The Newest Hurdle For Greenberg
Joey MatschulatAccording to Daniel Kaplan of the SportsBusiness Journal, Chuck Greenberg and Nolan Ryan will attempt to overcome a significant obstacle tomorrow when they convene at Major League Baseball headquarters in New York tomorrow with the creditors of Hicks Sports Group, some of whom are reportedly "livid" over the terms of the deal and could, according to the report, derail the entire sale:
“It’s a trainwreck,” said one source. “We will be better off in bankruptcy court.”
JPMorgan Chase is the agent bank for the group, which is owed $525M. Other key lenders are Monarch Alternative Capital, Galatioto Sports Partners and Metropolitan Life. The key issues, the sources said, are that while the sale has an announced price of $570M, there is only $390M of cash changing hands, with the difference assumed liabilities. And of that the banks would only get $250M, sources said. Before they get paid, according to the deal, Hicks would be paid for the real estate around the ballpark, MLB must be paid for loans it forwarded the team, and Rangers investment bankers, Merrill Lynch and Raine get paid too.
So after reading between the lines a little bit, one gets the sense that the perception amongst HSG creditors is that Hicks, in spite of his financial irresponsibility and mistakes (and, to a lesser extent, his poor fortune), is getting a good deal, but the entities to which he owes money are not. One suspects that the league will be utilizing whatever influence it might have upon said entities to push this sale through, but if these "key lenders" have some reason to believe that they can secure a much friendlier deal through Jim Crane (whose presence on the periphery suggests that he knows he's not dead yet), this could be an interesting showdown.
Of course, it would be a P.R. disaster of monumental proportions if the Greenberg/Ryan deal indeed collapsed at this stage ... if that were to happen, you're talking about dragging out the process through at least June/July as Hicks attempts to hammer out a new deal with Crane, which likely precludes any spending at the trade deadline, and perhaps even more importantly, you're talking about deflating a fan base that has seriously rallied around the impending regime change.
But given the bizarre history of this franchise, maybe nothing should really surprise us at this point.
Reader Comments (4)
... and with that, the Texas Rangers fan base just received a devastating uppercut to the jaw ... only Hicks could manage this ...
"Every time I try to get out ... they pull me back in" - Michael Corleone (Godfather III)(Ranger Fans 2010)
I wonder if part of that secured debt is on the Liverpool club. I also wonder if the "assumed liabilities" are considered in front or behind of the bank group. Interesting.
FWIW, we now have a local report suggesting that neither Greenberg nor Ryan will be present at these meetings in New York today, with the implication being that they're not overly concerned about this deal being nixed; additionally, the ever-popular unidentifiable "sources" are saying that the $570M/$390M figures quoted in the above article are inaccurate, but without any further elaboration that's extremely unhelpful.
Did notice one person quipping on a message board today that he believed Crane, if successful in a renewed bid to purchase the team, would be a worse owner than Hicks. Not only do I find that exceptionally hard to believe, I also find such an assertion completely baseless. We don't really know crap about Jim Crane other than that he has a lot of money and, presumably, isn't as charismatic as Greenberg ... and even there we can't really be too sure of ourselves, because we don't know the guy. It's that simple.
That said, it would still be a P.R. disaster if the process were to return to step one, and that disaster would ensue in part because people are already very comfortable with the idea of Greenberg/Ryan at the helm and fear the largely unknown Crane. It's understandable, because people generally loathe the concept of change and fear the unknown, but throwing Crane under the bus at this point strikes me as ridiculous.
What is this yellow liquid on my corn flakes?