Today marks the beginning of the quarterly meetings for Major League Baseball’s 30 owners, and with it, the discussion on the sale of the Texas Rangers is going to be at the top of the agenda. Here’s an update on where matters are at:
- On Monday we reported that this week the league would take action with Commissioner Selig evoking his “best interest of baseball” powers to seize control of the Rangers with the league quickly selling them to a group led by Pittsburgh sports attorney, Chuck Greenberg, and current Rangers president and Hall of Fame pitcher, Nolan Ryan. The league has not backed down from taking action, but as of late last night, it appears that action may not occur this week. The reason? The league appears to be dotting their “I”s and crossing their “t”s before taking action.
- Nolan Ryan is representing the Rangers at the owners meetings, a point that has rasied the discussion about whether the league is backing down from seizing the club. As noted, the league appears ready to go to the mat and seize the club in order to sell the club without creditor approval.
- There’s been some churn going on across blogs and forums that the Greenberg group is undercapitalized and overleveraged in this deal. Neither of these appear to be true. The group is within MLB’s rules regarding how much debt they can carry, and were able to gain what loans were needed in a difficult credit market.
- There have been reports that creditors will turn their back on the league, should MLB force the sale of the Rangers through without creditor approval. According to sources close to the Rangers deal, and in speaking to sources in the finance sector, when asked if deals, such as the loans made to Hicks Sports Group would stop (deals that were not fully collateralized, placing HSG in a massively overleveraged position), the answer was, “yes.” However, when creditor sources were asked if sound loans would dry up over the action being taken over the Rangers, the answer was, “no.“
“We’re all learning valuable lessons from the Hicks Sports Group situation,” one source said. “I would expect closer inspection around how loans are approved, but if the requests are sound, baseball should continue to see credit lines open to them.”
As one source said more directly, “The loans by the original lenders to HSG should not have been made in the first place.”
More updates as news becomes available.
Maury 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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