Padres could serve as consolation prize
The ownership turmoil began with a divorce. The payroll shrank by tens of millions of dollars. Then wealthy, powerful people came together and booted someone from their fraternity.
No, this isn’t about the Los Angeles Dodgers and Frank McCourt. We’re talking about the other National League franchise in Southern California.
The San Diego Padres will never be as popular or as rich as their neighbors to the north. The shadow cast by Dodger Stadium stretches over home plate at Petco Park, some 125 miles away. But now the franchises are linked, in a way that has nothing to do with Steve Garvey.
McCourt has put the Dodgers up for sale and is scheduled to pick a new owner by April 1.
John Moores, meanwhile, has reopened his efforts to sell the Padres. That was the takeaway from a Thursday news release that announced the resignation of Jeff Moorad as CEO. And at the risk of perpetuating a regional inferiority complex, San Diego could serve as a very lucrative relegation round for the L.A. also-rans.
While Moorad will remain with the team as vice chairman — at least for now — he’s no longer viewed as a viable candidate to become the Padres’ majority owner. The Padres said in a statement that Moorad will continue to be responsible for overseeing the team’s relationship with FOX Sports San Diego.
Moorad, who began a phased purchase of the team three years ago, faced two significant obstacles: He is a former player agent, and some owners — notably Jerry Reinsdorf, a close ally to Major League Baseball commissioner Bud Selig — never warmed to him. Also, questions arose about his group’s assets; those involved with the MLB approval process grew concerned about Moorad’s ability to successfully operate the club after closing the purchase, one major-league source told FOXSports.com.
(MLB officials are wary of highly leveraged owners, because of a certain Boston businessman who purchased a renowned franchise in the nation’s second-largest media market.)
If Reinsdorf, Ken Kendrick (Diamondbacks) and others were predisposed against Moorad, his financing had to be airtight. And it wasn’t. So, knowing he didn’t have the necessary support from other owners, Moorad withdrew his control transfer application earlier this month. Thursday’s announcement was further evidence that Moorad is standing down.
So, what happens next?
Well, Moores, as chairman, still owns 51 percent of the team. Moorad’s group holds 49. Right now, the wise play for Moores is to wait for another 10 days. After that, Moores will be able to say he owns the only baseball franchise known to be for sale.
And as any high school economics teacher would tell you: One seller + scarce commodity = big profit.
The New York Mets should remain off the market for the time being, after owner Fred Wilpon reached a settlement with the Bernie Madoff bankruptcy trustee. And McCourt will soon break the hearts of well-financed groups with interest in the Dodgers.
Reports say the Dodgers could sell for more than $1.5 billion. Moores won’t be able to get anything close to that for the Padres. But if he lets the Dodgers set the record for the highest franchise sale price, he can engage the L.A. runners-up and offer his wares for more than Moorad was willing to pay.
It would look like a discount to the buyers — even though it’s not.
So, the demise of Moorad’s bid could be a boon for Moores, even if he’s been trying to sell the team for years. The economy is stronger now than when Moorad agreed to buy the team in early 2009. The Padres are profitable, thanks to a small payroll and revenue-sharing proceeds. The reported television rights deal with FOX will boost the franchise’s value. Moores will have an easy sales job — that is, if he still wants to sell at all.
The timing and manner of Moorad’s exit could not be more ironic. His departure calls to mind the political realities of a sports agent joining the company of men with whom he has negotiated multimillion-dollar contracts. It’s a timely concern, with prominent baseball and basketball agent Arn Tellem serving as a key member of Steve Cohen’s bid to buy the Dodgers.
Would the owners find Tellem more palatable than Moorad? Does it matter as much, since Cohen is the principal? Have conflicts of interest arisen from Tellem’s status as a current agent and prospective team executive? (Of note, the players’ union is confident no such issues exist.)
Moores has been liberated from such questions in San Diego — at least for the time being. In early April, he can drape a “For Sale” sign on the Western Metal Supply Co. building in left field and wait for the phone calls. As a wise man told me last November, “There’s no better place to own a baseball team than San Diego, California.”
The wise man was John Moores.