CBA changes: The debt rules
While the changes to the collective bargaining agreement that affect the game on the field made a lot of the press, the new and updated debt rules weren’t publicized as much. Thanks to a great column by Neil deMause at Field of Schemes, we get a nice breakdown of the changes and specifically how they affect the Oakland Athletics’ pursuit of a new ballpark.
Before the rule change, there was a default EBITDA multiplier of ten, and this went up to 15 if the team had stadium-related debt. EBITDA is a financial acronym that stands for “earnings before interest, taxes, depreciation and amortization.” These number went down under the new collective bargaining agreement, and now there is a debt multiplier of eight unless the team has stadium debt, and then it goes up to twelve.
The column goes on to talk about how the Athletics’ EBITDA is around $22-23 million, which would support about $360 million in stadium debt. That means the new rules (probably put in place to remove the chance of another Los Angeles Dodgers situation) still leave the Athletics with the ability to finance a new ballpark yet gives the other teams in the league some added financial accountability.
Bud Selig—commissioner for life
It’s been a while since Bud Selig announced that he would retire at the end of his current term here in 2012. Since that time, Selig has reiterated that he’s done. Of course that didn’t stop the owners from wanting to give Selig another two-year term at the upcoming round of owners’ meetings.
This time it looks like it’s only going to be a two-year extension rather than four years, so that will probably make it more palatable to Selig. The owners like him, so it’s not a big surprise that they want him to stay on. It will be interesting how he justifies going back on his word (again) that he was going to retire, though.
Mets hire turnaround firm
The New York Mets hired CRG Partners to take a look at the Mets’ financial reporting and budgeting process. CRG was the firm that worked with the Texas Rangers when they went through their bankruptcy, and the Mets were quick to advertise the fact that they were not filing for bankruptcy protection.
This is a weird move to have a big-name firm look at the team’s budget, so I think there’s more here. The team is mired in a ton of debt, and while they keep talking about selling shares of the team, nothing has happened. Throw in the fact that Sandy Alderson said the team lost $70 million last year, and it will be interesting to see how CRG can right this financially sinking ship.
Disney family considering bid for Dodgers
The family of Roy Disney is considering making a bid for the Los Angeles Dodgers as the pool of bidders continues to increase. Roy Disney is the nephew of Walt Disney, and they’re affiliated with Walt Disney Co. ,which owned the then-Anaheim Angels from 1998 through 2003. The column lists eight other potential bidders who have been mentioned in the upcoming (but unscheduled) auction.
Rays stadium update
It must have been a slow news day because, while Tampa Bay Rays owner Stuart Sternberg meets with St. Petersburg mayor Bill Foster next week, we get a rundown of how the Rays are a good team but dead last in attendance. Sternberg mentions some quotes by Bud Selig and goes on to discuss how his actions aren’t being questioned but how the league is locked in on how the Rays can survive under the current stadium situation.
Odds are, the meeting next week between Sternberg and Foster will yield little as far as results. Still, it gives us something to talk about and the writers a throwaway column.