UPDATE #3: Gordon Edes of Yahoo! Sports reports the following:
A major league source told Yahoo! Sports the loan to the Hicks Sports Group was not made specifically to help Hicks with payroll obligations, and believed that the amount was for less than $15 million. A club source confirmed that the team met payroll and that the club is maintaining normal business operations, although earlier this season the team reduced its front office staff by 10 percent.
UPDATE #2: Kevin Kennedy has been reached for comment this morning on whether he is aware of any loan from the league to the Rangers to make payroll.
Kennedy relays that he does not have any knowledge of MLB making any kind of loan to the Rangers.
UPDATE #1: As Evan Grant reported, the Rangers are not commenting on the Rangers financial situation, and now the league office has followed suit.
Reached for comment, Rich Levin, spokesman for Major League Baseball would neither confirm or deny any league funds going to the Rangers to help them reach payroll.
"We don’t publicly discuss club finances," Levin sad.
In a sign that Tom Hicks’ financial woes may have reached a critical level, the Texas Rangers may have borrowed as much as $15 million from Major League Baseball to make payroll.
The news of the possible shortfall by the club arose yesterday on “Inside Pitch” which airs on SIRIUS XM Radio’s MLB Home Plate channel (XM channel 175, SIRIUS channel 210. The show is co-hosted by Kevin Kennedy and Jeff Joyce.
During the show, Kennedy fielded a caller in which he said that the Rangers had failed to make payroll on Tuesday and that the league loaned organization $15 million to cover the shortfall. The caller added, “What’s going to happen with that situation and what do you think, how does it affect the players and the managers and the GM?”
Kennedy replied, “Well, it’s pretty well known actually the last couple of years that there’s been some issues there. He had to reach out, Tom Hicks had to reach out this past year and try to get more investors and all the people that invested originally with him when they bought the Rangers have not gotten their money back and not gotten their money.”
Kennedy added that he had a “couple people really close to that situation” through his days with the Rangers and that “MLB is aware of it, and MLB has a fund obviously for that reason and this team will be sold - he wants to get out - and will be sold soon, sooner rather than later.”
Kennedy went on to say that the club would be most likely be sold in the off-season.
It is unclear whether Kennedy is referring to the overall financial distress that Hicks is under through HSG, or whether he is speaking specifically to any loans to the Rangers from MLB. Hicks Sports Group has gone into default on $525 million in loans to group of 40 financial institutions and other investors. Hicks has been working to sell a stake in the club, and possibly a majority holding, with current club president Nolan Ryan showing interest.
This morning, the Rangers organization has neither confirmed nor denied receiving funds from the league, according to Evan Grant, formerly of the Dallas Morning News, and now with D Magazine.
According to Grant, when contacted, Hicks deferred all comments to team spokesman John Blake. Blake, in turn, “said the team would have no comment on Hicks’ financial situation,” and Nolan Ryan refused comment after Rangers’ 9-7 win over Los Angeles last night. According to Grant:
Club sources, however, said the team has paid its employees for the most recent pay period and that Hicks remains in control of the organization. According to a source familiar with the situation, the Rangers are continuing normal operating procedures and have financial resources to sign both draft picks and international free agents. The source, however, did not mention the possibility of increasing payroll at the trading deadline.
According to a source, a scenario has been in place for several weeks that would have allowed the Rangers to borrow from the MLB fund. It would not mean MLB would take control of the club, but under those circumstances, it’s likely MLB would have much more say on spending matters. The Rangers top two draft picks, LHP Matt Purke and RHP Tanner Scheppers, are both demanding bonuses well in excess of the current MLB-recommended “slotting” system.
The Biz of Baseball is currently awaiting word from the Commissioner’s Office and Kennedy for further clarification. Look for updates as soon as they become available.
Joe Siegler of Rangerfans.com first noted the comments on MLB Homeplate, and reported on the story late Weds. night.
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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