Guest: Kurt Badenhausen, Forbes
On this week’s episode we take a look at the White Sox early returns on-and-off the field starting with a look at their most recent valuation with Forbes Senior Editor, Kurt Badenhausen.
Jim and Josh analyze the hot starts for Yoan Moncada and Tim Anderson to see how long these runs will last, and if Eloy Jimenez is poised for a big week.
Preview the Sox vs. Royals series, provide the latest in the minor leagues, and answer fans questions in P.O. Sox.
Why is Yolmer the best option we have? Everybody knows he’s a utility player at best, yet they are still starting him. Nobody better in the organization? Free agency? Why is the team not actively trying to get better at this position THIS SEASON?— Jason (@Salsashark21) April 14, 2019
How long do you think the Sox go before deciding that Cease is the best choice for a fifth starter, skipping him when possible to limit his innings and giving him the balance of this (lost) season to prepare for 2020?— Gucas Liogito (@GucasLiogito) April 14, 2019
#posox, @soxmachine_josh ,@SoxMachine— Jarrad Faehrmann (@Jardarf) April 14, 2019
Birmingham has the main crop of young players for the rebuild, is it a major concern that Birmingham have been having a slow start and most of these prospects are hitting below .200?
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Interesting discussion with Kurt. Thanks, Josh. It sounds like most of the Sox’ increase in valuation is based on potential, not actual realized monetary gains. Because there are in a big market they could make a ton of money from stadium name sponsorship, corporate spending in premium seats, large RSN TV deal, etc., etc. Of course they’re not really doing any of that currently but they could be based on the number of people and companies they are in proximity to. Also much of that increased valuation is based on broader market trends unrelated to baseball that could cause a drop in the value if the market falters regardless of how the team is operating. Which makes sense since everything to some extent is correlated to the broader market.
Thanks for the feedback.
Speaking with a couple of consultant’s who specialize in acquisitions and mergers, I asked them to take a look at the numbers provided by Forbes. Their opinion was that the White Sox don’t appear to be a team looking to increase spending. Instead, they see a team preparing to sell (High OI%, bottom of the market expenses, established stadium and television deal in third largest US market).
The one thing that caught my eye is % of revenue dedicated to payroll. League average is 42.8% of team revenue is tied to payroll.
White Sox are at 26.4%, lowest in MLB.
That was also my concern. This offseason looked very much like an inheritance building strategy, capped by the short term TV deal.
Hoping against proof that it was just the hiccup in development/injuries and depressed viewing audience that caused them to hold spending for another year.
I’d actually prefer a sale of the team – hope they hurry up and do it. Just read Astroball and I’d love to have an owner like Jim Crane. That would mean a shake-up of how the team operates and new FO guys.
Stellar investigative work, Josh. I hope that the local media pay attention to what you are doing.
Iiiiiiinteresting. That’s been a theory of mine for a while but without much to back it up. I don’t think JR wants to be the one to have a stadium battle with the city/state (again) which certainly is on the horizon in the late 2020s. That and preferring to have cost controlled value of younger players and not sunk cost in aging veteran FAs for a potential sale in 4-7 years.
I think that battle won’t take place until 2027, which Jerry Reinsdorf would be 91 years old.
Josh’s reaction to Jim taking the under cracked me up.