Lerners are Cheap - 2017

[PowerBoater69]

So dumb. Great, we sign Torii Hunter for $15 million a year after the 2007 season to win 62 games instead of 59 games in 2008. Mariners still win 61 and finish with the worst record in baseball, and draft Stephen Strasburg. We draft Dustin Ackley.

Then we double down and sign Teixeira after the 2008 season. Teixeira and Hunter propel us all the way to 67 wins in 2009 so only the 5th worst record! Instead of Bryce Harper (playing in Pittsburgh right now) we draft Drew Pomeranz.

Sure, instead of Strasburg and Harper we have Ackley and Pomeranz this year. But hey, we have all those special memories of Hunter and Teixeira being valuable contributors on those last place Nats teams!

How long have you been following this team? I'm guessing that you weren't around for the Kasten years. The team repeatedly made your same point, that they weren't going to blow money on a non-contender but that the funds would be available in a year or two when the team improved. Well the future is now and we're hearing reports that Rizzo doesn't have the money for a closer, or a decent catcher, or a bench.

[HalfSmokes]

How much of that goes to service debt? Does the LLC return anything to shareholders?

DC is a mid sized market with a crap tv deal that's spending like a mid sized team, and people are grabbing the pitch forks. It's kind of hilarious

[NJ Ave]

How much are they pulling from the team each year?

You see, I've always had problems with this. Team owners routinely don't count debt service as profit, despite the fact they are paying debt on a very quickly appreciating asset.

Let's put it simply - let's say the Lerners took out $600 million in debt to buy the team at 0% interest, payable in 10 annual installments of $60 million. My understanding is that those payments are taken out of operating profits for MLB purposes. So the Lerners could spend $60 million less in payroll without "taking any profits out of the team" according to MLB numbers.

Of course, after ten years they not only have the team owned debt-free, but the value of an MLB franchise likely doubles (conservatively) over ten years, so now they have a $1.2 billion asset without any debt on it, without having "taken any profits". Of course they'll be happy to take the profits when they sell the team

[PowerBoater69]

How much of that goes to service debt? Does the LLC return anything to shareholders?

DC is a mid sized market with a crap tv deal that's spending like a mid sized team, and people are grabbing the pitch forks. It's kind of hilarious

The debt was relatively low considering that the team was dirt cheap for an MLB franchise.

Good question about payments to shareholders, when the team was purchased there were a bunch of minority owners (including Kasten), a lot of them have now been bought out. My suspicion has been that the Lerners depressed the value of the team for those first five years in order to keep the price down as they consolidated ownership.

[NJ Ave]

How long have you been following this team?

I had season tickets at RFK, amigo.

And I don't disagree at all what you're saying about spending *now*. I disagree that money should have been spent *then*.

[PowerBoater69]

You see, I've always had problems with this. Team owners routinely don't count debt service as profit, despite the fact they are paying debt on a very quickly appreciating asset.

Let's put it simply - let's say the Lerners took out $600 million in debt to buy the team at 0% interest, payable in 10 annual installments of $60 million. My understanding is that those payments are taken out of operating profits for MLB purposes. So the Lerners could spend $60 million less in payroll without "taking any profits out of the team" according to MLB numbers.

Of course, after ten years they not only have the team owned debt-free, but the value of an MLB franchise likely doubles (conservatively) over ten years, so now they have a $1.2 billion asset without any debt on it, without having "taken any profits". Of course they'll be happy to take the profits when they sell the team

Your numbers are way off. The team was purchased for $450 million, I believe that 20% was paid in cash but that might have been less. So $360 million in debt. The team had a Forbes estimated value of $1.3 billion last year, tripling in value. (MASN used the Forbes estimate in a court filing as evidence that the Nats have not been harmed by the TV deal, the Lerners did not dispute the value.)

[Ray D]

Your numbers are way off.

It was a hypothetical example to illustrate the difference between growth and dividends (aka profit). Point being, you can divert profit into growth and claim no profit.  I knew what the Lerners were doing when the said that thing about profit. I'm sure many of us did.

[Natsinpwc]

It was a hypothetical example to illustrate the difference between growth and dividends (aka profit). Point being, you can divert profit into growth and claim no profit.  I knew what the Lerners were doing when the said that thing about profit. I'm sure many of us did.

That's why they're rich. And we are not.

[PowerBoater69]

It was a hypothetical example to illustrate the difference between growth and dividends (aka profit). Point being, you can divert profit into growth and claim no profit.  I knew what the Lerners were doing when the said that thing about profit. I'm sure many of us did.

Why use a hypothetical when the real values are known?

[Glockypoo]

How much of that goes to service debt? Does the LLC return anything to shareholders?

DC is a mid sized market with a crap tv deal that's spending like a mid sized team, and people are grabbing the pitch forks. It's kind of hilarious

Is DC really considered a mid-sized market? Legitimately asking.

[GuyFromCO]

Is DC really considered a mid-sized market? Legitimately asking.

Number 9 or 10. Not one the big boys, but way better than Milwaukee.

[Glockypoo]

Number 9 or 10. Not one the big boys, but way better than Milwaukee.

Thanks.

Google tells me Nielsen has it as seven and basically tied for 6th with San Fran.

[HalfSmokes]

Number 9 or 10. Not one the big boys, but way better than Milwaukee.

