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.