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Creditors reject Greenberg's latest offer

Mar 16, 2010, 10:50 AM EDT

Chuck Greenberg keeps telling everyone who will listen that there’s nothing to worry about, the sale of the Rangers will close by April 1, and all will be happy and sunshine. Events on the ground, however, continue to make such a scenario less and less likely. According to Daniel Kaplan of Sports Business Daily:

Hicks Sports Group creditors late last week again turned down terms for the
sale of the Rangers, continuing to throw into question when the ballclub will
be sold, sources said.

To review, under terms of the initial deal, the creditors were to get $230 million in cash. They want $300 million and have at least claimed that they’d throw the team into bankruptcy court in order to get it.  Now, to be fair, the odds of actually collecting that amount in bankruptcy court are rather small, and that’s before you even figure in the legal fees and hassle. But that’s the posture anyway, and each time Greenberg has attempted to get the deal done, they’ve said no dice.

Last week’s back and forth had Greenberg upping the offer to $240 million or $275 million depending on who you believe (the $275 million figure was supposed to contain deferred money).  $30-$60 million ain’t hay, so it’s not like you can expect the creditors to simply say “ah, screw it, let’s just round down” any more than you can expect Greenberg to simply say “ah screw it, I’ll just write you a check to get it done.”

This doesn’t mean Greenberg doesn’t end up with the Rangers at some point. It does, however, yet again, render the rosy “every little thing gonna be alright” jazz he’s been peddling since December increasingly silly.  Deals of this size get derailed over far less than $60 million, and even if they end up going through, a difference in that amount can utterly destroy the timeline.

Upshot: there’s a very real possibility that the Rangers may spend another season, or at least a good chunk of it, in the same kind of financial limbo they were in last year. A year in which they had to beg MLB for loans.

  1. Bg - Mar 16, 2010 at 11:52 AM

    Craig, we get it, you have a friend who is an enemy of Greenberg. You write the same thing every time. Your an unsuccessful writer and for that im sorry, but dont take your problems out on the public

  2. BC - Mar 16, 2010 at 12:00 PM

    Do the Rangers qualify for TARP money? Or heck, maybe we can pull a Fannie Mae and just nationalize them.

  3. Craig Calcaterra - Mar 16, 2010 at 12:07 PM

    That’s not true. I have no friends that are enemies of Greenberg.
    Back in December I reported that there were concerns that there wasn’t enough cash in this deal to make everyone happy. As soon as I wrote that, I received calls from multiple people connected to baseball and Greenberg telling me that I was dead wrong and that I shouldn’t have written it.
    Since that time the information has been proven to be accurate, as evidenced by the ongoing issues between Greenberg and the creditors over cash in the deal, the latest info about this which forms the basis of this post. Despite this, Greenberg has continued to attempt to portray these as minor issues that will easily be surmounted and which will lead to the deal being done by opening day.
    I continue to stick with this story, not because I have any dog in the hunt, but because I think Greenberg has been somewhat disingenuous in spinning the state of the deal to the press, and that Rangers fans should be made aware of it rather than simply accept the “we’ve entered a whole new era” party line. If the creditors — none of whom I know or have ever spoken with — decide to try to sink this deal for some reason new ownership won’t be in place for the season and that could impact the team. Someone should point that out, and for the want of any others interested in doing so, I’ve decided to be that someone.
    Personally, I hope the deal gets done quickly. Greenberg has an excellent track record as the owner of his minor league properties and Nolan Ryan has been an absolute good when it comes to this franchise. I have nothing personal against either of them. I do have something against spin, however, and they’ve been spinning like crazy.

