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.

Scooter Gennett wins arbitration case against Reds

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The Reds lost their first arbitration case of the offseason, per a report from Jon Heyman of FanRag Sports. Second baseman Scooter Gennett was awarded the $5.7 million salary figure he was seeking from the team, a $600,000 bump over the $5.1 million they countered with last month.

Gennett, 27, is coming off of a career-best performance in 2017. After getting claimed off of waivers by the Reds last March, he broke out with an impressive .295/.342/.531 batting line, 27 home runs and 2.4 fWAR in 497 plate appearances. By season’s end, he ranked among the top five most productive second basemen in the National League (and 12th overall). He’s currently set to remain under team control through 2019.

Gennett was only the second Reds player to go to an arbitration hearing this winter. Fellow infielder Eugenio Suarez was defeated in arbitration last week and stands to make just $3.75 million compared to the $4.2 million he filed for in January. All 22 arbitration cases have now been resolved. Twelve were decided in favor of the players.