Jun 3, 2011, 8:25 AM EST
On the one hand, this sounds alarming: Bill Shaikin of the L.A. Times reports that nine of baseball’s 30 teams are in violation baseball’s debt service rules. The teams: Dodgers and Mets — duh — as well as the Orioles, Cubs, Tigers, Marlins, Phillies, Rangers and Nationals.
On the other hand, it’s hard to say what this truly means. Sure, former commissioner Fay Vincent calls this “troublesome,” but he thinks everything that has happened since he left office is troublesome. What we don’t know, however, is how any of these teams outside the Dodgers, really, arrived at their currently-reported out-of compliance status and if it’s really a serious thing.
Is it short term debt or long term debt? A temporary blip of being-out-of-compliance, or something chronic? Generally, the rules limit a team’s debt to 10 times its annual earnings. How badly out of whack are, say, the Tigers, compared to where the Dodgers are? Doesn’t it matter that the Tigers owner has more money than Croesus, while the Dodgers’ owner does not?
Finally, Frank McCourt claims that he was given exemptions on his debt limit at times. If that’s the case (i.e. the game’s most train wreck of a financial case can be in technical compliance) doesn’t that render the concept of compliance a rather fluid one?
I don’t like that so many ownership groups are leveraged and baseball needs to be sure that the Frank McCourt/Tom Hicks examples are exceptions and not the rule. But I’m not sure that this report, in and of itself, tells us much.
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