Friday, November 4, 2011
Baseball team sales not all about money
By Kristi Dosh
It’s time to induct a new class of owners into Major League Baseball. The Houston Astros are in the midst of being sold, and the Los Angeles Dodgers have just gone up for sale. Anyone wanting to own one of these franchises will need to have more than just money, however.
The sale of a baseball club is somewhat like the sale of a house. Multiple purchase offers often are made, but the highest offer doesn’t always win. Often in baseball we’ve seen a lower offer with a higher cash component win out. A premium is also put on individual and family bids, with local ownership another key factor.
Three-quarters of baseball’s owners must approve any new owner or ownership group, a sometimes tough vote to earn. After Kansas City Royals’ owner Ewing Kaufmann’s death in 1993, the trust that owned the Royals attempted to sell the team to lawyer Miles Prentice. But other team owners delayed a vote on the sale saying they were concerned he had too many partners and the group wasn’t structured in a sound financial way. The team was ultimately sold to the chairman of the Royals’ Board of Directors, David Glass, even though. Prentice’s bid was reportedly worth $19 million more.
Baseball also seems to prefer individual owners like Glass over group ownership. When the Washington Nationals were sold in 2006, Commissioner Bud Selig said winning bidder Theodore Lerner benefited from having a family bid.
Baseball also likes local owners. Following the 2006 sale of the Cincinnati Reds to a group led by local produce magnate Robert Castellini, Selig reiterated a preference for local ownership. Castellini won out over two other bidders who made similar offers.
The Cubs sale in 2009 similarly went to a family, the patriarch are which grew up around Wrigley Field and met his wife in the bleachers. At one point during the process Mark Cuban had a bid in reported to be worth $1.3 billion, but in the end Tom Ricketts was said to have the bid with the highest cash component and purchased the team for $845 million.
Major League Baseball’s only pending sale is in Houston. According to the Houston Chronicle, owners will vote to approve Jim Crane as the new owner at their Nov. 15and 16 meetings.
The interesting part about the Dodgers sale is that so many who have expressed interest are individuals and are local. Peter O’Malley, whose family brought the Dodgers to Los Angeles from Brooklyn and owned the team from 1958 to 1998, has expressed interest. Another front-runner is a group led by former Dodgers Steve Garvey and Orel Hershiser. Former Dodgers GM Fred Claire has also expressed interest.
Yet there’s one individual who has repeatedly expressed his desire to own a baseball team but still remains outside looking in: Cuban.
The NBA’s Dallas Mavericks owner has unsuccessfully put it bids for the Rangers and Cubs and has expressed interest in the Dodgers. Even if he comes in strong with his bid, will he fall short again because he isn’t local and is a tad more outspoken and opinionated than some in baseball would like?