3/27 Game Notes and Preview: Cubs have highest operating income in baseball; Pick up RHP Moscoso off waivers

3/27 Game Notes and Preview: Cubs have highest operating income in baseball; Pick up RHP Moscoso off waivers

Want to get excited?  It's moving day for the Cubs!  Opening Day is drawing ever so close...

It has been an interesting day in the news for Cubs fans.  They picked up a reliever off of waivers to c0mpete for the last spot and were identified by Forbes as the most profitable team in baseball.  I'm sure that's not going to help their case in the Wrigley Renovation debate.

The Cubs play the Royals today and the game will be on MLB.TV at 8 pm CT.

News and Notes...

  • The Cubs picked up an intriguing arm today in RHP Guillermo Moscoso.  Moscoso is coming off a horrific year in which he put up a 6.12 ERA.  His peripherals are better, however.  He gets some swings and misses (8.46 Ks/9IP) with a low 90s fastball with good movement and some deception in his delivery. Moscoso approach is to keep the ball down in the strike zone but hasn't generated as many groundballs as you would think.  Hhe has average control (3.46 walks/9IP).  Moscosco also throws a good change-up as well as an average slider.  He has started in his minor league career and did make 3 starts last year, so the idea here may be that he can fill that long man/swingman role for the Cubs.  With the team's SP in flux, they may want to fill that bullpen spot with a guy who could double as rotation depth.  To make room, Arodys Vizcaino was officially put on the 60 Day DL.
  • The Cubs are the 4th highest team in terms of revenue, behind only the Yankees Dodgers, and Red Sox, and they are at the very top of the list when it comes to operating income. Right now the Cubs strategy is to rebuild and invest in player development, but they have plenty in reserve to increase that payroll when the time comes.  There should be no excuses about spending once the Cubs approach the point where they should start contending.
  • And on a related note, Schafer Condon managing partner Jim Stadler hopes that their "Committed"marketing campaign for the Cub has "legs for year two, three, four — we're just in the infancy stage of this campaign."  Let's hope that only applies to the marketing end and not the rebuilding process in general.
  • Gordon Wittenmeyer gives some more love to Cubs vets today.  Yesterday it was Alfonso Soriano.  Today it's David DeJesus.  Both players have been positive influences in the clubhouse.  DeJesus has especially been helpful with Anthony Rizzo.  The Cubs veteran outfielder realizes he was brought in for the short term but would like to stay here in Chicago and find a role with the team.  Unless the Cubs can get a talented young player for him, I'm good with that.  He can be a solid veteran 4th OF'er.

Today's Lineup

  1. DeJesus CF
  2. Clevenger 3B
  3. Rizzo 1B
  4. Soriano DH
  5. Hairston RF
  6. Navarro C
  7. Lillibridge SS
  8. Barney 2B
  9. Sappelt LF

What to watch for is on hiatus until Opening Day but...

  • I can't help feeling a little nervous about the left-side of that infield today. Steve Clevenger and Brent Lillibridge are handling those spots today.  We know their versatile but they are playing a couple of tough positions today.
  • By the way, Starlin Castro is okay.  He is flying out to be with his girlfriend as the couple are expecting their first child.  Congrats to Starlin and his family.

 

Comments

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  • What exactly do they mean by "operating income"?

  • In reply to KSCubsFan:

    According to a separate Score article, it seems to be the money they have to work with (i.e. another word for profit). I must confess I'm not much for business.

    Is there an accountant in the house?

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    In reply to John Arguello:

    Here's the definition from Investopedia: The amount of profit realized from a business's operations after taking out operating expenses - such as cost of goods sold (COGS) or wages - and depreciation. Operating income takes the gross income (revenue minus COGS) and subtracts other operating expenses and then removes depreciation. These operating expenses are costs which are incurred from operating activities and include things such as office supplies and heat and power. Operating Income is typically a synonym for earnings before interest and taxes (EBIT) and is also commonly referred to as "operating profit" or "recurring profit."

    Essentially, it measures the amount of money you make from the business itself -- not considering any interest payments on loans or taxes you pay.

  • In reply to Mike Moody:

    Thanks Mike!

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    In reply to Mike Moody:

    A couple important things to keep in mind, as this is about to become the world's biggest political football (Tom Tunney just popped a bottle of the good stuff): (1) These are estimates by Forbes, who presumably do not have access to the actual books and (2) more importantly, the calculations, if done right, are *before* the Cubs pay the Cook County Entertainment tax.

  • In reply to Mike Moody:

    According to Forbes the Cubs were the most profitable team in baseball in 2011 based on operating income as well so this isn't exactly a new story.

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    In reply to Mike Moody:

    That might not be true on the Entertainment tax. It depends on how the Cubs treat it. It's a variable cost, so they could make an argument for including it in cost of goods sold. I'm not an accountant though, so I will certainly cede to anyone with more expertise.

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    In reply to Mike Moody:

    Just for reference. They paid $845M and got a 3.7% return last year. The S&P 500 retuned 13.2% in 2012. That is what you would call a bad investment. Shows you exactly how "profitable" baseball teams really are.

  • In reply to Mike Moody:

    Deadspin leaked some Financials several teams a few year back. Obviously not the Cubs, but this might give a good idea of what composes Operating Income for a baseball team.

    http://deadspin.com/5615096/mlb-confidential-the-financial-documents-baseball-doesnt-want-you-to-see-part-1

    Most accountants are too busy this time of year to respond to your inquires John. Thanks for providing my daily distraction.

