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.

Video: Minor League Manager goes on epic rant

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Frisco RoughRiders manager Joe Mikulik got his money’s worth last night. He was ejected after arguing an automatic double play on an enforcement of the slide rule, and he didn’t go gently into that goodnight.

Rather, he threw things, kicked things, threw things and then subsequently kicked those same things, gave overly-demonstrative slides and safe signs and basically went all Earl Weaver/Lou Piniella on everyone.

Double-A baseball is the best minor league because you tend to see more prospects there than you do at Triple-A. But it’s also the best because, when you’re a manager who is not quite a heartbeat away from getting your shot at the big leagues, you’re a little less uptight about things. Or at least Mikulik was. Or maybe he was more uptight. I don’t know. He just went with it, and going with it has its charms.

 

(h/t Big League Stew)

A must-read oral history of the 1998 home run chase

7 Jul 1998:   American Leaguer player Mark McGwire #25 of the St Louis Cardinals and Sammy Sosa #21 of  the Chicago Cubs answer questions during  the Major League Baseball All-Star Game at Coors Field in Denver,  Colorado.The American  League defeated the
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It’s hard to believe that it’s been 18 years since Mark McGwire and Sammy Sosa captivated the nation with their epic chase of Roger Maris’ home run record. But it has been, and after years of reaction, counter-reaction and, of course, baseball’s reckoning with the performance-enhancing drugs which helped fuel the chase, it’s probably finally time to do our best to contextualize it historically.

Today one of my favorite news outlets does that with an oral history. All of the key figures weigh-in on it, from McGwire and Sosa to Bud Selig to Tony La Russa. Randy Johnson makes an appearance as well, reminding us that it wasn’t just the sluggers who had an amazing year in 1998. Indeed, his story, including his being traded to Houston and going on an amazing second-half run, has almost been lost to history.

This is bookmark material, my friends. For savoring later if you can’t read it now. And for revisiting at another time given the depths to the drama which justifies multiple readings. I’ll just warn you that there is some adult language in the story, but that’s to be expected given the passion the 1998 baseball season inspired.

Go check it out.

UPDATE: Asdrubal Cabrera leaves Mets-Nats game with back spasms

LOS ANGELES, CALIFORNIA - MAY 12:  Shortstop Asdrubal Cabrera #13 of the New York Mets throws to first from his knee after diving to catch a ground ball to get Joc Pederson #31 of the Los Angeles Dodgers for the second out of the sixth inning at Dodger Stadium on May 12, 2016 in Los Angeles, California.  The Dodgers won 5-0.  (Photo by Stephen Dunn/Getty Images)
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UPDATE: Cabrera was removed from the game due to back spasms.

1:21PM: This is not good: Asdrubal Cabrera was removed from today’s game against the Nationals with an apparent injury.

It’s unclear what the injury was, as Cabrera had yet to even play in the game. Matt Reynolds came on to play shortstop in the bottom of the first inning, but Cabrera didn’t bat in the top of the first. It could be an illness. Or some freak occurrence.

We’ll update when we hear more.

There are apparently unwritten rules about manager replay challenges now

CHICAGO, IL - APRIL 05: Manager Joe Maddon #70 of the Chicago Cubs shakes hands with manager Mike Matheny #26 of the St. Louis Cardinals before the Opening Night game at Wrigley Field on April 5, 2015 in Chicago, Illinois. (Photo by Jonathan Daniel/Getty Images)
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Last night’s Cardinals-Cubs game was a blowout, with the Cubs beating the Cards 12-3. Apparently, however, in the ninth inning of the game, Reynoldsburg, Ohio’s own Mike Matheny played the Cardinals infield in, which is a move you never see in a blowout. Why did he do that?

He hasn’t said yet, but Cubs manager Joe Maddon just spoke to the media before today’s game and he’s speculating that Matheny did it as a form of protest:

God, I hope that’s true. I hope that manager replay challenges, which are already dumb enough inasmuch as they turn what should be an officiating correction device into a strategic tool, are now turning into another front in the Great Unwritten Rules Wars. I hope that we now have a bunch of people talking about how there’s a right way and a wrong way to use the replay system and that one can disrespect the other side if they do it the wrong way. The way the replay system has been implemented often resembles tragedy. Why not make it farce?

Oh well, I guess it beats throwing at someone for doing that wrong. And I guess it’s just a reminder that no matter what we do, baseball is always gonna give us an opportunity for petty bits of silliness.