HOME

TheInfoList



OR:

A fire sale is the sale of goods at extremely discounted prices. The term originated in reference to the sale of goods at a heavy discount due to
fire damage Fire is the rapid oxidation of a material (the fuel) in the exothermic chemical process of combustion, releasing heat, light, and various reaction products. At a certain point in the combustion reaction, called the ignition point, flames are pr ...
. It may or may not be defined as a closeout, the final sale of goods to zero inventory. They are said to occur in the financial markets when bidders who value
asset In financial accounting, an asset is any resource owned or controlled by a business or an economic entity. It is anything (tangible or intangible) that can be used to produce positive economic value. Assets represent value of ownership that can b ...
s highly are prevented from bidding on them, depressing the average selling price below what it otherwise would be. This lowering of the price can cause even further issues because it may be inaccurately perceived as
signalling In signal processing, a signal is a function that conveys information about a phenomenon. Any quantity that can vary over space or time can be used as a signal to share messages between observers. The ''IEEE Transactions on Signal Processing'' ...
negative information.


History

The term is adapted from reference to the sale of fire-damaged goods at reduced prices. In ''Proceedings of the Fitchburg ass.Historical Society and Papers Relating to the History of the Town Read by Some of the Members'' the following entry is found:
In December, 1856, the account of an extensive fire in the American House mentions the following occupants: E. B. Gee, clothing; T. B. Choate, drugs; J. C. Tenney, boots and shoes; Maraton Upton, dry goods; and M. W. Hayward, groceries. Maraton Upton removed his stock to No. 9 Rollstone block, and advertised "Extraordinary fire sale; customers are invited to call and examine goods which are still warm."
The term also has a counterpart in "railroad salvage", the discount sale of goods damaged in derailment or other accidents. According to Plutarch, Crassus would show up to a burning building with a fire brigade and offer to put out the fire, or sometimes to buy the property at an outrageous discount. If the owner agreed, he would put out the fire. If they refused, he would stand by and let it burn.


