Cubs Game Notes and Thread: Marmol and The Closer Uncertainty Principle, Cubs debt, and Harrelson charges the windmills

Cubs Game Notes and Thread: Marmol and The Closer Uncertainty Principle, Cubs debt, and Harrelson charges the windmills
The Cubs closing situation

The Cubs outlasted the outmanned (feels good to say that) Miami Marlins last night as Carlos Marmol ran 93 mph in on Giancarlo Stanton than put him away with a slider low and away.  Was that textbook pitching or was it plain old luck?  Either way, I'll take it.

In the News...

  • Some teams use a closer by committee approach. The Cubs apparently are using the closer by uncertainty principle. Dale Sveum's new plan is to not hand Carlos Marmol the closer's job outright.  "He pitches great when he doesn't know he's the closer", said Sveum.   Maybe Marmol needs a little more stress and uncertainty in his life.  As Cubs fans, we know the feeling.
  • David Kaplan wrote a great piece on Tom Ricketts and the debt he incurred when buying the team.  Is some of that revenue we've heard so much about going to pay that debt?  It seems that way and you have to wonder if Theo Epstein feels a little deceived as to how much money would actually be available for the actual ballclub on the field.  Could this be why Ricketts is crying poor and clamoring for the added revenue that the Wrigley renovations would bring?
  • Matt Garza tweeted that he'll be back on the mound May 1st.  His actual tweet is this, "for the really fans, not fake cub.Fans who do nothing but talk smack! Had tiny setback,everything is all good! 5/1 is my day."  So there you have it from the man himself.  Good news and hopefully no more setbacks.
  • I'm not a White Sox fan, but I enjoy James Fegan's work and he breaks down the debate on MLB Network between Brian Kenney and Hawk Harrelson.  In case you missed it, the debate was about sabermetrics and Harrelson is very much against such newfangled thinking.  With all the tenacity of Don Quixote attacking windmills, the Hawk went on the offensive and controlled the debate -- even if much of what he was saying wasn't really relevant to the topic.

Here are your minor league transactions for the week, via Baseball America...

  • Placed on 7-day DL: RHP Jose Arias, RHP Ryan Searle, C Taylor Davis, 1B Justin Bour, OF Darien Martin, OF Tim Torres
  • Reinstated from DL: C Yaniel Cabezas, SS Tim Saunders, SS Elliot Soto

Today's Lineup:

  1. Sappelt CF
  2. Castro SS
  3. Rizzo 1B
  4. Soriano LF
  5. Castillo C
  6. Hairston RF
  7. Ransom 3B
  8. Barney 2B
  9. Feldman SP

What to Watch For:

John: Dave Sappelt is one of the players to feel the wrath of frustrated Cubs fans and it's not hard to see why.  Sappelt is in the lineup to hit.  He's not exactly a one trick pony, but none of his other tools are much better than average.  So he needs to start hitting.

Tom: With Matt Garza (allegedly) on the way back, Scott Feldman might be the odd man out with opening rotation 5th starter Carlos Villanueva outpitching him.  He can't afford to have a poor outing against the offensively challenged Marlins.

FelzzAlfonso Soriano. Warm weather, just what he needs maybe this is the series that spring boards one of his streaks

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  • fb_avatar

    Is Darien Martin "Trey"?

  • In reply to Matt McNear:

    Yes. He's officially listed as Darien in his MLB profile, but nobody calls him that. Well, maybe his mother.

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    The flip side of the money issue: if Theo feels betrayed by Ricketts, why doesn't he just walk? He could have another job inside of a week, and probably with an owner willing to spend. (I have to think the Dodgers are a little miffed with what their money has bought them to this point.) Something about all of this just doesn't sit right. I do believe that the Sam Zell financing nightmare is hurting the team, and I think that Wrigley renovations and the new TV contract will help significantly. But I feel like there is a big chunk of this story that we haven't heard yet.

  • In reply to Mike Moody:

    It's not my area of expertise so I'm throwing it out there for you guys but I definitely agree there's a lot that we don't know here.

