Was thinking about this a couple of weeks ago as we've had a number of these discussions and people (team, media, fans) try and align resources against some value.
Is there any space where everyone is telling the truth?
1) We've seen Peter Angelos say this any number of times over the years and it was reiterated (not by him specifically) recently...that they (the Angelos') don't take money off the team.
2) The recent MASN settlements have exposed some numbers that we should feel comfortable using as reasonable facts.
3) We know what the Nationals (related to #2) are spending on payroll (including what the Orioles have spent on payroll in recent years) so unless you believe the Nationals (Orioles too in '15-'16-'17) are spending a LOT more than than they generate then there is is significant capacity that the Orioles aren't using (even if the Nationals can afford incrementally more based on attendance or other revenue streams)
4) There's only so much you can spend on Organization infrastructure. If you want to believe that the Orioles need to somehow save money (for example, on Villar or other ML payroll, whatever) the only way that could be true is if there is another significant expense (like 30--50M) coming out somewhere....
...but if #1 is true and #4 is true....then where does that money go?
MLB has jumped franchise values to crazy levels (you see big spikes for all teams after '14 and after '16). The real value of teams isn't in year-over-year profit, but the windfall you get when you sell the team. Teams have a floor value simply based on the generation of national revenue outside of what the teams do. Teams control (and share) their local revenue.
Regardless of your view of the value of rebuilding, we should all agree that there's a consequence to rebuilding that minimizes (at least short-term) Franchise Value. Elias has made several comments this year about getting all of the fans back, etc, as the Orioles have bottomed out their local revenue sources to all-time levels. (lowest OPaCY attendance by a lot and lowest MASN viewership).
While that change may not much of an effect during a sale of the team, is there a case where minimizing Franchise Value has value?
We also know that, given PGA's failing health in recent year(s) that there's been/is/will be pressure to identify the Orioles' transition from him to ??? (presumably one of his sons)
The MASN dispute has also dragged on and while there's been a judgement (still some questions) about the 2012-2016 time period, it feels like there's still a lot of uncertainty in creating a stable profile across both teams.
If you wanted to make all of the above pieces fit into a reasonable scenario....does resource accumulation for Estate Taxes fit all of the boxes?
I am certainly not an Estate Tax expert (or anything close), but...I'd guess that the current Franchise Value of the Orioles far exceeds anything the Angelos' considered in terms of estate planning 10 years ago. If you were planning for a 800-900 million valuation and now the Franchise is worth 1.3B (or more if they were operating at capacity) then there has to be some real accounting (math accounting, not accountability) that has to happen. I think it's been said that the Angelos family doesn't have significant cash wealth. Much of it is wrapped up in assets, the most significant which is the Orioles.
John and Lou certainly don't have any income stream not tied to their dad's assets (at least not significant ones...just is what it is).
Seems like the argument for a lower Franchise Value (versus a more robust one, like in a sale) and the uncertainty of MASN leads to a better valuation in Estate settlement. There's probably a lot of rules in there and in the Estate planning that get covered, but certainly better for lower valuation than a higher one...right?
The Angelos family could certainly be aggregating Orioles profits away from the team to create the pool necessary to avoid losing the Franchise (or selling off parts of it, maybe losing control). That's doesn't necessarily violate the statement that they are taking profits off the Team. They would be using those resources to keep the team.
Maybe? Any better thought on how everything we know could make sense?
If true, would you care?