GRAIN OF SALT

The Atlanta Braves is one of the best run MLB franchises. It is a subsidiary of Liberty Media, a massive communication conglomerate. It has the financial resources to be competitive year in and year out, even though the team got a suburban county to fund a brand new stadium for the team.

Braves Chairman and CEO Terry McGuirk who, gave an interview to the Atlanta Business Chronicle He had a lot to say, and for context one should read it all, but this answer, in response to a question about whether Braves’ profits are reinvested in the club or, rather, sent back up to corporate parent Liberty Media, was quite a head-turner:

Basically, all of the money at the Braves. We’ve never really lost money with the Braves. Baseball is not a widely profitable business. If you took all of the free-cash flow of all of the 30 teams, it’s pretty much zero. That’s sort of a fairly well known fact. If you actually, do have free cash flow, you’re among a minority. We have always managed the team to at least break even on free cash flow or make a little. Sometimes we’ve made more than a little. But, that puts in a minority in this business.

There are a lot of ways to measure the financial health of a baseball team and cash profit is only one of them. Indeed, it may be the least significant part of the financial picture for a team. The real game is the appreciation of franchise value, and the Braves have certainly appreciated for Liberty media. When they purchased the team in 2007 the franchise was worth $450 million. This year Forbes valued the club at $1.15 billion. And that’s despite the fact that the Braves have one of the worst local TV deals of any club. Of course, based on what McGuirk is saying, the Braves are pursuing both tracks: watching the franchise value appreciate and doing its best to break even on cash flow “or make a little.” The best of both worlds if you’re an executive in charge of a division of a large corporation.

Since baseball is a private enterprise, their "books" are not open to public inspection or audit. But realize that baseball teams have several legal accounting tricks to minimize profits (and therefore reduce taxes) as do any other major corporation. But baseball has the Veeck rule, which allows a team to both deduct the salaries of players and depreciate their contracts as a declining asset. This is a double deduction accounting method which reduces "profits" on paper.

In addition, baseball is just starting to reap the benefits of new revenue sources like the MLB Network and streaming game services.

Owners would not pay billions of dollars to lose money operating a franchise. So take any mention that baseball owners are break even propositions with a grain of salt.

TRADE ODDITY

CBSSports reports that the Diamondbacks dealt right-handed starter Bronson Arroyo and Touki Toussaint   (their No. 5 prospect) to the Braves in a three-player deal on Saturday. In exchange, the Braves will be sending infielder Phil Gosselin to the Diamondbacks.

The oddity of this transaction is that the core players in the deal are on the disabled list with serious injuries.
 
Arroyo made 14 starts for Arizona in 2014 before undergoing Tommy John surgery. He has yet to pitch this year, and is not expected back until at least August. Arroyo's contract is for  $9.5 million for this year, and a $4.5 million buyout on a $13 million option for 2016, per FoxSports.com.

Meanwhile, Gosselin underwent surgery to repair a fractured thumb in May. He is currently on the disabled list and holds a .325 batting average in 40 at-bats this year.

Toussaint was a first-round draft pick (16th overall) by the Diamondbacks in 2014. The right-hander has been pitching with Class A Kane County this year, posting a 3.69 ERA through seven starts.

The Diamondbacks like their current pitching depth to trade Toussaint in the deal.

"We are getting some good pitching from our young rotation and that's the direction we are going to go," D-Backs general manager Dave Stewart said.

A BRAVE NEW WORLD

The biggest story of Opening Night was along the scroll bar.

The Padres made another blockbuster move.

New Friar general manager A.J. Preller acquired closer Craig Kimbrel, and OF  Melvin Upton from the fire sale Braves.

The Braves acquired veteran outfielders Cameron Maybin and Carlos Quentin,  pitching prospect Matt Wisler, outfielder Jordan Paroubeck and the 41st pick in the upcoming draft.
 

YahooSports reports that with Kimbrel, the Padres acquire arguably the most dominant reliever in the game over the past five seasons. The 26-year-old is coming off a season in which he posted a 1.61 ERA over 61 2/3 innings. He saved 47 games and struck out 97 batters. Kimbrel is under contract for at least the next three seasons. He's guaranteed $33 million over that period. Kimbrel also has a $13 million club option for 2018.

For Preller and the Padres, the move doubles-down on the all-in philosophy of the offseason. Kimbrel should combine with Joaquin Benoit, Kevin Quackenbush and Shawn Kelly to wreck havoc on opposing hitters in the late innings. 

