You Didn’t Earn It So Let’s Go Spend It

So the Powerball has hit record a record, well over one billion dollars.  During lunch today the inevitable topic came up of what you would do with your winnings.  I could imagine three things to do:

Scrooge McDuck
Literally swimming in the money. (http://blogs.disney.com/oh-my-disney/2013/06/13/dreams-do-come-true/)
  1. Build a money vault like Scrooge McDuck so I could go swimming in my winnings.
  2. Buy controlling interest in a large company on the NYSE (Facebook, Apple, something that hipsters like preferably) and then drive it into the ground and send the stock market into a tailspin, then start calling myself Dr. Claw and perfect an evil laugh as I pet my new cat.
  3. Buy a baseball team and sit up front every game.  Sadly I can’t become the manager anymore (Thanks Ted). 

I’m not sure what order I would try doing these in, but since this is a baseball blog, #3 is going to be the obvious choice to speculate on.

Ted Turner.jpg
Ted Turner ruined the fun for everyone who wants to buy and then manage a baseball team. (Marlene Karas/ USA TODAY Sport)

As a bit of a disclaimer, I am assuming that I manage to win the Powerball solo.  I’m also assuming that I don’t have to pay state income taxes.  If I did, after taking the lump sum, I would ONLY have $442 million.  If I are lucky enough to buy the tickets in a state without a state income take, I will have around $562 million. The still doesn’t give up enough to buy a team in the 2015 market.  Times are getting desperate.  In order to break into the bigs, I am going to advocate bribing the president of these United States.  Slide him a cool $100 million in a manilla envelope and I think he could see his way clear to letting you keep your well deserved winnings.  If not, I’m sure you could find someone that might do this, I mean that’s a lot of coin for someone on a government pension.  

Doctor_Claw.jpg
Everyone wants to be Doctor Claw in some way. (http://villains.wikia.com/wiki/Doctor_Claw)

With all of that being said, our market cap on purchasing a team (at the time of writing this article is going to be roughly $1.3 billion.   This automatically reduces the field of potential candidates.  Those outside of our price bracket are:

Rank Team Name 2015 Value ($millions)
1 New York Yankees 3200
2 Los Angeles Dodgers 2400
3 Boston Red Sox 2100
4 San Francisco Giants 2000
5 Chicago Cubs 1800
6 St. Louis Cardinals 1400
7 New York Mets 1350

With these teams out, I am down to a  total of 23 teams. Where do I go from here?  Well obviously I go shopping.  I know for a fact that if any of us were to win the kind of money that I am talking about I would go and buy the necessities, things like a Lamborghini Aventador LP 700-4, a floating bouncy fortress, or a new kitchen.  

Lambo.jpg
The Lamborghanini Aventador LP 700-4 becomes a necessity to travel to and from the ballpark. (www.lamborghanini.com)

That being said, I’m going to reconsider my previous estimate of having $1.3 billion down to a more manageable $1 billion, because you know, you need those things. That reduces the total number of teams.  Now the following teams are also out of reach:

8 Los Angeles Angels of Anaheim 1300
9 Washington Nationals 1280
10 Philadelphia Phillies 1250
11 Texas Rangers 1220
12 Atlanta Braves 1150
13 Detroit Tigers 1125
14 Seattle Mariners 1100

It’s OK though, you are gonna need someway to get to the stadium to oversee your empire.

Now onto the actual narrowing down of teams.  This is gonna be the tricky part.  What metrics do you use to select the right team?  First there are the money issues.  Do you want to blow the wad and try to be a baby Steinbrenner, buying up the best team you can with no wiggle room, or do you buy a team and leave yourself some disposable cash to go head hunting?  Do you eliminate teams based on their expected ROI (return on investment)? What about the amount of debt that you are purchasing (remember stadiums aren’t cheap)? How about weather? Let’s begin with the breakdown of the teams, and let the best team be bought.

floating-bouncy-castle.jpg
Every kid, and adults, has always dreamed of owning a floating bouncy castle. (http://www.wzlx.cbslocal.com/)

Dolla Dolla Bills Y’all

Here are the estimated values of the remaining teams from March of 2015.  