In terms of teams, three markets above us (4 if you include Oakland/sf) have two teams, that knocks us to 10/11. Of course, going by neilson, we're bigger than Boston and St. Louis

[PowerBoater69]

Checking Google for Metro areas by population and GDP has DC ranked 6th in both. Four of the five areas that are ranked higher support two teams. So we're the second largest single team market. The problem is that DC is ranked 36th for number of real fans.

[HalfSmokes]

Checking Google for Metro areas by population and GDP has DC ranked 6th in both. Four of the five areas that are ranked higher support two teams. So we're the second largest single team market. The problem is that DC is ranked 36th for number of real fans.

If that's your measure, we're supporting two teams too

[PowerBoater69]

If that's your measure, we're supporting two teams too

Nope, Google separates DC and Baltimore, if you combine them we'd be the forth largest market. (Damn, sure would be nice to own exclusive MLB broadcast rights for the forth largest US market plus Richmond and Tidewater.)

[NJ Ave]

Why use a hypothetical when the real values are known?

You know these real values? Among the unknowns, to me, are total original debt, total accumulated debt from when they bought out minority partners, total accumulated debt from other projects such as the spring training facility in Florida, interest rates, and term.

Forbes has the Nationals at 26% debt to value. Since value is $1.3 billion, that leaves $338 million in debt. Seems like they haven't paid much off in 10 years if it was "known" to be $360 million in original debt.

So please, enlighten me. Otherwise I fail to see how your hypothetical is more valuable, just because you claim everything is "known".

[PowerBoater69]

You know these real values? Among the unknowns, to me, are total original debt, total accumulated debt from when they bought out minority partners, total accumulated debt from other projects such as the spring training facility in Florida, interest rates, and term.

Forbes has the Nationals at 26% debt to value. Since value is $1.3 billion, that leaves $338 million in debt. Seems like they haven't paid much off in 10 years if it was "known" to be $360 million in original debt.

So please, enlighten me. Otherwise I fail to see how your hypothetical is more valuable, just because you claim everything is "known".

Calm down and read what I wrote before correcting me. The $450 million purchase price is known, the $1.3 billion current value is known, but as I wrote I'm not sure how much of that cost was financed. Speculation is fine but at least start off with the known values before guessing at the rest.

[nats4ever]

Dumbest post of the year goes to. Look how much money they spent on certain players.

[imref]

How long have you been following this team? I'm guessing that you weren't around for the Kasten years. The team repeatedly made your same point, that they weren't going to blow money on a non-contender but that the funds would be available in a year or two when the team improved. Well the future is now and we're hearing reports that Rizzo doesn't have the money for a closer, or a decent catcher, or a bench.

the Heyman article said we made a big offer to Jansen, more than what LA offered him ($80 million over 5 years), with little deferred money.  It also said we offered $50 million to Melancon.  If either had taken our offer, our payroll would have jumped by more than $12 million next year.

After reading it, I'm thinking either Jansen was a Mark Lerner project, or Rizzo just doesn't like to sign older free agents, especially relievers, to big money deals. 

[PowerBoater69]

Ladson did a podcast with Kasten, next to no mentions of the Nats, but Stan did state that the Dodgers have built 45 little league ball fields in the LA area since his group bought the Dodgers. 45 in less than five years! The Nats have built two, and one of those was contractually mandated in the deal that gave them Nationals Park.

https://t.co/ZZXCqquKp7

[tomterp]

Thanks.

Google tells me Nielsen has it as seven and basically tied for 6th with San Fran.

9th per the US Census.

http://www.iweblists.com/us/population/MetropolitanStatisticalAreaPop.html

[GuyFromCO]

Ladson did a podcast with Kasten, next to no mentions of the Nats, but Stan did state that the Dodgers have built 45 little league ball fields in the LA area since his group bought the Dodgers. 45 in less than five years! The Nats have built two, and one of those was contractually mandated in the deal that gave them Nationals Park.

https://t.co/ZZXCqquKp7

I know it's a sore subject, especially here, but Kasten was always class in my book. He went well out of his way for me and my family when he was with the Nats. I have no doubt that this is actually something he's proud of doing.

[PowerBoater69]

I know it's a sore subject, especially here, but Kasten was always class in my book. He went well out of his way for me and my family when he was with the Nats. I have no doubt that this is actually something he's proud of doing.

Listening to the podcast I was reminded of why his act wore thin here, he was saying the exact same things. The Dodgers are building the right way via the draft and international scouting, the Nats didn't do either and the Dodgers are trying to buy a WS (which is fine, just own it).

[PowerBoater69]

I mean, everybody likes security. Everybody likes to know what their future is going to be even though it doesn’t amount to much. But I’m very confident that we’d get things worked out. You’d like to do it sooner rather than later because I don’t want to be a distraction to my team.

Are you kidding me? Coming off a division win our manager is having to go public with his contract dispute. Baker doesn't want to be a distraction so he went to the press to ask for an extension???

So let's keep score of the last 30 days, 1) multiple reports leaked from the team are that Rizzo has his hands tied on signing free agents, 2) our highest profile player complained publicly about ownership budgeting priorities, and 3) our manager has complained publicly about his contract. Strap on your seatbelts it's going to be a bumpy ride.