The Lerners obssession with deferred money

[Slateman]

What is the deal with this?

Scherzer, Strasburg, and Corbin all signed deals with deferred money.

They offered a ton of deferred money to Harper. He went on to sign for a lower AAV over more years with no deferred money.

They offered Rendon a contract with deferred money. He went on to sign a deal with no deferred money.



Is it simply greed? Do they simply like making money off other people? At this point, it can't be balancing payroll.

[RyanZimsKazoo]

Lerners are cheap.

[aBaltoNat]

If I was in their shoes...and I'm 35...I would take deferred money laughing to the bank when you're already guaranteed hundreds of millions. I think this is a Boras/bad financial advisor thing.

Max and Stras will retire and still be able to count on millions of income.

[imref]

There was a report a couple of years ago that the deferred money is tied to the MASN conflict. The Nats want to argue that they can’t afford to pay up front due to lack of tv money.

[DCFan]

There was a report a couple of years ago that the deferred money is tied to the MASN conflict. The Nats want to argue that they can’t afford to pay up front due to lack of tv money.

When you're in the top 5 in MLB payroll that kinda shoots that argument down.

[Kevrock]

It’s a business strategy and they are saving millions of dollars.

[DCFan]

It’s a business strategy and they are saving millions of dollars.

I'm guessing there's some kind of tax benefit to the Lerners. 

[imref]

https://www.washingtonpost.com/sports/nationals/as-nationals-defer-chunks-of-their-payroll-what-happens-when-bill-comes-due/2017/03/03/d1f38184-0050-11e7-8f41-ea6ed597e4ca_story.html

The question people ask around baseball: Why? The question fans should ask: What are the implications?

The first is murky, because the Lerners won’t answer. But those who do business with them have some informed suspicions.

Turn first to the legal issue, the fact that the Nationals are arguing in a court case that the Baltimore Orioles are not paying them their rightful fees from their agreement with the Mid-Atlantic Sports Network, a convoluted deal negotiated through Major League Baseball before the Lerners owned the team. In a court filing last year, the Nats, for the first time, suggested the idea that they’re being shorted is prohibiting them from competing for talent.

“Without this added and steady income, the Nationals cannot bring full economic confidence to investments in multi-year player contracts to keep up with the fierce competition for top players,” Nationals principal Ed Cohen, a son-in-law of patriarch Ted Lerner, argued in a filing. More than a year later, that remains the strongest language linking the MASN situation to the way the team operates.

The article speculates is that the other reason is simply to earn interest on the money they aren't paying.

[RyanZimsKazoo]

https://www.washingtonpost.com/sports/nationals/as-nationals-defer-chunks-of-their-payroll-what-happens-when-bill-comes-due/2017/03/03/d1f38184-0050-11e7-8f41-ea6ed597e4ca_story.html

The article speculates is that the other reason is simply to earn interest on the money they aren't paying.

How long is MASN going to be the scapegoat? This is utterly ridiculous.

[HalfSmokes]

There could be a ton of reasons, I’d trust that they didn’t get where they are by not being finically astute. As a fan, they spend way above what we should expect given the market size and the routinely land big free agents - so it’s not like we have anything to complain about

[HalfSmokes]

How long is MASN going to be the scapegoat? This is utterly ridiculous.

Scapegoat for what- one of the largest payrolls in baseball?

[nfotiu]

How long is MASN going to be the scapegoat? This is utterly ridiculous.

Until they actually get paid what they are owed, it's always going to be brought up as a factor.  I'm guessing it's about $220 million now that they are owed but haven't received yet.

Bottom for me as a fan though, is that they are estimated to be about 12th in the league in revenue, and have been consistently in the top 5 for payroll.   The deferred money is kind of an odd quirk, but we've been pretty successful in the free agent market.  It just seems they are more willing to spend what it takes for pitchers than position players.

[RyanZimsKazoo]

  It just seems they are more willing to spend what it takes for pitchers than position players.

I just dont get the logic behind that. You are giving your highest payroll to a guy who only plays 30-35 games a year versus guys who play 150+ games a year.

I trust in Rizzo but I still think its kind of dumb. I get good pitching is hard to find but good pitching doesnt matter if your bats cant drive in any runs.

[DCFan]

https://www.washingtonpost.com/sports/nationals/as-nationals-defer-chunks-of-their-payroll-what-happens-when-bill-comes-due/2017/03/03/d1f38184-0050-11e7-8f41-ea6ed597e4ca_story.html

The article speculates is that the other reason is simply to earn interest on the money they aren't paying.

Enough with the articles from 2017. The Nats payroll is in the top 5 so this speculation is way out of date and worthless.

[DCFan]

Scapegoat for what- one of the largest payrolls in baseball?

He's in agreement with you.

[nfotiu]

I just dont get the logic behind that. You are giving your highest payroll to a guy who only plays 30-35 games a year versus guys who play 150+ games a year.

