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Thread: Article: The Tanaka Factor

  1. #61
    Junior Member Rookie FSP's Avatar
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    Quote Originally Posted by clutterheart View Post
    He benefited greatly because Japan "deadened" their ball this year.
    I heard Japan "livened" their ball. That is part of the reason why Wladimir Balentien destroyed their HR record. Also why their commissioner stepped down in shame recently.
    Last edited by FSP; 10-07-2013 at 10:40 PM.

  2. #62
    Quote Originally Posted by clutterheart View Post
    He benefited greatly because Japan "deadened" their ball this year. If he signs with the Twins, we might be seeing him get that Neck injury from watching the ball fly out of the park - especially in places like Chicago. I don't know if he is worth a triple digit investment.
    http://hardballtalk.nbcsports.com/20...rease-offense/

    So isn't the opposite true? Since he has been so productive with a juiced baseball you must be enthusiastic about signing him!

  3. #63
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    Quote Originally Posted by launchingthrees View Post
    Japanese baseball officials admit to altering the baseball to increase offense | HardballTalk

    So isn't the opposite true? Since he has been so productive with a juiced baseball you must be enthusiastic about signing him!
    Yes, you are right, they did enbiggen the ball. I read incorrectly.

    But...still not pumped about him and would like the twins to go after other FA

  4. #64
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    Quote Originally Posted by clutterheart View Post

    Furthermore, the posting process could drag out until March. I would hate to have the Twins have all their FA eggs in this basket and it not pan out.

    The best outcome would be the Twins get aggressive with Free Agents and sign guys while other teams wait on the Tanka.
    What eggs? Seriously? Maybe this is the year!!!! We have only been waiting for the Twins to spend on free agency for 50 years. I highly doubt the Twins will seriously compete for any free agents that command a salary above $5 million and they probabliy figure that keeping Kevin Correia is more than enough "investment".

  5. #65
    Head Moderator All-Star glunn's Avatar
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    Quote Originally Posted by drivlikejehu View Post
    Completely incorrect. Comments of this nature should probably be avoided without the appropriate background, because the result can be to mislead readers who don't know otherwise.

    Human beings are not capital assets and cannot be depreciated or amortized. Also, the 'matching principle' of expense recognition does not apply to periodic expenses such as MLB salaries.
    With all due respect, I am 99% certain that Major Leauge Ready is correct -- the fee paid to his ballclub in Japan would have to be deducted over the term of Tanaka's contact, i.e. amortized. I am too lazy to look at the primary sources tonight, but here is a link to a treatise by Sky Moore, who is a tax genius, and you can see Sky's citations in footnote 7. I am confident that Sky is correct, because Sky is always correct, but if you still disagree then please be ready to debate why Sky's citations are not controlling. Also, I would note that not requiring amortization would facilitate extreme shenanigans.

    Kudos to Major Leauge Ready for his apparently correct intuition on this.

    And let this be a lesson to all of us not to label someone else's post as "completely incorrect" unless we are 100% sure.

  6. #66
    Head Moderator All-Star glunn's Avatar
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    Quote Originally Posted by drivlikejehu View Post
    Completely incorrect. Comments of this nature should probably be avoided without the appropriate background, because the result can be to mislead readers who don't know otherwise.

    Human beings are not capital assets and cannot be depreciated or amortized. Also, the 'matching principle' of expense recognition does not apply to periodic expenses such as MLB salaries.

    The timing of the expense is not terribly important to the Twins because they run a profit in any event. Obviously, front loading a contract may result in lower profits in the short term and higher in the long term, but unless tax rates change significantly the overall effect is minimal.
    Quote Originally Posted by DJL44 View Post
    The red flag on Tanaka is his out pitch is the split fingered fastball. The Twins organization believes the splitter causes elbow injuries.

    http://www.nytimes.com/2011/10/02/sp...anted=all&_r=0
    I wish that this post and the accompanying link were getting more attention. If this information about the splitter is correct, then Tanaka seems scary risky to me.

  7. #67
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    Quote Originally Posted by drivlikejehu View Post
    Completely incorrect. Comments of this nature should probably be avoided without the appropriate background, because the result can be to mislead readers who don't know otherwise.

    Human beings are not capital assets and cannot be depreciated or amortized. Also, the 'matching principle' of expense recognition does not apply to periodic expenses such as MLB salaries.

