Major League Baseball

Texas Rangers bankruptcy and auction Q&A

Published Aug. 4, 2010 4:17 a.m. ET

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After two months of contentious bankruptcy court hearings, the Texas Rangers are expected to be sold at an auction Wednesday at the federal courthouse in Fort Worth. It's believed to be only the second time a Major League Baseball team has been sold in this manner.

Here are some questions and answers about the auction and the final hearing on the team's bankruptcy plan:

Q: How did the team end up on the auction block?

A: The Rangers filed for bankruptcy in May with a plan to repay creditors and sell the team to a group led by Hall of Fame pitcher Nolan Ryan and Pittsburgh sports attorney Chuck Greenberg. The team hoped the filing would complete the long-delayed sale to that group, endorsed by Major League Baseball. But angry creditors, who had blocked the sale for months, argued in court that the Greenberg-Ryan bid wasn't the highest during the original bidding process last year. After much back and forth, U.S. Bankruptcy Judge D. Michael Lynn agreed to an auction.

Q: Who are the bidders?

A: Besides the Greenberg-Ryan group, Dallas Mavericks owner Mark Cuban and Houston businessman Jim Crane joined forces, and their group was the only one to submit a bid by Tuesday night's deadline. The court-appointed restructuring officer, William K. Snyder, told The Associated Press that he and team attorneys were reviewing it to make sure it met certain qualifications. Dallas investor Jeff Beck, also approved by MLB to submit a bid, opted not to. Fox, a unit of News Corp. that has Rangers' TV rights through Fox Sports Southwest, ended speculation Tuesday and said it would not bid.

Q: What's the opening bid?

A: All bids must start out at least $15 million more than $306.7 million, which is the cash portion of the Greenberg-Ryan group's total offer of about $520 million for the team. That offer became the starting bid when the team agreed to an auction. But the Cuban-Crane bid was not expected to be identical to the Greenberg-Ryan bid, which includes some of team owner Tom Hicks' other companies' debts that were transferred to the Rangers before the bankruptcy filing. Attorneys from the team and the restructuring officer must determine the Cuban-Crane bid's value, based on what it includes.

Q: What will happen at the auction?

A: The judge overseeing the auction, U.S. Bankruptcy Judge Russell Nelms, will announce which bid is the highest, and then the bidding war begins. Subsequent bids must be at least $2 million higher. Bids must be submitted every 20 minutes in the first three rounds and every 30 minutes after that, and during breaks bidders will go in separate rooms to talk to their attorneys and call investors.

Q: Will the highest bidder win?

A: Not necessarily. Final approval rests with Major League Baseball, which can select the second-highest bidder - although an official said Tuesday that the league plans to work with the winning bidder. The MLB team owners' quarterly meeting is about a week after the auction, and they could vote then if the winner is the Greenberg-Ryan group - whose funding guarantee ends Aug. 12. But if the Cuban-Crane group - which is not as familiar to the league - is the winning bidder, the approval process could take six months or longer.

Q: When will the Rangers get out of bankruptcy court?

A: A final hearing on the team's bankruptcy plan, which has been revised since the auction was set, is slated for immediately after the sale. Only the restructuring officer, William K. Snyder, will have an official vote on the plan, based on whether he believes the team's assets have been maximized. If Snyder says the plan should be rejected, the judge could approve it anyway if he determines that it meets certain bankruptcy codes.

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AP Sports Writer Ron Blum in New York contributed to this report.

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