As a Bay Area resident who vociferously rooted for the Rangers in their failed attempt to beat the hometown Giants, I had to endure many withering glares and short pours of Cabarnet.
It was brutal. The experience made it important to me to find a kick ass Texas Rangers blogger and we've got our man. W.W. McClyde. Look for his new blog One Riot One Ranger to be launched soon. - S.R.
Brian Cashman: LOOK MR. STEINBRENNER, THERE'S THIS THING DOWN IN TEXAS CALLED THE BARNETT SHALE, AND THESE TWO BILLIONAIRES FROM DALLAS, WELL, THEY SORT OF THE MAJORITY STOCKHOLDERS IN THE RANGERS, AND ...
Here’s what’s happening right now on the Courtship of Clifton Phifer Lee. The Texas Rangers are toe-to-toe with the Federal Reserve Bank of the New York Yankees. The Rangers have the edge. The Yankees know it -- and they are waiting. And sweating. Can the Yankees up the ante? Always. But based on the last 24 hours, this much I know: if Cliff Lee ends up in pinstripes, it won’t because the Yankees money-whipped the Rangers.
The Billion Dollar Swinging Dicks (BDSDs) who actually own the Rangers now have their dice on the carpet. If they really want Cliff Lee, they’ll get him. It’s that simple.
We pause briefly to extend a helping hand to New York baseball writers, many of whom could very well stroke out as they struggle to comprehend the fundamental paradigm shift embraced by the foregoing statement. Fellas, take a deep breath, recite all the retired numbers, say five Hail Georges, then type these words into your googleplexer: Ray Davis Bob Simpson Texas Rangers. Click enter. Read.
For the rest of us, more on those guys in a minute.
If the Yankees end up with Lee, it will be because the Rangers decided that a 7-year contract for a 32-year-old command and control pitcher with a fastball that can only exceed 93 mph in a wind tunnel is, by any reasonable assessment, absolutely fucking insane.
This has no doubt crossed the minds of club president Nolan Ryan and GM Jon Daniels. Don’t get me wrong -- there’s nothing to suggest that Nolan has changed his opinion of Lee (at this point in his career, possibly the best pure pitcher he’s ever seen). That said, don’t forget that just a few months ago, Ryan and Daniels were the ones worried about making payroll every two weeks with the franchise in bankruptcy court to escape from the Tom Hicks Leverage Bukkake. Creative, aggressive and relentless they are. Pound foolish they are not.
But it doesn’t look like Ryan and Daniels are calling the shots on this one. Not anymore. And that’s why this story went from interesting to compelling overnight.
For a detailed play-x-play of yesterday’s events, see Maury Brown at Biz of Baseball or Anthony Andro at the FW Startlegram. Real quick, the salient facts are these:
1. In the wake of the Yankees’ latest offer, the Rangers urgently dispatched at least three people to Little Rock, Arkansas late Thursday afternoon to meet with Cliff Lee, his wife Kristin and Lee’s agent, Darek Braunecker (winner of the 2010 Country Club Asshole Name of the Year Award).
2. The delegation was led by CEO Chuck Greenberg -- looking for higher mountains to climb fresh off his inspired decision to buy a new scoreboard -- and also included Assistant GM Thad Levine. Don’t be fooled by Levine’s title -- he’s the contracts guy.
3. Neither Nolan Ryan nor Jon Daniels were on the trip.
4. Ray Davis -- one of the Rangers two BDSDs -- was the third guy.
5. After the 90 minute meeting, Greenberg does a conference call with beat writers to express his optimism, but won’t go into the details of the “menu of complex options and offers” that were presented to the Lees.
6. Neither Ryan nor Daniels were on the conference call.
Walk through this chain of events with me...
From the end of the World Series through Wednesday, the Rangers had been taking their Lee queues from Ryan and Daniels. Lee was telling his teammates that he wanted to come back to Texas, but the Rangers had to make a competitive offer. Ryan/Daniels were determined to wait the Yankees out, gauge Lee’s interest at the end point, then try a collaborative approach to making a deal.
Since the Yankees have no rival when it comes to leaks, the parameters of their “first best” offer were pretty clear by COB on the first day of the Winter Meetings. Cashman preferred a 5-year deal at $25MM per, but he could go to 6 years at $24MM per -- $144 million -- without exceeding the benchmark set by C.C. Sabathia’s 7-year, $161MM deal (which apparently includes a $3MM stipend for the Big Top Shelter Company make C.C.’s uniform pants).