    The timing of the expense is not terribly important to the Twins because they run a profit in any event. Obviously, front loading a contract may result in lower profits in the short term and higher in the long term, but unless tax rates change significantly the overall effect is minimal.
    It really is unfortunate you were so concrete in your claims. In addition to what Glunn pointed out, player salaries (originally and especially in Baseball) have enjoyed a somewhat unique relationship with tax law.

    For decades, organizations were allowed to write off salary expenses as asset depreciation as well (because all players were getting older and less valuable. Yes the internal logic for that position is tenuous at best) . In essence, a $2m salary became a $4m expense, doublecounting the expense to inflate the loss. Without any recent meaningful leaks, it's difficult to know exactly where this currently lies. Previous financial information leaks from the last decade or so have suggested that some form of this accounting policy is still in being used, with the blessing of the IRS and in accordance with GAAP.

    I apologize for the slight derail as it's not specifically Tanaka related, but wanted to make sure readers weren't misinformed.

  8. #68
    You see how many people here are dreaming about him in a Twins uni? Well the Dodgers, Yankees, Red Sox and every other big market team are doing the same thing. The only difference is they are willing to spend to win. When was the last time the Twins went out and out bid everyone to get the best FA or the best INTL FA? NEVER. And don't say Sano because we all know if there wasn't an age controversy the Twins would of have no chance. I mean we could of gotten Anibal Sanchez last off season but we didn't, and he was cheap when it comes to good SPs.

  9. #69
    It'll be a slap in the face if they don't spend the money they saved last year. Remember they promised 50-52% of revenue?

  10. #70
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    Quote Originally Posted by Hugh Morris View Post
    It really is unfortunate you were so concrete in your claims. In addition to what Glunn pointed out, player salaries (originally and especially in Baseball) have enjoyed a somewhat unique relationship with tax law.

    For decades, organizations were allowed to write off salary expenses as asset depreciation as well (because all players were getting older and less valuable. Yes the internal logic for that position is tenuous at best) . In essence, a $2m salary became a $4m expense, doublecounting the expense to inflate the loss. Without any recent meaningful leaks, it's difficult to know exactly where this currently lies. Previous financial information leaks from the last decade or so have suggested that some form of this accounting policy is still in being used, with the blessing of the IRS and in accordance with GAAP.

    I apologize for the slight derail as it's not specifically Tanaka related, but wanted to make sure readers weren't misinformed.
    I slightly misread what MLR posted, but I was correct and his analysis remains problematic.

    I clearly referred to 'salaries' and 'periodic expenses' in noting that the Twins could front-load a player's contract without having to amortize it. The posting fee is a one-time expense that I did not address; it would be amortized over the 'useful life' of the ultimate contract.

    So while MLR was correct in that aspect of the posting fee, it is incorrect to suggest the result is a problem for the Twins. They could still shift actual expenses to the current year, where there is budget room. They could still front-load the contract to leave more room for later. And by structuring the contract properly, they could still amortize a substantial portion of the posting fee in the current year.

    *** Edited to add - here's an example of what I meant:

    Posting fee: $40MM, Salary 4 years/$40MM with 2 option years

    Salary by year: $18MM, $10MM, $6MM, $6MM, $12MM (vesting option), $12MM (vesting option)
    Present value by year including amortized posting fee: $33MM, $23MM, $18MM, $17MM, $9MM, $9MM
    Last edited by drivlikejehu; 10-08-2013 at 08:18 AM.

  11. #71
    I think the drop in payroll the last two years would cover the posting fee. And 10-11 million a year for a young #1 type pitcher is worth the gamble. But it will never happen. This is the risk averse Twins we are talking about. In Terry Ryan's eyes Mike Pelfrey is the answer. Accept and expect mediocrity next year. Because that is all Terry Ryan will give you.

  12. #72
    Senior Member All-Star JB_Iowa's Avatar
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    I wish I understood the Nishioka failure better.

    I realize that scouting a pitcher is not the same as scouting a SS but Nishi was such a massive failure, it is very hard for me to have any confidence in the Twins putting so much money in the Tanaka basket.

    I'm not saying they shouldn't do it but I hope the Twins have a good grasp on what went so dramatically wrong with Nishioka's transition before they decide to try it again with Tanaka (and a lot more money on the line).

  13. #73
    I signed up specifically to comment on this thread which I am sure will lead me down the rabbit hole.

