thought, how badly are the Tigers going to suffer? If Detriot automakers don't get the bailout and are forced to shut down, no one in Detroit will have disposable income to spend at the ball park. Detriot might really be looking to trade away some players to shed salary. (Seriously, how awesome would Granderson be as a lead-off hitter?)

[endaround]

No the reason most owners are "fans" is thats how MLB wants it. They want an individual owner representing the group.

[logan82]

I think the Brewers are probably run as a separate organization with none of Mark A. or the rest of the ownership groups' money going into the team and almost all the profit going back into the organization. I do think the owners get money from the Brewers whether or not the Brewers actually turn a profit. My guess is that Mark A. and the rest of the ownership group gave themselves bogus titles and a yearly salary to go with them with a possible bonus if the team turns a profit.

[1992casey]

The way I read is tha 75% of the team is owned by a particular ownrrship subset, of which Mark A. is only one of them. Is Mark A. a 51% majority owner or a "I own more of the Brewers than anyone else " majority owner?

 

I seem to recall reading that Attanasio owns 47% of the team, but that he's the one with control. That's relying totally on fuzzy memory, so take that for what it's worth.

 

It strikes me how little we really know about the ownership group...

 

We also didn't know a whole lot about the last ownership group, either. This group doesn't even have a board of directors to answer to. I believe Mark has referred to a "board of advisers."