Jim Crane met the media as the owner-in-waiting for the Houston Astros yesterday, and that led to a couple of glowing reviews of his business acumen and his plans for the future of the organization. It also led to a report in Forbes that says $300 million of the $680 million sales price of the team will be debt-financed.
It’s hard to place this in any kind of context because the Forbes report is thin on (actually devoid of) detail. What kind of debt is this, short or long term? Does that include the fairly standard line of credit that Major League Baseball extends all teams or is that separate? Is this secured by team property and future revenues or is it secured by, say, Jim Crane’s other businesses and/or personal property and that of the others in the ownership group? All of that matters. And, even if the report is true and the debts impinge on team assets, it’s in no case as bad as the McCourt financing of the Dodgers which represented far more than 100% of the purchase price.
But for all of the unknowns, the debt situation is worth looking into as the deal approaches closing. Recent history has shown us that team debt matters, and seeing how the Astros sale is being handled will provide us some amount of insight as to whether Major League Baseball has learned anything from recent history.
The Indians, Mariners, and Rays are working toward finalizing a three-team trade. The full details have not been revealed yet, and there are conflicting reports as to who is going where, but we know that Carlos Santana and Edwin Encarnacion are involved.
Initial reports have the Mariners getting Edwin Encarnacion from the Indians in exchange for Carlos Santana, with Cleveland also receiving first baseman Jake Bauers from the Rays. Outfielder/third baseman Yandy Diaz will reportedly head to Tampa Bay along with a player to be named later. There has been a conflict in the past few minutes, however as to where Encarnacion is actually going: Seattle or Tampa Bay. Mark Feinsand of MLB.com says it’s Seattle, Bob Nightengale says it’s Tampa Bay. We’ll know soon enough, I suppose.
Santana played for the Phillies last year and was traded to Seattle just a couple of weeks ago. He’ll never have a chance to wear a Mariners uniform and, instead, will go back to Cleveland, where he played his entire career until 2018. Encarnacion has spent the last two years in Cleveland. Santana is owed $35 million over the next two seasons and has a 2021 buyout. Encarnacion is owed $24 million in 2019 if you include the buyout on his 2020 club option. If Encarnacion is going to Seattle, you have to figure that the Mariners will flip him in mid-season if possible.