  4. APBA Guy - Mar 16, 2010 at 12:42 PM

    Personally, you can write the same thing over and over about this transaction because all of your points do bear repeating.
    There is no reason for the creditors to let Hicks off the hook, and it is quite reasonable for Greenberg to put as little real money into this deal as he can. That said, I’m sure in his mind he believes the deal will get done because slowly but surely, they are circling in on a number everyone involved with the deal can live with.
    We certainly don’t want MLB to sell the team to another one of Bud’s pals, do we? The Rangers would turn into the Nats. Oh wait…

  5. Kip Cricket - Mar 16, 2010 at 3:47 PM

    Wow, so you’re admitting that you’re just a douche bag with a vendetta.
    Thanks for clearing that up.

  6. Craig Calcaterra - Mar 16, 2010 at 3:49 PM

    So it’s a vendetta to point out when team owners — or would be owners — are passing along misinformation? Oh well in that case . . .

  7. YX - Mar 16, 2010 at 4:30 PM

    A d-bag, maybe, but he is not wrong though.

  8. Maury Brown - Mar 16, 2010 at 6:27 PM

    Just to be clear, the headline is incorrect. Greenberg had nothing to do with the latest offer, and in terms of where things are with the creditors, it has never had to do with Greenberg/Ryan.
    Read closely, folks… the issue is between HSG and the creditors. HSG made the new offer with the escrow component that was rejected (not Greenberg). MLB is acting as the intermediary between HSG and the creditors.

  9. Maury Brown - Mar 16, 2010 at 6:28 PM

    What misinformation?

  10. Maury Brown - Mar 16, 2010 at 6:54 PM

    And as a point of reference, the point above did not come from Greenberg ;-)

  11. jdj - Mar 16, 2010 at 8:48 PM

    Greenberg was a sports attorney who specialized in this stuff. I have a feeling he knows what he is doing a bit more than you do

  12. Craig Calcaterra - Mar 16, 2010 at 8:48 PM

    HSG is run by Tom Hicks and Tom Hicks is part of the potential new ownership group as well. A small part, that needs to keep Mr. Greenberg and Mr. Ryan happy if he wishes to remain a part at all. Are you suggesting that Greenberg has absolutely no control over what Hicks is doing with his creditors?
    And while I’ll grant that the headline of this post was inadvertently misleading in that regard (i.e. not technically Greenberg’s offer), the practical implications of this back and forth are all about Greenberg’s potential ownership, so it’s not like he’s some uninterested bystander.
    As for misinformation, I’ve never seen Greenberg once say anything in the press apart from “everything’s on schedule.” He said it before the exclusive negotiating window deadline came and went. He’s saying it again now despite the fact that things aren’t going 100% smoothly and the opening day transfer of ownership appears to be in jeopardy. My problem throughout all of this has been spin and a failure to even acknowledge that, like all such deals, there are bumps in the road.

  13. Maury Brown - Mar 17, 2010 at 12:01 AM

    If you knew how much Hicks will be retaining when all is said and done, it would do more than surprise you. It will be less than 5%… WAY LESS than 5%.
    As to the sales process, the sales agreement was reached between HSG and Greenberg. The way that funds move after the sale is what is creating the most friction. There was no lien on the land which is a big part of the deal, and the league, and other fees are ahead in the que ahead of the creditors in the structure that HSG has set forth. How does Greenberg/Ryan fall into who gets paid first? That’s HSG’s gig.
    In talking with sources close to the deal (and yes, this includes Greenberg), there has never been anything that led one to believe that he didn’t see this as complex. In terms of being on schedule… the closing date is 4/1, after that, then matters are delayed, and at this stage it should surprise anyone if 4/1 rolls up and the deal’s not consummated.
    However… Look at the sale of the Cubs. It too went past its window, and there wasn’t 1/10th the bluster going on over the Rangers sale. If you read my story this past week, there are good reasons for the creditors to reach agreement. I’m sticking to my guns and say the deal gets done, but I’ll possibly be buying you that six-pack over meeting the Opening Day deadline. When deals of this magnitude are done, they are most often reached at the 11th hour. We’re not there yet.

  14. Maury Brown - Mar 17, 2010 at 3:40 AM

    Should say, “at this stage it should NOT surprise anyone…”

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