MLB has history of ownership woes
John Moores’ sale of the San Diego Padres to a group headed by former agent Jeff Moorad is on hold. The future of the New York Mets hangs in a pending lawsuit against the team over owner Fred Wilpon’s investments with Bernie Madoff.
The Los Angeles Dodgers, meanwhile, are within weeks of having their soap-opera ownership situation settled.
Major League Baseball’s executive council of owners met this week to narrow the list of candidates to buy the franchise from Frank McCourt, who is expected to decide among what is reported to be four remaining offers by April 1. The expectation is that the deal will be finalized by April 30, when McCourt has to pay former wife Jamie McCourt $131 million as part of the divorce settlement.
McCourt will receive a record-setting sale price for his franchise.
The question is: Who will be paying the record amount?
There are interesting scenarios awaiting McCourt.
A group headed by Mark Walter, CEO of Guggenheimer Partners, includes NBA great Magic Johnson and also Stan Kasten, former president of the Atlanta Braves and Washington Nationals as well as the NBA Atlanta Hawks and TBS Sports. Kasten is an ally of Commissioner Bud Selig, which McCourt may not appreciate given his ongoing battle with Selig over the Dodgers’ ownership. Walter’s $1.6 billion offer is the largest.
Stan Kroenke, owner of the NFL St. Louis Rams, NHL Colorado Avalanche and NBA Denver Nuggets has a $1.3 billion bid and could be interesting in terms of a future television deal. In Colorado, Kroenke created a regional sports network for televising his hockey and basketball teams. There is speculation he could move the Rams back to Los Angeles and build their stadium across the parking lot from Dodger Stadium, which could lead to the involvement of McCourt, who is attempting to keep the parking lot out of the team sale.
Hedge fund manager Steve Cohen, whose group includes agent Arn Telem, has an upfront payment of more than half his $1.3 billion offer. A report this week that he will hire former manager Tony La Russa to a management position created a stir in baseball.
Michael Heisley, owner of the NBA Memphis Grizzlies, heads another group that includes Tony Ressler, co-founder of Ares Capital and minority owner in the Milwaukee Brewers.
The ownership uncertainty has become a focal point for Major League Baseball.
It, however, is not something new.
There’s been troubled ownership in baseball since at least the days of Babe Ruth, who in 1919 was sold by Boston Red Sox owner Harry Frazee to the New York Yankees for $125,000 because Frazee needed money to fund his Broadway musical “No, No, Nannette.”
C. Arnholdt Smith, the original owner of the San Diego Padres, sold his team in 1974. The previous year he was convicted for embezzlement and tax fraud in dealings with US National Bank in San Diego, stemming from the excessive level of bad loans given to Smith’s capital company.
The Seattle Pilots, born of the same 1969 expansion as the Padres, survived only one year before the bankrupt ownership group sold the team to Selig, who moved the franchise to Milwaukee.
The Seattle Mariners, created out of expansion in 1977 to appease congress over the Pilots move, were originally owned by a group that included actor Danny Kaye and was forced to sell in 1980 because of financial problems.
After the 1952 season, St. Louis Cardinals owner Fred Saigh was forced to sell his team after a tax evasion conviction. Bill Veeck’s sale of the Cleveland Indians in 1949 was forced by the settlement of his divorce from his first wife.
Hall of Fame pitcher Nolan Ryan’s ownership group of the Texas Rangers purchased the franchise prior to last season out of bankruptcy from Tom Hicks.
In 2002, Selig suggested contracting two teams. The Montreal Expos and Oakland were the initial teams, although Minnesota owner Carl Pohlad, unable to find a buyer for his team, was granted a request that his team be considered for contraction instead of the A’s. Opposition led to the idea being sidelined, but Major League Baseball did take control of the Expos, eventually moving them to Washington, D.C.
The Philadelphia Phillies had a financially troubled time, and then-commissioner Kenesaw Mountain Landis actually added to the problems when in 1942 he not only vetoed the sale of the team to Veeck because of speculation Veeck was going to reinforce his roster with an influx of players from the Negro Leagues, but approved the February 1943 purchase by William Cox.
Cox lasted one year, and was banished by Landis because of gambling. Cox did not deny the charge, but defended himself by saying he only bet on his team to win games.
Selig can only hope that the pending moves of current baseball ownership have a more lasting impact on the sport.