Wednesday, August 15, 2007

From The Inbox

Someone sent this to me, and it makes a lot of sense... it blends in with the last few posts, so I wasn't sure where to put it. So I'll throw it here, dammit.

"Off the topic . . . While your point about a penny being saved this year doesn't mean that penny is spent next year seems to ring true given what we know about baseball owners, I do wonder if it's actually correct.

To my knowledge, there's nothing really foreclosing the possibility that a bigger than expected gain during Fiscal Year 1 (which we'll define as ending on Dec. 1, since that's the way MLB defines a championship season) can't be allocated (or a portion thereof) to the operating budget for Fiscal Year 2. Just because that money isn't preliminarily budgeted doesn't mean it won't be applied to the next year's operating expenses. Without seeing their books, we never could tell if even a cent of it was/will be, or not. But it seems reasonable that, given the team stands to make a ton of money this year (the local media rights very nearly cover payroll alone!), the team will have to apply some degree of that money in a future year rather than pocketing it all lest its vague claims about its financial status (as all teams make vague claims about financial status) start to receive some scrutiny. So I think the "safer" point to make is that invariably some of this year's "savings" will be applied in the future, but we'll never know the extent to which they are. Does that make sense?

Now, for the cynical part: From what I know about closely held corporations (which the Nats are, basically), this type of decision (transferring past proceeds to future expenses, as distinguished from mere cash-on-hand issues) would require a vote of the operating board. And there are several Lerners on that board. So . . ."

I never meant to imply that the team wasn't 'saving' for the future at all. We know that they're earmarking some of this year's profits for future years of stadium construction, for example. But it's a good email, raising some interesting counterpoints and issues.


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