The 30-year-old Upton has not performed well in Atlanta, and the move is perceived as a salary dump for the Braves. Upton hit just .208/287/.333 last season, and is still owed $46.35 million over the next three seasons. He'll likely be a fourth outfielder with San Diego.

On the Braves side, both Quentin and Maybin should provide outfield depth. Quentin isn't regarded as highly for his defense, and had been used at first base during camp. Freddie Freeman is firmly entrenched in that spot, so it appears as if Quentin will continue to play the outfield. It is possible that Quentin may be DFA'd.

Wisler, 22, rated as the top prospect in San Diego's system, according to Baseball America. His stats in the minors have been strong up until he was promoted to Triple-A last season. He considered relatively close to major-league ready, and profiles as a No. 3 starter, according to BA. 

Paroubeck was considered a minor-league sleeper to watch by Baseball America, but did not rank among the Padres' top-30 prospects. After being selected in the second round of the 2013 draft, Paraoubeck hit .286/.346/.457 over 157 plate appearances in rookie ball. He's just 20, and remains a few seasons away from the majors.

The Padres have been the most aggressive team this off season. Last year, Oakland's Billy Beane sold the future for a run at the present, and lost that bet. It should be an interesting year in the NL West.

FIRE SALE BUYERS

This off-season has been puzzling and strange.

Why is Oakland and Atlanta conducting massive fire sales?

Why is San Diego of all clubs, an aggressive buyer?

The whirlwind of transactions for the Padres under new hyper-aggressive GM A.J. Preller. Te Padres made their acquisition of Matt Kemp official (after review of troublesome medicals), and they’re slated to do the same with a three-team trade that will net them power hitter Wil Myers and catcher Ryan Hanigan  from the Rays. The Padres have also struck deals to acquire catcher Derek Norris from the A’s and Justin Upton from the Braves. But won’t be hanging onto Hanigan; he’s reportedly headed to the Red Sox in a swap that will bring third baseman and former hot prospect gone cold, Will Middlebrooks to San Diego.
Oakland's Billy Beane went "all in" last season to trade for veteran pitchers to win it all, and he failed. So he is backing up his truck and re-tooling his small market club.

Atlanta got rid of its old GM and the older executives seem to be content on cutting salary costs and rebuild for a playoff run in 2017, when the Braves get their new, fancy, taxpayer paid new suburban stadium.

The Padres have always been a small market club with not a strong attendance fan base. Even in the tough NL West with power money teams like the Giants and Dodgers, San Diego seems to have taken an Oakland "win now" pill.

It is interesting to note that second tier clubs have been the most aggressive in the trade market.

A SHARK FOR A SHORT

There is a rumor that the A's are shopping Jeff Samardzija, who has one year left on his deal. But the asking price is steep.

The A's are looking for a shortstop, and the White Sox Alexi Ramirez's name has popped up in rumors.

Ramirez has two years left on his deal, at $10 million each, which is not too expensive for a starting shortstop.

The question is whether a Ramirez for Samardzija rental a good trade?

For the White Sox, no. Ramirez is still a valuable top half of the order player for whom the younger players respect. It will take two years before the White Sox top prospect, Tim Anderson, is ready to play short. So it makes more sense to hold on to Ramirez.

Yes, the White Sox are in need of starting pitchers, especially a right hander or two. Unless Samardzija agrees to an extension before trade, the A's are not going to get the bounty that they are asking for.

There was also another rumor about a three team trade with Braves which would include C/1B Evan Gattis. Again, the White Sox are in need of upgrading their catcher spot, but that is not nearly as important has maintaining stability at shortstop.

The A's might as well keep the Shark for 2015, give him a qualifer and then get a high draft pick for 2016.

SEEING RED

If there was ever a team that should go "all in" in 2015, it is the Cincinnati Reds.

Yes, the Cardinals have been the dominant team in the NL Central, and the Pirates have risen from the bottom to be a contender, but the Reds have one last chance with the current core roster to make a charge.

Many rumors are spreading around the Reds trading off pieces. But some would question why.

Yes, 4/5ths of the current rotation (Johnny Cueto, Mike Leake, Mat Latos and Alfredo Simon) are all free agents following the 2015 season. That is the reason why the Reds should go all out to win in 2015. It will be nearly impossible to rebuild that rotation quickly in today's baseball economics.

In 2014, the Reds finished 76-86, 14 GB in the standings.

The team just needs to tweak the bullpen, shore up the outfield with some power and hope the injury bug does not bite them hard.

