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  1. #1
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    Default Report says Tigers in violation of MLB debt rules




    Report: Tigers one of nine MLB teams violating debt rules | Detroit Free Press | freep.com

    Doesn't get into specifics with the Tigers, just lists them as a team. At first I thought it was simply due to new stadiums but I don't see that common among the teams listed. The Dodgers need approval from their appointed trustee to spend over $5000??? Wow.

    Nine of the 30 teams are in violation of the MLB debt service rules, according to information presented in a confidential briefing at the owners’ meetings last month and confirmed to the Los Angeles Times by three people familiar with the presentation.


    In addition to the Dodgers and Mets, the teams out of compliance are the Baltimore Orioles, Chicago Cubs, Detroit Tigers, Florida Marlins, Philadelphia Phillies, Texas Rangers and Washington Nationals, according to the people, none of whom were authorized to disclose the information.


    -------

    The rules, intended to ensure clubs have the resources to support their financial obligations, generally limit a team’s debt to 10 times its annual earnings, although Selig has wide latitude to enforce those rules.


    ----

    Under the debt service rule, Selig is authorized to impose whatever remedial measures he sees fit. The rule lists 16 possible actions Selig could take, among them an order that a team raise equity, a requirement that all team expenditures be approved by his office and the suspension of the team owner.

    .

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    Well at least now we know where the savings from trading Granderson will go...defeasing non-compliant debt. Yay financial flexibility.
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    debit limited to 10 x annual earnings? With the Tigers losing money, I would take it we can have no debt?

    This is coming out right before the draft as well....
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    Just because new stadiums isn't common among the teams doesn't mean it isn't the primary reason for the Tigers being on the list. I personally don't see a concern about the team not having the appropriate resources.
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    Does this mean that the Tigers will not be able to go above slot for draft picks without league authorization? Will overpaying even be possible, though, given how far down the food chain the Tigers will be by the time they make their first pick? Will it even be a practical option?
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    Quote Originally Posted by Walt View Post
    I personally don't see a concern about the team not having the appropriate resources.
    The Mets & Dodgers agree with you....
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    This is not a concern. The tigers have a pretty reliable source from which to add equity if they need to do that.

    It's pretty easy to see why these particular teams are in violation.
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    Quote Originally Posted by C03BRA View Post
    The Mets & Dodgers agree with you....
    WTH do they have to do with the Tigers?
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    Quote Originally Posted by IdahoBert View Post
    Does this mean that the Tigers will not be able to go above slot for draft picks without league authorization? Will overpaying even be possible, though, given how far down the food chain the Tigers will be by the time they make their first pick? Will it even be a practical option?
    There are already rumors swirling of us going WAY over slot

    Secondly, and more importantly, is money. The bonus Bell wants to forego his UT scholarship is reportedly astronomical -- Keith Law says in a chat session today that he's hearing Detroit and Boston as the teams with the most interest in Bell, with rumors of a $6 million deal with Detroit being in play. And Bell is a Boras client, which means that negotiations will be difficult and protracted.
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    Quote Originally Posted by C03BRA View Post
    There are already rumors swirling of us going WAY over slot



    2011 MLB Draft Prospects Preview -- Josh Bell - Lone Star Ball
    That is good news.
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    Quote Originally Posted by Walt View Post
    WTH do they have to do with the Tigers?
    Their both on the same list and struggling to make payroll....not having appropriate resources is definitely a concern.
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    Both the mets and dodgers have ownership issues. The tigers have an owner with more money than god.
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    That would be awesome for the Tigers.
    Where's Zimm?
    VT

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    Quote Originally Posted by C03BRA View Post
    Their both on the same list and struggling to make payroll....not having appropriate resources is definitely a concern.
    Are you trying to say the Tigers are having trouble making payroll? Seriously? Has there been a season since 2003 that it has looked like the Tigers were overly worried about payroll? The only thing that the Mets and Dodgers have in common is a good matchup as trading partners at the deadline.
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    LOL the Mets and Dodgers situation is completely different from the Tigers.

    Also, all those teams except for Chicago and Los Angeles have had stadiums built in the past 20 years. Mike Illitch financed 62% of Comerica Park.

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    Stadiums don't bankrupt teams. They bankrupt the tax payers .
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    Quote Originally Posted by Edman85 View Post
    Stadiums don't bankrupt teams. They bankrupt the tax payers .
    Illitch paid more for the stadium than Detroit or Wayne county did.

