Prince's Future

[Invader3K]

Let me be clear, I'm all for re-signing Fielder if it's possible. It just depends again on what the actual structure of a possible deal is going to look like.

[BrewCrewForever]

Let me be clear, I'm all for re-signing Fielder if it's possible. It just depends again on what the actual structure of a possible deal is going to look like.

Totally agree, along with how much higher can Mark A raise the payroll to pay some of our other players that will need to get raises at some point. Can he raise it to $100 mill? Maybe a little higher then that? If he can that would be nice.

[logan82]

Let me be clear, I'm all for re-signing Fielder if it's possible. It just depends again on what the actual structure of a possible deal is going to look like.

Totally agree, along with how much higher can Mark A raise the payroll to pay some of our other players that will need to get raises at some point. Can he raise it to $100 mill? Maybe a little higher then that? If he can that would be nice.

First I would love to see Fielder extended if it can be done in the $15M range. Once you start talking about getting up around the $20M range I don't like it as much.

 

Second, I think we are at our limit for salary. Things would have to change(revenue sharing) for us to push salary up to $100M. It sounds like we are at our very limit right now.

[Invader3K]

That's the worrisome thing, logan. It sounds like the Brewers are basically tapped out as far as revenue streams. Sure, they'll keep gradually raising ticket prices, but that's basically a drop in the bucket as far as making a difference annually. The details were never announced, but hopefully their new TV contract with FSN will give them some more revenue down the line.

[logan82]

Yeah their TV contract details are kind of murky(length and money) but it sounds like we get about $30M in revenue sharing and $10M from our TV contract. I can't remember exactly where it was but it was mentioned in the JS a few weeks back. That means about $55M from ticket sales. We rely alot on ticket sales to make payroll.

[Invader3K]

Yeah their TV contract details are kind of murky(length and money) but it sounds like we get about $30M in revenue sharing and $10M from our TV contract. I can't remember exactly where it was but it was mentioned in the JS a few weeks back. That means about $55M from ticket sales. We rely alot on ticket sales to make payroll.

Right, that's the huge disadvantage the Brewers are at. Bigger market teams like the Cubs aren't nearly as reliant on selling tickets because they get so much money from TV and other avenues.

[logan82]

I think I estimated about $15 per ticket for payroll so a drop in attendance of 1000/game would be a loss of about $1.2M for salary.(things probably aren't really that linear though, overhead and operating costs are probably pretty set) If the Brewers don't win, they can't maintain their payroll.

[monty57]

One macro factor that's being overlooked is that for the past nearly 30 years, we have seen low inflation, with essentially a deflationary period for the past year or two. We are VERY likely to see moderately high to high inflation in the near future, which will likely last for an extended period. Generally, a good thing to do when going into an inflationary period is to lock yourself into long-term fixed payments. This is probably diluted to some extent in that player salaries have risen faster than inflation over the past 30 years, but I think it's likely that nationally, if not globally, prices will rise significantly over the next 10 years. On a micro level, this includes ticket prices, concession prices, parking prices, etc., which would increase revenue and therefore allow for higher payrolls.

[endaround]

Actually no we're not likely to see high inflation anytime soon. The Fed won't even commit to a decent 3% inflation target which really needs to be done for a number of reasons.

[monty57]

Define "anytime soon." Most economists seem to believe we'll see inflation within 12-24 months, and most seem to feel we'll see a minimum of 4-6% inflation, with some calling for "70's style" inflation. We've started seeing the deflationary trend ebb, and consumer and industrial spending are starting to creep back up. The historically loose monetary policy and the ballooning debt will lead to inflation. It's not really a question of if, but when. Whatever the eventual outcome, it is pretty likely that we will see higher than normal inflation within the time frame of an extended Prince Fielder contract

 

If we even saw a 4% rise in prices (and sebsequently revenue, although it's obviously not a 1-for-1 ratio) over the next five year, and we're at say $85MM this year, our future salary constraints over the next five years would be:

 

2010 $85,000,000

2011 $88,400,000

2012 $91,936,000

2013 $95,613,440

2014 $99,437,978

2015 $103,415,497

 

Of course it won't work exactly this way, but the magic of compounding will increase our payroll over time. During inflationary times, a fixed payment gradually gets "less expensive" over time. $20MM / year would still be a significant portion of our payroll five years from now, but it could be 20% vs. 25%. Of course, other salaries will go up during this period, but often the final years of long term contracts seem relatively small compared to what contemporaries are currently signing for.

