Saturday, January 23, 2010
Updated: January 25, 1:14 PM ET
Source: Sale of Rangers nears $570M
By Richard Durrett
A group headed by Pittsburgh attorney Chuck Greenberg, called Rangers Baseball Express, has a deal in place to purchase the Texas Rangers from owner Tom Hicks, Hicks Sports Group announced Saturday night.
A sale price was not announced, but a source said the price tag was under $570 million, which includes the team, the lease at Rangers Ballpark in Arlington and approximately 153 acres of real estate around the park. The real estate portion of the agreement was part of a separate transaction, which transfers most of the land controlled by Hicks around the ballpark and Cowboys Stadium to the Greenberg group.
Attorneys representing Greenberg's group, which includes Rangers president Nolan Ryan, and Hicks Sports Group needed more than a week after a 30-day exclusive negotiating window closed to hammer out the final details. The agreement does not go into effect until HSG's lenders, which hold the company's debt, and 75 percent of Major League Baseball owners approve it. That could take until March or even close to Opening Day.
"Nolan and I greatly appreciate Tom Hicks' willingness to work beyond the deadline to complete the deal and his support for passing the torch from the Hicks family to our group," Greenberg said in a statement. "His actions speak eloquently to his commitment to serve the best interests of Rangers fans and the community."
Greenberg, whose investment group is 80 percent local, would become the general managing partner and CEO, handling the day-to-day business operations. He would also oversee a board of directors.
Ryan would stay on as president and set the direction of the baseball operations. Hicks would remain as a minority partner in the club and hold the title of chairman emeritus. Investors Ray Davis of Dallas and Bob Simpson of Fort Worth, who have a stake in Greenberg's group, will serve as co-chairmen of the board for Rangers Baseball Express.
"The efforts of the last few years are evident in the very positive direction in which the Rangers are heading," Ryan said in a release. "We look forward to continuing that work for the 2010 season and beyond. I am excited to have the opportunity to be a part of this organization as we go forward."
The agreement comes after many long days during the last week. HSG and the Greenberg-Ryan group were given a 30-day exclusive negotiating period by MLB to finalize a deal on Dec. 15. That month ended at midnight CST on Jan. 15 without an agreement in place.
It was possible at that time that other potential investors, such as Houston businessman Jim Crane, would get back into the bidding process. But the lawyers for Greenberg and Hicks Sports Group continued to meet and kept making progress until a deal was reached Saturday.
"Together, we have worked exhaustively since last month to attain this agreement," Hicks said in the release. "It's a complex business deal that positions the franchise positively for the future."
For Greenberg, it marks a high point in his nine-month attempt to buy the club. He decided last May that he wanted to purchase the Rangers and convinced Ryan to support his bid. Ryan's son, Reid, had worked with Greenberg in the minor leagues and introduced his friend to his father. Greenberg owns minor league teams in Myrtle Beach, S.C., and State College, Penn., and runs Greenberg Sports Group, a marketing and consulting firm that deals with sports teams.
Greenberg is familiar with the process of closing deals. He helped Mario Lemieux raise the capital to purchase the NHL's Pittsburgh Penguins in 1999. Greenberg also worked to secure a new arena deal in 2007 for the Consol Energy Center, replacing 48-year-old Mellon Arena. He also negotiated the sale of the NBA's Atlanta Hawks and NHL's Thrashers to Texan David McDavid, but the deal fell through.
Greenberg said all along that he was committed to purchasing the Rangers no matter how long the process took. He came to Arlington for about 16 games over the summer, checking out the ballpark, securing local investors and talking to club officials as part of due diligence.
Greenberg has said that he would move to the Dallas area if he bought the team.
"It's not a part-time job that can be done from a distance," Greenberg said in December.
Greenberg and Ryan submitted a bid to buy the club just before Thanksgiving, the first of several deadlines during the various phases of the negotiations. At that time, former sports agent Dennis Gilbert and Crane also submitted bids on behalf of their investment groups. Even Hicks himself tried to secure enough investors to start his own group and keep control of the team.
Crane re-submitted a higher bid just before the Dec. 15 deadline to choose an exclusive negotiating partner. Greenberg worked all day to tweak his group's proposal and present it to Hicks. The new bid was enough for HSG to choose the Greenberg-Ryan group as an exclusive partner.
It took five more weeks to jump over all the remaining hurdles to getting a deal done.
Hicks decided to sell the team last spring in an attempt to pay down or pay off HSG's debt. HSG defaulted on $525 million in loans last year tied up in the Rangers and the NHL's Dallas Stars, which Hicks has owned since 1996. Hicks said then that it was a deliberate move to renegotiate the loans. Initially, Hicks wanted to sell a minority stake in the club, but had trouble finding an investor or group interested. So he decided to put majority stake on the market and solicited some offers.
"The HSG holding company has too much debt," Hicks said in December. "We're no different than a lot of companies around the world. We just have to de-leverage."
Hicks purchased the Rangers for $250 million in 1998 from an ownership group that included former president George W. Bush and Tom Schieffer, who served in Bush's administration and dropped out of the Texas governor's race in November, running as a Democrat.
The Rangers won the AL West title in 1998 and 1999 during Hicks' tenure, but haven't made the playoffs since then. The club has had just two seasons above .500 since 1999, including last season's 87-75 record, which was good enough for second place in the division.
Richard Durrett covers the Rangers for ESPN Dallas. You can follow him on Twitter or leave a question for his weekly mailbag.