Cash in trades - Do worlds discourage it? Topic

silentpadna
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I'm not opposed to the idea that I'm missing a point here, but I'm finding it tough to buy the explanations. If cash is allowed to be traded, like any other asset, then it's not fixed.

In your example, my division foe had $185 million just like me. He invested something of value for the extra $15 million.

In theory I would have had the same opportunity to make that investment. If you're asking me how I'd feel, I would probably feel like I didn't recognize the value of investing in cash and then maybe compete for a similar investment if it was worth it to me. That fixed amount of cash in the league is a commodity just like the players are. Why do we complete for one commodity and not another? Isn't it up to every owner to establish the value of his assets?

6/16/2009 12:15 PM
silentpadna
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BTW, what is "HGWHD"?
6/16/2009 12:16 PM
cjl9652
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Quote: Originally Posted By toddcommish on 6/16/2009
You're missing a fundamental point here. Cash is FIXED for a given year.

32 teams x $185M = $5.92B. That's all the money there is to spend for all teams.

If you trade, say, $5M in cash, you're essentially giving ONE team more than its fair share of cash, handicapping 31 other teams. Now you can say, HGWHD by fleecing some newb or taking advantage of a tanker, but it's a league killer when you allow that kind of stuff since it unbalances a balanced game.

Put it this way, how would YOU feel if your division foes all had $200M to spend, while you had $185M? (Well, you'd feel like the Orioles, and feel like the system was unfair, and you'd likely bail)



If they had to lose 3 prospects each to get that other $15 million, I'd be thrilled. It's not like they are magically getting that $15 million for nothing. It's not unfair. In the same vein, if they got $280 million because they traded away 20 stud prospects, I'd be thrilled about that as well. Probably moreso.
6/16/2009 12:25 PM
unclevic
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Quote: Originally Posted By silentpadna on 6/16/2009BTW, what is "HGWHD"
He got what he deserved.
6/16/2009 12:29 PM
toddcommish
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Quote: Originally Posted By cjl9652 on 6/16/2009
Quote: Originally Posted By toddcommish on 6/16/2009

You're missing a fundamental point here. Cash is FIXED for a given year.

32 teams x $185M = $5.92B. That's all the money there is to spend for all teams.

If you trade, say, $5M in cash, you're essentially giving ONE team more than its fair share of cash, handicapping 31 other teams. Now you can say, HGWHD by fleecing some newb or taking advantage of a tanker, but it's a league killer when you allow that kind of stuff since it unbalances a balanced game.

Put it this way, how would YOU feel if your division foes all had $200M to spend, while you had $185M? (Well, you'd feel like the Orioles, and feel like the system was unfair, and you'd likely bail)




If they had to lose 3 prospects each to get that other $15 million, I'd be thrilled. It's not like they are magically getting that $15 million for nothing. It's not unfair. In the same vein, if they got $280 million because they traded away 20 stud prospects, I'd be thrilled about that as well. Probably moreso.
Yah, but if he BAILS the very next season, and leaves a bankrupt farm system with no prospects, you've KILLED that franchise.

Fine, if you don't care if you have a tarded up league...
6/16/2009 12:32 PM
unclevic
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6/16/2009 12:40 PM
98greenc5
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Quote: Originally Posted By silentpadna on 6/16/2009That cash, to me is worth whatever I perceive I can get for it, not whatever 30 other owners think I should get for it. If I make a deal with another owner to rid me of that cash, it’s not as if each of the other owners didn’t have the same opportunity to acquire it. I fail to see what is so unfair about it.
so, you should be able to trade $5M of cash for a training camp pitcher?
6/16/2009 1:26 PM
unclevic
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greenc, try to keep up, okay?
6/16/2009 1:27 PM
98greenc5
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Quote: Originally Posted By unclevic on 6/16/2009greenc, try to keep up, okay
the next time you actually add something to a conversation will be your first time
6/16/2009 1:30 PM
toddcommish
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FWIW, I would have NO problem with deals involving cash if there was a way to enforce a multi-year commitment.

But, since people can mortgage the future of a franchise for extra cash this year, AND THEN BAIL WITH NO PENALTY, they can subvert a basic principle of HBD, which is to run a franchise and deal with the ups-and-downs from year to year.
6/16/2009 1:40 PM
unclevic
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Quote: Originally Posted By 98greenc5 on 6/16/2009
so, you should be able to trade $5M of cash for a training camp pitcher?
Wow, I see what you mean about adding something to the conversation.
6/16/2009 1:42 PM
jvford
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Quote: Originally Posted By 98greenc5 on 6/16/2009
Quote: Originally Posted By silentpadna on 6/16/2009
That cash, to me is worth whatever I perceive I can get for it, not whatever 30 other owners think I should get for it. If I make a deal with another owner to rid me of that cash, it’s not as if each of the other owners didn’t have the same opportunity to acquire it. I fail to see what is so unfair about it.
so, you should be able to trade $5M of cash for a training camp pitcher?

That's where vetos come in.
6/16/2009 1:43 PM
jvford
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Quote: Originally Posted By toddcommish on 6/16/2009
FWIW, I would have NO problem with deals involving cash if there was a way to enforce a multi-year commitment.

But, since people can mortgage the future of a franchise for extra cash this year, AND THEN BAIL WITH NO PENALTY, they can subvert a basic principle of HBD, which is to run a franchise and deal with the ups-and-downs from year to year.

An owner can already eff up a franchise in multiple ways that no one can do anything about.
6/16/2009 1:45 PM
silentpadna
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If I say "I've got $5M on the market, who needs it?", I'm liable to get a better offer than a training camp pitcher...

But...to answer your question, sort of.....yes. However, in your reductio ad absurdum example, it's not likely to happen. There are opportunity costs for the cash. An owner can do one of 4 things with it:

1. Horde it through the end of the season and lose it.
2. Trade it for something of value.
3. Spend it for something of value (like for a scrap heap FA). This option should always outweigh a training camp pitcher option.
4. Move it to the prospect budget, pay the tax, and then spend it for something of value.

Other owners can determine what the opportunity cost for the cash is by establishing the market in trade. Cash is an asset you can choose to trade or buy. Market forces determine its value. As a shopper, I'd be looking for a discount on whatever I value...
6/16/2009 1:46 PM
98greenc5
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Quote: Originally Posted By jvford on 6/16/2009

Quote: Originally Posted By 98greenc5 on 6/16/2009
so, you should be able to trade $5M of cash for a training camp pitcher?
That's where vetos come in.
but if that's the most he can get for his $5M, who are you to judge it was veto worthy?

BTW, that was sarcasm ... point being, of course my example was at the extreme and stupid ... but it shows that there is some theoretical limit to valuing what the "cash" is worth

and if the league is going to veto some cash deals and not others on some possibly aribitrary standard, there will worlds that get into big arguments when trade A is vetoed, but not similar trade B ("similar" always in the eye of the beholder)
6/16/2009 1:48 PM
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