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Table of Contents:
What I Watched Last Week
Deep Dive: Barcelona’s Financial Turmoil
What I Am Watching This Week
What I’m Reading
What I Watched This Week
MLB
Hitter of the Week: Bryce Harper
The Bryce Harper MVP chatter is starting to increase. After a recent hot streak, he is slashing .300/.400/.500 — the only player in the majors to do so. A few weeks ago, his odds were widely available at +2500; now, they have shifted to +500. Harper is a unique hitter: he hits for average and power with an extremely high walk rate. Throughout the season, he has been a Baseball Savant darling with high xBA and xSLG.
His stats for the past 7, 15, and 30 games are below.
Many will fail to recognize the season Harper is having due to his lack of RBIs. The Good Phight, a Phillies blog, does an admirable job of making a case against this view:
Many people will turn towards Harper’s lack of RBIs as a case against him, he only has 44 of them through August 6. For many readers, those lack of RBIs tells them that Harper just isn’t living up to his contract and being productive when player’s are on base. But that’s just it, Harper has only experienced runners in scoring position in just 19.2% of his at bats. With RISP, Harper is slashing .322/.453/.441 with 22 RBIs, over half of his RBI total. In other words, when he has the opportunity, he is taking advantage of the runners on base and more importantly, in scoring position.1
While Harper has been unfairly ridiculed during his time, his contract remains good value. He suffers from being an overly-hyped prospect, who many anticipated would reach heights reserved for those in Cooperstown. Harper has maintained strong slash lines for the entirety of his career. While he may never reach the peaks many anticipated, he remains an incredibly consistent hitter and perennial MVP candidate.
Let’s quantify his actual value using Fangraph’s Wins Above Replacement statistic $/WAR:
Applying it to Harper’s contract:
In the first three years of his contract, Harper has outpaced the free-agent market’s pricing for productivity. Harper will not win NL MVP this year, but that should not stop all of us from cumulatively giving him the respect he deserves as a top 10 hitter in baseball.
Pitcher of the Week: Zach Wheeler
Sunday was a season-defining start for Zach Wheeler. While Wheeler has played phenomenally all year, his start against the Mets may catapult him atop the CY Young rankings. In a complete game shut-out, Wheeler gave up 2 hits and a walk while failing to surrender a single run. With DeGrom’s lack of innings, the NL CY Young has opened up to pitchers who have been on the peripheral all season long. The race has narrowed to Buehler (last week’s PotW), Wheeler, and Burnes. If Wheeler can continue to eat innings while pitching effectively, it will be his award to lose. His underlying stats, per Baseball Savant, reinforce his dominant season: balancing a K% of 29.1 with a walk rate of 5.6%. With an xERA of 2.62, Wheeler has been the workhorse the Phillies will lean on if they hope to win the NL East.
Deep-Dive
Barcelona’s Financial Turmoil
On Wednesday, the inevitable finally occurred: Lionel Messi’s departure from Barcelona was announced. Despite a few recent road bumps, most were convinced that Messi would remain a one-club player, a rarity in today’s game driven by the pursuit of profit over a love for the game. There were some rumors of a possible rift between Messi, his father, and Barcelona. However, any fan can point to many instances when a shiny, new contract fixed the Messi family’s issue with the club. Not this time. There have been few organizations run with the same negligence as Barcelona. My hope with this deep-dive is to encapsulate the borderline criminal leadership that has left one of the most valuable sports teams in shambles. In the coming weeks, blame will be bestowed upon Josep Bartomeu — rightfully so. However, the issues that are finally coming into fruition at Barcelona traces back to 2010.
Part 1: The Beginnings
Former President Joan Laporta’s reign had just ended. His time atop the club hierarchy coincided with unsustainable spending and a collection of silverware. Laporta’s replacement, Sandro Rosell, placed fixing the club’s finances as his primary objective. Rosell appointed successful private equity investors Javier Faus as Barcelona’s “economic vice-president.”2 The cost-cutting project emphasized nonsensical initiatives like “banning colour photocopying at all Camp Nou offices.”3 Further, Rosell prioritized adding cash flow initiatives, including their kit sponsorship with The Qatar Foundation. Said sponsorship was promptly denounced by club legend Johan Cruyff, describing it as sullying the jersey. Rosell countered, “we concluded that it was better that the payroll get paid rather than not.”4 The controversial sponsorship with The Qatar Foundation improved their financial standing as the expenditures remained constant between 2011/2012 and 2012/2013.
