Nolan Ryan: the bankruptcy is gutting the Rangers

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Day two of that fun Texas Rangers hearing down in Forth Worth and the highlight so far — thanks to some live tweeting by SBJ’s Daniel Kaplan — is Nolan Ryan on the witness stand.  Among the tidbits he dropped during his testimony, which concluded a few minutes ago:

  • The team is being forced to deplete its minor league
    system because of the bankruptcy;

  • The bankruptcy is preventing the Rangers from signing international players. Ryan says that because of this “there is a void in our system”;

  • The bankruptcy could prevent the team from buying a new
    video board, priced between $5 million and $12 million;

  • Because of the bankruptcy, other teams are starting to poach Rangers’ scouts;

  • A prolonged bankruptcy could cause the team to lose Josh Hamilton;

  • Bankruptcy aside, the team is running $5 million ahead of budget projections in revenue this year, presumably because they’ve been winning.

  • The team expects to sell playoff tickets this year, which will bring in between $11 million and $14 million.

That’s all interesting, but it’s worth noting that Nolan Ryan has every incentive — not just as the Rangers’ President, but also as
its prospective new owner — 
to get the team out of bankruptcy as soon as possible. That  means that a doomsday scenario for the Rangers-in-bankruptcy is in his own best interests in this particular hearing, because if it’s truly doomsday, Greenberg and Hicks’ position — auction the team yesterday before other bidders can improve their chances at landing the team — should win. That doesn’t mean that he’s not telling the truth, but I’m betting there were a lot of “coulds” and “mights” in Ryan’s testimony today.

The judge seemingly took Ryan’s testimony with a grain of salt. According to Kaplan, after Ryan was done, the judge observed that it was not the bankruptcy that was causing many of these problems for the Rangers, but the fact that they’ve been on a line of credit from Major League Baseball to cover expenses. Including, one assumes, scout salaries and signing bonuses for international players.  Which is not to say that the bankruptcy is a good thing — it’s not — but blaming it for all the team’s financial problems seems pretty questionable to me.

The vast majority of the Rangers’ business issues right now are Tom Hicks’ fault, not the fault of the process by which the court is attempting to ensure that the creditors Hicks stiffed for so long get something approaching fair value in return.  The suggestion that it’s the bankruptcy itself that is the real evil here seems wrong to me.

Report: Koji Uehara close to signing with the Cubs

BOSTON, MA - OCTOBER 10:  Koji Uehara #19 of the Boston Red Sox pitches in the eighth inning against the Cleveland Indians during game three of the American League Divison Series at Fenway Park on October 10, 2016 in Boston, Massachusetts.  (Photo by Maddie Meyer/Getty Images)
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Evan Drellich of the Boston Herald reports, citing a source as well as Nikkan Sports, that reliever Koji Uehara is close to signing a one-year, $4.5 million deal with the Cubs.

Uehara, 41, finished the 2016 season with a 3.45 ERA and a 63/11 K/BB ratio over 47 innings. He missed some time in the second half with a strained right pectoral muscle. When Uehara returned from the disabled list on September 7, he tossed 11 scoreless innings with 12 strikeouts and two walks through the end of the regular season. So there’s at least some evidence, albeit in a very small sample size, that Uehara has stuff left in the tank.

The Cubs recently acquired closer Wade Davis from the Royals. Uehara would join Hector Rondon, Pedro Strop, Carl Edwards, Jr., Justin Grimm, and Mike Montgomery in what is once again a very deep bullpen.

MLB implements another player-unfriendly rule, this time targeting draftees

CHICAGO, IL - OCTOBER 28:  MLB Commissioner Rob Manfred speaks to the media before Game Three of the 2016 World Series between the Chicago Cubs and the Cleveland Indians at Wrigley Field on October 28, 2016 in Chicago, Illinois.  (Photo by Elsa/Getty Images)
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Jon Morosi of MLB Network and FOX Sports reports that the MLB draft has a new program in which the top-50 pitching prospects are asked to undergo a voluntary pre-draft MRI on their throwing arm. At first glance, it seems reasonable because, hey, pitchers are injury-prone and players sometimes hide injuries. It would feel bad if my favorite team drafted a lemon!

The reality is that this is just another player-unfriendly rule that shifts financial risk away from the owners and onto the players. The players, in this case, are often not wealthy and are about to begin life in the minor leagues where they earn less than $8,000 per year. Signing bonuses help alleviate some of the immediate financial discomfort of minor league life.

The pre-draft MRI is “voluntary” with quotes around it. Choosing not to undergo the MRI will only give prospective teams more reason to be skeptical of one’s durability. It’s a lot like those voluntary workouts in football that aren’t so voluntary due to superior and peer pressure. You don’t show up, you’re lazy, entitled, a bad teammate, etc. In this case, a pitching prospect refuses to undergo the MRI, it’s because he’s hiding an injury.

Ian Anderson was the first pitcher taken off the board in the 2016 draft, going to the Braves at No. 3. He got a $4 million signing bonus. Let’s say this new MRI program had already been instituted and Anderson refused, or something came up that caused the Braves to change their minds. Anderson’s draft stock falls, let’s say to 21 where the Blue Jays took T.J. Zeuch with a $2.175 million signing bonus. Falling 18 spots in this case costs Anderson about $2 million, perhaps more because he loses a lot of negotiating leverage. Maybe he falls further, even to the second round.

In a column for FanGraphs nearly two years ago, Nathaniel Grow showed that, as a percentage of total league revenues, player salaries have been declining since the early 2000’s. In 2002, player salaries made up 56 percent of league revenues. In 2014, it was only 38 percent.

In isolation, the MRI program isn’t a big deal. The injured player loses stock, but another player moves up to take his place and earns a bit more money. As part of the bigger picture, however, this is part of an ongoing trend in which owners abdicate financial risk and push it all onto the players. The new collective bargaining agreement, for example, capped international signings at $5-6 million per team per year. That removes any incentive for overseas stars like Shohei Otani from coming over to play Major League Baseball. If he wanted to anyway, he would make much less money than he otherwise would on an open market. The amateur draft itself is almost entirely risk-avoidant for owners and it’s terrible for the players because they, too, would earn much more on an open market. And let’s not forget how owners have fought tooth-and-nail to keep minor league salaries suppressed.

Diamondbacks owner Ken Kendrick once paid $2.8 million for the Honus Wagner T-206 baseball card. Let’s not act like these owners can’t afford to shoulder the risk on young pitchers.

EDIT (4:40 PM EST): As I’ve seen others mention it, it’s worth bringing up the Astros/Brady Aiken issue. The Astros took him first in the 2014 draft, but they took issue with his elbow health. The two sides had agreed to a $6.5 million signing bonus, but the Astros wanted to reduce it to $5 million as a result. Aiken didn’t end up signing with the Astros. He underwent Tommy John surgery and was later selected by the Indians 17th overall in the first round of the 2015 draft. He got a $2,513,280 signing bonus.