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    Quote Originally Posted by Oblong View Post
    Report: Tigers one of nine MLB teams violating debt rules | Detroit Free Press | freep.com

    Doesn't get into specifics with the Tigers, just lists them as a team. At first I thought it was simply due to new stadiums but I don't see that common among the teams listed. The Dodgers need approval from their appointed trustee to spend over $5000??? Wow.
    I can see any possible way the Tigers debt is 10x earnings. That would be nearly a billion dollars. The whole stadium was less than 500 million and as noted Ilitch paid in the range of 60%. If they mean 10x profit, that's pretty meaningless since the major source of profits for almost all sports team owners is asset appreciation, which doesn't show up in the operations financial reporting.
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    More from Law on the Tigers and Josh Bell.


    •Law hears rumors that the Tigers and Red Sox are in on high school outfielder Josh Bell, a Boras Corporation advisee who sent a letter to the MLB Scouting Bureau saying he intends to honor his commitment to the University of Texas and does not want to be drafted. Law hears a "widespread rumor" about the Tigers drafting Bell and offering $6MM, presumably with the #76 overall pick (their first).

    Law On Royals, Josh Bell, Dodgers, Mets: MLB Rumors - MLBTradeRumors.com



    Josh Bell wants to go to Texas
    MLB.com has confirmed that high school outfielder Josh Bell, considered one of the better high school bats in this year’s Draft class, has indeed sent a letter to the Major League Scouting Bureau informing the Bureau that he does not want to be drafted because he won’t sign and will honor his commitment to the University of Texas.

    Report about the letter first came via Baseball America’s Conor Glassey via Twitter, a tweet that read “Heard that Dallas Jesuit OF Josh Bell sent a letter to the Scouting Bureau saying he doesn’t want to sign & wants to go to Texas.” Glassey followed it up with a blog post.

    A source with knowledge of the letter confirmed that it was sent to the Scouting Bureau. When reached for reaction to the initial report, the Bureau would not comment..

    There are two possible reasons for such a letter to be sent. The first is that Bell is being genuine and simply wants to inform teams that taking him would be a waste of a pick because he truly does want to go to college. The second reason, which is more cynical, is that the Scott Boras Corp. advised player sent the letter as a ploy to push him down to a team that would meet his asking price to sign him away from his Texas commitment.

    In either case, it certainly thickens the plot of this year’s Draft. Bell is ranked No. 23 in MLB.com’s Top 50 Draft prospects. The switch-hitter would be a first-rounder based solely on talent.

    Josh Bell wants to go to Texas B3: Big, Bald and Beautiful

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    Quote Originally Posted by Gehringer_2 View Post
    I can see any possible way the Tigers debt is 10x earnings. That would be nearly a billion dollars. The whole stadium was less than 500 million and as noted Ilitch paid in the range of 60%. If they mean 10x profit, that's pretty meaningless since the major source of profits for almost all sports team owners is asset appreciation, which doesn't show up in the operations financial reporting.
    But have they taken out loans over the last 10 years to make payroll?

    I have no idea.... just throwing out what was posted in the article. It also says "Generally 10x earnings" and that Selig has latitude.... does that mean he can lower it for other teams? Perhaps as payback for doing something he doesn't like?

    And Cecil, Baltimore's stadium is almost 20 years old and only cost $110 million to build so I don't really consider that new.
    .

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    Quote Originally Posted by Oblong View Post
    But have they taken out loans over the last 10 years to make payroll?

    I have no idea.... just throwing out what was posted in the article. It also says "Generally 10x earnings" and that Selig has latitude.... does that mean he can lower it for other teams? Perhaps as payback for doing something he doesn't like?

    And Cecil, Baltimore's stadium is almost 20 years old and only cost $110 million to build so I don't really consider that new.
    They still probably owe on it.

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    Quote Originally Posted by Cecil View Post
    They still probably owe on it.
    What are the mortgage terms on an MLB ballpark?
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    Quote Originally Posted by Walt View Post
    What are the mortgage terms on an MLB ballpark?
    I don't know but IIRC Detroit approved a hotel and rental car tax for 30 years. I'm guessing they financed it for at least 20 years.

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    Maybe Ilitch was drawing on Tigers equity in the effort to finance the new Red Wings arena? Who knows but I doubt the team is in dire financial straits. Call me when he gets divorced or loses half a bil in a Ponzi scheme, then maybe I'll be worried.
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    Quote Originally Posted by Cecil View Post
    I don't know but IIRC Detroit approved a hotel and rental car tax for 30 years. I'm guessing they financed it for at least 20 years.
    I wasn't asking you directly, just pondering openly based on your post. I would think that you are likely correct though. I can't imagine financing something of tat magnitude for a shorter time period. I would think thae tax increases would have more to do with the city's contribution than Illitch's financing however.
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    Quote Originally Posted by The Truman Show View Post
    Maybe Ilitch was drawing on Tigers equity in the effort to finance the new Red Wings arena? Who knows but I doubt the team is in dire financial straits. Call me when he gets divorced or loses half a bil in a Ponzi scheme, then maybe I'll be worried.
    Or the Gov't outlaws cheap pizza.
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    Quote Originally Posted by C03BRA View Post
    There are already rumors swirling of us going WAY over slot



