I know this is WAY tl dr... but I got to digging and wanted to offer it for anyone who was interested.
We've talked about signing Ohtani and the positives and negatives.
I think the Rangers getting their local media rights for 2024 is a game changer. If done right, I think they make more than the $111M. They could capitalize on an Ohtani signing in a way they wouldn't if the deal was already fixed and in place.
Sherrington had an article tempering the thought on the Rangers signing Ohtani. Central to the argument was the Rangers have only spent big in 2 yrs (the last 2) and they will likely go back to being cheap. Signing Ohtani would impact the Luxury Tax for a long time, but no context or supporting info was provided. I would expect that to be true, but to what extent?
The article was poorly written, IMO, and lacked any supporting information other than mentioned above.
We've thrown out some of what we think Ohtani is worth. This
article puts it at: $787.7M/12 yrs. It builds in some of what I have below, but gives you an idea. That is about $65M/yr. I think if the Rangers were to capitalize, it would be at the high-end. A team like LAD/NYY, IMO, may see less uplift because they are pretty well capitalized already.
There is a down side. Costs in money, draft picks, Int'l pool money... compounded impact of exceeding LT
Let's dig into some things.
Negative:-
Loss of draft position and Int'l Pool money for signing QO. We'd lose our 2nd and 5th, plus $1M in Pool money. If we sign Hader... he'd be a multiple.
Quote:
Competitive Balance Tax payors: A team that exceeded the CBT threshold in the preceding season will lose its second- and fifth-highest selections in the following year's Draft, as well as $1 million from its international bonus pool for the upcoming signing period. If such a team signs multiple qualifying-offer free agents, it will forfeit its third- and sixth-highest remaining picks as well.
- Losses of draft position for Luxury TaxI thought there was something here, but I think in my mind this had to do with losing draft position for a QO that leaves. LAAA will lose compensation position for losing Ohtani, because they are over the LT. This would impact us if we have a FA that leaves after declining a QO.
- Losses of Luxury Tax Money.Quote:
First year: 20 percent tax on all overages
Second consecutive year: 30 percent
Third consecutive year or more: 50 percent
If a club dips below the luxury tax threshold for a season, the penalty level is reset.
If Ohtani gets $50M/yr assume that is all an overage. For math, we'll assume the 1st 3 years are at/below $40M.
We'd pay $12M, $20M, and $20M the 1st 3 years.
With Payroll commits below, the Rangers could reset the amount, limiting the impact. This would really impact cash-flow more than overall valuation. That makes it a different argument in terms of impact.
There's also a surcharge threshold for clubs that exceed the base threshold by $20 million or more.
This is where it can get expensive. Stay below the $40M overage.
Quote:
$20 million to $40 million: 12 percent surcharge
$40 million to $60 million: 42.5 percent surcharge for first year; 45 percent for each consecutive year after that
$60 million or more: 60 percent surcharge
Still assuming his full amount is above the LT, now you see why I chose $40M.
Another $4.8M. Let's call it $5M. (12% of $40)
Below are the Payroll threshholds for reference. What we'd want to manage. The following thresholds were put in place per the 2022-26 collective bargaining agreement. Scherzer drops off after 2024 and that is a nice chunk:
Quote:
2022: $230 million
2023: $233 million
2024: $237 million
2025: $241 million
2026: $244 million
There is an additional penalty in terms of where your draft pick moves:
Quote:
Clubs that are $40 million or more above the threshold shall have their highest selection in the next Rule 4 Draft moved back 10 places unless the pick falls in the top six. In that case, the team will have its second-highest selection moved back 10 places instead.
Some of those penalties are very punitive. Those are reasons you've heard me talk about trading certain players. Heaney ($13M next year) and Gray ($13M in '24 and '25) are ways to bring money down. Would you trade BOTH for '24 to sign Monty for $26M?
Total penalty is about $17M, $25M, and $25M for each of the 1st 3 seasons. Added to the $40M paid for Ohtani. Other penalties apply. You could trade Heaney/Gray to get Top talent to lessen the blow.
==========Opportunity:- Rangers may own their media rights for 2024+ and elevate the pricing. Teams get $60M from MLB for media and the floor for most local media revenue is $40M... ceiling is like $200M+. $100M seems mid.
- Rangers could set a new narrative on where the Metroplex sits in terms of media market.Attendance and viewership has been limited by Bally's and the Rangers tanking. If you look at viewership during the past 3 years, it has been below what it will be once Bally's is gone.
- It would make the Rangers an "inevitable" favorite for the 2024 WS.The National media will have to constantly recognize the Rangers. If the Rangers get out quickly, they'll set the narrative for the season.
- All-Star game in Arlington. All things equal, you now could put 7 position players in the game. You could have 2... 2... SPs.
- Carter, Garcia... - Jung, Seager, Semien, Heim, Ohtani.
The O performance will be off the charts. One expectation is the Rangers would likely exceed 1000Rs for the 1st time by an MLB team since Cle in 1999.
Others of note (since 1900):1,067: 1931 Yankees
1,065: 1936 Yankees
1,062: 1930 Yankees
1,027: 1960 BoSox
1,009: 1999 Indians/Guardians
-
2023947 Braves (1)
906 Dodgers (2)
881 Rangers (3)
- Ohtani puts the Rangers in a position for Sunday Night featured games/ More exposure.
- Rangers become an International Brand.
- Potential Hall.of.Famer. Would likely go in as a Ranger
- Branding of the Offense.
This would be awesome.
-- Sultans of Swat: Ruth ('20-34 w/NYY), Gehrig ('23-39 w/NYY), Dimaggio ('36-51 w/NYY-WW2), and Mantle ('51-68)
-- Bronx Bombers
-- Bash Brothers (A's McGwire and Canseco)
We'd have the following top of the order:
HR Rank. Name (2023 HRs) - MVP voting
14. Semien (29) - MVP3, 162 GP
5. Seager (33) - MVP2, 119 GP
1. Ohtani (44) - MVP1, 135 GP
2. Garcia (39) - MVP14, 148 GP
145 HRs in 2023 for your Top4.Atlanta had the most HRs in a season with 307 in 2023.
- Attendance:-- 2022: 2,011,381 (18th)
-- 2023: 2,533,062 (16th)
-- Capacity: 3,264,300 - 500K X $20 => $10M
- Valuation of Rangers franchise.Winning a WS should give a boost. Back-to-back and overall media attention will expand the Rangers brand. For rich people, Assets are important. How much are they worth? Valuation can grow faster than through cashflow.
The Yankees are the last team to win back-to-back WS. They won a three-peat.
Quote:
Valuation went:
$1.700M - 2019
$1.750M - 2020
$1.785M - 2021
$2.050M - 2022 <- Impact of new stadium/FA signings?
$2.225M - 2023 <- Winning
2024? After winning WS?
Rangers payroll:
Quote:
Payroll:
2024: $206M
2025: $111M
2026: $ 97M
I'm ready... Let's get him signed and start Spring Training.
ETA GP by the lineup.