Bidding showdown for Texas Rangers on deck

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Published: August 4,2010

Tags: bankruptcy, mergers and acquisitions, sports

FORT WORTH, Texas — More than two months after the Texas Rangers filed for bankruptcy, the auction for the AL West-leading team has come down to a bidding showdown between a baseball legend and one of the most colorful owners in professional sports.

Major League Baseball’s preferred buyer, a group led by Hall of Fame pitcher Nolan Ryan and Pittsburgh sports attorney Chuck Greenberg, was expected to face only one opponent today: a group led by outspoken Dallas Mavericks owner Mark Cuban and Houston businessman Jim Crane.

The Cuban-Crane group was the only bid submitted by last night’s deadline, said the court-appointed restructuring officer, William K. Snyder.

He did not reveal terms, but the bid must be at least $15 million higher than $306.7 million, the cash portion of the Greenberg-Ryan offer that totals about $520 million for the team. Crane opted to join Cuban instead of submitting his own offer.

Dallas businessman Jeff Beck also had been pre-qualified by MLB to bid. Fox, a unit of Rupert Murdoch’s News Corp., said yesterday it did not plan to bid after speculation it wanted to firm up its hold on Rangers’ TV rights through Fox Sports Southwest.

The auction in federal bankruptcy court is the most dramatic development yet in one of the most contentious sales of an American professional sports team. The last Major League Baseball team to be auctioned off in such a way was the Baltimore Orioles in 1993.

Final approval of the Rangers sale rests with MLB, which has the option of choosing the second-highest bid instead.

The league intends to work with the winning bidder, a league official told The AP, speaking on the condition of anonymity.

However, it’s unclear if the Cuban-Crane group actually would be approved, since both men have been frowned upon by MLB in their separate, previous attempts to buy baseball teams. Crane reportedly had the highest bid during the Rangers’ original sale process last year, but MLB was hesitant since his deal to buy the Houston Astros in 2008 fell through. Cuban got negative feedback from MLB when he was ready to pony up more than $1 billion for the Chicago Cubs, which wound up briefly in bankruptcy before Tribune Co. sold the team to the Ricketts family last year.

“Mark Cuban could take the Rangers to the next level, but Major League Baseball has been wary of his personality. It would not surprise me if he would be highly critical of umpires or disagree with (commissioner) Bud Selig and maybe side with the players’ association,” said Wayne McDonnell, a professor at New York University’s Tisch Center for Hospitality, Tourism and Sports Management. “He’s a bit of a wild card and very different from the good ol’ boys network in baseball, but he has a burning desire for victory and the financial wherewithal to buy the Rangers and increase their value.”

The Greenberg-Ryan group still has a good chance at the auction, McDonnell said, “because they’ve been in this process the longest, and their persistence and perseverance could pay off.”

The Greenberg-Ryan group was announced as the new buyer in January, but the sale was stalled by angry creditors who said other bids were higher. Lenders feared they would not be repaid the $525 million in loans that team owner Tom Hicks’ sports group defaulted on.

Hoping to push through the sale to the Greenberg-Ryan group, the Rangers filed for Chapter 11 bankruptcy protection in May. Since then, the case has been anything but smooth or predictable, and the auction was among many unpleasant surprises for the team.

The judge has said creditors will only get $75 million from the team but they can go after Hicks’ other companies. Unsecured creditors are expected to be paid the full $204 million owed to them — including Alex Rodriguez, who’s owed $24.9 million in deferred compensation six years after he was traded to the New York Yankees.

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