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.
- Royals sign Edinson Volquez for two years, $20 million 25
- Rays, Padres, Nationals agree to 11-player trade 85
- Sergio Romo re-signs with the Giants for $15 million 14
- So, apparently we’re sweating the Matt Kemp physical now 46
- The United States will seek to normalize relations with Cuba 144
- Marlins complete Michael Morse deal: two years, $16 million 19
- Padres, Rays, Mariners discussing trade involving Wil Myers 36
- It is perfectly clear that A-Rod is the Yankees’ DH. At best. So there will be no drama, right? 37
- Baseball’s highest-ranking Hispanic woman employee sues for discrimination (163)
- The United States will seek to normalize relations with Cuba (144)
- Cubs, Red Sox, Dodgers, Padres, Rangers, and Astros interested in Phillies’ Cole Hamels (110)
- Done Deal: Yoenis Cespedes and two players traded to Detroit for Rick Porcello and a minor leaguer (105)
- Chase Headley signs a four-year deal with the Yankees worth at least $52 million. (95)