The Rangers stayed cool, but they had to be getting uncomfortable. They’ve known all along that they don’t have to match the Yankees dollar-for-dollar. Since Texas has no income tax (schools? fuck ‘em) and New York (state and city) income taxes can exceed 12.5% of AGI above $500k, the Rangers could apply an ersatz tax credit to their offer of somewhere between $1.5 and $2.6 million per year depending on the base dollars (this assumes that the player is credited for taxes paid in other states for road games, which is the usual scenario). This would enable Texas to offer 6 years at $22MM per ($132MM) and stay relatively on par with the Yankees. That was thought to be the absolute edge of the envelope for the Rangers, and Ryan was already being about as subtle as one of his “attention pitches” about his reluctance to do a 6-year deal.
[Of course, both the Yankees and the Rangers are willing to go more money per year for a shorter contract term -- like $25MM per for 5 years versus a little less per year on longer terms -- but the reality is that with the 6 and 7-year offers flying around over the last couple of days, anything less than 6 years is now virtually impossible. Even if Cliff was inclined to do a 4 or 5-year deal, the MLBPA would Hoffa the shit out of it while his own agent tries to beat him to death with a cardigan.]
On Wednesday night, the Red Sox won the winter meetings by signing Carl Crawford. Three days earlier, the Sox had acquired Adrian Gonzalez by trade with the Padres. For Yankees GM Brian Cashman, the tally sheet looked like this: he hadn’t signed Cliff Lee yet, but he had managed to ink a death pact with his soon-to-be 37-year-old shortstop with the range of a manatee. It was time, therefore, for the New York Yankees to do what they do better than any other organization on the Good Earth:
(1) panic; and (2) negotiate against themselves by vomiting money in copious, indiscriminate quantities. Cliff Lee’s 6-year, $144MM deal became 7 years and +/- $160 to $170MM .... Just.Like.That.
Come Thursday morning, Braunecker was on Mike & Mike telling Nolan Ryan where he could stick his negotiating strategy. Upon hearing of the Yankees latest offer, Nolan said: “This obviously makes it more challenging for us. There’s a limit to these things and if you go past that, it’s not in your best long-term interest ... it’s hard to say how anybody will perform in five years, let alone six.”
Uh-oh. Thence came the tidal tweets from the Bronx. Consensus coalesced: game over, queue Frank: Start spreadin’ the news...
And that’s when Ray Davis and Bob Simpson apparently decided that far from being over, the rules of the Cliff Lee game were about to change. What remains to be seen is whether or not they’ve permanently altered the rules of the game for the franchise itself. Best put that picture of Tom Hicks back on the wall, boys, lest you forget who he was.
Who the hell is in charge here, anyway?
Understand this about the way the Rangers are set up -- at least theoretically.
Ryan is the face of the franchise. Ryan and Daniels -- at least until Thursday afternoon -- appeared to be the ones making all the personnel decisions. We can only hope that’s still the case. By all accounts, they’ve been doing nothing short of a miraculous job. Last August, the club was literally auctioned off on the floor of the federal courthouse in downtown Fort Worth like a vacant Eagle Mountain Lake lot with a tax lien. Two months later, they were in the World Series.
Greenberg is the Pittsburgh sports lawyer (I can’t escape the feeling of being chased by an oxymoron as I type that) who put the 18-member buyer’s group together. He’s the face guy for everything outside the chalk. Davis and Simpson are co-chairmen of the board. Greenberg, Ryan and Daniels get to do their things as long as Davis and Simpson let them. Why? Because Davis and Simpson are the BDSDs who actually own the team.
BDSD stands for this: Billion Dollar Swinging Dick. Davis is a Dallas BDSD. Forbes estimated Davis’s net worth last year at around $1.2 billion, but I talked to a couple guys who would know otherwise who say it’s a lot closer to $2 billion. Davis and one of his pals formed an outfit called Energy Transfer Partners (sounds kinda like a front for a swingers club, don’t you think?) and started acquiring pipeline assets that Enron left behind -- just in time to draw the Barnett Shale Treasure Bath. The end result was the largest natural gas distribution network in Texas. Davis sold “a portion” of his shares in 2007 for around $600 million -- and still owns nearly 19 million shares valued at (according to yesterday’s market) about $746 million.
Simpson is a Fort Worth BDSD. He co-founded XTO Energy and recently stepped aside as its chairman -- when he and the other principal shareholders voted to approve the sale of the company to ExxonMobil for around $35 billion -- sorry I can’t be more precise, but I think we can assume, arguendo, that Simpson’s take was somewhere north of shitload.
