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.

Joe Panik says he’s “100 percent” recovered from back injury

San Francisco Giants second baseman Joe Panik follows through on a single off Colorado Rockies relief pitcher Scott Oberg in the eighth inning of Game 1 of a baseball doubleheader Saturday, May 23, 2015, in Denver. The Giants won 10-8. (AP Photo/David Zalubowski)
AP Photo/David Zalubowski
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Giants second baseman Joe Panik missed nearly all of August and September last season due to a nagging back injury, but he told Alex Pavlovic of CSNBayArea.com on Friday that he’s feeling “100 percent.”

Panik, who earned his first All-Star selection last season, originally landed on the disabled list in early August due to what was described as lower back inflammation. He made his return in September, but appeared in just three games before being shut down. The good news is that he was cleared by doctors in mid-December and considers himself “back to normal.”

“It was right around the time of all the signings,” he said, smiling. “I was able to fly under the radar. I got tested and everything had healed up. I got cleared and was able to have my full offseason workouts. I’m good to go. I’m happy to be feeling good and going back out on the field to show that I’m healthy. My swing feels strong.”

Panik altered his offseason workout routine and plans to spend less time in his spikes in the early part of spring training. The hope is that these changes will prevent future issues.

After a strong showing as a rookie in 2014, the 25-year-old Panik proved to be one of the best second baseman in the majors last season by batting .312/.378/.455 with eight home runs and 37 RBI over 100 games while playing solid defense.

Baseball America names Corey Seager as baseball’s top prospect

Los Angeles Dodgers' Corey Seager follows through a single that scored Austin Barnes, in front of Colorado Rockies' Wilin Rosario during the sixth inning of a baseball game, Wednesday, Sept. 16, 2015, in Los Angeles. (AP Photo/Danny Moloshok)
AP Photo/Danny Moloshok
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Baseball America unveiled their top 100 prospect list Friday night during a special on MLB Network. It should come as no surprise that Dodgers infielder Corey Seager came in at No. 1.

This makes Seager the consensus top prospect in the game. He was also ranked first by MLB.com, Baseball Prospectus, and ESPN’s Keith Law. Twins outfielder Byron Buxton was ranked second on all four lists.

Baseball America has the most aggressive ranking of Cuban infielder Yoan Moncada from the Red Sox, who checked in at No. 3. He was followed by pitching prospects Lucas Giolito from the Nationals and Julio Urias from the Dodgers to round out the top five.

You can see Baseball America’s full top 100 list here.

Jenrry Mejia: “It is not like they say. I am sure that I did not use anything.”

New York Mets' Jenrry Mejia reacts after getting the last out against the Milwaukee Brewers during the ninth inning of a baseball game Friday, July 25, 2014, in Milwaukee. The Mets won 3-2. (AP Photo/Jeffrey Phelps)
AP Photo/Jeffrey Phelps
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Mets reliever Jenrry Mejia was permanently suspended on Friday after testing positive for a third time for a performance-enhancing drug. The right-hander is maintaining his innocence, as ESPN’s Adam Rubin notes in quoting Dominican sports journalist Hector Gomez. Mejia said, “It is not like they say. I am sure that I did not use anything.”

Mejia has the opportunity to petition commissioner Rob Manfred in one year for reinstatement to Major League Baseball. However, he must sit out at least two years before becoming eligible to pitch in the majors again, which would mean Mejia would be 28 years old.

Over parts of five seasons, Mejia has a career 3.68 ERA with 162 strikeouts and 76 walks over 183 1/3 innings. He was once a top prospect in the Mets’ minor league system and a top-100 overall prospect heading into the 2010 and ’11 seasons.

Bryce Harper on potential $400 million contract: “Don’t sell me short.”

Bryce Harper
AP Photo/Nick Wass
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Nationals outfielder Bryce Harper is at least three years away from free agency, but people are already contemplating just how large a contract the phenom will be able to negotiate, especially after taking home the National League Most Valuable Player Award for his performance this past season.

When the likes of David Price and Zack Greinke are signing for over $200 million at the age of 30 or older, it stands to reason that Harper could draw more as a 26-year-old if he can maintain MVP-esque levels of production over the next several seasons. $400 million might not be enough for Harper, though, as MLB.com’s Jamal Collier reports. He said, “Don’t sell me short,” which is a fantastic response.

During the 2015 season, Harper led the majors with a .460 on-base percentage and a .649 slugging percentage while leading the National League with 42 home runs and 118 runs scored. He also knocked in 99 runs for good measure. Harper and Ted Williams are the only hitters in baseball history to put up an adjusted OPS of 195 or better (100 is average) at the age of 22 or younger.