 

Since we've seen contracts going down recently (relfecting the macro economy), contracts signed 4 or 5 years ago (like Suppan) look really bad. In "normal" times, they don't generally look quite as bad. All this said, making a big bet on one player, even one the caliber of Fielder, could seriously hamper a franchise, so I hope the Brewers' management doesn't get the team into a situation where they can't afford complementary players or has to forego signing draft picks. I have faith that Mark A and Melvin have considered all of this, and won't sign Fielder to a contract that will cripple the team.

[endaround]

Who are these "economists"? Larry Kudlow? There is absolutely nothing that shows inflation expectations to be anywhere near inflation in the 4-6%. The 10 year TIPS spread is at 2.5-2.75%. So by soon I mean the next 10-20 years.

[Invader3K]

Michael Hunt interviews Doug Melvin on this subject.

[logan82]

Of course it won't work exactly this way, but the magic of compounding will increase our payroll over time.

 

Of course our fixed expenses will also go up over the years as well so payroll will not grow quickly, if at all even with more income. Our payroll has been pretty much in the $90M range for the last couple years and I would be surprised to see it go up anytime soon.

[The Big Cheese]

Sometimes you just gotta "pay the cost if you wanna be the boss"

 

If Prince has a Pujols like year, he must be re-signed, or the Brewers will forever remain behind the Packers and now possibly even the Bucks in terms of relevance in the realm of Wisconsin Professional Athletics.

[RyDogg66]

After the 2011 season, and as it stands right now, there will be 4 very good first basemen available via Free Agency. Albert Pujols, Ryan Howard, Adrian Gonzalez and Prince Fielder.

 

Does the fact that the Market is so flooded with 1b coupled with some teams like the Yankees already set at 1b mean that Prince's price goes down at all? Or at least doesnt go past Teixeira's?

[sveumrules]

Those factors are certainly significant and the more I think about it lately it makes me think that the Rays might make a strong play for Fielder should he become available. They have the pitching we would certainly require in any Fielder deal and with Pena a free agent after this year they will have a hole at first base.

[Patrick425]

I guess Melvin was a guest on XM MLB's "The Show" last week. I did not catch the entire interview, but I heard a "promo" ad on XM this morning where they played a snippet from the interview. In regards to Fielder he said something like "Fielder is not a FA until after the 2011 season, so the Brewers are not in the same situation with Fielder as the Twins were with Mauer".

To me, this translates to "Boras and Fielder were not thrilled with our offer"

[zzzmanwitz]

I guess Melvin was a guest on XM MLB's "The Show" last week. I did not catch the entire interview, but I heard a "promo" ad on XM this morning where they played a snippet from the interview. In regards to Fielder he said something like "Fielder is not a FA until after the 2011 season, so the Brewers are not in the same situation with Fielder as the Twins were with Mauer".

 

To me, this translates to "Boras and Fielder were not thrilled with our offer"

That seems like a pretty big leap, especially since Doug Melvin only speaks in GM speak.

[endaround]

To me that means don't expect a contract signing ceremony on opening day and nothing past that

[JohnBriggs12]

Who are these "economists"? Larry Kudlow? There is absolutely nothing that shows inflation expectations to be anywhere near inflation in the 4-6%. The 10 year TIPS spread is at 2.5-2.75%. So by soon I mean the next 10-20 years.