    2011 MLB Draft Prospects Preview -- Josh Bell - Lone Star Ball
    Oh come on, he's not going to last until Detroit drafts...
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    Quote Originally Posted by ballmich View Post
    Oh come on, he's not going to last until Detroit drafts...
    I don't know much about him, but why would a team take such a high signability risk early in what is supposed to be a really deep draft?
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    Quote Originally Posted by Walt View Post
    I don't know much about him, but why would a team take such a high signability risk early in what is supposed to be a really deep draft?
    The Tigers don't have a first round pick. It would be a good way to maximize their 2nd round pick.

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    Quote Originally Posted by Cecil View Post
    The Tigers don't have a first round pick. It would be a good way to maximize their 2nd round pick.
    I agree, I was referring to the teams that draft before us. I think this sounds like a typical move from our management regime.
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    Quote Originally Posted by Walt View Post
    I don't know much about him, but why would a team take such a high signability risk early in what is supposed to be a really deep draft?
    A team would if they thought Boras was blowing smoke and thought the player in question was so good that it is worth the risk to try to call his bluff.

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    On that Josh Bell kid, might as well take a risk on him especially at pick #76. Low risk, high reward type of move. If he doesn't sign, oh well.

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    Quote Originally Posted by Walt View Post
    Are you trying to say the Tigers are having trouble making payroll? Seriously? Has there been a season since 2003 that it has looked like the Tigers were overly worried about payroll? The only thing that the Mets and Dodgers have in common is a good matchup as trading partners at the deadline.
    If I was trying to say it I would have....

    All I said is "not having appropriate resources is definitely a concern"

    What happens if Illitch passes? Are their children going to accept multi-million dollar losses?

    They are obviously working on the issues with cutting back on payroll....we all know $130M wasn't sustainable.

    I'm not worried about this by any means...but things can happen
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    Quote Originally Posted by C03BRA View Post
    If I was trying to say it I would have....

    All I said is "not having appropriate resources is definitely a concern"

    What happens if Illitch passes? Are their children going to accept multi-million dollar losses?

    They are obviously working on the issues with cutting back on payroll....we all know $130M wasn't sustainable.

    I'm not worried about this by any means...but things can happen
    I only asked because your message wasn't clear to me. I agree that "not having appropriate resources is definitely a concern", but I haven't seen anything from this organization to indicate that they do not. Sustaining the payroll is debatable. The Tigers have reduced their payroll, but that could be because they have spent extra in other places such as scouting. Being able to maintain a $130M payroll doesn't mean that you should spend the money to get to that number every year. I am also less than trusting of the reporting of losses by any pro team. If these teams were always losing so much money, why do people line up to buy them?
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    Ilitch financed $185 million of the $300 million cost. The rest of it was covered by the city through those taxes. I belive it was a Japanese bank he got the note from.

    I recall a story or rumor around 2002 that they didn't have enough cash on hand to meet payroll.
    .

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    They also sold the naming rights. Who gets that money, the city or Illitch?

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    Quote Originally Posted by Cecil View Post
    They also sold the naming rights. Who gets that money, the city or Illitch?
    I'd assume Ilitch

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    I'm not totally surprised the Orioles ended up on the list. I have heard rumors (obviously you can't put a whole lot into rumors, but they are there nonetheless) that the owner had to take out a loan to pay the vendors in addition to meet portions of the players' salaries. As far as a mortgage goes, I'm sure that we're talking at least 30 years. Most major construction debt projects are that length.

    I would venture Philly is in the same situation.
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    Quote Originally Posted by ballmich View Post
    Oh come on, he's not going to last until Detroit drafts...
    He might if no one else thinks he can sign them.

    One thing DD has done that he doesn't get much recognition for is to give Detroit a reputation for quickly promoting prospects. A fast-track to the majors time means more career earnings, and both agents and players are aware of that. This is why the Tigers are able to sign the "signability" guys far on down in the draft. These guys will simply tell other teams they're going to college, but change their mind if they are drafted by teams like the Tigers when they know they'll be playing in the majors by age 21 or 22.
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    Quote Originally Posted by TheCouga View Post
    He might if no one else thinks he can sign them.

    One thing DD has done that he doesn't get much recognition for is to give Detroit a reputation for quickly promoting prospects. A fast-track to the majors time means more career earnings, and both agents and players are aware of that. This is why the Tigers are able to sign the "signability" guys far on down in the draft. These guys will simply tell other teams they're going to college, but change their mind if they are drafted by teams like the Tigers when they know they'll be playing in the majors by age 21 or 22.
    If they keep sending all this young players to the big league team, they can't brag they have great minor league teams like Kansas City

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