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GScottar – What I actually said is that the biggest portion of the ROI for members of the St. Louis Cardinals LLC is in asset appreciation. It’s BDW’s job to continue to increase the value of the asset. It means more than a cash on cash return every year. The members may get a distribution every year. I don’t know. But if the LLC produces a profit, then a distribution would have to be large enough for each member to cover taxes.
As much as I disagree with bccran about the Cardinals, he is spot on regarding operating income and EBITDA. As a CPA who just completed his continuing education credits for 2022 a few hours ago never in a million years would have anticipated talking about this here.
As a CPA who just completed his continuing education credits for 2022 a few hours ago never in a million years would have anticipated talking about this here.
As a long ago participant would have said, ‘its not just about baseball’. BW will remember some of those conversations.
There’s less than a handful of guys that I can come up with who could possibly be called “risks” that the Redbirds took regarding signing them prior to the ’06 and ’11 WS championship seasons. In the winter of ’06 the Cardinals signed Juan Encarnacion for 3 years at around $5MM per. He did pretty well in ’06 by today’s standards. Juan played in 153 regular season games and put .278/19/79 on the back of his card for that first season as a Cardinal. However, he struggled during that year’s post-season and was benched by TLR for the final 3 games of the ’06 WS. Most of you probably remember that his career was ended by a foul ball off the bat of Redbird teammate Aaron Miles that struck him in the eye as he stood in the OD circle during the ’07 season. I’m not sure this one could be termed a risk, but the Redbirds signed Scott Spezio to a minor league contract in the winter of ’06 after he’d been realeased by the Mariners and invited him to ST…Haha! He paid off like a loaded slot machine on fire during both the stretch run of the regular season and the ’06 Championship run.
I’d have to say my all-time favorite risk the Cardinals took regarding the signing of a FA was the signing of Lance Berkman for a 1 year at $8MM deal in Dec. of ’05. And even though his career as a Redbird was short lived, he’s one of my all time favorite Cardinals if only for the reason that I didn’t have to worry anymore about him absolutely destroying Cardinal pitching every time he steppped in from either side of the box when he was an Astro. Everyone said he was not only washed up as a hitter, but could never play RF with his banged up tie rod ends. Well, he played RF just fine. He also flashed .301/31/94 during the regular season, led all Cardinals in the ’11 WS in BA at .423, runs scored with 9, and hits with 11 of them…Haha! He also collected 5 RBI’s and a tater in that series. Washed up my backside! Berky could flat out hit the baseball. He may well be Johnny’s single most stroke of genius regarding FA’s.
There is a sort of evil genius behind the way Mo has gone into the last couple seasons with a scratch and dent pitching staff of hopefuls and rehabbers, and then fill it out at mid-season.
Its like this:
You can hire whoever you want, and pay them whatever it costs, but you still have no idea if they will be able to take the mound by mid-season. Its a gamble and the more you spend, the bigger the risk. So if you want pitchers who will still be on the mound at mid-season, wait until mid-season comes along and see who they are and go get some. If it was my money, I would appreciate that kind of risk reduction.
Yep…I like to make fun of him, but Johnny’s no joke, Bling. He has to be getting close to claiming the title as longest tenured current executive in the Big Leagues for one team, and I can’t come up with anyone other than Branch Rickey who has ever been employed as long as he has in an executive capacity for the Cardinals. His area of expertise requires almost constantly successful results and there’s a legitimate reason he’s survived as long as he has.
GScottar – What I actually said is that the biggest portion of the ROI for members of the St. Louis Cardinals LLC is in asset appreciation. It’s BDW’s job to continue to increase the value of the asset. It means more than a cash on cash return every year. The members may get a distribution every year. I don’t know. But if the LLC produces a profit, then a distribution would have to be large enough for each member to cover taxes.
Yep, I deal with this everyday in my job. I am familiar with all of these concepts.
I am not saying the Cardinals should be unprofitable. I am saying that it is my opinion that the Cardinals could bump their payroll up closer to the CBT line and still be profitable. Win win. Do I have absolute proof of that? No, I do not and no one else has absolute proof to say otherwise because the books are closed.
The Braves, however, are a public company and their books are open. They are definitely profitable. I can’t say for sure that Cardinals are equivalent to the Braves but I suspect they are much closer to them than they are the Mets, Yanks, Dodgers, etc…
“The Braves enjoyed a banner year in 2021. Per their filing, they turned a profit of $104 million. That’s full-year OIBDA, or operating income before depreciation and amortization. That brings their four-year operating income, including the pandemic-marred 2020 season, to $193 million.”
https://blogs.fangraphs.com/the-braves-made-some-money-in-2021/
I always find it interesting to see the Braves financials, as they are owned by my long time employer Liberty Media. The bulk of my career was with Starz Entertainment, and most of that time Starz was also owned by Liberty Media.
John Malone made a fortune in the cable television industry back when it boomed in the late ‘70s and throughout the ‘80s and ‘90s. Malone was a shrewd and sometimes ruthless businessman, who worked deals to avoid as much tax as possible and build value. He also took care of his employees with better-than-standard benefits.
I get somewhat cynical at times about corporate America, as in the end they do a lot more for the executives than the “regular” employees. They are not real good at sharing the wealth. But in all honesty my wife (she was at Starz 12 years and me almost 19) and I owe a lot of our current comfortable standard of living to the nice 401K plan Liberty had for their employees, not too mention decent salaries and bonuses. Again, there was plenty in the coffers to do better by the middle and lower eschelon employees, and I was middle management, but that is a different conversation.
It is not surprising that the Braves are a profitable enterprise being in the Liberty portfolio of assets.
They bit the bullet this year by not bringing back Dansby Swanson. It will be interesting to see how his career transpires and if that deal is a good one for the Cubs, or ends up looking more like the Jason Heyward fiasco, which we were lucky to avoid.
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