John Moores has owned the Padres for 14 years.
Now, he is selling the club. The question is, who
might be buying?
John Moores, mired in divorce proceedings and coming off a 99-loss season, has officially announced that he has hired Goldman Sachs in an effort to sell the team to potential buyers. Moores, who has owned the club since 1994, has seen four postseason appearances (won the NL West in '96, went to the World Series in '98, and won the NL West back-to-back in '05 and '06). He also was able to get a new ballpark in PETCO Park built in 2004 amidst lawsuits and voter referendums.
The key reason for Moores' desire to sell centers on the divorce from his wife, Becky, with whom Moores has been married to for 44 years. The two own 90 percent of the Padres, but based upon community property laws in the state of California, Becky will be sharing 50 percent of the assets with John. Moores’ daughter, Jennifer, owns 5%, with the remaining 5% owned by San Diego-based businessman Glenn Doshay. Asked by Barry Bloom of MLB.com whether California state court presiding over the divorce would be the arbitrator, Moores weighed in.
"But that strikes me as very remote," Moores said. "There's a cooperative process between me and Becky ongoing now through Goldman Sachs."
The questions are, how much can the Padres be sold for, and who might the bidders be?
While Forbes placed the value of the Padres at $385 million, 19th among the 30 Major League clubs, the depressed credit market may play a factor in possibly moving that figure. Based on the Forbes valuations, the Padres had operating income estimated at $23.6 million on revenue of $167 million. However, according to the San Diego Union-Tribune, debt service on Petco Park cut into the team's profit. Still, never underestimate how much a would-be buyer might be willing to spend to get into the MLB ownership game.
The club is also working to cut player payroll and instead focusing on developing young talent.
"For us to do it the Yankees way is just utterly foolish," Moores said to MLB.com. "I think most baseball people would agree with that. On top of it, it's been a bad year, going through a divorce and headed into a recession. That's as bad a combo as you can find. We're not going to risk the franchise by signing contracts that don't make any sense and put us in long-term debt.
"I don't want to go through another 2008. I think it was terrible. I think that shocked the system. It's not going to happen again in 2009. We're going to put together a much better team."
The Padres have discussed lowering their payroll to $40 million next year and have guaranteed $27.5 million to four players for 2009: Jake Peavy, who is guaranteed $11 million in 2009 as part of a four-year, $63 million guarantee through 2012, right fielder Brian Giles ($9 million), pitcher Chris Young ($4.5 million) and first baseman Adrian Gonzalez ($3 million).
At a time when the sale of the Cubs is nearing an end, it is possible that the losing bidders in that process may find interest in the Padres.
One name that was deeply associated with the Washington Nationals bid, and then briefly with the Chicago Cubs was Fred Malek. He was the founder and Chairman of Thayer Capital Partners. Prior to establishing Thayer in 1991, Malek co-led the buyout of Northwest Airlines and then served as its President and Vice Chairman; led the buyout of CB Richard Ellis; led the acquisition of the Ritz-Carlton Hotel Company; and participated in the acquisition and ownership of the Texas Rangers.
The other name that certainly has been discussed in Larry Lucchino, who formerly was the President and CEO of the Padres before heading to the Orioles, and then to the Red Sox where he currently holds the same titles.
The "outsider" might be Mark Cuban, who was involved in the bidding process for the Cubs, but does not match MLB personality profile of other owners in league. Cuban is also mired in charges made by the SEC of insider trading.
Reportedly, the financial book compiled by Goldman Sachs that will be presented to potential bidders will be ready sometime early next year.
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 contributor to Baseball Prospectus, and is available as a freelance writer. 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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