The finance-driven executives started to run into conflicts with their new mandates: “leadership must resign if debts were twice EBITDA in two successive years” (this is important for later). There is a recurring theme of Jorge Messi requesting a pay bump for his son every few years. Rosell declined to oblige a new pay packet for Lionel Messi. Rosell’s lieutenant Faus spoke on radio: “‘I do not know why we have to do it again,’ the blaugrana executive said. ‘We do not have to improve a contract every six months.’”5 From the Messi’s perspective, this was not unusual as they improved his contract “six times in eight years.”6 A significant error on Faus’ part as Messi provided a scathing rebuttal in the press, foreshadowing Faus’ departure. The following June, Messi signed a brand new contract that doubled his wages. The chart’s sharp increase in Football Salaries derives from other players leveraging Messi’s new contract to negotiate pay increases for themselves.
Rosell’s downfall came from the transfer of prolific talent Neymar from Santos. Due to all of the top clubs vying for Neymar’s services, Barca settled on an unprecedented €57.1 million fee. Neymar’s prowess for his age contributed to unorthodox transfer dealings as the majority of the fee went to “companies controlled by Neymar Sr..”7 Additionally, Santos received €17.1m of which €6.8m was owed to DIS — a stake deriving from a previous sale of Neymar's sporting rights. Prosecutors argued that Santos, Barcelona, and Neymar’s family engaged in improper business due to inconsistencies in the money transfers. Prosecutors alleged that Santos received “€25.1m, meaning DIS would be entitled to an additional €3.2m.” Afraid of being forced to testify, Rosell resigned unexpectedly and named board-member Josep Maria Bartomeu as caretaker.
Part 2: Transfer Failures
With Neymar and Messi in the fold, Bartomeu started his presidency off well with the purchase of Luis Suarez from Liverpool. His signing completed the famous MSN trio and ushered in an era of runaway success on the pitch. Bartomeu was expected to only finish off Rosell’s term as President. However, Barcelona’s 3-1 victory over Juventus in Berlin earned him the support of the socios in a landslide election.
In the FT’s piece on Barcelona’s ineptitude, they profile Bartomeu as ill-equipped for the role:
The man overseeing Barcelona’s disastrous transfer policy between 2014 and 2020 was Josep Maria Bartomeu. An amiable chap, he runs a family company that makes the jet bridges that take passengers from plane to terminal. In January 2014, he went from obscure Barça vice-president to accidental president when the incumbent, Sandro Rosell, stepped down… The problem was that he knew little about either football or the football business. His sporting director, the legendary Spanish goalkeeper Andoni “Zubi” Zubizarreta, had signed players like Neymar and Luis Suárez, who gelled with Messi into the “MSN” attack, the best in football. But Bartomeu soon sacked Zubi. In all, the President had five sporting directors in six years.
8
Not only beyond his depth, Bartomeu continuously gave into his players’ demands. His inability to handle his players’ avarice was affirmed during contract talks with Iniesta. The soft-spoken Iniesta publicly denounced the President’s claim that a deal had been reached. Promptly, Iniesta was rewarded with a new contract and the fellow Barcelona first team “learned that publicly confronting Bartomeu could secure a salary ‘update.’”9 Consequently, team stalwarts Gerard Pique and Jordi Alba negotiated new contracts. Furthermore, the wage bill of Barcelona ballooned: from 2017-2018, football salaries rose from £342 million to £457 million.
The cost increases did not seem to be an issue as revenues surpassed €1 billion annually —a statistic routinely touted by Bartomeu. Barcelona seemed incapable of doing any wrong… until they, like all clubs, were faced with the full effects of COVID-19. With revenues halted, Barcelona became unable to service their debt sheet of €1.173 billion.
