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Home MLB News MLB Club Sales Judge Sets Aug 4 Auction Date for Texas Rangers

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Judge Sets Aug 4 Auction Date for Texas Rangers PDF Print E-mail
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MLB Club Sales
Written by Maury Brown   
Wednesday, 14 July 2010 12:16

Texas RangersIn a landscape that seems to shift almost daily, an auction hearing and auction date for the sale of the Texas Rangers was moved at a hearing yesterday from July 22 to Aug. 4, something that lawyers for the Rangers and creditors of the bankrupt club were both unhappy with. The creditors for the Rangers claimed it would not give enough time for potential bidders to garner needed funding, while lawyers for the Greenberg-Ryan group said they wanted the date set well before the expiration of the Asset Purchase Agreement the investor group has on Aug 12.

The other bidders believed to be in the mix for the auction include Houston businessman Jim Crane, and a group led by Dennis Gilbert and Dallas investor Jeff Beck. Crane and Gilbert were both approved by MLB before Greenberg/Ryan were selected as exclusive bidders. As part of the argument by the creditors that the Aug. 4 auction date is too soon, under the bid procedure, any new investors, such as the rumored addition of Mark Cuban to the Gilbert/Beck group would have to be approved by the league before being considered as part of any bid package.

U.S. Bankruptcy Judge Michael Lynn set the tone at the hearing by saying, "We're going to get this process on the road. I know this doesn't make all of us happy. But if that's so, I've done something right in this case."

The hearing also saw Judge Lynn accept the most recent motion for bid procedures in the auction. In a victory for the Greenberg/Ryan group, their enhanced bid that now sees $306.7 million in cash and removal of a controversial charter aircraft lease, allowed Lynn to say that their new bid would be the starting point for bidding. Under the auction rules, the Greenberg/Ryan group’s bid then becomes a “stalking horse” where bidding much now by at least $15 million higher than the $306.7 million bid by Greenberg/Ryan. The auction process would then see bids after that increase in increments of $2 million. The auction does not include the approx. $75 million transaction that encompasses 154 acres of land around the Ballpark. Lenders for Hicks Sports Group, the holding company for the Rangers, which defaulted on $525 million in loans, do not have a lien on that land, and subsequently, is not part of the bankruptcy proceedings. With the land deal in play, the Greenberg/Ryan bid is now over $580 million.

(READ THE NEW MOTION FOR BID PROCEDURES)

The hearing, set just 3 weeks from today, would determine whether there are accepted bids for the purchase of the club beyond the Greenberg/Ryan group. Based on the concerns by the creditors, it is possible that rival bidders may not be able to gain completed funding by the date. If no other approved bids step forward at the hearing, the sale would default to Greenberg/Ryan.

If, through the process, a bidder other than Greenberg/Ryan were to win at auction, the group would need approval from 75 percent of MLB’s owners. The league has backed the Greenberg/Ryan group for months. In the past, MLB has said that the highest bid does not always mean the best owners for the make-up of the ownership brethren of the league. Indeed, the league sold the Boston Red Sox to the John Henry group with a lower bid offer than both Miles Prentice and Charles Dolan. Lynn said that he can determine whether the league acted in good faith in the process.

If the Greenberg/Ryan group were to lose out in the auction and MLB approval process, Judge Lynn said that he accepted a $15 million “break-up fee” should go to investor group for costs associated expenses. The figure is approx. 3 percent of the bid offer’s value.

Chuck Greenberg, who was at attendance during All-Star Game festivities in Anaheim, declined comment citing the court’s request that no one discuss court proceedings.

More news as it becomes available.

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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, as well as a contributor to Forbes SportsMoney blog. 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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