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 Post subject: Dodgers may need to cut Salary
PostPosted: Sat Dec 10, 2016 9:14 pm 
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First - good. I hate the Dodgers.

Second, I'm posting this cause I was completely unaware. Based on recent spending I'd assumed teh Dodgers were Yankees 2.0, a gonzo spending team over and above everyone else in the NL. I wasn't aware that they had a window and their MLB debt exception ends next year. (whatever that is. Really, I'm not sure what that is).

Article: http://metsmerizedonline.com/2016/11/do ... puig.html/

Quote:
their exemption from MLB debt rules expires in 2017.


and

Quote:
The Dodgers are left with a conundrum. How do they shed enough payroll while still filling their needs?


So, who-hoo. Dodgers can't keep spending the GNP of Canada every year, and, does anyone have a layman's explanation of what this means?

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I've always loved a good underdog story. Go Mets (2018). I know an underdog when I see one.


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 Post subject: Re: Dodgers may need to cut Salary
PostPosted: Mon Dec 12, 2016 1:23 am 
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Not super familiar with this, but my interpretation is that MLB doesn't want any of its teams to go bankrupt so it forces them to keep debt at manageable levels, probably relative to overall earnings and assets. It sounds like the Dodgers seemingly bottomless pile of cash has actually been built on a foundation of borrowed money and that they haven't been paying down their debt as quickly as they need to be. MLB would have granted them a waiver when the team was first purchased, as it stands to reason that their debt would be relatively high to start, but that waiver can't last forever. Basically, they have to balance their books.

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 Post subject: Re: Dodgers may need to cut Salary
PostPosted: Mon Dec 12, 2016 9:50 pm 
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northway wrote:
Not super familiar with this, but my interpretation is that MLB doesn't want any of its teams to go bankrupt so it forces them to keep debt at manageable levels, probably relative to overall earnings and assets. It sounds like the Dodgers seemingly bottomless pile of cash has actually been built on a foundation of borrowed money and that they haven't been paying down their debt as quickly as they need to be. MLB would have granted them a waiver when the team was first purchased, as it stands to reason that their debt would be relatively high to start, but that waiver can't last forever. Basically, they have to balance their books.


That's about what I came up with. There were a few articles about this last November, the one I posted and a couple others, but that was the gist of it.

As I recall, the Dodgers were bought by a conglomerate, not an individual, called Guggenheim baseball management:
https://en.wikipedia.org/wiki/Guggenhei ... nvestments

So, I don't think they're in any risk of running out of money, but with low interest rates these days, the debt may be higher than MLB allows, and that's coming due in 2017 (basically what you said).

Personally, I like having a person as an owner, not an investment group. An investment group feels so distant, but I'd still prefer an investment group to the Wilpons.

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"When I give food to the poor, they call me a saint. When I ask why they are poor, they call me a communist." - Dom Hélder Câmara

I've always loved a good underdog story. Go Mets (2018). I know an underdog when I see one.


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 Post subject: Re: Dodgers may need to cut Salary
PostPosted: Mon Dec 12, 2016 10:11 pm 
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2 days after this post Dodgers go on spending spree


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 Post subject: Re: Dodgers may need to cut Salary
PostPosted: Tue Dec 13, 2016 8:29 am 
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I don't know that I would call Guggenheim Partners a conglomerate. It's very much made up of individuals. It's not as if they have corporate owners.

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