From: golchowy@alchemy.chem.utoronto.ca (Gerald Olchowy)
Subject: Re: fair is fair: i believe cone
Organization: University of Toronto Chemistry Department
Date: Mon, 14 Dec 1992 02:28:41 GMT

In article <1992Dec13.230944.28514@athena.mit.edu> cmk@athena.mit.edu (Charles M Kozierok) writes:
>
>>The Canadian dollar has fallen over 10% in just a year and a half...
>>almost all the Jays revenue (except for their share of MLB TV deal)
>>is in Canadian dollars, and almost all of their expenses are in
>>American dollars...10% of the revenue lost is pretty close to
>>$10 million dollars (a Cone and a half).
>
>if this is the case, why are the purse-strings still flapping in the
>wind?
>

They raised their ticket prices 10-15% across the board last week...
in Canadian dollars it is an increase...in American dollars it really
isn't.

The purse strings aren't flapping...in the Gruber deal they save 
$2 million, not signing Henke saves another $2.5 million, Maldanado
$1.5 mil...plus they are shopping Borders because with arbitration he
will get a big increase...and with Knorr and Sprague they have two
cheap catchers who are probably adequate.

Besides Borders, they face large arbitration
increases for D. Ward, Wells, Olerud, and Stottlemyre.

They overpaid for Carter, but from Gillick's point-of-view he had no
choice...and Molitor received the money, perhaps a bit more than
Winfield would have gotten...and Dave Stewart got Jimmy Key's money.

>
>this is a whole different discussion. your comments also
>reflect a mistake i have heard many times: evaluating the 
>financial return of a ball club on its operating margin, while
>ignoring the capital appreciation in the value of the club.
>how much did the jays cost in '77? how much are they worth now?
>

It would be different if the real estate conglomerate that ultimately
owns the Blue Jays were not nearly another O&Y due to the deflation
of their real estate assets. 

It is not clear that with the financial situation of the ultimate
owners, and their outstanding debt, that these same banks would be
willing to float loans to the Blue Jays to operate with a significant
yearly operating loss.  The Blue Jays books are balanced as it is
because 4 million people go through the turnstiles...how often has
that happened in major league baseball history...and the corporate
owners, because of the real estate situation aren't really a good 
source of cash, to take advantage of the capital appreciation of
the ball club.

>anyway, it's all irrelevant. see below.
>
>here we go again... is the following really so hard to understand?
>
>the point being made here is presumably that the jays could not afford
>a $9M signing bonus, but that if it were paid as normal salary (ignoring
>a small signing bonus which everyone gets just for simplicity), they
>could afford it. i say bunk. we are comparing two alternatives, A and B:
>

The Blue Jays are not going to offer a $9 million dollar signing bonus
facing a potential lockout...where ultimately there are shareholders...
and not just a philanthropist like in Kansas City...and it sets a
horrible precedent...

>
>so the only question is if they could have gotten the loan. and it is
>not much of a question. think the jays will do good business this year?
>how about all the WS championship merchandising going on? their cut of
>that alone probably pays a good chunk of cone's salary.
>

The Blue Jays, which rely on ticket buyers, unlike KC which has a 
philanthropist for an owner, would be in big trouble if there was a
lockout.  The Blue Jays are operated so to operationally break even
on a yearly basis.        

>
>the only reasonable answer is that gillick chose not to spend the money
>for some reason only he knows, or more likely, cone wanted to go to KC.
>

The only reasonable answer is that Gillick, really Beeston, whose decision
this ultimately was, is not going to offer $9 million dollars in lockout
protection to any baseball player...the Blue Jays take risks but
affordable ones, only.

Gerald