Bloom: Baseball, Rangers are big winners

Bloom: Baseball, Rangers are big winners

Major League Baseball was a big winner this week, when a group headed by attorney Chuck Greenberg and Hall of Fame pitcher Nolan Ryan won a bidding process, held in a U.S. bankruptcy court in Fort Worth, Texas, for the purchase of the Texas Rangers.

The Greenberg-Ryan group had earned support from Commissioner Bud Selig's office previously as prospective new owners of the Rangers, and it proceeded to outbid Mark Cuban and Jim Crane, prevailing in a big-as-Texas auction that went deep into the night. Tom Hicks, whose financial picture took more than its share of hits in the last couple of years, is now out as Rangers owner.

The creditors that Hicks owes are going to be paid a much higher proportion of the sale proceeds, and now the business of running the Rangers can move forward, as Greenberg said when he pegged Opening Day as the hoped-for start of the transition. Better four months late than never.

"We budgeted to purchase the ballclub," Ryan said during a news conference in Arlington on Thursday. "Obviously, that budget was adjusted [as a result of the auction] to a level that we didn't anticipate. But we felt like it still made sense for us."

MLB's next quarterly owners meetings are taking place on Wednesday and Thursday in Minneapolis. Although Selig has yet to formally place the sale on the agenda, it is likely that the sale will go before the ownership committee and the executive council for approval on Wednesday. Upon approval, on Thursday the deal would be heard by the full ownership group, and it must garner at least 75 percent of the 30 votes. It is unclear whether Cuban-Crane could have mustered that kind of support, particularly in such short order.

Given what likely will be unanimous approval by the MLB owners, Greenberg-Ryan could close the sale financially by the end of next week.

Texas' new ownership group will be called Rangers Baseball Express, with Greenberg serving as managing general partner and Ryan remaining as club president. Fort Worth businessman Bob Simpson and Dallas billionaire Ray Davis will serve as co-lead investors. Country music legend Charley Pride also is part of the group, which includes 18 partners.

According to figures provided by the bankruptcy court, the total worth of the transaction is $593 million -- $385 million in cash and $208 million in debt, which was reduced by $3 million because of various discounts.

Had Cuban, the owner of the NBA's Dallas Mavericks, and Crane, a Houston investor, prevailed, a $10 million to $13 million breakup fee would have been tacked on to be paid to Greenberg-Ryan for their months of involvement. That went away when Cuban-Crane threw in the towel.

Given all the financial turmoil, the Rangers' performance on the field has been remarkable. Despite a $65 million player payroll, they lead the A's by 8 1/2 games and the Angels by 10 in the American League West. At 63-45, the Rangers have the fourth-best record in the Majors.

Before the non-waiver Trade Deadline, they added ace left-hander Cliff Lee from the Mariners, Bengie Molina from the Giants, Cristian Guzman from the Nationals and Jorge Cantu from the Marlins in an attempt to win their first division title since 1999 and fourth in club history. The Rangers never have advanced beyond the AL Division Series.

MLB has lent the Rangers approximately $40 million in operating capital based on advances usually apportioned out of the general fund to each team at the end of the season. With financial stability coming, the Rangers now seem to have their shot at not only a deeper postseason run but sustainability.

"We didn't [make the deal] at the expense of some other aspect of the game or our organization," Ryan said. "We anticipate putting a budget together for next year, and it would include trying to improve the ballclub and make some improvements that we feel are important for the fan experience here."

The sale of the team became a fait accompli last year when Hicks defaulted on $525 million in loans involving his sports empire to a multitude of banks. Hicks reportedly is also trying to sell his share of the NHL's Dallas Stars and Liverpool FC, a European soccer team.

Prior to the auction, Hicks had accepted an offer of $575 million from Greenberg-Ryan that included about $70 million in land surrounding the team's ballpark. The creditors complained that the franchise could have brought more money through an open process.

Without agreement from the creditors, the Rangers were forced into bankruptcy in May. Wednesday's auction essentially marks the end of that process.

When the bidding began that day, the land portion of the deal was extricated, so the final closing price offers creditors about $85 million more to divvy up than previously allocated. According to a source, the banks stand to be repaid $300 million to $320 million of the $525 million out of the cash proceeds. Other assets belonging to Hicks figure to be sold to make up the difference.

The last two sales of Major League franchises have involved complicated transactions handled by federal bankruptcy courts.

When the Cubs were purchased last year by Tom Ricketts and his family for about $900 million, the sale came out of proceedings involving the bankruptcy of the Tribune Co., owned by Sam Zell. That sale was delayed for months while details of the transaction were analyzed by the court. In that litigation the Cubs and Wrigley Field were not placed under bankruptcy, but the court had to analyze how the sale would affect the repayment of Zell's other debts as dictated by the court.

In the end, the Ricketts family wound up purchasing the Cubs. The overwhelming sentiment coming out of that process was optimism, even excitement. The same can be said a year later in Texas now that the Greenberg-Ryan group is about to take possession of the Rangers. The Rangers are winners, with forward-thinking and formidable leadership. So is Major League Baseball and its business.

Barry M. Bloom is national reporter for MLB.com and writes an MLBlog, Boomskie on Baseball. This story was not subject to the approval of Major League Baseball or its clubs.