Are the Rangers going to stiff Alex Rodriguez?

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UPDATE: OK, some more research leads me to believe that the answer in the headline is “no” A-Rod is not going to get stiffed. At least probably not.

It’s possible and, in “prepacked” bankruptcies like this one, common, for the debtor (i.e. the Rangers) to  file for bankruptcy when it has the assets
to cover the liabilities but can’t pay the liabilities exactly as they come due
. This sort of Chapter 11 may allow the debtor to hold a sale — say, to someone like Chuck Greenberg! — to get fresh
cash and to restructure the timing of payments.

Upshot: A-Rod and all of the other creditors (which includes Mickey Tettleton of all people) are still quite likely to get their money, even if there is some sort of delay or disruption.

I think we all learned something today kids: bankruptcy is difficult to understand. And kind of boring, frankly. So unless a ballplayer shoots someone this afternoon, it’s going to be actual baseball content for the rest of the day.

2:09: I am obviously not a bankruptcy expert, but thankfully some of you are, and you have informed me that I got some stuff wrong below. Let me, to the best of my ability, fix it.

The notion that unsecureds don’t get paid is not accurate. They do get paid, and often, but it’s usually pennies on the dollar. Moreover, they are paid at the same rate, so if Alex Rodriguez gets, say, 50 cents on the dollar, all the unsecured creditors get 50 cents on the dollar.  It would not be kosher, then for A-Rod to get his $24.9 million and the others to get stiffed.

The practical implication of this is that yes, A-Rod is likely to get at least partially stiffed. Because if he gets all of his $24.9 million, all the creditors get all of their money and then, by definition, there is no point of a bankruptcy (i.e. a bankruptcy is defined by owing more money than you have). Since the Rangers filed for bankruptcy it means they don’t have enough money to pay all of their unsecureds at a 100% rate. That means that A-Rod should not get all the money he thought he’d get and all of the ugly union/team dynamics set forth below come into play.

Another point of clarification: there can’t be a “side deal” between the Rangers and A-Rod, because that would violate bankruptcy laws which prohibit a debtor agreeing to make preferential payments to certain creditors before the filing. I didn’t intend that meaning when I said “side deal” — I really meant that there was some understanding on A-Rod’s part that he would be taken care of in the normal bankruptcy process — but that seems far less likely given the pro-rata thing outlined above, even if it were proper for the Rangers to make such an assurance, which I’m not sure is the case.

I’d ask that the bankruptcy experts among you continue to help me out with this stuff, but for now anyway, it seems like, yeah, A-Rod is gonna walk away with less money than he bargained for.  I can’t help but think that this will become something of a problem for baseball going forward.

1:15 P.M.: Pfun Pfact from the Rangers bankruptcy filing: the largest unsecured creditor is Alex Rodriguez, who is still owed
$24.9 million in deferred compensation from his big $250 million deal.

“Unsecured” means that Mr. Rodriguez does not have any collateral for the amount of money he is owed.  Unsecured creditors rarely if ever get any of the money they’re owed when the debtor goes into bankruptcy. Your mortgage company is secured (i.e. it has a lien on your house) which means that if you stiff them, they can take the house back to satisfy what you owe them.  Your credit card company, in contrast, is an unsecured creditor. If you stiff them they can try to collect from you and can ruin your credit rating, but they can’t take your stuff and, for the most part, once you file bankruptcy, its game over for them. Which is the biggest reason why credit card companies donate a lot of money to Congressmen in order to get them to make it harder for you and I to file bankruptcy.

But that’s a subject for another blog. Let’s you and I stick to Alex Rodriguez. Is A-Rod SOL?  Are the Rangers going to really just walk away from the money they owe him? The short answer: I don’t know.

The longer answer: man, I can’t see them just doing that. Lots of teams owe deferred compensation to players. Indeed, I think the Diamondbacks spent more time in the last decade working on deferred comp deals than they did playing baseball games.  If a team were to suddenly renege on a major deferred compensation deal you’d have to think that the union would scream and the other teams — who might like to convince some of their own high-priced players to take deferred compensation — would scream even louder.  If there’s a chance they’re going to get burnt, why would any player take such a deal again?

As is the case with the Tom Hicks creditors, I can’t help but think that there is a side deal to pay Mr. Rodriguez what he is owed, be it from the Rangers or some other source.* Otherwise, the team and the league will have just created a big labor headache that no one needs.

*How that is specifically being done — if indeed it is being done — is a pretty interesting question, because I think it’s unprecedented in baseball history.  The most recent parallel I can think of is Mario Lemieux, who was owed so much in deferred compensation that he just up and converted all that debt into an equity stake with the Penguins and now owns the team.  That can’t happen with A-Rod because baseball prohibits players from doing such a thing.  Seems like it would have to be a cash thing.

