On the heels of great weekend for the Rangers, baseball-wise, comes news that Major League Baseball might this week seize control of the team. Hicks Sports Group’s creditors are in a tizzy because they think Chuck Greenberg and Nolan Ryan’s group offered the lowest bid, which Hicks chose anyway because it gave him favorable terms on the land he still owns next to the stadium — which land the creditors don’t have lien on. You following all this? But it looks like MLB will go against the creditors’ wishes and force a sale to Greenberg. Says the SportsBusiness Journal: “It’s always possible that were MLB to seize the team, it could sell the club to [a higher bidder]. But one source close to the Pittsburgh-based Greenberg said the sports lawyer is so confident MLB will push through his deal that he is in the process of buying a home in the Dallas area.”
This is a relief to us at D Magazine, because in our May issue, we wrote an open letter to Greenberg, welcoming him to town: “Dear Mr. Greenberg: As a newcomer to the area, here’s what you need to know. Don’t bring up snow monkeys around Nolan Ryan—sensitive subject. Don’t do shots with Josh Hamilton, no matter how much whipped cream he sprays on his chest. If you catch Ron Washington injecting black tar heroin between his toes, go easy on him. Probably just a “one-time transgression.” Don’t tell that turncoat Evan Grant anything. Not a word, you hear? Don’t try to party with Jerry Jones. You might have some experience pounding cans of Iron City back in Pittsburgh, but Jerry is on a completely different level, Chuck—like centaurs, mead, and secret lairs. You see that Cowboys bus headed down Ballpark Way, keep your distance. Promise us! And most important: don’t ask for ketchup at the Stoneleigh P. It says so right on the menu.”
3 comments
There are a number of problems with the Greenberg/Ryan bid. The Wall Street Journal reported on the primary issues in March. HSG borrowed $540mm from a consortium of lenders. And with the sale price being appx. $530mm, one would think the primary lenders would be almost made whole. But that’s not the case. Under the Greenberg/Ryan bid, the lenders only receive $231mm, or 43% of the sales price. That’s over a 50% loss. And Hicks will receive $90mm personally from the proceeds in exchange for conveying Glorypark to Greenberg (the lenders don’t have a lien on Glorypark). Needless to say, the lenders don’t want to see Hicks pocketing $90mm on Glorypark while they are taking a loss on the Rangers loan in excess of $200-300mm.
Bottom line – it seems to me that the lenders want Hicks to kick in more money from Glorypark into the deal, and until Hicks does so, or Greenberg ponies up more money, this sale isn’t going to happen.
Stoneleigh P = Worst Bar in Dallas.
@Arec – That $540 million loan covered both the Stars and Rangers since HSG runs/owns both of them. The lenders will get money from both the sale of the Stars and Rangers. Also, the amount going to the lenders as of now is $270 million from the Rangers.
What MLB is trying to do is to reject HSG’s franchise agreement with MLB and then go through with the sale. They’d then give the $270 million to the lenders and tell them to go after HSG for the rest, since that is who the debtor in all this is. Of course there’d be lawsuits about that, but eventually MLB would win.