Buster Olney's NL Central comments

[mikechamp]

From an ESPN chat:

Mandatory Linkage: http://proxy.espn.go.com/chat/chatESPN?event_id=15235
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Hey Buster some people here are worried about Pujols game, I know he didn't have a great spring and went 0-4 against the Mets sunday but this is Albert Pujols were talking about. Nobody should be worried should they?

Buster Olney
He'll figure it out. Everybody goes through some kind of slump during a year -- it's just that his discomfort is occuring in the first few games of the season, rather than three games in August. He'll finish with his usual .320/120 RBI.
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How far away are the Reds from contending?

Buster Olney
They play in the mediocre NL Central, they have two terrific starting pitchers and they'll catch the ball -- so they are contenders, as we speak.
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Buster, do you know where I can borrow $600 million. I have an inside track on an investment!!!

Buster Olney
The Cubs at $600 million? What a bargain.
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How long do you think Scrap Heap will run Lidge out to the mound in the 9th before he realizes the guy is cooked?

Buster Olney
It's one game on one day, and given the fact that the Astros aggressively fended off entreaties for Lidge from the Red Sox this spring, you can bet that he's got a pretty long leash.
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What are your thoughts on the sale of the Cubs?

Buster Olney
It'll be good for the organization, and for fans. Within baseball, the general perception of the Tribune Co. is that it has competed with one financial hand tied behind its back, and I have to believe that the next owner will take the team into the financial superpower realm of the Yankees, Red Sox and Mets, where the Cubs should be.
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Buster what did you think of Ben Sheets performence yesterday?

Buster Olney
I thought about picking the Brewers to win the division because of the pitching, but worried, in the end, about their defense. But if Sheets makes his 34 starts and gives them 15-20 like that, the Brewers will be playing in October.
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How does the sale of the cubs affect contract negotiations with Zambrano?

Buster Olney
I called around to ask that question today and the answer I got repeatedly was: it's not clear. The feeling was that once the execs at the Tribune analyzed the proposed deal -- five years, $80 to $85 million -- they would rate it as a serious asset that would only increase the value of the Cubs. But as you know, in these type of situations, sometimes budgets are frozen, and maybe the Trib brass would decline to finish the deal. If they do, they are absolutely crazy -- if Zambrano gets through this year healthy, and continues to pitch well, he would cost $130-$150 million as a free agent. This is a great deal for the Cubs and they should finish it.
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[ToughGuy_BlueShirt]

From an ESPN chat:

Mandatory Linkage: http://proxy.espn.go.com/chat/chatESPN?event_id=15235
=============

Hey Buster some people here are worried about Pujols game, I know he didn't have a great spring and went 0-4 against the Mets sunday but this is Albert Pujols were talking about. Nobody should be worried should they?

Buster Olney
He'll figure it out. Everybody goes through some kind of slump during a year -- it's just that his discomfort is occuring in the first few games of the season, rather than three games in August. He'll finish with his usual .320/120 RBI.
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People are worried about Pujols? Who in their right mind would think that Pujols is going suck? That guy needs to speak for himself.

[mikechamp]

In regards to the last question, I can see this going down either way.

Mumbles is a valuable asset to have. Paying him $80-100 million, depending on contract length, is in line with the current market. And there's not many pitchers out there better than him.

However, would the new owners want to have to shell out (guessing) $700 million for the team, then also take on an additional $400 million in debt (new contract money handed out in the past 5 months plus Mumbles' potential deal)? I know it's a lot of money just to buy the team and take on the current debt, but would the $80-100 million contract be slightly too much money for a potential buyer?

[heyzeus]

Olney is wrong on the Cubs sale question - when a hedge/private equity fund purchases the team, you can be assured that the bottom line is going to become more important. Ie, cutting costs. The wall street journal noted that Wrigley has a 95% rate of ticket sales. Why would they increase/maintain spending levels when it won't impact revenue to spend less on the team?

[mikechamp]

Isn't ticket sales small potatoes compared to TV revenues nowadays?

[Hungary Jack]

In regards to the last question, I can see this going down either way.

Mumbles is a valuable asset to have. Paying him $80-100 million, depending on contract length, is in line with the current market. And there's not many pitchers out there better than him.

However, would the new owners want to have to shell out (guessing) $700 million for the team, then also take on an additional $400 million in debt (new contract money handed out in the past 5 months plus Mumbles' potential deal)? I know it's a lot of money just to buy the team and take on the current debt, but would the $80-100 million contract be slightly too much money for a potential buyer?

I don't think so. With MLB revenues rising at a 10% annual rate, a deal that looks ludicrous today will look like a bargain in a few years. Pujols' deal is a good one at any price, but now the deal is now an absolute steal. Locking in a young guy like Zambrano at market rate would make the Cubs a more attractive asset, IMO.

Remember that the cash required to fund these long-term contracts is generated by the ongoing operations of the business. There is no additional debt incurred to fund the deals, unless the team is expected to bleed $$ (the price wouldn't be $700M+ if this was the case). Thus the large long-term contracts don't pose cash flow issues.

The bigger issue is paying down the debt used to fund the purchase (if that is how the deal is done, as was the case with DeWitt's & Co's purchase of the team, and the construction of Busch III).

[heyzeus]

Isn't ticket sales small potatoes compared to TV revenues nowadays?

Yes, but the deal will apparently include the cubs' cable network, which much like the team, has done well despite a lot of lean years.