The Braves are very much shopping Justin Upton but they are requesting a higher return than they received earlier this week when they dealt their other corner outfielder, Jason Heyward.

In exchange for Heyward and reliever Jordan Walden, Atlanta received from St. Louis a pretty good starter with four years of control in Shelby Miller plus pitching prospect Tyrell Jenkins.

Like Heyward, Upton can be a free agent after this season and is due $14.5 million in 2015 compared to the $8.3 million that Heyward will earn. Nevertheless, the Braves think Upton has greater value in the trade market because his overall offense — particularly his power — is superior. Upton hit 29 homers and Heyward 11. And Upton brings righty power, which is in particularly short demand.

This would one of those "all in" one year or bust deals if the Reds took a flyer on Upton. It would send a strong message: win now, or go home. Actually, that should be every team's message every spring.

WHO IS GONNA WIN?

In a financial duel for star pitcher Jon Lester, who is going to win?

The Cubs. The Cardinals. The Braves. The Red Sox.

Fans "think" the Cubs have money to burn on star free agents. But nothing has materialized in the last few years. The powder is not dry; it has blown away.

The Cardinals have an interesting budget twist. With Kyle Lohse only making $500,000 on his last front loaded deal, the Cardinals have his "market value" of $10 million as a starter available plus Shelby Miller's potential arb value (another $6 million or so), so St. Louis has free cap space of $16 million to start the bidding for Lester.

The Braves have a new front office after GM Wren's firing, so there may be some incentive to make a big opening splash. The Braves have had a recent history of injured starters. The Cubs sending back Vizcaino for a nominal second baseman may be some insurance. With Medlin and Beachy coming off Tommy John surgeries, the rotation seems it needs a huge shot in the arm.

The Red Sox can be aggressive and they have the best history with Lester. He always said he would be open to returning to Boston. If so, then the trade was a great one for the Red Sox, who acquired Cespedes from Oakland.

It comes down to which team is ready, willing and able to handle a "bad" big money contract (because 70 percent turn out bad)?

I suspect the tale of the tape will be Red Sox, Cardinals, Braves then Cubs running last in a three horse race.

SITTING PRETTY FLOYD

We have made the comparison of Jeff Samardzija to Galvin Floyd.

In seven seasons with the White Sox, Gavin Floyd was either underrated or overrated, depending on who you asked. Now, those debates -- and Floyd -- are off to Atlanta, with the soon-to-be 31-year-old signing a one-year deal with the Braves for approximately $4 million plus incentives.

It pays to be a consistent major league pitcher. Floyd was never flashy or a flash-in-the pan. He fits into the #3-#4 arm in a rotation.

The right-hander flashed no-hit potential on a few occasions, and would go months looking unhittable. Those stretches went hand-in-hand with Floyd having good command on his fastball and snapping off his devastating 12-6 curveball to rack up strikeouts.

But on a game-by-game basis, consistency and control eluded Floyd throughout his career with the White Sox. It's why, on a season-by-season basis, Floyd actually was fairly consistent: after posting a 3.84 ERA in 2008, Floyd never had an ERA lower than 4.06 or higher than 4.37 from 2009-2012.

"You can see him throw seven, eight innings of no-hit caliber ball, and then there will be some shorter outings where he gets blown up a little bit," general manager Rick Hahn said before last season. "When you have that kind of stuff, when you have the ability to throw that length of shutout and quality outings, we know that's in there."

Floyd underwent Tommy John surgery in early May of last season, ending any chance of a big season in the final year of his contract with the White Sox. A 14-to-19-month timetable was given for his recovery, though Floyd expects to pitch in the majors by May of 2014, according to ESPN.com.

Floyd's career numbers are similar to Samardzija's.  However, Samardzija has been pitching in the #1 rotation slot by necessity, so some people get confused that he is an "ace" starter. With the rumor that Samardzija was going to sign a $55 million extension with the Cubs (which failed to disclose number of years), begs the question whether Samardzija is worth three times more than Floyd. Apparently not, since the Braves, who had interest in Samardzija, did not facilitate a trade with the Cubs at the Winter Meetings.

THREE SHEETS TO THE WIND

The Braves will start former Brewer Ben Sheets tonight. Sheets has not pitched since 2010. He blew out an elbow and had to have surgery. He is another one of those comeback rehabilitation projects many general managers are fond of experimenting with during a season. Sheets has been on the disabled list seven times in his career.

