Major League Baseball: Mark Cuban Joins the Texas Rangers Hunt
The Texas Rangers bankruptcy and sale is still as mangled up and twisted mess as it was in the beginning of the year. The stakes are high and all eyes are now on Mark Cuban who recently confessed his interest in acquiring the team after rumours first surfaced almost a week ago.
“The economics have changed, which has gotten me interested,” Cuban was reported to have said adding that his lawyers were still looking at the hiccups but at least Cuban himself was interested.
Already the owner of the Dallas Mavericks, Cuban wants to be the owner or a major investor in the Texas Rangers. The change occurred only recently as Cuban himself said that if he had been asked about interest in the Texas Rangers just a few weeks ago, he would have replied in the negative.
The Rangers have entered into a sale agreement with a group led by its president, Nolan Ryan, The Rangers Baseball Express. That sale however has not been able to go through because the current owner, HSG Sports Group, owes over 500 million dollars to creditors and the creditors are not happy with the sale.
The rangers placed themselves in voluntary bankruptcy to settle the dispute but that failed too and instead of a speedy resolution, the courts decided that the team must be placed on auction.
Cuban has until August the 4th to make a bid for the Texas Rangers that trumps the $575 million the Rangers Baseball Express has made, unless the creditors can once again clog up the process.
The creditors are now arguing the deadline is too close for a bidder to be prepared or to arrange finances and are seeking an extension. Neither are they satisfied with the rules of the auction, claiming that it favours the Greenberg-Nolan led group. The court is to hold a hearing on Tuesday regarding the auction rules and date.
There is a lot of money at stake. If the sale goes through as planned, the creditors still stand to lose over a $100 million and that is why they will spare no effort to extract more dollars from the sale.
As for the fans, they only want to see the Rangers winning and under Cuban’s ownership the Dallas Mavericks have become a winning team. While they have been making the playoffs every year since Cuban took over, the Texas Rangers have played one playoff game in 3 decades.
Maybe their fortunes could begin to change when ownership changes. Though, the Rangers should be understood to exist separately from owner, HSG. It is the HSG that is financially struggling and not the Texas Rangers. The Rangers are the twelfth most valuable team in Major League Baseball.
Cuban has good reason to want in on the sale of the team. Whether or not he can get a piece of the pie is yet not clear. He made it known that he will not object to forming a group even with Nolan or Greenberg. His enthusiasm, though, could have diminished when JP Morgan Chase filed a law suit against the HSG.
In the last of many entanglements plaguing the long overdue sale, JP Morgan Chase argued that the HSG transferred city owned stadium’s lease to the team without acquiring permission from the bank as per the terms of its loan agreement. When the court hears JP Morgan’s case and if, merciful heavens forbid, the courts rule in their favour; that could spell the end of the sale saga.
JP Morgan argues that when the money was loaned to HSG it was agreed that part of the liability could be shared. The HSG was required to repay the full amount of the JP Morgan loan while the Texas Rangers Baseball Partners, to which the lease was transferred, was liable only for $75 million.
Just by transferring the lease on the eve of filing for bankruptcy, HSG could leave the creditor almost $400 million short-changed. So now JP Morgan is asking the courts to make the transfer null and void, arguing it violated the mortgage on the property. It will then mean that sale of the team cannot not include the all important stadium.
The Greenberg-Nolan deal works fantastically well for Hicks of HSG but the creditors will not be happy. That puts Mark Cuban in favourable light among creditors but at this time we simply cannot say if that will be enough to propel the sale through.
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