    Ratmoss, CPA

  • In reply to Ratmoss:

    Haha! Thanks for the link at least ;) Forgot it was tax time...gotta get those done soon.

  • In reply to John Arguello:

    John, the Cubs have the 4th highest revenues after the Yankee's, Redsox and Phillies.

    The Dodgers actually generated less revenue than the Cubs and Phillies last year.

  • In reply to Northside Neuman:

    That's not surprising at all. The Cubs are a money making machine no matter how they perform. Maybe Dodgers pass them up with a good season.

  • In reply to KSCubsFan:

    In a normal business, operating income would not include income that comes from outside of the operations of the business, ie income on stock or bond investments, capital gains income from sale of assets, etc.

    I assume that for a baseball club, it would exclude those things plus perhaps luxury tax income. If the Cubs are the actual owners of the McDonalds across the street, it would exclude that type of income also.

  • Lets hope that all the players they have acquired since last season
    help the team. Hopefully after the season a few can stay with the
    team.

  • In reply to emartinezjr:

    Agreed. I'd like the Cubs to keep adding pieces, not keep starting over every year. Hopefully they can find a few long term pieces this year.

  • In reply to John Arguello:

    We found three last year. I'll take three more this year, then start adding pieces from the farm, and more nuggets from trades.

    2011-November Castro and Marshall.
    2013-March Castro, Rizzo, Samardzija, Jackson, Barney

  • Just curious, John, (and a bit lazy, too ;-) who waived Moscosco?
    How long has he been with that team as an MLBer?

  • In reply to HefCA:

    I think Tim answered it. It was Toronto but he's bounced around a bit. Believe he was with Detroit and Texas before, off the top of my head.

  • Toronto.

    http://www.baseball-reference.com/players/m/moscogu01.shtml

  • john I like jim callis but how did he rank the yankees farm system ahead of the cubs ?

  • In reply to seankl:

    Callis is a Cubs fan, I believe, so it's not bias. I also think they all rank them together so he doesn't get the only say.

  • 5 & 97.5 for Wainwright.

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    That's going to make extending Samardzija rather pricey.

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    John. Do you think Barney is a core piece? Would you extend him or trade him if you were Theo?

  • In reply to Demarrer:

    I think he's good enough to be a part of the core. Not everyone is going to be a star and while the Cubs are deep at 2B, it going to be tough to unseat him. That said, if a team wanted him enough to offer value, I'd definitely listen.

  • Well, before someone starts calling the Rickett's "dirty Capitalists" let's just make a simple point! The Cub's payroll is way down. That being the case for the next few years, might it be likely that there will be some profits to be made? And when the owners come in and upgrade the ballpark and make other improvements, and when they increase the size of the staff in their operations, isn't that a sign of commitment and not "raiding"?

  • In reply to Quasimodo:

    Whatever you think of the Ricketts family and how they made their fortune, you can't say they bought the Cubs to make some easy money. They may have the most profit of any team right now, but they are clearly reinvesting it in the infrastructure of their business. It's simply a sound long term business strategy. Cut costs short term and take a minor hit in gross income that results in a greater net profit. Pour that increased net profit back into the company to improve the product long term. Smart.

  • In reply to Quasimodo:

    I would also think that interest paid on the money borrowed to purchase the Cubs would not be part of operating income (deducted from operating revenue). But it has to be paid through profits, or the Ricketts family won't own the Cubs very long.

  • john, I hear the cubs are interested in shortstop Gleyber Torres. Can you get us some info on this kid ?

  • In reply to seankl:

    Just posted a quick piece on him. Toolsy but polished SS. Good all-around skill set, 15-20 HR power with good average, defense, and a strong arm. Has the speed to steal bases as well.

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    Vizcaino to the 60 day? I hope that is retroactive...now Baker, Vizcaino and waiting for Garza to be placed...ouch.

  • In reply to Ray A:

    They'll make it retroactive. He was going to start in extended spring training anyway.

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    Feldman is awful. He's Volstad 2.0. I don't care how good his peripherals are, he has no business starting. If he didn't have the contract, he probably shouldn't make the team. Rusin should be in the rotation. I get that it's spring training, but he's been throwing BP. He should have a very short leash.

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    In reply to brober34:

    People were literally saying the exact same thing about Maholm and Wood during ST last year...... Lets give this guy some time, eh?

  • In reply to Marcel Jenkins:

    Exactly Marcel,... I remember a bunch of individuals swearing up & down how signing Maholm was a horrible idea,... and how Wood was a terrible piece to get in return for Marshal. We'll see in the next season or so whether those were good trades,... I think that Wood (in particular) is going to be a good one for the cost. And even if he isn't a long-term piece,... if he has a good season or two a decent lefty SP always brings a good market price in trade.

    Volstad,... well he was the cost of jettisoning Zambrano IMO,... and probably wasn't that much worse as player than Zambrano was last year anyway. Now they are both gone and so is the dead weight of Zambrano's contract.

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    John, I get the gut feeling that DeJesus is someone we'll see back in the organization when his playing career is done. What do you think?

  • It would be a most welcome post career job for DeJesus IMO with his family roots in Wheaton.

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