The sale of the Texas Rangers, its associated voluntary Chapter 11 and auction saga, for all intents and purposes is over (no, it hasn't closed yet, but there are no more road blocks), with the group led by Chuck Greenberg and Nolan Ryan preparing to take over the club on Aug 13, less than one week from today. Since the auction and confirmation hearing for a “pre-packaged plan” that saw four revisions (see the final, fourth version of the Plan), I’ve received a mountain of emails or inquires through my Twitter account, @BizballMaury. It should be noted that Jeff Wilson of the Star-Telegram got hit with some of the same questions that I will answer below, but I suggest checking Jeff’s answers as he got some that I did not, and vice-versa.
When does MLB vote to approve the Greenberg/Ryan group, and how?
The owners will convene in a face-to-face meeting on Aug. 12. It’s a given that 3/4 of the owners are going to vote to approve, with the ownership transfer sealed, but I would expect the vote to be unanimous.
There was talk that the group may be on the hook for Tom Hicks’ legal fees. Is that still in place?
The last and final version of the Plan that was signed off on does not include any provision for Hicks’ legal fees. He appears to be on his own in this regard.
How many members are within the investor group that will shortly own the Rangers?
Chuck Greennberg testified through the bankruptcy proceedings that there are 18 members.
Is there a complete listing of the owners?
No, and don’t expect it anytime soon. There are no plans currently to release all the names, and they may never do so.
Who do we know is within the group?
Two of the names everyone following this saga well knows. But, here’s a brief breakdown of the 5:
- Chuck Greenberg – Pittsburgh minor league club owners and sports attorney that assisted in brokering the sale of the Pittsburgh Penguins out of bankruptcy to Mario Lemieux. He will assume the title of Managing Partner and CEO
- Nolan Ryan – Hall of Fame pitcher and current President of the Rangers. His title will remain unchanged.
- Bob R. Simpson – A key investor in the group. Simpson is the former CEO of XTO Energy (SYMBOL: XTO) in Ft. Worth. He will be co-chair for the board of directors of the investment group.
- Ray C. Davis – The other key investor in the group. Davis is the former co-chair and co-CEO of Energy Transfer Partners, L.P. He will be the other co-chair for the board of directors of the investment group.
- Charley Pride – Yes, he’s known as a historic country recording artist, but he was also a baseball player, pitching in 1952 for the Memphis Red Sox of the Negro American League, in 1953 for the Boise Yankees, the Class C farm team for the New York Yankees, the Louisville Clippers and also for the Birmingham Black Barons. He is a minority investor.
Do we know how many of the investors are local?
Eighty-five percent of the investor group and the associated money in the purchase is from the Dallas/Ft. Worth metroplex area
There was so much talk that the $70 million 154 acre land deal was critical to any ownership taking over. Greenberg/Ryan terminated the deal just before the auction. Are they losing parking revenues?
The answer, at least for now, is no… At least for Rangers games. The group will have access to the parking revenues through at least next year. After that, the land could once again could surface.
Is Tom Hicks involved in the organization in any capacity after the 12th?
No. When the land deal was terminated, so were any ties to Hicks. He will likely retain his seats at the Ballpark, but will have no have no standing with the organization.
The sale price was clearly more than the group was looking to spend. Does that mean that the group will be altering plans?
While it’s clear the group paid more than it had hoped to, their operating budget was not impacted. Player payroll is expected to increase over a two to three year period to around $90 million, up from the $55.25 million Opening Day payroll this season.
It seemed that group was stalling when the auction started. What was the deal?
The auction was supposed to start at 9am but it really wasn’t until approx. 4pm that the Greenberg/Ryan group knew what was on the table. Before then, it was all a huge debate, based on the structure of the Cuban/Crane initial bid, whether it was even qualified. It was from there that matters started to slowly pick up in the auction process.
What was the tipping point in the auction?
If there was key point where the auction tipped in favor of Greenberg/Ryan it was when they moved up with the $385 million bid shortly after the Cuban group put the $365 million bid with $12 million in escrow as the high point. When it was clear that the Greenberg/Ryan group was willing to go over the minimum bid of $2 million overbid, the group conceded.
Who was the winner in this whole process?
Greenberg/Ryan wound up with the team, but it’s clear the creditors were the real winners. Sal Galatito, a second-lien lender nixed a $361 million deal that was on the table on Tues. night that would have avoided the auction process.
Did Greenberg/Ryan approach the lenders on the nixed deal, or the other way around?
The lenders approached Greenberg/Ryan, which means they could have had concerns about how the auction process might go with Crane and Cuban.
Wasn’t there what is called an Intercreditor Agreement in play?
This is a confusing part. There was an agreement in place that would see the first-lien lenders having approval process above the second-lien lenders, of which Galatito was part of. The Plan also had the second-lien lenders as being unimpaired through the process, so how Galatito was able to block the deal before the auction remains a mystery.
Was it a mistake to place the club into involuntary bankruptcy?
Ultimately, the group that was preferred by Major League Baseball wound up with the club, but if the sides had stuck to the figures, and acted in good faith, the $300 million creditors had said they would accept no less than would have avoided $85 million extra that came out of the auction process, and millions more in legal fees, the latter of which we may never know how much it really was (there was a $10-$13 million “break-up” fee if Greenberg/Ryan had lost, so that gives an idea).
What’s in the future for the Rangers?
There are plans for a new $5-$12M video board for next season, but that may be in jeopardy, not due to lack of funds, but because to get it installed in time for next season means getting the order in place by the end of the month. That is still being worked on. There will likely be staff turnover, and the group is expected to have an operating plan that is fairly aggressive to improve the fan experience at the ballpark. It would make sense that Ron Washington’s contract will be one of the first items to address, with Jon Daniels shortly thereafter. The FOX Sports Southwest television deal doesn’t expire for a few years, but it’s clearly something that was front and center when Mark Cuban jumped into the mix. While I haven’t heard as much, it is possible that a new deal could be reached ahead of the current contract’s expiration in four years.
I need to offer up sincere thanks to all of those that followed me on Twitter and here on The Biz of Baseball during the entire process. I also wish to tip my hat to the reporters that covered the story including Daniel Kaplan, Evan Grant, Barry Shlachter, Richard Durrett, Anthony Andro, TR Sullivan, and CBS 11 News. I also need to thank those in the media that had an interest in what I had to say including the Ben and Skin Show, plus Galloway & Co. on ESPN Radio in Dallas; Jim Duquette, Jeff Nelson, Casey Stern, Jim Bowden, Jeff Erickson, Mike Ferrin, Seth Everett and all the great producers at MLB Network Radio and Fantasy Foxus on Sirus/XM Radio; WBAP Radio in Dallas, SportsRadio 1310 "The Ticket" in Dallas, Ted Price with Dallas Sports Network.tv, Jayson Stark, Baseball Time in Arlington (BBTIA), Jamey Newberg, the Dallas Morning News, ESPNDallas.com, the Ft. Worth Star-Telegram, the Dallas Observer, Joe Siegler, and a special hat tip to Adam Morris and all the fans at Lone Star Ball. For the rest that read The Biz of Baseball that went, "Enough, already!" by Friday Aug. 13th, the Greenberg/Ryan group should officially take over the club, and but one more club sale will be in the books. The next focus? The A's/Giants battle for San Jose, and the outcome of the McCourts divorce impacting the Dodgers.... Oh, that and a myriad of baseball business stories -- Maury Brown
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, as well as a contributor to FanGraphs and Forbes SportsMoney. 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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