But the Braves rotation has been hit with injuries and inconsistency. So the idea of bringing in a veteran pitcher makes some sense. But the trend is trying a re-tread first; it costs less money than trading prospects for an established veteran pitcher.

Teams are guarding the hen house (minor league prospects) closely. The Tampa and Florida model of promoting your minor leagues quickly is becoming standard operating procedure throughout baseball. Teams are also guarding their piggy banks, as the economy is not as robust as economists and bureaucrats claim it to be in this election year. Adding a quality veteran starter will cost you a big bump in payroll and probably two of your top ten system prospects. Many owners and general managers would rather wait out their pitching storm with a comeback player or a rookie than gambling on a trade.

There may be many players available at the July 31 trade deadline. But the market for Buyers seems to be more tepid than previously thought. The Dodgers have been talking to the Cubs for weeks on Dempster and Garza, but no deal is close. The Cubs have no use in not trading their veteran talent, but it appears teams like the Dodgers, who have a several quality minor league pitching prospects, are not willing to give up too much "just to make a deal."

Whether Sheets is ready or able to contribute to the Braves playoff run is to be seen. But the prospect of Sheets being a contributor after a long lay-off is less than 50-50.

QUICK WORK

It took the Atlanta Braves less than 24 hours to sign their top five draft selections.  That is Light Speed considering the unknown ramifications of the new Collective Bargaining Agreement and slot calculations.

The Cubs are on the opposite end of the spectrum.

Their first round selection, Albert Almora, is a high school senior who has a full ride scholarship to Miami. As a Florida kid, Almora was excited to get a scholarship. However, he is also been on numerous Team USA squads and wants to play professional ball.  His only leverage to get beyond the #6 slot bonus amount is say he won't sign and go to college.

Almora's agent is Scott Boras. He does not like the new CBA draft system. His other client, Stanford pitcher Appel, went from the #1 pick, turning down a $6 million bonus, to being selected #8 by Pittsburgh. Appel was made about the events. Boras was livid about the events. By dropping eight spots, the bonus money is about half.  Appel also has the option to return to college for his final year.

So, some writers believe that Boras may make a stand and play hard ball with the Cubs on Almora. The Cubs really can't sign any of their Top 10 selections without first knowing if they can sign Almora.

On the upside, if the Cubs don't sign Almora, they lose the slot amount in their bonus pool for this year. But they get a compensation pick in next year's draft (at #6). So in theory, a bad Cubs 2012 could lead to having a #2 and #6 selection in the 2013 draft.

But the same signability issues will happen again next year.

WHITE SOX LAUNDRY

GM Kenny Williams is in the process of cleaning house. Ozzie Guillen has been spun out of town to the Marlins, and replaced by a manager who will listen to the GM, Robin Ventura, who has zero managerial experience.

Williams surprised many by trading his closer, Santos, to the Blue Jays for a good, 22 year old pitching prospect. Williams further surprised when he sent back reliever Jason Frasor back to the Jays for two low minor pitching prospects (one good, one not so good). Then feeling good about that, Williams finally traded RF Carlos Quentin to the Padres for two low minor league pitching prospects (one good, one not so good). Clearly, a pattern is developing here: trade for low level prospects and cut the payroll for 2012. Williams has pared $34 million off the 2011 payroll, which in a long recession and announced ticket price reductions, is a prudent course. But the cleaning of payroll is not over; rumors have it Williams wants to dump reliever Thorton ($12 million owed for 2 years) and starter Floyd ($16 million/2 years). Since 4th starter free agents are commanding $10 million, Floyd could be moved to a contender by the trade deadline.

But the real trading chip for Williams was power hitting RF Quentin. As the off-season began, a good match for a trade partner would have been the Atlanta Braves, who were looking for a power hitting right handed outfielder. And the Braves put it out there that starting pitcher Jair Jurrjens and second baseman Martin Prado were available. It would have been a good match to send Quentin (and Gordon Beckman and prospect/cash) to Atlanta for the Jurrjens and Prado, who would be two position upgrades for the Sox. But the teams were never linked in any trade discussions. (The Rockies were looking for a package deal with the Braves, but it stalled.)


Even the Cubs were not in the discussion, which can only be explained by the fact that the team cannot take on the salaries of Jurrjens and/or Prado, who would be huge upgrades for the Cubs. At the time, the Cubs had Colvin, LeMathieu and could toss in pitching prospects such as Carpenter or McNutt, to make the deal. The Braves have a surplus of young pitching so Jurrjens, who had an injury last season but is still has All Star potential, was available. The Braves price may be too high for any team.