Sports usage

In professional sports, a fire sale occurs when a team trades many of its veteran players, especially expensive star players, to other teams for less expensive and usually younger players. Teams usually have a fire sale for financial reasons. The term is generally thought of as different from merely "rebuilding" a team, because during a rebuilding process, teams often obtain players who are already in the major leagues or who are close to being major-league-ready, while retaining at least some of their key veterans (such as a franchise player) while also getting players from their minor league system; most rebuilding teams have few veterans remaining to jettison in the first place. On the other hand, trades in a fire sale often bring a team
draft pick A draft is a process used in some countries (especially in North America) and sports (especially in closed leagues) to allocate certain players to teams. In a draft, teams take turns selecting from a pool of eligible players. When a team selec ...
s and
prospect Prospect may refer to: General * Prospect (marketing), a marketing term describing a potential customer * Prospect (sports), any player whose rights are owned by a professional team, but who has yet to play a game for the team * Prospect (minin ...
s who have little to no major-league experience in their sport, in exchange for proven, experienced veterans. The term comes from the perception that the team is trying to get rid of all its players. The sports usage of the term "fire sale" is most especially used in Major League Baseball, where the most infamous fire sale occurred in 1997. Weeks after winning the
1997 World Series The 1997 World Series was the championship series of Major League Baseball's (MLB) 1997 season. The 93rd edition of the World Series, it was a best-of-seven playoff between the American League (AL) champion Cleveland Indians and the National L ...
, the
Florida Marlins The Miami Marlins are an American professional baseball team based in Miami. The Marlins compete in Major League Baseball (MLB) as a member club of the National League (NL) East division. The club's home ballpark is LoanDepot Park. The franc ...
began trading away several of their high salary players and key cogs in the championship run, with Moisés Alou and
Al Leiter Alois Terry Leiter (; born October 23, 1965) is an American former professional baseball player and current television sports commentator. He played in Major League Baseball as a left-handed pitcher from to for the New York Yankees, Toronto Blu ...
among the first of many to go throughout the off-season and well into the 1998 season. This ended any realistic chance of the Marlins' defending their title. They plummeted to a 54-108 record in 1998, the worst ever by a defending World Series champion. Owner/Manager Connie Mack put the
Philadelphia Athletics The Philadelphia Athletics were a Major League Baseball team that played in Philadelphia from 1901 to 1954, when they moved to Kansas City, Missouri, and became the Kansas City Athletics. Following another move in 1967, the team became the Oakla ...
through a fire sale twice. In 1914, the Athletics lost the
1914 World Series The 1914 World Series was the championship series of Major League Baseball's 1914 season. The 11th edition of the World Series, it was played between the American League champion and defending World Series champion Philadelphia Athletics and ...
to the "Miracle Braves" in a four-game sweep. Mack traded, sold or released most of the team's star players soon after, in what could be considered as the first fire sale in organized sports. The second and more damning fire sale came after the 1933 season. On December 12, he traded Mickey Cochrane to the
Detroit Tigers The Detroit Tigers are an American professional baseball team based in Detroit. The Tigers compete in Major League Baseball (MLB) as a member of the American League (AL) Central division. One of the AL's eight charter franchises, the club was f ...
for
Johnny Pasek John Paul Pasek (June 25, 1905 – May 13, 1976) was a Major League Baseball catcher. Pasek played for the Detroit Tigers in and the Chicago White Sox in . He batted and threw right-handed. Pasek was born in Niagara Falls, New York. From 19 ...
and $100,000 and then traded Pasek and former 20-game winner
George Earnshaw George Livingston Earnshaw (February 15, 1900 – December 1, 1976) was a Major League Baseball pitcher. He played in parts of nine seasons (1928–36) with the Philadelphia Athletics, Chicago White Sox, Brooklyn Dodgers, and St. Louis Cardin ...
to the
Chicago White Sox The Chicago White Sox are an American professional baseball team based in Chicago. The White Sox compete in Major League Baseball (MLB) as a member club of the American League (AL) Central division. The team is owned by Jerry Reinsdorf, and ...
for
Charlie Berry Charles Francis Berry (October 18, 1902 – September 6, 1972) was an American athlete and sports official who enjoyed careers as a catcher and umpire in Major League Baseball and as an end and official in the National Football League. His ...
and $20,000. On the same day he traded another future Hall of Famer, sending Lefty Grove,
Max Bishop Max Frederick Bishop (September 5, 1899 – February 24, 1962) was an American professional baseball player, scout and manager. He played in Major League Baseball as a second baseman from through , most notably as a member of the Philadelphia At ...
and Rube Walberg to the
Boston Red Sox The Boston Red Sox are an American professional baseball team based in Boston. The Red Sox compete in Major League Baseball (MLB) as a member club of the American League (AL) East division. Founded in as one of the American League's ei ...
for
Rabbit Warstler Harold Burton "Rabbit" Warstler (September 13, 1903 – May 31, 1964) was a professional baseball infielder. He played all or part of 11 seasons in Major League Baseball as a shortstop and second baseman for the Boston Red Sox (1930–33), Philad ...
