Daily Archives: May 6, 2005

Stros activate Berkman

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Berkman4.jpgThe reeling Stros (11-16) get a nice boost today as the club’s best hitter — Lance Berkman — is expected to play tonight in the Stros’ game against the Braves (17-11) in Atlanta. Berkman has been rehabilitating his right ACL over the past six months after surgery on his knee that he injured while playing flag football last November. Here is the Stros’ press release on the activation of Berkman.
Although the Stros have not yet announced the player who will be dropped from the 25 player roster to accomodate Berkman, my sense is that it will be either Brandon “Home Run” Duckworth or Chad Harville, who had a rough outing in last night’s game in Atlanta.
Update: Just to show what I know, the Stros announced this evening that they sent rookie Chris Burke (-4 RCAA/.222 Ave/.265 OBP/.244 SLG) to AAA Round Rock to make room on the roster for Berkman. Inasmuch as Burke is blocked by Bidg at his natural position of second base and has not hit well enough so far this season to merit a reserve role in the outfield, he is probably better off at Round Rock where he can play every day. However, the Stros probably will not carry 12 pitchers on the 25 player roster for long, so another roster move is likely in the near future.
The already weak-hitting Stros have been struggling at the plate this season without Berkman, who is legitimately one of the best hitters in Major League Baseball right now. To appreciate just how good a hitter Berkman is, consider his runs scored against average (“RCAA”), which is a statistic that Lee Sinins developed to measure how many more runs a hitter generates compared to the number of runs an average hitter creates.
As noted several times on this blog, RCAA is particularly valuable to evaluate hitting because it focuses on the two most important things in winning baseball games — that is, creating runs and avoiding making outs. RCAA basically computes the number of outs that a particular player uses in creating runs for his team and then compares that number to the amount of runs that an average player in the league would create while using an equivalent number of outs. Inasmuch as the hypothetical average player’s RCAA is always zero, a player can have either an RCAA that is a positive number — which indicates he is an above average hitter (i.e., Barry Bonds) — or an RCAA that is a negative number, which means he is performing below average (i.e., Brad Ausmus).
Moreover, RCAA is a valuable tool to evaluate hitting ability because it provides a good measure for comparing hitters who played during different eras. Inasmuch as RCAA measures a player’s hitting ability against that of an average player in the player’s league for each particular season, a player’s lifetime RCAA is an accurate measure to compare players from different eras — it essentially measures how each player performed against an average player in his era. On the other hand, comparing other hitting statistics — such as on-base average, slugging percentage, and batting average — is often skewed between players of hitter-friendly eras versus players of pitcher-friendly eras.
Berkman is well on his way to being the best hitter in Stros history. After a 55 RCAA/.982 OPS 2002 season and a 40 RCAA/.927 OPS 2003 season, Berkman had an incredible .566 SLG, .450 OBA, 1.016 OPS, 69 RCAA in 160 games during the 2004 season. He has a .980 career OPS (i.e. on-base average + slugging percentage), compared to the league average of .777 during his career, and 254 RCAA in 775 games.
Berkman’s 236 RCAA over the past 4 years ranks 8th in the past half century for players of the age 25-28:
1 Mickey Mantle 322
2 Frank Thomas 320
3 Barry Bonds 319
4 Hank Aaron 256
5 Manny Ramirez 250
6 Willie Mays 246
7 Jeff Bagwell 239
8 Lance Berkman 236
T9 Todd Helton 228
T9 Frank Robinson 228
Not bad company.

Dr. Bart Smith updates Houston economic forecast

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Bart Smith.jpgAs noted earlier here and here, University of Houston economics professor Dr. Barton Smith is the leading expert on the regional economics of the Houston metropolitan area. Dr. Smith is also the director of the UH Institute for Regional Forecasting, and his report on the local real estate market that he gives a couple of times a year to the Houston real estate business community is always one of the most well-attended luncheons in the Houston business community.
All in all, Dr. Smith views the Houston economy to be in a small but steady growth mode that is largely dependent on what happens in the exploration and production sector of the oil and gas industry. While Houston’s housing market is not overinflated, Dr. Smith believes that it is currently suffering from oversupply, although not close to the extent of the dreaded days in the Houston real estate market of the mid-to-late 1980’s. Dr. Smith reminded the audience that high energy prices alone are not enough to create a booming economy in Houston anymore, and noted that, while upstream energy grew at nearly 5 percent last year, the overall regional economy grew only 0.9 percent. Dr. Smith pointed out that this is the result of such factors as slow growth in downstream energy (including refining and petrochemicals) and in non-energy sectors of the regional economy.