Rank Team Name 2015 Value ($millions)
1 Baltimore Orioles 1000
2 Chicago White Sox 975
3 Pittsburgh Pirates 900
4 Minnesota Twins 895
5 Sandiego Padres 890
6 Cincinnati Reds 885
7 Milwaukee Brewers 875
8 Toronto Blue Jays 870
9 Colorado Rockies 855
10 Arizona Diamondbacks 840
11 Cleveland Indians 825
12 Houston Astros 800
13 Oakland Athletics 725
14 Kansas City Royals 700
15 Miami Marlins 650
16 Tampa Bay Rays 625

Junk Bond Status

So first thing first, let us check if we are doing nothing but buying a fistfull of debt.  The following is a list of the remaining teams that we can afford that have the lowest debt to value rating (D/V).  If you have a team with a zero value on this, it will mean that you are buying into no debt.  A high number will mean that the total amount of debt is greater in relation to the value of the team.

Best

Rank Team Name Debt/Value (%)
1 Toronto Blue Jays 0
2 Chicago White Sox 5
3 Cincinnati Reds 6
4 Milwaukee Brewers 6
5 Colorado Rockies 7

Worst

Rank Team Name Debt/Value (%)
16 Houston Astros 34
15 Miami Marlins 34
14 Minnesota Twins 25
13 San Diego Padres 22
12 Tampa Bay Rays 22

ROI

One of the better tracking items that Wall Street loves to foam at the mouth over is the  ROI.  How much are you going to get back for your investment?  You should be like the Lord our God, and command your money to go forth and multiply.  Let’s take a look and where your money is gonna make bank.

Best ROI

Rank Team Name 1-Year Value Change (%)
1 Baltimore Orioles 61
2 Pittsburgh Pirates 57
3 Milwaukee Brewers 55
4 Houston Astros 51
5 Colorado Rockies 49

Worst ROI

Rank Team Name 1-Year Value Change (%)
1 Tampa Bay Rays 29
2 Miami Marlins 30
3 Chicago White Sox 40
4 Kansas City Royals 43
5 Toronto Blue Jays 43

Now taking a look at this, it will have to be a judgement call on where to buy a team that’s already increasing in value and you have to pay a premium on the new shiny, or do you buy something that has a potential for a great rise?  Your call.

BBQ Boat
You have to eat, so why not do it in a Barbecue Dining Boat. (http://www.hammacher.com/)

Fat Stacks of Cash

The last major factor to look at would be the amount of cash you are bringing in against what you are paying out.  The following is a sum of the revenue and operating income for each of the remaining teams.

Rank Team Name Revenue ($millions) Operating Income ($millions) Revenue and OI
1 Baltimore Orioles 245 31.4 276.4
2 Pittsburgh Pirates 229 43.6 272.6
3 San Diego Padres 224 35 259
4 Chicago White Sox 227 31.9 258.9
5 Kansas City Royals 231 26.6 257.6
6 Minnesota Twins 223 21.3 244.3
7 Milwaukee Brewers 226 11.3 237.3
8 Cincinnati Reds 227 2.2 229.2
9 Colorado Rockies 214 12.6 226.6
10 Oakland Athletics 202 20.8 222.8
11 Cleveland Indians 207 8.9 215.9
12 Toronto Blue Jays 227 -17.9 209.1
13 Arizona Diamondbacks 211 -2.2 208.8
14 Miami Marlins 188 15.4 203.4
15 Houston Astros 175 21.6 196.6
16 Tampa Bay Rays 188 7.9 195.9

Survey Says…

If we get all sciencey and stuff, we can do some sweet sweet spreadsheet action we can seemingly make a decision on which team is the best for us to buy.  The rank was given by taking the ranks of each of the remaining teams and adding their placement in the above categories together.  Lower score is better, like in baseball’s drunk cousin, golf.

Rank Bang For Your Buck Points Team Name
1 24 Milwaukee Brewers
2 27 Pittsburgh Pirates
3 27 Kansas City Royals
4 28 Baltimore Orioles
5 28 Oakland Atheletics
6 29 Cincinnati Reds
7 29 Colorado Rockies
8 35 Chicago White Sox
9 35 Cleveland Indians
10 35 Toronto Blue Jays
11 36 Sandiego Padres
12 39 Minnesota Twins
13 39 Houston Astros
14 42 Arizona Diamondbacks
15 46 Tampa Bay Rays
16 47 Miami Marlins

So which team would you like to purchase with your new wealth?

JJ

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One comment

  1. Pingback: Discover: Wednesday Wonderings « MLB.com Blogs

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