Rangers' debt holder warns Selig not to seize the team

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Monarch Alternative Capital is the fly in the ointment, the monkey in the wrench, the pain in the assets of the Texas Rangers sale.  They’re the lead debt holder, and the ones who appear to be calling the creditors’ shots in the seemingly interminable brinkmanship that has characterized the team’s sale.

Today Richard Sandomir of the New York Times reports that they’re not taking Bud Selig’s threats to seize the Rangers, cancel the debt and do the deal lightly, sending an email to him in which consequences most dire are predicted, including the team’s bankruptcy or “costly, distracting and messy”
litigation.

Which is really the only response that one can expect given Bud’s threats. There are disagreements about whether Monarch actually has the stones to go through with it all, but if you’re in the business of buying debt and a major debtor is basically saying he’s going to ignore your claims, you pretty much have to litigate if you want to be taken seriously with your other customers, don’t you? It’s like the unwritten rules for banks. If one high-profile debtor is allowed to walk all over you, you’re toast. Ask Tony La Russa. I’m sure he can tell you all about it.

That aside, I think the most interesting thing about it is the last line of Monarch’s letter Sandomir quotes, in which they warn of a negative impact to team values if Selig carries out his threat, “as funding will become more costly and difficult to obtain as lenders
lose faith in the contractual security of their loans.”

This is what I was talking about the other day: the lenders may not have all the leverage in the world in the context of this deal, but if they do end up getting burned, you have to figure that the terms of loans to baseball teams will be much more arduous going forward, and not just from entities like Monarch. Lenders are in the business of valuing risk. If the Rangers are able to simply walk away from current obligations like this, banks will consider baseball teams to be bigger risks going forward. And not just because they’re worried that the team will default, but because they’re worried that the debt they hold will be harder to sell on the open market to secondary holders . . . like Monarch Alternative Captial.

In other words, there are greater stakes at issue here than the simple selling of the Texas Rangers, and I’d be surprised if Selig and his able business associates are not well aware of them privately, even if their public rhetoric is errs on the side of the cavalier.

Astros extend winning streak to 11 games

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The Astros rallied late to keep their winning streak alive, extending it to 11 games with a 7-4 victory over the Royals on Sunday afternoon. The club is now 48-25, leading the Mariners by a full game in the AL West.

The Royals took a 4-2 lead after three innings, but Brian McCann knocked in a run with a single in the top of the fourth to cut the deficit to one run. Carlos Correa hit a game-tying solo home run in the eighth. The Astros kept their foot on the gas, scoring two more runs on RBI singles from Evan Gattis and Marwin Gonzalez in the top of the eighth and another in the top of the ninth on Correa’s sacrifice fly.

Starter Lance McCullers allowed four runs (two earned) on six hits and two walks with nine strikeouts over six innings. Tony Sipp worked a scoreless seventh. Ken Giles did the same in the eighth. Hector Rondon finished off the win in the ninth, working around a one-out walk with a game-ending double play.

After winning all 10 games on their road trip against the Rangers, Athletics, and Royals, the Astros will head home for a nine-game homestand against the Rays, Royals, and Blue Jays. Each club is below .500.