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Greenberg and Ryan win the Rangers, but it came at a steep price

Aug 5, 2010, 8:25 AM EDT

Their stubbornness cost them close to $100 million in cash, but in the end Chuck Greenberg and Nolan Ryan landed the Texas Rangers.

Wow.

The battle for the Texas Rangers lost a lot of its intrigue for me when the team traded for Cliff Lee. The reason for this is simple: while the drama was interesting on some level as a business story, its significance — to me at least — had mostly to do with how much the strife would impact the Rangers’ ability to make the necessary moves to stay in contention. They made the moves, however, and the courtroom drama turned into more of a sideshow.

But that changed last night when a boring legal battle turned into a dramatic auction, with Mark Cuban and Jim Crane appearing as though they were going to leave the courthouse as the new owners. Indeed, for a while there, they would raise their bid by tens of millions of dollars in the space of mere minutes, while it took Greenberg and Ryan hours to come up with a higher bid of their own. At one point the restructuring officer informed the court that Cuban would beat any bid Greenberg made, and Cuban’s lawyer boldly proclaimed “my client is prepared to own this team.” There were obscenity-filled shouting matches and, at around midnight, Greenberg’s group appeared as though it was going to march out of the courtroom in protest.

But then things changed. Greenberg upped the cash portion of his bid to $365 million (and noted as he did it that, at that very moment, Michael Young hit a grand slam in the Rangers-Mariners game).  Cuban and Crane then upped theirs to $390 million. However, because a sale to Cuban was presumed to take much longer to close and because time is money, Cuban essentially had to outbid Greenberg by $25 million. Greenberg came back five minutes later at $385 million.

Cuban took ten minutes to consider going up past $400 million. Then he folded.  Chuck Greenberg and Nolan Ryan had won. They will be the next owners of the Texas Rangers.

But make no mistake: this was a costly victory.  For months, Greenberg and Ryan were offering a cash portion of the deal that would have paid team creditors $230 million.  The creditors said that they would have accepted $300 million to drop their objections to the sale.  In thinking that they could do an end-run around the creditors’ demands, Greenberg and Ryan took the Chapter 11 route. That move ended up costing them nearly $100 million in cash before even considering the legal fees and interest on operating loans.  Overall, the legal battle caused the sale price of the team to go up from $520 million to $588 million.

Which brings us back to the on-the-field impacts of all of this.  How much does that $100 million in cash and overall increase of $68 million in sale price affect baseball operations?  I’m guessing if you asked them Greenberg and Ryan would say not a all — and this morning Greenberg is talking big about signing Cliff Lee to a long-term deal — but that hardly seems logical. The fact is that the Rangers will have new owners but those new owners will be much more leveraged than they had planned to be when they drew it all up.

But that’s a worry for another day.  For now it’s enough for Rangers fans to know that their team will soon be out of bankruptcy court purgatory.

  1. Chris Fiorentino - Aug 5, 2010 at 9:51 AM

    “But that’s a worry for another day. For now it’s enough for Rangers fans to know that their team will soon be out of bankruptcy court purgatory.”
    This is an awful defeat for Rangers fans. Clearly, the Greenberg/Ryan ownership group will be severly hampered for a few years, while Cuban would have hit the ground running. If Cuban would have won, and said “WE ARE KEEPING CLIFF LEE” it would have made people cheer for joy. All Greenberg’s boast brought about were jeers and a general lack of belief that is understandable. This is NOT a happy day for Rangers fans.

  2. BC - Aug 5, 2010 at 10:15 AM

    @!!#$&!@!! I wanted Cuban in MLB so badly. Any other teams for sale?

  3. Kevin S. - Aug 5, 2010 at 10:26 AM

    I still think he rescues the Dodgers from Divorce McCourt, and if the rumors that the Wilpons have to sell are true, I’d welcome a competent ownership going up against my Yankees in the battle for the city.

  4. APBA Guy - Aug 5, 2010 at 10:26 AM

    I wonder what Cuban’s rationale was for folding at the point he did? Meg Whitman’s spent $ 100 M of her own money just to run for Gov here in CA. You’d think getting a return like you get from owning a baseball team would be compelling for a billionaire like Cuban. Perhaps his free cash situation had limits, or his own RoI on the Rangers had a ceiling. It’d be fun to know.

  5. Chris Fiorentino - Aug 5, 2010 at 10:33 AM

    If this were the Phillies, and the choice was Mark Cuban or a group run by Michael Jack Schmidt and Steve Carlton, I would choose Cuban every day of the week. I believe BOTH would do their best to put a winner out there, but CUBAN has the dough and the other guys would be relying on other sources for their money. BIG DIFFERENCE. I still believe Greenberg/Ryan are worse for Rangers.

  6. Md23Rewls - Aug 5, 2010 at 10:49 AM

    Bummer. Cuban was going to be interesting. Here’s hoping he has a chance at another team.

  7. Kiwicricket - Aug 5, 2010 at 12:16 PM

    Interesting to read other sites where Rangers fans cast their thoughts. Most seem to hate the thought of Cuban owning the Rangers. Perhaps the locals prefer Greenberg/Ryan but outsiders like the thought of Cuban? I don’ know, but there seems to be a distinct difference.

  8. schiebs - Aug 5, 2010 at 2:07 PM

    I’m pretty sure Cuban can’t own another MLB team unless he sells the Mavericks. Isn’t that the big deal with the Rams and the guy trying to buy the team? He owns teams in the Denver market as well?

  9. willmose - Aug 5, 2010 at 2:09 PM

    The Yankees will pick up all of Texas player assets for a song. That’s why MLB approved Greenberg/Ryan group to start with.

  10. Kevin S. - Aug 5, 2010 at 2:22 PM

    Jerry Reinsdorf owns the White Sox and Bulls. James Dolan owns the Rangers and Knicks. Ted Leonsis owns the Capitals and Wizards. Mickey Ilitch owns the Tigers and Red Wings. Paul Allen owns the Seahawks and Trail Blazers. I’m fairly certain owning teams in multiple leagues isn’t an impediment.

  11. Cindy Bailes - Aug 5, 2010 at 3:14 PM

    If you were from this area, you would know Cuban is only in it for the money. He never really wanted to buy the Rangers. He had bought some of the bad notes and wanted to push the price up so he could make more money!!

  12. Michael - Aug 6, 2010 at 4:17 AM

    You should read Cuban’s blog on the matter (Craig linked it in another story). He believes that in becoming a serious bidder he had some contingencies removed from the deal that will save Greenberg serious money in the long run.

  13. schiebs - Aug 6, 2010 at 1:44 PM

    Out of market teams. All of those guys own teams in the same market. You can’t own a team in New York and another in LA regardless of the league.

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