,
Bob Kline Robert George Kline unior(December 9, 1909 – March 16, 1987) was a pitcher in Major League Baseball who played for three teams between the 1930 and 1934 seasons. Listed at 6' 3", 200 lb., Kline batted and threw right-handed. He was ...
and $125,000. Between 1933 and 1935 the Athletics also traded or sold Jimmie Foxx,
Al Simmons Aloysius Harry Simmons (May 22, 1902 – May 26, 1956), born Alois Szymanski, was an American professional baseball player. Nicknamed "Bucketfoot Al", he played for two decades in Major League Baseball (MLB) as an outfielder and had his best year ...
,
Doc Cramer Roger Maxwell "Doc" Cramer (July 22, 1905 – September 9, 1990) was an American center fielder and left-handed batter in Major League Baseball who played for four American League teams from 1929 to 1948. Career A mainstay at the top of his team' ...
, and
Jimmie Dykes James Joseph Dykes (November 10, 1896 – June 15, 1976) was an American professional baseball player, coach and manager. He played in Major League Baseball as a third and second baseman from through , most notably as a member of the Philadelp ...
. The Athletics would never come close to having the success they had before the fire sale and the team eventually moved to Kansas City in 1955. Another infamous fire sale occurred in 1994. The Montreal Expos ended the strike-shortened 1994 season with the best record in the majors. But by the start of the following season, many of the team's young stars had either been traded or lost to free agency. The Expos never really recovered on or off the field from this, and were forced to move to
Washington, D.C. ) , image_skyline = , image_caption = Clockwise from top left: the Washington Monument and Lincoln Memorial on the National Mall, United States Capitol, Logan Circle, Jefferson Memorial, White House, Adams Morgan, Na ...
as the Nationals in 2005. The Miami Marlins had another controversial fire sale in the 2012-2013 offseason. In a massive 12-player trade with the Toronto Blue Jays, they sent away such players as Josh Johnson, José Reyes, and Mark Buehrle. In the 2017-18 offseason, the Marlins had yet another fire sale. After longtime owner
Jeffrey Loria Jeffrey Harold Loria (born November 20, 1940) is an American art dealer, author, and the former owner of the Montreal Expos (now the Washington Nationals) and Miami Marlins of Major League Baseball. Early life Loria was born and raised in a Je ...
sold the team to a group led by former MLB player Derek Jeter and
Bruce Sherman Bruce S. Sherman (born May 1948) is an American businessman and co-founder of the wealth-management firm Private Capital Management and the chairman and majority owner of the Miami Marlins of Major League Baseball. Early life Sherman was raised ...
, nearly all of the team's star players, notably
Giancarlo Stanton Giancarlo Cruz-Michael Stanton (born November 8, 1989), formerly known as Mike Stanton, is an American professional baseball designated hitter and outfielder for the New York Yankees of Major League Baseball (MLB). He made his MLB debut in 2010 a ...
,
Christian Yelich Christian Stephen Yelich (born December 5, 1991) is an American professional baseball left fielder for the Milwaukee Brewers of Major League Baseball (MLB). He previously played for the Miami Marlins. The Marlins selected Yelich in the first r ...
, and
Marcell Ozuna Marcell Ozuna Idelfonso (born November 12, 1990), nicknamed "The Big Bear", is a Dominican professional baseball outfielder for the Atlanta Braves of Major League Baseball (MLB). He has previously played in MLB for the Miami Marlins and St. Lou ...
, were traded to different teams across the major leagues. The motive for the team dismantling was primarily to help lessen payroll to pay off the organization's outstanding debt. The team's popularity notably declined in 2018 as a result of the fire sale, with the team's attendance falling to the worst in all of baseball. The
Ottawa Senators The Ottawa Senators (french: Sénateurs d'Ottawa), officially the Ottawa Senators Hockey Club and colloquially known as the Sens, are a professional ice hockey team based in Ottawa. They compete in the National Hockey League (NHL) as a member ...
had a fire sale during the 2018–19 season. Several star players like
Matt Duchene Matthew Duchene (; born 16 January 1991) is a Canadian professional ice hockey centre for the Nashville Predators of the National Hockey League (NHL). He has previously played in the NHL for the Colorado Avalanche, Ottawa Senators, and Columbus ...
, Mike Hoffman, Mark Stone and team captain
Erik Karlsson Erik Sven Gunnar Karlsson (; born 31 May 1990) is a Swedish professional ice hockey defenceman and alternate captain for the San Jose Sharks of the National Hockey League (NHL). Karlsson was drafted in the first round, 15th overall, by the Ott ...
were traded in exchange for declining veterans, prospects and draft picks. Many perceived the fire sale as Senators' management being unwilling to sign his stars to long-term, expensive extensions, as many of them would be eligible to become free agents after the season. The Senators would finish dead last in 2018–19, while their former stars found success on other teams, and fan attendance and support dropped significantly due to a lack of good will with Senators ownership and the fanbase. In Association Football, clubs which go through financial troubles and/or are relegated & dropped into a lower division may need to go through a fire sale to reduce their operating expenses or in an effort to recover additional funding to replace the funding lost from being in the inferior division. Players who are deemed to have overinflated wages and/or a lack of quality may also be sold for low transfer fees, or even on a free transfer in order to get their wage off the books.


See also

* Suggested retail price


References

{{reflist Pricing Fire Bankruptcy