Besides taking down Rosell’s presidency, Neymar was a superb purchase by Barca. He brought dynamism and youthful exuberance to a club that preached collective over individual pursuits. Neymar dreamed of carrying the weight of a franchise player and opted to move to Parisian heavyweights PSG. Barcelona reluctantly sold him for a sum €220m. A war chest of that magnitude could have injected youth into the aging Barcelona squad or service its debt. The funds could have been used to purchase Monaco standout Kylian Mbappé, whose agent, Junior Minguelle, offered him to Barcelona. Bartomeu’s pompousness is illustrated by his failure to respond to Mr. Minguelle’s WhatsApp message. Instead, Bartomeu targeted French winger Ousmane Dembélé.
**As an aside, I urge readers to read the full piece from the FT; they do a fantastic job of summarizing Bartomeu’s shortcomings. **
Bartomeu landed in Monte Carlo with the sole objective of not paying a dime over €80 million. As the FT states, “in the room, they got a surprise. The Germans said they had no time to chat, had a plane to catch, wouldn’t negotiate and wanted about double Barcelona’s budgeted sum for Dembélé. Bartomeu gave in… He committed to pay €105m up front, plus €42m in easily obtained performance bonuses.”10 Did it work out? No, Dembele has been sidelined for a substantial portion of his time at Barcelona with injuries. And Mbappe, well, is on a shortlist of the best players in the world.
There are plenty more examples that illustrate Bartomeu’s lack of restraint. Negotiations for Frenkie De Jong settled €75 million — “nearly double what Ajax initially hoped to get.” My favorite anecdote is Bartomeu’s long-standing love affair with Antoine Griezmann. After being spurned by the French striker in 2018, he paid the entire release clause in 2019 to demonstrate the club’s financial might. He should have realized that Griezmann failed to fit into the squad before he borrowed the full £105 million for the purchase.
Part 3: The Present and Dark Days Ahead
Bartomeu’s incompetence was revealed during the pandemic. There are endless articles published on how clubs are dealing with the impacts of COVID-19. Barcelona is ill-equipped to rebound as the problems have festered for so long that they have become ingrained into the club.
Circling back to what I said before, we must think back to the law instituted: “leadership must resign if debts were twice EBITDA in two successive years.” Thus, Bartomeu and the rest of the board were dangerously close to being on the hook for the losses. Consequently, they needed to sell a sizable portion of their first team.
One solution was utilizing accounting tricks: Barca and Juve engaged in a transaction solely for their respective books. When selling players, clubs can record the inflowing cash flows as revenue at time 0. But, player acquisitions can be amortized across the life of the contract. Accounting gymnastics like this do not help the club’s solvency; instead, they prevent the board from covering the losses out of pocket.
Remember those increased wage packets? Currently, the Barcelona players are past their primes and making hefty sums. Few, if any, other clubs would pay anything near what they are making. The situation is so fraught that they cannot register their summer signings and are stuck in limbo.
La Liga institutes their own pseudo salary cap to ensure clubs are not spending beyond their means. In 19/20, Barca’s cap was €671 million, but for 20/21 La Liga ruled it to be €382.7 million.11 In response, Goldman Sachs issued an emergency loan of €525 million for their stadium renovation project.
Barcelona still needs to register Sergio Aguero, Memphis Depay, Eric Garcia, and more. Moreover, the resigning of Lionel Messi became impossible, opening the door for his switch to PSG. With borderline criminal leadership, it is not surprising Bartomeu and Rosell both endured jail stints.
Més de un Club.
UFC
Vicente Luque def. Michael Chiesa via SUB Round 1 (3:25)
What a fight. I had high expectations for this fight. I saw two likely outcomes: Chiesa by submission or Luque by TKO. Surprisingly, Luque got it done on the ground. Chiesa had control during most of the round— nearly finishing the fight with two chokes and an armbar. Chiesa’s chokes were, by Luque’s admission, 80% in. However, Luque correctly identified the attempt as more of a crank. He survived and proceeded to submit Chiesa via a d’arce. With his two losses being to Wonderboy and Edwards, Luque has a claim to be the most underrated fighter in the promotion. Does it make sense to allow him to avenge one of his losses vs Wonderboy? If I am Dana, that is the next fight.
