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)

Johnny Cueto expected to opt-out of his deal after the season

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Johnny Cueto signed a six-year $130 million deal with the Giants prior to the 2016 season. In his first season he went 18-5 with a 2.79 ERA and 198 strikeouts in 219.2 innings, helping lead the Giants to the playoffs. This season has been rocky for Cueto — he’s got a a 4.42 ERA in 15 starts and has battled blisters — but they’ve been far rockier for the Giants overall, as they sit in last place in the NL West and have the second worst record in baseball.

Many suspect that the Giants will either rebuild or, at the very least, restructure some in response to this nightmare year. If so, they’re likely going to be doing it with Cueto, who Jon Heyman reports is going to opt-out of his deal:

San Francisco Giants starting pitcher Johnny Cueto is planning to opt out of his contract at the end of the year, but he would listen to any extension offer . . . Cueto has $84 million to go over four years. It would probably take an injury or major slump for Cueto not to opt out. But it makes sense that he will.

Heyman says the Giants are not inclined to give him an extension, so expect to see Cueto on the free agent market three days after the World Series ends, which is the deadline for him to exercise his opt-out rights.

The Dodgers are concerned about Julio Urias’ shoulder

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Things are going great for the Dodgers lately. They’ve won seven consecutive games and 13 of their last 14. They lead the National League in wins and are in first place in, arguably, the best division in baseball.

But there are a lot of moving parts on a baseball team, and even when some things are going great, other things can go not-so-great. Like this:

Urias has been diagnosed with shoulder inflammation and shut down indefinitely. An MRI last week showed no structural damage, but his shoulder is still bothering him. He has not pitched in the bigs since late May, when he allowed seven runs in less than three innings against the Miami Marlins. He was sent down after that and went 3-0 with a 3.12 ERA, six walks and 17 strikeouts in 17.1 innings pitched in three starts with Oklahoma City before being shelved.