  • In reply to Mike Moody:

    I'm not sure why this is such an issue or is so surprising all of a sudden. They took out $500 million in loans when they bought the team. How did everyone think they were going to pay these loans back???? Did everyone think TD Ameritrade was going to foot the bill for a seperate corporate entitiy? Was Joe Ricketts going to liquidate another $500 million in family owned company shares to pay this off? And what does Sam Zell have to do with this, the Tribunes only impact on the Cubs currently is that the Trib has a 5% equity interest in the team to stave off the IRS from taking more of the profits from the sale of the team. They have nothing to do with the operations or financial liquidity of the team. And I don't even think that matters anymore since the Trib went through bankruptcy proceedings, the Government may not even have the ability to put a tax lein against them anymore. As soon as this franchise locks up new local broadcast and a regional cable deals the only debt this team will ever have to worry about is the short term contractual kind that makes up the 25 man roster.

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    In reply to Northside Neuman:

    Read the article. Zell is important because he insisted on debt financing as part of any deal. (I'd heard that before -- the debt financing let him play the financial games with the deal that he played.) I believe, but am not sure, that there are covenants in place that restrict paying off the loans.

    The Ricketts literally had no choice but to buy it with debt if they wanted to buy at all. Wittenmeyer's column -- for however much you want to believe it -- goes further and says that there are covenants in those loans that restrict how much money the Cubs can spend so long as the loans are in place. Because of that, even if they wanted to pull a Steinbrenner and pay lavishly for talent, they legally can't. (Again, according to Wittenmeyer.) This is all deeply complicated financial rules -- and all tied up in the financing that Zell insisted on to sell the team in the first place.

  • In reply to Mike Moody:

    Mike, nowhere in that article does it state that the Cubs need to maintain debt at elevated levels long term, just that the purchase at the time of closing needed to be heavily leveraged. It states that the the Tribune asked to be allowed to maintain a 5% equity ownership in the team for several years going forward. The fact that the Ricketts used more debt rather than selling their equity in TD Ameritrade was a boon for them. In February of 2009 the family sold 34 million shares of (AMTD) at $11.85 per share to raise $403 million in cash for the purchase. Since then the stock has rebounded to pre-financial crisis levels to $19.54 a share as of todays market. Which means their equity holdings in (AMTD) alone are now worth roughly $1.076 billion more than midway though 2009. If they had sold an additional 1% in the company in February 2009 to invest $200 million more in cash into the Cubs they would've lost out on $129.7 million in capital appreciation.

    Frankly, I can't see why anyone would agree to such early prepayment penalty covenants on debt. But if their are some in place the Ricketts are benefiting more than anything from them. The team has appreciated $300 according to Forbe's estimates and the Ricketts total net worth has increased almost $1.4 billion in 4 years, at least on paper.

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    In reply to Northside Neuman:

    Yeah, it isn't in the Kaplan piece but my understanding is that its critical to the deal. Honestly, it makes sense. Otherwise, all the other people that were scared off by financing it with debt wouldn't have been scared off -- they simply buy it with debt and immediately pay off the debt. Problem solved. And where it bites is on the covenants of the debt structures used -- that require very strict expenditure-to-revenue rules. And those rules are holding down free agent spending. (This is Wittenmeyer's tale.)

  • In reply to Mike Moody:

    Wittenmeyer doesn't understand what operating revenues means, so any of his opinions on the financial health of this team or any other business entity I take a block of salt....

  • Can someone give me an update on maples,underwood,and blackburn ? Where will they start the season ?

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    In reply to seankl:

    All of them are currently in extended spring training. (Underwood pitched 3 innings yesterday and had some problems finding the plate.) Odds are good that every one of them will be on Boise when the Hawks open up play in about two months.

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    The Kaplan article is a good one, and a reminder of the constraints. The Cubs right now have to spend like a mid-market team. That will change over time, as we have the potential to be Yankee-esque in that department.

    I don't doubt Ricketts wants to win.

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    In reply to Zonk:

    For me the key quote was this one: "Plus, do you really think that [MLB commissioner] Bud Selig, who is one of the smartest guys around, would have allowed the Cubs, a premier franchise, to be operating under a risky structure? No way." It's exactly right. If Bud Selig knows anything, it's financing baseball teams. I just don't see how he would allow a financial straight jacked on the Cubs for a decade. I don't pretend to have a great handle on the nuts and bolts of financial deals -- that's my brother's department -- but, as I said above, the stories we're hearing just feel incomplete.

  • In reply to Zonk:

    I agree Zonk.

  • Let's hope all the money is there for the draft and international
    signings. This is where our future talent will come from. It's
    not time to worry about signing big FA's.

