In case anyone needed further evidence of the strange and sordid business that goes into joining the MLB ownership fraternity, this report intimates that Dallas Mavericks owner Mark Cuban, along with two partners, is interested in entering the bidding for the bankrupt Texas Rangers franchise.
The sordid part of the affair is that, in an effort to kill off any competing bids, Hall of Famer and current Texas Rangers team president Nolan Ryan is suing the team he works for to ward off any competition. The weirdest thing in all of this is that Nolan Ryan is actually the front man for the ownership group trying to buy the Rangers out of bankruptcy which, essentially, means that Ryan is suing himself.
Tom Hicks, the Rangers former owner, has a substantial group of unsecured creditors who have a vested interest in seeing the team sold to the highest bidder. Among this group of unsecured creditors is former Rangers SS Alex Rodriguez who has a $24.8M claim against the Rangers (the total unsecured claim against the Rangers is $46,331,199.40 held by 30 creditors).
If Mark Cuban – or any other potential owner, for that matter – can buy the Rangers out of bankruptcy for more than what Ryan’s group is willing to pay, the bankruptcy court owes it to these creditors to take the best offer possible. However, as we saw with the sale of the Chicago Cubs last year, cronyism and inside dealings led the Cubs to the Ricketts family for $900M, instead of the reported $1.2B-$1.3B that Mark Cuban was willing to spend.
I don’t expect Mark Cuban or any other rival ownership group to squeeze Nolan Ryan out of eventually owning the Rangers. But it should definitely give one pause about dealing with Bud Selig when he’s willing to seize the club by using his broad powers in order to freeze out the results of a bankruptcy court ruling.
The sordid part of the affair is that, in an effort to kill off any competing bids, Hall of Famer and current Texas Rangers team president Nolan Ryan is suing the team he works for to ward off any competition. The weirdest thing in all of this is that Nolan Ryan is actually the front man for the ownership group trying to buy the Rangers out of bankruptcy which, essentially, means that Ryan is suing himself.
Tom Hicks, the Rangers former owner, has a substantial group of unsecured creditors who have a vested interest in seeing the team sold to the highest bidder. Among this group of unsecured creditors is former Rangers SS Alex Rodriguez who has a $24.8M claim against the Rangers (the total unsecured claim against the Rangers is $46,331,199.40 held by 30 creditors).
If Mark Cuban – or any other potential owner, for that matter – can buy the Rangers out of bankruptcy for more than what Ryan’s group is willing to pay, the bankruptcy court owes it to these creditors to take the best offer possible. However, as we saw with the sale of the Chicago Cubs last year, cronyism and inside dealings led the Cubs to the Ricketts family for $900M, instead of the reported $1.2B-$1.3B that Mark Cuban was willing to spend.
I don’t expect Mark Cuban or any other rival ownership group to squeeze Nolan Ryan out of eventually owning the Rangers. But it should definitely give one pause about dealing with Bud Selig when he’s willing to seize the club by using his broad powers in order to freeze out the results of a bankruptcy court ruling.
5 comments:
I'm obviously confused. Selig is helping freeze out Cuban? Why do the other owners not want more money injected into MLB (I assume if the bid prices is higher that would only help their own team value). Is it simple country club mentality?
@Mighty: You hit the nail on the head; it's the insider's/country club mentality and Bud Selig prefers working with his friends and friends of friends over outsiders, even if they're loaded and have a track record of wanting to spend to help their team win (Cuban's Mavs).
It's a completely backwards approach to doing business but, hey, no one ever accused Bud Selig of being overcome with logic and common sense.
I assume (and please correct me) if Selig is doing this he has to have a lot/most of the other owners behind him. Hooray collusion...
@Mighty: You assume correctly. A team's sale has to be approved by 66% of the league's owners so Selig has the support of at least two-thirds of the other teams in this low-level type of collusion.
Of course, one could argue that MLB owners are famously awful at protecting their best interests so one cannot truly know if Selig has their votes or if they've simply delegated all management decisions to him by proxy and they ignore the proceedings altogether.
In a rational/logical environment, no owner would prefer that a team be sold for the lesser of two offers which is why I have to assume that Selig is controlling the process here and he's rather approve someone that will owe him a favor down the line.
Not that I know the first thing about baseball owners but the flaw is that in a rational world you wouldn't have Selig controlling the process as owner's would hire people to pay attention to something this important (maybe its not important for them I don't know)
I think there is a scenario for rational behavior and owners being behind Selig. Let us assume that owners discount the present and value the future, then having an owner owe other owners a favor (no different than an owner owing Selig a favor) as well as having a voting member closer to the preferences of other baseball owners has value as it allows the current owners to have more control over future baseball decisions (which over time exceeds the short term monetary gain of sales).
Of course it could just be they don't like Mark Cuban or aren't rational utility maximizers (i.e., satisificing, idiots) or any number of things. It's just odd that a world could exist where Selig is more competent than well anyone...
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