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Sizing Up the Sale of the Texas Rangers PDF Print E-mail
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MLB Club Sales
Written by Maury Brown   
Monday, 14 December 2009 16:15

RangersWhether it is the Nationals, Braves, or the Texas Rangers, you can’t paint the sale of an MLB club with the same brush. Sure, some aspects are the same (approval process with the league often times has the same moving parts), but for the most part, each is its own animal.

The sale of the Rangers is an interesting study. Some have scratched their head on how current majority and controlling owner, Tom Hicks, can approve the sale in which he is considered to be part of one of the groups bidding on the franchise. Seems like a conflict of interest, right? Well, sort of.

Like the sale of the Cubs, the next stage in the process is to approve one of three bidders that will then enter an exclusive negotiating agreement to purchase the club. This doesn’t mean that the bidder who wins these rights is a lock to land the club. In the case of the Cubs, the Ricketts family had their negotiating window extended past the one month agreement, and even then, it wasn’t until rival bidder Marc Utay, a managing partner with New York-based private equity firm Clarion Capital Partners LLC, and his partner Leo Hindery were thrown back into the mix that the deal got hammered out to its conclusion; a bit of leveraging to get the deal completed.

Hicks could – repeat could – approve the final bidder by tomorrow. Self-imposed deadlines, even with Bud Selig and Co. pushing for the process to get completed well in advance of Spring Training, doesn’t mean it will. Still, the landscape as to who is involved and the politics behind the deal has settled in. Here’s the players:

Jim Crane – Crane was seen as having no chance to land the Rangers, but recently, he has resurfaced with a competitive bid. Crane made a stab at purchasing the Astros, making a verbal commitment to purchase the club in the ‘90s, but backed out at the 11th hour. That did not sit well with MLB. Given that the league has a long memory, nothing short of a bid that far surpasses the competitors has a chance. While that may seem like death knell, it isn't. Crane's bid is reportedly superior than the other three in play, and that coulld ultimatly push him over the top.

Dennis Gilbert – Gilbert is a former sports agent that made his fortunes in the insurance industry and would be the second former player agent to own a club, should he win the day (the other is Jeff Moorad, who was formerly with the Diamondbacks and is now CEO of the Padres, and is working toward controlling interest of the club). At one point, Tom Hicks was working on a partnership with Gilbert in which Hicks had hoped to retain controlling interest in the Rangers. Hicks backed off the negotiations to join with Gilbert earlier this month, opting for a lesser role in the bidding process. Gilbert has said that if he purchases the club, he will look to control the baseball operations, as well. As we’ll see, that point may kill him politically, although a deal with more money could push him over the top. He also has a powerful ally in White Sox owner Jerry Reinsdolf. Gilbert has consulted for the White Sox. Given how tight Reinsdorf and Selig are, it seems that the White Sox owner is lobbying hard for Gilbert.

Chuck Greenberg – Chuck Greenberg has current Rangers president, Nolan Ryan in his corner, which is a huge negotiating chip. Ryan aligned himself with Greenberg early on, and when news came that Dennis Gilbert would assume control of baseball ops, should he purchase the Rangers, that put Ryan in a lesser role. Ryan has said he will step down from the Rangers, should Gilbert be the winning bidder, something that has huge implications politically. Greenberg, the Pittsburgh sports attorney, has made it clear that if he wins the day, Ryan stays on as president of the Rangers. All things being equal, this aspect is the tipping point in the process. Ryan is seen as not only a Hall of Fame pitcher with an incredible legacy on the diamond, he’s also been successful as the principle owner in two minor league teams affiliated with the Astros (the Triple-A Round Rock Express of the PCL, as well as the Double-A Corpus Christi Hooks).

Greenberg has owned three minor league clubs (he recently sold one), and has made attempts at NHL ownership, including the Penguins in ’99 and the Panthers in ’01, all of which bode well for Greenberg. Throw in that he has a solid investment group, and Greenberg is in good shape.

And the Winner Is…

We prefaced Greenberg’s profile by saying, “all things being equal”, which means Greenberg’s deal has to be on-par, or possibly the highest bidder in the process. A key aspect for Greenberg is that he has said that if he is the winning bidder, he will keep Hicks on as a minority owner, something that gives Hicks extra reason to focus on the bid.

However, the bottom line is the bottom line. Hicks is approx. $525 million in debt. We projected early on that the sale would be between $450-$550 million, and the top end of that range seems to be where the sale is headed. Crane would have to have a bid that is the highest, and most likely, by a considerable margin, to be considered the winning bidder, which late Monday, has been drifting about. Chances are, like Utay and Hindery with the Cubs, he is being brought in as a “ginning up” component.

Gilbert’s bid seems wrapped up in how Ryan factors in. The notion that a new owner would come in and not only run the business side, but play “Jerry Jones” is cetainly aggressive, maybe too much so for many of the owners in MLB. However, it’s the other Jerry, as in Reinsdorf, that could hold sway in the process.

The exclusive agreement with the final bidder may or may not come tomorrow, but look for a close one between Crane and Greenberg, with the us leaning toward the latter winning out, if his bid figure is competitive. He has Ryan in his court, a solid local investment group, and Hicks is retained in a minority capacity. It's all going to come down to money. On that... Expect the winning bid in excess of $500 million. We're projecting $530 million.


Maury BrownMaury Brown is the Founder and President of the Business of Sports Network, which includes The Biz of Baseball, The Biz of Football, The Biz of Basketball and The Biz of Hockey. He is available for hire or freelance. Brown's full bio is here. He looks forward to your comments via email and can be contacted through the Business of Sports Network.

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