I trust in Rizzo but I still think its kind of dumb. I get good pitching is hard to find but good pitching doesnt matter if your bats cant drive in any runs.

It's a strategy that won us a World Series.   Every time I look at this list, https://www.spotrac.com/mlb/rankings/2019/average/ , it strikes me that every team that has starting pitchers up high on that list is good, and every team that has position players is bad.   

It seems the successful teams think they can fill out their batting order with team controlled guys, trades and mid tier free agents.   But, getting ace level starting pitching requires spending money.   

[GburgNatsFan]

I just dont get the logic behind that. You are giving your highest payroll to a guy who only plays 30-35 games a year versus guys who play 150+ games a year.

I trust in Rizzo but I still think its kind of dumb. I get good pitching is hard to find but good pitching doesnt matter if your bats cant drive in any runs.

I agree with you on this, but I'm speculating that Rendon had something very specific in mind. Reports are that the Dodgers felt like Rendon just didn't want to play with them, that they were out of the picture, so they didn't make an offer.  He may very well just have not wanted to play in DC anymore, for reasons entirely his own.

[loshjott]

I just dont get the logic behind that. You are giving your highest payroll to a guy who only plays 30-35 games a year versus guys who play 150+ games a year.

I trust in Rizzo but I still think its kind of dumb. I get good pitching is hard to find but good pitching doesnt matter if your bats cant drive in any runs.

Why is it kind of dumb when the Nats are in the top 2-4 in wins since 2012 and just won a WS because their 3 aces dominated multiple postseason starts and bullpen appearances? The strategy has been spectacularly successful.   Rizzo cut his teeth with the 2001 Diamondbacks when Johnson and Schilling similarly dominated the postseason.

[HalfSmokes]

Starters may play fewer games, but they have outsize impacts on those games, good starters can cover for a bad offense on their own and bad starters can also singlehandedly  lose games - the same can’t really be said of position players

[RyanZimsKazoo]

Why is it kind of dumb when the Nats are in the top 2-4 in wins since 2012 and just won a WS because their 3 aces dominated multiple postseason starts and bullpen appearances? The strategy has been spectacularly successful.   Rizzo cut his teeth with the 2001 Diamondbacks when Johnson and Schilling similarly dominated the postseason.

because position players put butts in the seats. And while pitching was clutch in the post season, are you going to ignore the fact when it was crunch time Rendon ultimately saved game 6 of the WS? The man was the definition of clutch hitting.

Clutch Hitting is just as important as clutch pitching.

[aBaltoNat]

As per my post above ... you guys are arguing about the wrong thing.

Just because it isn't normal, doesn't mean it doesn't make a crap ton of sense for both parties.

[imref]

I agree with you on this, but I'm speculating that Rendon had something very specific in mind. Reports are that the Dodgers felt like Rendon just didn't want to play with them, that they were out of the picture, so they didn't make an offer.  He may very well just have not wanted to play in DC anymore, for reasons entirely his own.

seems like he likes to play in low pressure situations. 

I'm really surprised the Rangers didn't break the bank for him.

[JCA-CrystalCity]

seems like he likes to play in low pressure situations. 

I'm really surprised the Rangers didn't break the bank for him.

If by pressure you mean Philly / NY / Boston fanbase type of focus on the team, then that may be true, but in terms of competitive pressure, he's impervious to it. 

As for the money, the Lerners are probably playing some 3 dimensional chess while I'm playing tic-tac-toe when it  comes to money management.  To me, it looks like they are willing to rob the future for current performance. As has been pointed out, they run near the CBT threshold in terms of AAV while the team's revenues and attendance are only in the 10- 12 range. If they were planning on selling the team after the old man passes away, then they'd be converting sales price (cap gains) into currently cash flow / ordinary income, which makes no sense.  However, given that they have never indicated they would sell, I suppose this may be Marc and his siblings robbing themselves for their father's joy at this point.

[RyanZimsKazoo]

If by pressure you mean Philly / NY / Boston fanbase type of focus on the team, then that may be true, but in terms of competitive pressure, he's impervious to it. 

As for the money, the Lerners are probably playing some 3 dimensional chess while I'm playing tic-tac-toe when it  comes to money management.  To me, it looks like they are willing to rob the future for current performance. As has been pointed out, they run near the CBT threshold in terms of AAV while the team's revenues and attendance are only in the 10- 12 range. If they were planning on selling the team after the old man passes away, then they'd be converting sales price (cap gains) into currently cash flow / ordinary income, which makes no sense.  However, given that they have never indicated they would sell, I suppose this may be Marc and his siblings robbing themselves for their father's joy at this point.

Despite all of this....the Lerners still arent the worst owner in DC. That belongs to Danny Boy. Probably one of the worst owners in all of sports.

[JCA-CrystalCity]

Despite all of this....the Lerners still arent the worst owner in DC. That belongs to Danny Boy. Probably one of the worst owners in all of sports.

far from the worst.  They are  robbing their future value to put a winner on the field now.  They are consistently competitive while doing this, and won.