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The Rangers sale hits a snag. Again.

Mar 9, 2010, 8:40 AM EDT

I reported way back in December that Chuck Greenberg and Nolan Ryan’s purchase of the Rangers was no done deal, that there were serious concerns that their offer was cash-light and debt-heavy, and too many people were owed too much by Tom Hicks to simply let the deal go through on the power of wishes, hopes and Nolan Ryan’s drawl.  At the time everyone — including Chuck Greenberg himself, who called me at home — told me I was wrong, and that things were smooth sailing.

Then a little problem with the creditors popped up, and once again I wrote about it.  Once again, people told me I was full of it, that the deal was all cream cheese, and why was I being such a negative nellie about it anyway?

As recently as a few days ago we were still getting those “this is a done deal” reports, the sort of which sound more like a press release than news.  But you’ll forgive me if I, once again, refuse to drink the Kool-Aid:

The sale of the Texas
Rangers stalled last week, sources said, after MLB informed the team’s
creditors that there would be delays in responding to the lenders’ concerns
about the deal.

The developments serve as
a challenge to would-be buyer Chuck Greenberg’s stated goal of having the
transaction closed by Opening Day, if it can close at all, the sources said . . .

. . . MLB, acting as
intermediary between the creditors and HSG, was scheduled to respond by Feb. 26
to their demand for more cash. On March 1, MLB informed the lenders that there
were delays but did not offer details for why the delays were happening, the
sources said.

Of the delays, one
financial source said, “I don’t even think a deal gets done at $300 million
from the banks’ perspective. It feels like they are spinning their wheels.”
Another financial source was not as pessimistic but conceded that the clock was
approaching midnight for getting a deal done by Opening Day.

The original basis of concerns I reported in December was that Greenberg’s group — which consists of a lot of investors banded together — didn’t have the cash.  In this, it’s like any other number of team purchases in recent years. Only in the post-2008 world, people aren’t as happy taking IOUs as they used to be.  While there was always some merit to those who gave blithe “everything is going to be fine” assurances before, right now people want their money, not promises. In light of this it doesn’t surprise me at all that the deal is hanging up like it is.

Will Greenberg and Ryan get the Rangers? I still think, yeah, it will probably happen.  Too many people want it to happen in order to stop it, and at some point, if the creditors become enough of a problem, baseball or someone may actually step in and help the buyers out in some way to get it done.  But please, everyone involved in this deal needs to stop pretending that we’re stupid for not buying their talking points.  This deal has been in some choppy water for a long time, and no amount of assuming its inevitability changes that.

  1. Jonny5 - Mar 9, 2010 at 9:28 AM

    Nolan Ryan is going to punch someone in the face….

  2. Robin Ventura - Mar 9, 2010 at 9:34 AM

    RUN AWAY!!!!!!!!!!!!

  3. BC - Mar 9, 2010 at 9:56 AM

    Instead of selling the team, could they just merge with the Mets? We might have a fighting chance then.

  4. Ryan - Mar 9, 2010 at 10:13 AM

    You could call them the New York Rangers!! Oh wait…

  5. Big Ed 1935 - Mar 9, 2010 at 10:32 AM

    Watch out for those SNOW MONKEYS. They will jump on your back.

  6. Big Ed 1935 - Mar 9, 2010 at 10:35 AM

    Watch out for those Snow Monkeys!

  7. BC - Mar 9, 2010 at 10:43 AM

    That’s perfect!!!!

  8. APBA Guy - Mar 9, 2010 at 10:57 AM

    Hmm debt heavy, cash light transactions. Let’s go back to yesteryear and the debt heavy transactions of the 1980’s, like KKR buying RJR/Nabisco.
    Ok let’s not.
    Debt heavy purchases actually started long before that, right after the Civil war. And business cycles inevitably point to the risky nature of these transactions.
    The latest baseball related debt loaded fiasco was the Cubs/Tribune deal and Sam Zell’s all debt, all the time transaction. Not a fiasco for the fans necessarily, but the bankers holding the debt end up with 60 cents on the dollar in a bad economy, because these debt deals are always justified with some package of rosy assumptions (the Rangers will make the playoffs 10 straight years and get post-season revenues to pay the debt service. Attendance will go up steadily, etc., also to pay debt service.)
    Tom Hicks, how’s that debt deal working out in Liverpool? Wigan 1 v. Liverpool 0. That’s how. Wigan for goodness sakes. That’s like the Royals taking the season series against the Rangers. When you have too much debt, you can’t do that last trade deadline deal, you cut back on scouting, and you outsource your front office stats guys.
    And you start that downhill slide.

  9. RoyceTheBaseballHack - Mar 9, 2010 at 11:45 AM

    What a stinkin’ mess. If anyone within sniffing distance of The Rangers office tries to sell a story that none of this has been a problem in the off-season, or as they’re trying to get their scene together in Spring Training, I’m calling Bull$hit.
    I drive right past The Ballpark twice a day – on my way into the office, and on my way home. At least once a week, I see an armored car parked in front, likely doing its normal business with the regular retail outlets that operate in the stadium year-round. I always look for an MLB logo on the side of the damned thing, though, and maybe a site a Bud Selig, carrying a shovel.

  10. Maury Brown - Mar 9, 2010 at 12:02 PM

    Craig… You saw the part about Greenberg having a load set aside with a reserve component in place to address.
    Nothing is certain in this world, but I’ll say this…
    The deal gets done.

  11. Craig Calcaterra - Mar 9, 2010 at 12:22 PM

    Never said it wouldn’t. I’m just tired of Greenberg and MLB’s unwavering “everything is going just fine” line. It’s obviously been a really tough go of it these past few months, and no amount of pollyanna talking points by those guys changes that. And if Greenberg was able to simply get this done he would have already. I think he has a large, unwieldy group of investors he has to wrangle, and while he’s doing a more or less OK job of doing that thus far, this has been a struggle for him.

  12. Maury Brown - Mar 9, 2010 at 12:41 PM

    So, it’s a typical club sale.

  13. The Conductor - Mar 9, 2010 at 12:46 PM

    Craig – – I have no idea who you are, and I don’t live in Dallas. But, I do know Nolan Ryan, and he’d never, ever associate his name or his money with something that would tarnish the former or deplete the latter. Period. From the start, this deal has been extraordinarily complex. Deals of this magnitude take time and patience – and obstacles are expected throughout.

  14. Craig Calcaterra - Mar 9, 2010 at 12:51 PM

    Sure it’s typical. I’d just like some candor from the players involved is all.

  15. Maury Brown - Mar 9, 2010 at 12:55 PM

    I would contend that the sale of the Cubs was more difficult. Nats sale was tough, based on the stadium issue…. The biggest thing is this: the focus should be on HSG, not Greenberg. Hicks is the one getting bread before the creditors… he approved the sales agreement. Think Greenberg/Ryan is getting shafted.

  16. Ryan - Mar 9, 2010 at 1:03 PM

    Something I learned from marketing – the sexier the advertisement, the more mundane the product. Business deals like this seem to follow a similar path, in that when we hear a deal is going great over and over, the reality is likely that it isn’t going great. You can say that these deals always run into snags, which they do, but at some point you have to stop saying you’ve ‘hit a snag’ and just admit its not really a snag so much as an impassable grown of underbrush that you’ve hit and constantly denying that fact quickly erodes any belief that we have [had] in their words.

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