    From what I have read this would be a decent way to go for the Twins. signing Tanaka would generate some hype (for the casual fan maybe not "good" due to the Nishi debacle), the team will get a good pitcher and will be seen as spending money.

    However there are some things to think about here. First off is the posting fee. The people who think that his fee will be higher than Darvish's are likely wrong. Tanaka's stuff isn't as good. He also has some moving parts in his delivery, relies on his splitter for his out pitch, and has thrown a lot more pitches than most 24 year olds. The most worrying thing for me is that he seems to pitch high in (and out of) the zone. I got my info here ( I paid a bit of attention to the analysis but more to the stats.) Pitch high in MLB is a good way to have a high ERA.

    As disjointed as this post may be, my point is this: Tanaka has a ceiling of a good number 2 for a contender but is more likely to be an average 2 or top notch 3. For the Twins he would become our ace for next season and show the rest of the free agent market that we have found some ambition. As far as his posting fee, it should be around 33 million but if some team wants him enough could go as high as 45m. For me 45 is too much as I don't see Tanaka as worth that plus a five or 6 year deal at over 10m a season. you can find better value elsewhere.

  14. #74
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    To me, I think the idea of paying $50-$60 million just to talk to a prospect is a little crazy. Let me ask this question, who here would be willing to sign Byron Buxton to a 6 year $120+ million contract right now? It's not a perfect question, but Buxton is the #1 prospect in the game and neither have played in the majors.

  15. #75
    The King In The North All-Star Nick Nelson's Avatar
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    Quote Originally Posted by Anthonyq View Post
    First off is the posting fee. The people who think that his fee will be higher than Darvish's are likely wrong. Tanaka's stuff isn't as good. He also has some moving parts in his delivery, relies on his splitter for his out pitch, and has thrown a lot more pitches than most 24 year olds.
    Assessing what Tanaka might get for a posting fee isn't about comparing him with Darvish as a player. The landscape is simply different now than when Darvish came over two years ago. If Tanaka's posting fee is higher (which I suspect it will be) it's a reflection of the financial state of the game, not of his talent relative to Darvish.

  16. #76
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    Quote Originally Posted by Nick Nelson View Post
    Assessing what Tanaka might get for a posting fee isn't about comparing him with Darvish as a player. The landscape is simply different now than when Darvish came over two years ago. If Tanaka's posting fee is higher (which I suspect it will be) it's a reflection of the financial state of the game, not of his talent relative to Darvish.
    Tanaka is closer to the Dodgers Ryu Hyun Jin than Darvish. While Tanaka and Darvish are Japanese, Ryu Korean, both Tanaka/Ryu are #3 starters with #2 upside stuff wise. Ryu was signed last year for $36M for 6 years and had a $25.7M posting fee. I find it hard to believe Tanaka will get over double Ryu.

  17. #77
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    I wish we had a #3 starter who carried an ERA of 3.00 and a FIP of 3.24. That would be fantastic! Just because Ryu is a #3 on the Dodgers, I'm not sure he's actually just a #3.
    Just remember: You put the lime IN the coconut. Only THEN, can you drink it all up.

  18. #78
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    Quote Originally Posted by ThePuck View Post
    I wish we had a #3 starter who carried an ERA of 3.00 and a FIP of 3.24. That would be fantastic! Just because Ryu is a #3 on the Dodgers, I'm not sure he's actually just a #3.
    Sorry, I meant to say when Ryu was posted that was the scouting report. #3 with potential to be #2.

  19. #79
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    Quote Originally Posted by cmb0252 View Post
    Sorry, I meant to say when Ryu was posted that was the scouting report. #3 with potential to be #2.
    Ah, I should have understood that. My bad.
    Just remember: You put the lime IN the coconut. Only THEN, can you drink it all up.

  20. #80
    The King In The North All-Star Nick Nelson's Avatar
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    Quote Originally Posted by cmb0252 View Post
    Tanaka is closer to the Dodgers Ryu Hyun Jin than Darvish. While Tanaka and Darvish are Japanese, Ryu Korean, both Tanaka/Ryu are #3 starters with #2 upside stuff wise. Ryu was signed last year for $36M for 6 years and had a $25.7M posting fee. I find it hard to believe Tanaka will get over double Ryu.
    Again, this is a comparison based on precedence and that doesn't work here. The stakes are raised when every single team has an additional 25-30M in annual income to play with.

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