Hicks Sports Group Creditors Threatening bankruptcy for the Rangers

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It’s hard to tell if this afternoon’s BusinessWeek report represents something truly new or if it’s more of a rehash of what we already know, but for the record:

The Texas Rangers, the Major League Baseball team
controlled by billionaire Thomas Hicks, may be forced into bankruptcy
unless terms of a planned sale of the team are improved or another buyer
is found, according to two people familiar with the matter.

Creditors led by Monarch Alternative Capital may
block Hicks Sports Group LLC, which defaulted on $525 million of debt
last year, from selling the Rangers and try to put the team into
bankruptcy, said the people, who declined to be identified because the
debt talks are private. The creditor group, which includes CIT Group
Inc. and Galatioto Sports Partners LLC, is seeking at least $30 million
more from the team’s sale, one of the people said.

The dynamic is the same that we’ve seen all along: Hicks’ creditors want more money, they’re threatening to force the team into bankruptcy if they don’t get it. Based on the tone of the article and based on the positions the parties have taken in the past, my guess is that the source for this specific report is one of the creditors, trying to ratchet up the pressure. The whole thing works best if you read it in a “and this time we really, really mean it” tone.

Not that it’s an empty or meaningless threat. No one ever gets rich forcing one’s opponent into bankruptcy, but this may one of those situations where it makes some amount of sense. The biggest problem of bankruptcy is the delay it causes in the asset in question getting liquidated, which often diminishes its value. The nut of this dispute, however, is Hicks’ proceeds from a land sale to Greenberg along with the Rangers. Land for mixed-use development — which is what this land, next to the Ballpark, is — is likely about as down in the dumper as it’s ever going to be right now.  Yes, bankruptcy will cause everyone to incur costs in the short term, but if the whole thing gets tied up for months or longer that same piece of land is still going to have to be disposed of in the end, and there’s every reason to believe that it will be worth more later than it is now.

But however that shakes out — and there are a million ways it could shake out — this report can be viewed as a signpost.  A week ago it was reported that Major League Baseball was stepping in to try and persuade the creditors to get the deal done. At the time Greenberg made noises that it would get done next week. The next thing we hear from the creditors is a renewed bankruptcy threat.

What to make of it? Perhaps they are not all that impressed with Mr. Selig’s efforts to play peacemaker. Perhaps they are not all that impressed with Mr. Greenberg’s public statements of inevitability.  Perhaps no one — not Hicks, not Greenberg, not baseball, not anyone — has enough money to wave at Hicks’ creditors to make them think that they’d get all that worse a deal in bankruptcy court. Hard to say.

The only thing that is certain in all of this is that Greenberg will come out with a statement in the next 48 hours in which he tells us, once again, that the deal is almost done. Because that’s what he always does.

(Thanks to Kevin T. for the heads up)

Cardinals, Dexter Fowler agree to a five-year, $82 million deal

CLEVELAND, OH - NOVEMBER 02:  Dexter Fowler #24 of the Chicago Cubs reacts during the seventh inning against the Cleveland Indians in Game Seven of the 2016 World Series at Progressive Field on November 2, 2016 in Cleveland, Ohio.  (Photo by Gregory Shamus/Getty Images)
Getty Images
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The Cardinals have officially signed outfielder Dexter Fowler to a five-year, $82.5 million contract. Fowler will also get a full no-trade clause.

The Cardinals gave Fowler a bigger deal than many speculated he’d get, as some reports predicted he’d get something in the $52-72 million range. His skills, however — he’s a fantastic leadoff hitter who plays a premium defensive position — definitely earned him some major dough. Fowler hit .276/.393/.447 with 13 homers, 48 RBI and 13 steals over 125 games in 2016 for the World Series champion Cubs.

For the Cardinals, this will allow Matt Carpenter to move down to the middle of the batting order and will shift Randal Grichuk to left field. It also takes a prime piece from the Cardinals’ biggest rival. For their part, earlier this offseason the Cubs signed former Cardinal center fielder Jon Jay. So that’s fun.

Are the Cardinals about to go on a free agent binge?

John Mozeliak AP
Associated Press
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The Cardinals have always emphasized building from within. In the 2016-17 offseason, however, they may end up being one of the bigger free agent buyers. At least according to some informed speculation.

St. Louis is already in agreement with Dexter Fowler. But Derrick Goold and Ben Frederickson of the St. Louis Post-Dispatch write today that the Cardinals “could become more aggressive than previously believed,” with Mark Trumbo and Edwin Encarnacion as “possible pursuits.” Worth noting that separate reports alleged some interest on the part of the Cards front office in free agent third baseman Justin Turner.

The Cardinals are already losing their first round pick due to the Fowler signing, so any other top free agent won’t cost them more than the money he’s owed. And as far as money goes, the Cardinals have a great deal of it, despite being a small market team. They have a billion dollar TV deal coming online and Matt Holliday and Jaime Garcia are off the payroll now. Spending big on a free agent or three would not cripple them or anything.

Encarnacion or Trumbo would be first baseman, which wold fly in the face of the Cards’ move of Matt Carpenter to first base (and, at least as far as Encarnacion goes, would fly in the face of good defense). Getting either of them would push Carpenter back to second, displacing Kolten Wong, or over to third, displacing Jhonny Peralta. If you’re going to do that, I’d say that Turner would make more sense, but what do I know?

Either way, the Cardinals may be entering a pretty interesting phase of their offseason now. And an unfamiliar one as, quite possibly, the top free agent buyer on the market.