Mar 25, 2011, 2:37 PM EST
Just a day after Forbes released a story about Major League Baseball teams in debt trouble, the New York Post reports that baseball is changing its debt rules:
Major League Baseball is working to cut how much debt its teams can carry, The Post has learned.
The move, aimed at avoiding a Mets-like cash squeeze or a Texas Rangers bankruptcy-type scenario, will be centered on widening the definition of team debt, sources close to the situation said.
For example, MLB wants teams to include holding company loans and not just what is directly on team’s books when determining total debt, a source with direct knowledge of the talks said.
This is apparently part of collective bargaining. Makes some sense given that a team’s ability to take on debt has a direct relationship to how much it can spend on stuff, salaries included. I’m sure it’s a tough balance for the union given that they want teams to be both free-spending and solvent.
Whatever happens, there isn’t much murkier in the world than the finances of professional sports teams, so it’s hard to see all of the different directions in which this kind of thing can break. But this seems like a good idea. One Tom Hicks situation is enough. And by the time this is all said and done, we may have had three of them.
- Report: Red Sox make $95 million offer to Pablo Sandoval 76
- White Sox sign Adam LaRoche to two-year, $25 million deal 35
- Report: Red Sox offer Jon Lester six years, $110-120 million 72
- Report: “There is a 90 percent chance that Pablo Sandoval will sign with the Red Sox” 130
- A’s sign Billy Butler to three-year, $30 million contract 84
- Cardinals reportedly joining pursuit of Jon Lester 65
- Giancarlo Stanton’s contract is backloaded. REALLY backloaded. 148
- Braves and Cardinals swap Jason Heyward and Shelby Miller in blockbuster deal 157
- Braves and Cardinals swap Jason Heyward and Shelby Miller in blockbuster deal (157)
- Giancarlo Stanton’s contract is backloaded. REALLY backloaded. (148)
- Blue Jays sign Russell Martin to five-year, $82 million deal (135)
- Report: “There is a 90 percent chance that Pablo Sandoval will sign with the Red Sox” (130)
- Sexual assualt charges reinstated against Tigers pitcher Evan Reed (129)