What's holding up Astros sale?
When Jim Crane agreed to purchase the Houston Astros in mid-May, baseball officials estimated that the approval process would take two months.
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The process is now at three months and counting.
Baseball announced Monday that a vote on Crane's bid is not expected at this week’s owners meetings in Cooperstown, NY, stunning ownership representatives throughout the sport and raising questions about the sale’s viability.
As recently as Monday morning, Crane was under the impression that his purchase of the club for $680 million would become official this week, according to one source.
Two separate issues account for the delay, sources say.
• Baseball’s efforts to resolve the Dodgers’ ownership situation, which is diverting manpower from the vetting of Crane and his partners.
• Commissioner Bud Selig’s discomfort with one or more aspects of the Astros sale, which makes him unwilling to submit Crane for approval to the owners at this stage.
“The standard due diligence that must be completed before any transaction of this magnitude can close remains ongoing,” baseball said in a statement.
“Because that procedure is continuing, it is not expected that the proposed sale of the Astros will go to the approval process at this week’s owners’ meetings. Major League Baseball will continue to work as expeditiously as possible to complete the process.”
The next owners meetings are scheduled for November in Milwaukee. Baseball could conduct a phone vote on the Astros sale before then, and both Crane and the team’s current owner, Drayton McLane, might lobby for such an outcome. The team is on pace to lose 111 games, and the delay could complicate its offseason planning, sources said.
Crane, who wants to lower the payroll and rebuild through scouting and player development, was a strong influence behind the Astros’ recent trades of outfielders Hunter Pence and Michael Bourn.
Left-hander Wandy Rodriguez could be the next to go, but the Astros — perhaps out of deference to McLane — were waiting for the sale to be approved before putting the pitcher on waivers for a possible trade. McLane has always resisted parting with veterans, preferring to compete with big-name players.
One major league executive said Monday he was “shocked” a vote on the Astros would not take place this week. Another, however, said he sensed a delay might occur; his team had not received any financial information about the sale from the commissioner’s office, a sign that Selig was not yet ready to move.
Selig evidently is not satisfied with the deal’s financial structure; baseball is still investigating that aspect of the deal, sources said.
Crane, according to Forbes, intends to finance about $300 million — nearly half the purchase price — with debt. Such a figure, if accurate, almost certainly would give Selig pause at a time when two prominent franchises, the Los Angeles Dodgers and New York Mets, are enduring financial difficulties.
Complaints filed in 1997 with the Equal Employment Opportunity Commission about the hiring practices of a company run by Crane, Eagle USA Airfreight, could be a source of additional scrutiny, sources said.
The EEOC issued a highly critical 104-page report on Eagle’s treatment of female and minority employees. Crane admitted to no wrongdoing, but his renamed company, Eagle Global Logistics, reached an $8.5 million settlement with the EEOC in 2001. Four years later, a district judge ordered nearly $6 million of that sum to be returned.
About $900,000 went to back pay and damages for African-Americans, Hispanics and females employed by Eagle between Dec. 1, 1995, and Dec. 30, 2000, and job applicants who sought employment at that time.
Crane is not unfamiliar to baseball — he previously tried to buy the Cubs and Rangers, and backed out of a deal for the Astros in 2008. But while his history is well-documented, Selig prefers to take additional time to answer every last question rather than rush into a vote, sources said.
The Astros have been mentioned prominently in baseball’s potential realignment, but that is not currently believed to be a hang-up in the approval of Crane.