  • In reply to emartinezjr:

    Oh, I think they'll sign FAs. Maybe not overspend on guys like Josh Hamilton, but at least the way they did this year.

  • Is Rizz just swinging for the fences or what? 7 of his 15 total hits are homers.

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    In reply to KSCubsFan:

    Is he going to finish the season with a .190 batting average and 60 home runs?

  • I'm liking it. 8 HRs?? He's only two away from the record Soriano set last year. And against a lefty to boot. He'll get the average up eventually.

  • Lots of discussion here over the last few days about second basemen coming up in the system to replace Barney - and I am excited about them as well. But gotta love Barney - what would the third have looked like tonight had Feldman succeeded in throwing the ball into center field with two on and no outs?

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    Can you blame Sam Zell for insisting on a debt deal? Who in their right mind would want to pay more taxes for any reason? But the Ricketts are wise business people and will right this ship. The pieces are all falling in place. We have the right folks in the right places.

    Although this looks bad at first glance, it shouldn't really change any of the long term plans. If anything it enhances the plan. We just can't stray away and sign a big money contract just to please fans and and pressure they might put on the organization. Our hands are a bit tied right now and are forced to follow through on Theo's vision.

    Makes me all the more excited for the 2015 season and beyond!

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    In reply to bocabobby:

    It would be nice to know what the inner workings of that original deal was. If the Rickets really wanted to put more cash down in the deal, how soon before they could rework the deal? Interest rates are at all time lows right now.

    I bet they also would eventually want that 5% back from Sam Zell as well. The sooner the better as this team's value will only go up. Especially after the next TV deal goes down.

    This is the kind of insider info I'd like to know. But with all that said, it still shouldn't affect the process of the rebuild of the product on the field..... imo

  • Ben Wells with a no-hitter through 5. Baez 2-3 with 2 RBI.

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    In reply to John Arguello:

    On the downside -- the out is yet another strikeout.

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    Someone with a higher finance IQ is going to have to explain why the debt financing deal should be crippling to thd ricketts. The way I read it, ricketts wanted to pay cash for the team, ie they had the lump sum in their back pocket. Zell says no, I don't want to pay tax on 800 bil all at once, give it to me a little at a time, with interest. So fine, you take your lump sum and invest it - who better than the ricketts would know how to get a good rate of return on an investment - and keep servicing your debt a little at a time. Yes you're paying more than you planned for the team (in interest) but you're making up for that by investing your capital. Where's the crippling aspect?

  • In reply to SKMD:

    The loan covenants limit the amount of operating income that can be spent on salaries and other expenses.

  • fb_avatar

    A higher finance IQ than me, I mean.

  • John, call it panic but do you think Theo and co. could leave if things don't turn around in 2 years as expected. I believe he was signed to a 5 year deal? If the struggles and lack of resources continue into years 3 and 4 is it possible an 8-10 plan might not come to fruition?

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    As much as we've been frustrated with Rizzo and Castro this season, I'd take either one of them over Giancarlo Stanton and his struggles in a heartbeat.

  • fb_avatar
    In reply to Mike Moody:

    Not to mention his bad knees and penchant for missing months at a time with various injuries pretty much every year he's been up. He's 23 but it seems like he has the body of a 35yr old.

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    Three up, three down. No drama.

    I didn't know Cubs closers were allowed to do that.

    I say Gregg stays there until he stops doing that.

  • In reply to Mike Moody:

    I fear Greg will stop doing that as soon as he faces a real major league team.

    This whole "finance-tying-our-hands" thing is so depressing. I hope it's not true. Certainly possible that this kind of story is a plant to combat the disgruntled fans. "Gee we would spend more money on talent if only Zells didn't make us do a deal that prohibits us from doing so. Honest."

    After 104 years of Cubs fans can no longer say "wait til next year." It's now "just wait til we refinance!"

  • fb_avatar

    While the debt may be a constraint, I suspect it's not a severe one. First of all, interest rates are crazy low at the moment. Many businesses are keeping cash on hand and using debt to pay for certain kinds of expenditures because it's practically free money.

    Secondly, why would this information be out there and available? Who benefits from it being public knowledge? Ricketts, who's been trying to negotiate high-profile deals to improve his revenue streams from the stadium. Based on that, and the fact that Theo's been banging the revenue drum - this is Theo who worked with Larry Lucchino for years without expressing any public frustration - I suspect it's largely PR.

  • Carlos Marmol lacks TWTW.

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