Jose Aldo def. Pedro Munhoz via DEC (30-27, 30-27, 30-27)
I wanted to laud Jose Aldo’s performance on the PPV. He looked as fast and twitchy as ever. I was genuinely surprised at his lack of kicks; instead, he showcased his newly-refined boxing skills. I loved how he diversified his target and ripped Munhoz with a steady balance of body shots.
Ciryl Gane def. Derrick Lewis via TKO Round 3 (4:11)
What a fantastic array of skills demonstrated by Ciryl Gane. His Muay Thai striking is so crisp. His speed allowed him to throw strikes at range without needing to worry about Lewis returning. By the third round, Gane’s commitment to chopping at Lewis’ legs came to fruition. Lewis was rendered immobilized, and Gane wailed on him until the ref ended the fight.
What I’m Watching This Week
Monday:
N/A
Tuesday:
Rays vs Red Sox at 7:10 PM EST on MLB.TV
Wednesday:
Chelsea vs Villareal (UEFA Super Cup) at 3:00 PM EST on Paramount +
Rays vs Red Sox at 7:10 PM EST on MLB.TV
Thursday:
Rays vs Red Sox at 4:10 PM EST on MLB.TV
Friday:
Mönchengladbach vs Bayern at 2:30 PM EST on ESPN +
Brentford vs Arsenal at 3:00 PM EST on NBC
Saturday:
Manchester United vs Leeds United at 7:30 AM EST on Peacock
Leicester City vs Wolves at 10:00 AM EST on Peacock
NY Jets vs NY Giants at 7:30 PM EST on CBS
Yankees vs White Sox at 7:10 PM EST on YES
Sunday:
Tottenham vs Manchester City ay 11:30 AM EST on NBC
Yankees vs White Sox at 2:10 PM EST on YES
What I’m Reading
Sports
Gold teeth to gold jacket: The stories that made Edgerrin James a legend *** (The Athletic)
Harry Kane’s no-show for Tottenham training leaves a sour taste – but is it understandable? * (The Athletic)
Ciryl Gane predictably picked apart Derrick Lewis at UFC 265. Now with Francis Ngnnou waiting, the fun begins ** (The Athletic)
Messi left Barcelona because of the club, not because of La Liga * (The Athletic)
‘Do you want to take a shot?’: Inside the negotiation of Josh Allen’s record-breaking deal with the Bills *** (The Athletic)
How Paris Saint-Germain closed in on signing Lionel Messi ** (The Athletic)
Roy Keane at 50: The robot, the madman, the winner * (The Athletic)
Beckham’s Miami or Vegas, baby: How Lionel Messi could end up in the US eventually * (The Athletic)
The secrets of Solskjaer’s reign at Manchester United: Now can he deliver? * (The Athletic)
‘Rare talent in a very smooth package’: Charles Woodson and the kid who punted to him in high school ** (The Athletic)
Business
Investors shouldn’t bet too much on macro forecasts (FT) **
Hedge Fund Alphadyne Loses $1.5 Billion in Short Squeeze (BBG) **
From goal posts to fishnets, German investor Windhorst hurries to clear debt (Reuters) *
*** Must Read
** Very Good
* Recommended
https://www.thegoodphight.com/2021/8/7/22611400/philadelphia-phillies-bryce-harper-case-for-mvp
https://theathletic.com/1725827/2020/04/07/barcelona-messi-bartomeu-xavi-iniesta-neymar-barca/
Ibid
https://www.cbsnews.com/news/fc-barcelonas-new-shirt-sponsor-linked-to-controversial-muslim-cleric/
https://www.espn.com/soccer/news/story/_/id/1647424/lionel-messi-renewal-not-barcelona-agenda-yet
Ibid
https://www.espn.com/soccer/soccer-transfers/story/2991686/neymar-faces-trial-in-spain-over-barcelona-transfer
https://www.ft.com/content/c2c8565a-e282-481c-8897-0530b0c81bce
https://theathletic.com/1725827/2020/04/07/barcelona-messi-bartomeu-xavi-iniesta-neymar-barca/
https://www.ft.com/content/c2c8565a-e282-481c-8897-0530b0c81bce
https://www.espn.com/soccer/barcelona-espbarcelona/story/4415644/la-liga-president-warns-barcelona-to-reduce-wage-bill-or-risk-lionel-messi-contract
Love this