Between them, Davis and Simpson control at least 60% of the shares in Texas Rangers Baseball Express, L.L.C. They put up over half of the $593MM purchase price at auction -- mostly in cash. You might say that Messrs. Davis and Simpson enjoy a pure equity position.
After the Rangers won the pennant and played in the club’s first World Series, Simpson granted an interview to the Dallas News. He noted that the club’s end-of-season run added about $14MM to the bottom line, and that continued success should boost the near-term value of the franchise by as much as another $100MM. “Winning,” said Mr. Simpson, “is a huge enhancement.”
Why would the Rangers do it?
For the last two hours, I’ve tried to figure out a way to justify giving a 6-year deal -- let alone seven -- to a 32-year-old pitcher of Lee’s makeup, however great he may be at the moment. Since I can’t do it with a straight face, I’ll tell you why I think Greenberg, Davis and Simpson have taken the reins from Ryan/Daniels and are making a run at it:
Q: Other than winning a WS, what’s the one thing that this franchise has never been able to do?
A: Sign the top free agent pitcher on the market.
Q: What has historically been the achilles heel of the franchise?
A: They treat quality starting pitching like a whore with the clap -- something to be avoided at all costs much less acquired and retained.
Q: As new owners who believe that the way to make money is by winning, how do we keep up the momentum of 2010? How do we demonstrate to the fan base that winning is priority one?
A: Sign Clifton Phifer Lee.
Q: How do we demonstrate to the baseball world that the dynamics of the franchise have been fundamentally changed -- we are a larger market team who expects to contend annually.
A: Sign Clifton Phifer Lee out from under the New York Yankees.
Can the Rangers afford it or is this another A-Rod debacle waiting to happen?
I won’t belabor my point about 7-year contracts for pitchers in their 30s, other than to remind the reader that you always start from this presumption: absolute fucking insanity.
That having been said, I’m a total hypocrite -- as a fan, I’d blow the Pope if I thought it would better the Rangers chances of signing Cliff Lee.
I just heard Greenberg do a 10-min bit on the ESPN affiliate in Dallas, and he swears that they can do a Lee deal in a financially responsible manner -- that it won’t be an A-Rod albatross redux. This is where it gets tricky.
With or without Lee, the club has committed to substantially increasing its payroll. It does have the benefit of the new 20-year, $3 billion TV deal ($80MM per). It also figures to have the benefit of more butts in seats. But committing over $20MM/year to ONE pitcher is still an incredibly scary commitment for all but maybe three franchises -- and the Rangers aren’t one of them. Ray Davis and Bob Simpson may be the ones enabling the Rangers to compete with the Yankees for this player at this moment in time, but it would take several BDSDs to make up the difference between the Rangers’ projected annual revenues and those of the Yankees. That’s just a fact.
The answer here might be that this isn’t treated like a normal player transaction that would count against the player personnel budget given to Ryan & Daniels. This would explain the sudden involvement of Davis and Simpson. What they might be doing is treating Cliff Lee like a strategic investment almost as much as a player investment, for the reasons suggested in the Q&A above. It’s a tone-setter for the franchise and rocket fuel for the growth of the brand. Ownership is betting that if the Rangers can get back to the Series quickly, they’ll be the ones who can finally tap root-deep into what’s been called the sleeping giant of major league markets for the last 20 years.
As for charges that this would be just as bad as the A-Rod deal, consider this: the 2003 Texas Rangers had about $61MM tied up in bats -- $53MM in A-Rod, Juan Gonzalez, Rafael Palmeiro and Carl Everett (ugh). The Rangers had exactly one starting pitcher making more than $5MM that year -- Chan Ho Park at $13MM.
God help me, I’ve almost convinced myself that this makes sense.
My guess is that despite all the talk of giving the Lees as much time as they need, this is all coming down in the next 48 hours. If it doesn’t, the Kansas City Royals will just say to hell with it and deal Zack Greinke to the Cuban National Team for some sugar futures. The Nationals and the Angels refuse to admit they’re out, but this is a two-horse race between New York and Texas.
BREAKING NEWS: Auburn dropped out of the race overnight since Bobby Lowder wouldn’t go beyond a 5-year deal. “They’re of no use to me after 5 years anyway, unless I can get a good plastie to cut on their faces and dip ‘em to change their identities.”