List of teams with potential cash flow problems

[NYChez]

ESPN had a report that some franchises would have to dump salary mid-season because they won't have the cash flow to pay salaries. I made up this list sorted from most likely to least likely to have these problems, based on revenue, payroll as % of revenue, attendance (and likelihood of drop), regional economic problems, and recent earnings. I had Milwaukee on the bottom 10 of this list, meaning in 2009 they're the 10th most financially stable franchise. If my list is correct, then look for guys like Gary Sheffield, Magglio Ordonez, Carlos Guillen, BJ Ryan, Scott Rolen, and Ichiro to be available soon.

 

Detroit

Toronto

Seattle

Cleveland

Kansas City

Baltimore

Arizona

Florida

Pittsburgh

Cincinnati

Texas

Chicago Sox

Oakland

Tampa Bay

San Diego

Washington

Houston

Minnesota

Colorado

Atlanta

Milwaukee

Philadelphia

NY Mets

San Francisco

NY Yankees

Chicago Cubs

St. Louis

LA Angels

LA Dodgers

Boston

 

[1992casey]

...based on revenue, payroll as % of revenue, attendance (and likelihood of drop), regional economic problems, and recent earnings.

 

Where did you get the figures for these areas, and how much did you weigh each?

[rluzinski]

Very interesting concept but to echo casey, I'd like to see more of the methodology.

[JohnBriggs12]

I question the methodology as well. Florida is 7th? Their payroll is so low, they can get by off of their share of national tv revenue, luxury tax on Yankees, and the visitor takes in places like Chicago, St. Louis and LA. They don't need more than 8-10,000 fans per game.

[Invader3K]

Yeah, I was going to point out the same thing about the Marlins. How much payroll can they really slash at this point? They pay their whole team slightly more than A-Rod gets for one season. Maybe they could trade their whole team and then call up their entire AAA affiliate...but then hopefully Selig would step in.

 

Could probably make similar arguments about Kansas City and Pittsburgh.

[kramnoj]

The Royals are going to have their highest payroll ever this year. I eyeballed it at over $75M, it may be another $5M or more.

 

I would like to see the article, or was it just something on the Network? Bill Simmons has an interesting read on how much trouble the NBA is in and how much trouble it could be in, but I didn't see anything like this for baseball. I thought one of the whole points of the offseason is that certain teams didn't spend much in anticipation of lower revenue, so that they wouldn't be in trouble this season.

[Invader3K]

Yes, MLB's current financial outlook looks much more rosy than that of the NBA right now.

 

I didn't realize the Royals' had raised their outlay so much. Good for them.

[splitterpfj]

Detroit is the first team that comes to mind for me, they've got a big-time payroll, and we all know what's been happening in the auto industry....that's bad math.

 

I do think the Blue Jays are a good fit here too, if they fall out of things early on. That division is stacked, I can't see why ownership there would keep guys just for the sake of keeping guys. Roy Halladay comes to mind immediately.

[endaround]

Yes, MLB's current financial outlook looks much more rosy than that of the NBA right now.

 

I didn't realize the Royals' had raised their outlay so much. Good for them.

 

When main recipients of the money are Jose Guillen (12 m), Mike Jacobs(3.25m for arguably the worst starting position player in the major leagues),Willie Bloomquist (1.5m), and Teahen (3.575m) a guy they don't even know they have a position for it isn't a good thing.

[NYChez]

I just read an ESPN The Magazine story about the Lakers and Celtics making moves that make no basketball sense at the trade deadline just to save a million dollars or so. These are the top two money makers in the NBA experiencing financial concerns. I wouldn't be surprised if all 30 MLB teams end up being in major cost-cutting mode very soon if they aren't already. The luxury boxes and sponsorship deals will be the first sources of lost revenue. If a team stinks, their attendance could plummet. The Brewers picked a very good time to be peaking in terms of fan interest, and if they get off to a good start this year, they could easily pick up some players for a fraction of the cost (in terms of prospects that need to be traded) than in previous years if they're willing to take on a little salary.

[wallus]

You mean we could turn into the Cubs who get hugely lopsided trades because of money?

[kramnoj]

So was the report about basketball, or was it about baseball? The sports are different enough that the troubles of the NBA can't be attributed directly to baseball.