The Enron brand

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Judge Bowdre.jpgOne of the remarkable cultural developments since the collapse of Enron Corporation has been the branding of the “Enron” name to become synonomous with all forms of corporate corruption. Earlier this week, the prosecution’s use of the Enron brand in the corporate-fraud trial of former HealthSouth CEO Richard M. Scrushy got the prosecution in some very hot water with the judge in that case.
The fireworks came after the witness — HealthSouth’s security chief and a key defense witness — had mentioned Enron during cross-examination. The prosecutor then then asked the witness if he was referring to “the same company that defrauded investors and laid off many employees, resulting in prison sentences for some people.” That prompted U.S. District Judge Karon O. Bowdre (pictured above) — who previously had warned lawyers in the trial to refrain from references to Enron or any other corporate frauds — to pound her gavel and yell the prosecutor’s name.
After slamming her gavel, Judge Bowdre instructed the jury that the prosecutor had asked a “series of inappropriate questions.” The judge then advised the jury that she was terminating the cross-examination “as a sanction” to the prosecution. No word yet on whether the prosecutor faces further sanctions for what is a serious and intentional breach of the judge’s previous order.
Professor Ribstein has a typically adept observation about this latest incident of prosecutorial misconduct:

“If the government actually has to try the facts of each individual corporate fraud case, it could get sticky.”

“Now be nice, Carl”

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carl_icahn.jpgYesterday’s conference call for Blockbuster, Inc.’s CEO John Antioco to discuss the company’s quarterly earnings turned out not to be the routine chat that usually occurs in such calls. Blockbuster investor Carl Icahn made sure of that.
Mr. Icahn and two entertainment industry veterans are opposing Mr. Antioco and two current directors in the company’s upcoming annual meeting. Mr. Icahn is Blockbuster’s biggest shareholder, with about 8.6% of Blockbuster’s combined voting shares. He is also expected to receive support in his fight with Mr. Antioco from most of the hedge funds that own a big chunk of Blockbuster’s stock.
So, this veteran warrior of seemingly countless corporate battles (here are a few previous posts on Mr. Icahn) surprised everyone on the call (via about 450 phone and Web connections) when his distinctive raspy-voice joined the question-and-answer session of the call, beginning with the following missile shot at Mr. Antioco:

“You have mischaracterized what I’m trying to achieve here,” Mr. Icahn alleged regarding his recent move to gain control of the Blockbuster board. “We would want you accountable.”

Mr. Icahn went on to characterize Mr. Antioco’s $50 million bonus last year as “egregious” given Blockbuster’s faltering business. Earlier, the company had announced a first-quarter loss of $57.5 million compared with year-earlier net income of about $115 million.
Well, if you want a fight, just mischaracterize a CEO’s pay. The usually calm Mr. Antioco accused Mr. Icahn of making an “erroneous” statement about his pay and then said:

“I didn’t get a $50 million bonus. I think you know that.”

Blockbuster regulatory filings show that Mr. Antioco earned $7 million in cash and $26.7 million in restricted stock in addition to stock options worth potentially much more. Mr. Antioco then appealed to investors on the call:

“Do you honestly believe that electing a divisive element will help move the company and your investment forward?”

In addition to the foregoing, Mr. Icahn challenged Mr. Antioco to give up his entitlement to future bonuses in light of Blockbuster’s financial problems and to put the entire board up for election next year rather than continuing the staggered current system under which two or three directors are nominated for election every year. Mr. Antioco shot back that such decisions were the preogative of the board.
At any rate, the unusual dust-up between the two rivals went on for six minutes with each man interrupting the other and ended only when Mr. Icahn was cut off in midsentence by the conference call operator, who declared the investor’s comments were not “appropriate.” The operator’s cut-off came right before Mr. Icahn appeared ready to reveal details of an offer from a leveraged buyout firm to bid for Blockbuster. Mr. Antioco later told listeners on the call that the company had received no such offers. Being cut off in mid-sentence was “corporate democracy, Antioco-style,” Mr. Icahn commented later.
No word yet on whether Blockbuster is selling tickets to its upcoming annual meeting.
Update: Charlie Quidnunc, a podcast-blogger in Mercer Island, Washington, actually listened in on the Blockbuster conference call and has this post and podcast on the call. Don’t miss it. As Charlie notes, this was not your typical conference call for a publicly-traded company.