Friday, January 07, 2005

Angelos Pacification Continues

Bob DuPuy and Havana Peter Angelos met yesterday, in their continuining negotiations to make Angelos richer and richer.

Neither side had any comment, but it's a pretty good sign that they're meeting face-to-face.

In the Post, Tom Boswell, in a seemingly continuing series, shows his disgust for Angelos. He compares him unfavorably to George Steinbrenner.

Boswell is making an argument I've made before--that the terms of the pacification deal that have floated around are so generous, that there's no real incentive to work hard to put a winning team on the field.
The Orioles know the unwritten rules of how to acquire, or "just miss" the available winter talent. And now they are missing it all, just when they appear to be a couple of pitchers shy of a winning team.

Why?

A better question might be, "Why not?"

As part of its mend-the-fences efforts, baseball has offered Angelos a guaranteed minimum sale price for his franchise far into the future....

The final terms of a cease-fire between baseball and Angelos have not been reached. But, at the least, Angelos knows that a "floor" has been put under the value of his team. No matter how bad it is, he knows he can sell it for a fancy price.

If you were guaranteed a fixed price for your house for the next 10 years, would you paint it? Would you spend money on new shutters? Or add a porch?

Is Angelos going to run the Orioles as a modest-payroll team that's a cash cow? Then sell when the profits are exhausted?

Read the whole thing. He makes some excellent points. And besides, it's always fun to read something written in anger!

6 Comments:

  • Boswell makes some decent points, but his house analogy is terrible. Would I paint the house or build a new porch? Hell yes -- I'm going to be living in the house for the next ten years. In fact, pretty much every home owner in the entire DC metro area is in this situation -- the odds of the value of your home going down are staggeringly low, and yet additions, new kitchens, decks, and landscaping are going like gangbusters. It's tough to even find someone competent to do these jobs because they're so much in demand. Houses are an investment, but they are also homes, essential to people's quality of life.

    Similarly (although I admit not identically -- but hey, it's Boswell's crappy analogy), baseball teams are an investment, but they are more than that as well. There are lots of better investments out there for people who have enough money to buy a baseball team -- they people who buy them do so because they want to own a baseball team, not simply because they want to make money (not that they don't also want to make money). There's a quality of life (or quality of ego) issue involved. Perhaps Angelos is biding his time, waiting to get out of the game and take a guaranteed profit, but that wouldn't really fit with his past actions -- if anything, he's been guilty of Steinbrenneresque devotion to over the hill veterans far too often; and didn't he just go on a spending spree last year?

    By Blogger Randolph, at 1/07/2005 9:40 AM  

  • Yeah, he went on a spending spree, but that was partially driven by the fact that he had something like $20 million coming off the books that year. (Thanks Albert Belle!)

    Your ego point is the saving grace, and that's the point I've made before. The ONLY reason that Angelos wouldn't completely tank the team is because of pride. Petey has a ton of civic pride and greatly cares about the city and the team. I really think he WANTS to put a winning team on the field. He just doesn't surround himself with people who know how to do it.

    As to the house analogy, it's not a perfect analogy, but it makes sense on a basic level, especially when you use it in the context of Angelos/Steinbrenner. Angelos may put a new porch on the house, but Steinbrenner's adding an entire second floor.

    By Blogger Chris Needham, at 1/07/2005 9:45 AM  

  • MLB isn't looking to compensate Havana Pete because they don't believe he has lost any money. The 29-1 humiliation by his colleagues is evidence of that.

    What MLB is offering is indemnification, not compensation, in the event of any future financial harm. There is no massive cash payment being offered.

    That's a huge difference. MLB is setting up guarantees, and if you know how they operate, you also know these are for items they don't believe they will ever pay.

    Sale price? The market will likely cover it. Annual revenue? There hasn't exactly been an exodus of Camden season ticket and luxury box cancellations since the announcement of the Nats. Nor has there been any blackening of Baltimore games from mid-atlantic TV screens, or pulling back of advertising.

    As for offering him owner equity in the regional cable deal, DC at best would've pulled 50 percent of a partnership with Baltimore rather than 40 percent.

    Unless this impacts on the sales price of the Nats, expect it to remain. If it does, expect it to be dropped by MLB.

    Why? Because MLB isn't paying Havana Pete a dime over DC, and they never will.

    By Anonymous Anonymous, at 1/07/2005 11:03 AM  

  • A better analogy than the house would be owning a rental property.

    If you were guaranteed revenues equal to what you'd make with a full property, would you bother upgrading the furnace? Or fixing those leaky pipes? Or painting each apartment?

    Of course you wouldn't, and you especially wouldn't if you were not only guaranteed the minimum revenue, but also a sale price after a few years.

    By Blogger Yuda, at 1/07/2005 12:49 PM  

  • I think that, if not forced into a TV deal with the Orioles, it may have been better for the Nats financially to create their own network, instead of sharing one.

    As is, much of the pad content will probably focus on the O's since they have a history, instead of other sports or local interests. I think that'll suck :-)

    By Blogger John, at 1/07/2005 2:56 PM  

  • I prefer to call Angelos "Cuban Pete," which conjures up the old song -- "chic-chicy-boom." Actually, I like to call Angelos worse things, but they really shouldn't be printed here.

    By Anonymous Anonymous, at 1/10/2005 8:05 AM  

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