Rangers' debt holder warns Selig not to seize the team

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Monarch Alternative Capital is the fly in the ointment, the monkey in the wrench, the pain in the assets of the Texas Rangers sale.  They’re the lead debt holder, and the ones who appear to be calling the creditors’ shots in the seemingly interminable brinkmanship that has characterized the team’s sale.

Today Richard Sandomir of the New York Times reports that they’re not taking Bud Selig’s threats to seize the Rangers, cancel the debt and do the deal lightly, sending an email to him in which consequences most dire are predicted, including the team’s bankruptcy or “costly, distracting and messy”
litigation.

Which is really the only response that one can expect given Bud’s threats. There are disagreements about whether Monarch actually has the stones to go through with it all, but if you’re in the business of buying debt and a major debtor is basically saying he’s going to ignore your claims, you pretty much have to litigate if you want to be taken seriously with your other customers, don’t you? It’s like the unwritten rules for banks. If one high-profile debtor is allowed to walk all over you, you’re toast. Ask Tony La Russa. I’m sure he can tell you all about it.

That aside, I think the most interesting thing about it is the last line of Monarch’s letter Sandomir quotes, in which they warn of a negative impact to team values if Selig carries out his threat, “as funding will become more costly and difficult to obtain as lenders
lose faith in the contractual security of their loans.”

This is what I was talking about the other day: the lenders may not have all the leverage in the world in the context of this deal, but if they do end up getting burned, you have to figure that the terms of loans to baseball teams will be much more arduous going forward, and not just from entities like Monarch. Lenders are in the business of valuing risk. If the Rangers are able to simply walk away from current obligations like this, banks will consider baseball teams to be bigger risks going forward. And not just because they’re worried that the team will default, but because they’re worried that the debt they hold will be harder to sell on the open market to secondary holders . . . like Monarch Alternative Captial.

In other words, there are greater stakes at issue here than the simple selling of the Texas Rangers, and I’d be surprised if Selig and his able business associates are not well aware of them privately, even if their public rhetoric is errs on the side of the cavalier.

Seattle Mariners to make a “full-court press” for Shohei Ohtani

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Mariners general manager Jerry Dipoto said in a team-sponsored podcast the other day that the M’s will make a “full-court press” for Shohei Ohtani. To that end, Dipoto said that the M’s would be willing to let the two-way star to pitch and to hit, which is something Ohtani is interested in doing in the United States. Not all clubs are likely to let him do this, with most likely seeing him as a starting pitcher only.

Ohtani, who is expected to be posted by his Japanese team, the Nippon Ham Fighters, possibly as early as today, can sign with anyone he wants. He is, however, subject to the international bonus pool caps, so the bids on him will be somewhat limited. The Texas Rangers and New York Yankees have the most money available: $3.535 million for the Rangers and $3.5 million for the Yankees. The Twins ($3.245 million), Pirates ($2.266 million), Marlins ($1.74 million) and Mariners ($1.57 million) are the only other teams with more than $1 million left. Twelve teams — including the Dodgers, Cubs, Cardinals and Astros — are limited to a maximum of $300,000, having met or exceeded their caps for this signing period already.

Ohtani, however, is said to be less motivated by money than he is by finding the right situation. While a lot of guys say that, the fact that Ohtani is coming over to the U.S. now, when his financial prospects are limited, as opposed to waiting for two years when he is not subject to the bonus caps and could sign for nine figures, suggests that he is telling the truth. As such, a team like the Mariners that is willing to allow him to hit and pitch could make up for the couple of million less they have in bonus money to spend.

As for how that might work logistically, Dipoto said that the team would be willing to play DH Nelson Cruz a few days in the outfield to accommodate Ohtani, allowing him to DH on the days he’s not pitching. That might be . . . interesting to see, but given how badly the Mariners could use a good starting pitcher, they have an incentive to be creative.

Ohtani, 23, suffered some injuries in 2017, limiting him to just five starts and 65 games as a hitter. In 2016, however, he hit .289/.356/.547 with 22 homers in 342 at-bats and went 11-3 with a 3.24 ERA, and a K/BB ratio of 146/51 in 133.1 innings as a starter.

Five clubs have more money to spend on Ohtani than the Mariners do. None of those teams are on the west coast, which some Asian players have said in the past they preferred due to faster travel back home. The Mariners, owned for a long time by a Japanese company which still retains a minority interest in the club, and long the home for high-profile Japanese players such as Ichiro and Hisashi Iwakuma, likely have a better media and marketing reach in Japan than most other teams as well, which might be a factor in his decision making process. Is all that enough to sway Ohtani?

We’ll find out over the next couple of weeks.