J.D. Foster, Ph.D., Norman B. True Senior Fellow in the Economics of Fiscal Policy in the Thomas A. Roe Institute for Economic Policy Studies at the The Heritage Foundation wrote this on February 22nd:

 

"The Fed's actions in the recent credit crisis have led to the creation of a mountain of excess reserves held by banks at the Fed. If unleashed on the economy too rapidly, these excess reserves would almost certainly trigger an extended period of rapidly increasing prices. Fed officials have repeatedly expressed an awareness of the inflation threat and a determination to ward off higher inflation if needed."

 

He goes on the say later:

 

"there are sound substantive reasons for concern that the Fed will misjudge the situation for a long time. A view (which endaround expresses) that appears to be widely held inside and outside of the Fed is that sustained economic weakness provides sustained resistance to inflationary pressures. Even granting that an underperforming economy and a high rate of unemployment provide a degree of insurance against inflation over a period of time, that period is not indefinite. As the United States has learned painfully in the 1970's, if monetary accommodation is generous enough and long enough, inflation has little trouble igniting even with a high unemployment rate."

 

In layman's terms he's saying the Feds actions in preventing a banking collapse have poised the system in such a way that economic recovery when it happens is likely to set off significant inflation. I think this is a view that's pretty widely held in the economic community and that it's exacerbated by $1.6 trillion deficits.

[Invader3K]

To me that means don't expect a contract signing ceremony on opening day and nothing past that

Yeah, I tend to agree with this viewpoint a bit more.

[kramnoj]

To me, this translates to "Boras and Fielder were not thrilled with our offer"

 

In addition to what others have said, do we even know if an offer has been made? They had a meeting. I think it's far more likely that the meeting was about the Brewers getting a feel for what expectations Fielder had, rather than the Brewers making an offer. An offer can be faxed, no need to fly two execs out for a day for that. How many years does Fielder want, does he want a no-trade, does he want an opt out, when does he want an opt-out, is he willing to sign before he hits FA, or is it a waste of time for the Brewers to even put together an offer, are there other perks that Fielder wants, etc.

[Patrick425]

Invader3K[/b]]

endaround[/b]]To me that means don't expect a contract signing ceremony on opening day and nothing past that

Yeah, I tend to agree with this viewpoint a bit more.

To me it's the same viewpoint. Don't expect a contract signing ceremony on opening day because the two sides are pretty far apart.

 

 

In addition to what others have said, do we even know if an offer has been made? They had a meeting. I think it's far more likely that the meeting was about the Brewers getting a feel for what expectations Fielder had, rather than the Brewers making an offer. An offer can be faxed, no need to fly two execs out for a day for that. How many years does Fielder want, does he want a no-trade, does he want an opt out, when does he want an opt-out, is he willing to sign before he hits FA, or is it a waste of time for the Brewers to even put together an offer, are there other perks that Fielder wants, etc.

 

Ok..so maybe an offer was not made. They just got together to discuss Fielder's expectations. Maybe as you suggested, as a result of this meeting, the Brewers felt it would be a waste of time to even put together an offer at this point. This would make sense, given Melvin's defensive comments in comparing the Brewer's situation to the Twin's situation.

[endaround]

1)Never ever trust the Heritage Foundation on anything. 2) Yes the Fed has been increasing the monetary base but they can shrink the monetary base the same way and just as quickly 3)No actual economist expects inflation and the market doesn't expect inflation 4)Debt has little affect on inflation as long as no one sees inflation as the only avenue for government revenue 5) Deflation is much more a problem right now than inflation

[kramnoj]

Maybe as you suggested, as a result of this meeting, the Brewers felt it would be a waste of time to even put together an offer at this point. This would make sense, given Melvin's defensive comments in comparing the Brewer's situation to the Twin's situation.

 

How do you get there? Per your recap, Melvin said something factual. Why do you see that as defensive? As far as I can see, things are amicable. Prince wants to stay, the team wants him to stay, fans want him to stay. There has been no drama, and nothing has to get done this year.