 

I also think it should be clarified if what you saw actually talked about teams not being able to make payroll, or if they would just cut bait early to save money. Those aren't the same thing.

[endaround]

Thew NBA is a third tier sport that the press treats on the same level as football and baseball when it just isn't.

[JoeHova]

Thew NBA is a third tier sport that the press treats on the same level as football and baseball when it just isn't.

Classless, but I don't feel like getting into another big thing about this. Suffice to say that what you said is totally wrong.

 

Anyway, I'm skeptical that any league or team (except a couple in the NHL) is in major trouble yet. Owners always cry about how poor they are and how little money they make, even in the best of times. Of course they are going to make those same claims now.

 

[Invader3K]

You mean we could turn into the Cubs who get hugely lopsided trades because of money?

Could happen, given the position the Brewers will hopefully be in, and what is likely to be out there by the trading deadline. Attanasio has said they will be able to spend money mid-season if they're in a position to win again.

[kramnoj]

Attanasio has said they will be able to spend money mid-season if they're in a position to win again.

 

I know he said this before the Looper signing, did he say so afterwards? I thought the discussion for awhile was that the Brewers could sign one more starter before ST or go with what they had and acquire something mid-season. It was my impression that with the Looper signing and the room for Gagne's incentives if he makes the team would eat up the rest of the Brewers budget.

[areacodes]

In TH's blog from 2/18, a direct quote from Attanasio:

 

"We have a prudent amount of debt and we're trying to keep it that way. I am a little nervous this year but that will be my nervousness. We're at the limit of what we can support. And you know if we get to midseason and we're in a position to win, we're going to go for it."

It is also mentioned in that blog that with the Looper and Gagne signings we are approaching $90 million in payroll, which includes potential bonuses and call-ups.

[kramnoj]

Thank you for the link. So I was right in thinking that they were at their budget limit and wrong in thinking they wouldn't have room to make a move if one became available. Well, I thought they would think about it once the time came, but wasn't sure they had been vocal about it.

[pete]

I think the premise is correct. When Looper was signed, Melvin talked about how they had evaluated who might be available and what they would cost, so they must have a list.

 

I think the Tigers could do okay. They had one of those everything goes wrong seasons last year and if they are competitive, I'll bet they sell a lot of tickets. What about San Diego? It seems like beyond going into full rebuild mode, there has been some ugly news things like Giles smacking his ex. I think Peavy's contract looks scary for a team like the Brewers, it must look pretty unpleasant for them. I guess after Peavy and Giles there isn't much to cut loose.

[bucks2281]

Thew NBA is a third tier sport that the press treats on the same level as football and baseball when it just isn't.

 

Do you have any basis for this other than your own opinion? It doesn't make much sense to me.

 

 

I suggest reading the Bill Simmons article about the economics of the current NBA. He interviewed execs at the All-Star Game, and they had some outlanidsh predictions about the next few teams. One apparently believes that 15(!) NHL teams will fold over the next, and one believes that MLB will suffer the next couple of years. And, the outlook does not look good for the NBA -- I think many, many teams are experiencing cash flow problems.

 

The Tigers were near the top of the league in attendance last year, so there's no way they're going to be in the most trouble. AKA Pete, I think the Padres are in trouble -- they're going to be really bad this year, and they have FO turmoil. It'll be ugly at the gates this season. I could also see the Orioles and Blue Jays having trouble.

[endaround]

Based on what? The NBA falling behind Football, Baseball, College Football and NASCAR on most fan polls. The World Series despite being in the middle on fall premier season usually garner a 50% higher rating than NBA finals during the middle of summer.

[bklynbrewcrew]

If you think things are bad now just wait and see where we are in the next few years. If you think baseball wont be terribly affected by this economic situation you are very very wrong. The economy is in terrible shape and will only be getting worse over the next few years. At some point even the yankees and red sox will be affected and have to lower payroll.

[DHonks]

Russ, don't forget College Basketball. I've long believed that if you ask people in Wisconsin what their favorite basketball team is, you'd get

1) Badgers-50%

2) Marquette-20%

3) other college team-15%

4) Bucks-15%

 

My numbers could be way off, but I've always thought the MU following was very strong for such a mid-sized school.

[endaround]

A look at markets and relative unemployment rates:

http://www.baseballdailydigest.com/blogs/2009/02/18/the-economy-and-baseball/