Colin Rea loses no-hit bid in the seventh against the Mets

San Diego Padres starting pitcher Colin Rea works against a Pittsburgh Pirates batter during the first inning of a baseball game Tuesday, April 19, 2016, in San Diego. (AP Photo/Gregory Bull)
AP Photo/Gregory Bull
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Update (12:01 AM EDT): And it’s over. Yoenis Cespedes drove a ground ball single to right field with two outs in the seventh inning to end Rea’s no-hit bid.

*

Padres starter Colin Rea has tamed the hot-hitting Mets lineup so far this Thursday night. The right-hander has walked only one, the lone batter above the minimum he has faced. Rea has also struck out three while accumulating 76 pitches.

The Padres’ offense provided Rea with five runs of support, scoring once in each of the first, second, and third, as well as twice in the sixth. Wil Myers smacked a solo homer off of Jacob deGrom in the first inning. Rea helped himself with an RBI single in the second, Alexei Ramirez brought in a run with a double in the third, Derek Norris drove a solo homer in the sixth, and Jon Jay shortly thereafter hit an RBI double.

The Mets entered play Thursday tied for the National League lead in home runs hit as a team with 40. Rea, meanwhile, came into Thursday’s action with a 4.61 ERA and a 22/13 K/BB ratio in 27 1/3 innings spanning five starts and one relief appearance.

If Rea is able to complete the job, he would become the first pitcher in Padres history to throw a no-hitter. Jake Arrieta threw the first no-hitter of the 2016 season on April 21 against the Reds.

We’ll keep you updated as Rea attempts to navigate through the final three innings.

Jason Heyward hopes to return to Cubs’ lineup on Friday

Chicago Cubs' Jason Heyward hits a double to drive in Dexter Fowler off Cincinnati Reds relief pitcher J.J. Hoover during the ninth inning of a baseball game, Friday, April 22, 2016, in Cincinnati. The Cubs won 8-1. (AP Photo/John Minchillo)
AP Photo/John Minchillo
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Cubs outfielder Jason Heyward hasn’t played since Sunday due to a sore right wrist, but he’s hoping to be included in his team’s lineup on Friday, MLB.com’s Carrie Muskat reports. Matt Szucur, Ben Zobrist, and Kris Bryant have handled right field while Heyward has been out.

Heyward, 26, has gotten off to a disappointing start, as he’s batting .211/.317/.256 with only four doubles, no home runs, and 13 RBI in 104 plate appearances. He signed an eight-year, $184 million contract with the Cubs back in December.

Heyward said he hurt his wrist putting emphasis on it during hitting drills. He said, “I was doing some work off the tee and doing a drill with a donut on the bat, swinging, trying to stay through the middle, and I put more emphasis on [his wrist] and strained it from that.”

Cardinals plan to get creative to keep Aledmys Diaz in the lineup

St. Louis Cardinals' Jedd Gyorko high-fives with Matt Carpenter as they and Aledmys Diaz, center, leave the field following the Cardinals' 11-2 victory over the San Diego Padres in a baseball game Saturday, April 23, 2016, in San Diego. (AP Photo/Lenny Ignelzi)
AP Photo/Lenny Ignelzi
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Cardinals shortstop Jhonny Peralta is expected to return from the disabled list in early June, which means current shortstop Aledmys Diaz would return to the bench. There’s only one problem: Diaz has been one of the best hitters in baseball. The 25-year-old owns a sparkling .381/.422/.679 triple-slash line with 14 extra-base hits (including five homers) in 90 plate appearances.

The Cardinals plan to get creative to keep Diaz’s bat in the lineup. Per Jon Morosi of FOX Sports, the club is considering using Peralta at first and third base. Peralta, 33, last played third base in 2010 with the Indians and Tigers. He has logged only three games and nine total defensive innings at first base in his major league career.

Diaz isn’t about to displace Peralta. Last season, Peralta was one of the best-hitting shortstops, finishing with a .275/.334/.411 triple-slash line with 17 home runs and 41 RBI in 640 plate appearances. He was even more productive in 2014, his first year with the Cardinals.

Chris Bassitt will undergo Tommy John surgery on Friday

Oakland Athletics pitcher Chris Bassitt sits in the dugout after being relieved against the Detroit Tigers in the fourth inning of a baseball game in Detroit, Thursday, April 28, 2016. (AP Photo/Paul Sancya)
AP Photo/Paul Sancya
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Athletics pitcher Chris Bassitt will undergo season-ending Tommy John surgery on Friday, MLB.com’s Jane Lee reports. He was diagnosed with a partially torn ulnar collateral ligament over the weekend, so this news doesn’t come as much of a surprise.

Bassitt, 27, is certainly out for the remainder of the 2016 season and will likely miss a sizable portion of the 2017 season as well. The right-hander made five starts for the A’s to begin the season, but put up an ugly 6.11 ERA with a 23/14 K/BB ratio in 28 innings.

Jesse Hahn took Bassitt’s spot in the Athletics’ starting rotation. Hahn is expected to start next on Saturday versus the Orioles.