Baseball team for sale
While the imminent sale of the San Diego Padres has been a rumor for months, owner John Moores finally made it official when he announced that he had retained Goldman Sachs to identify future buyers for the team. The reason behind the sale is his pending divorce in the community property state of California.
It’ll be interesting to see how this all shakes out. The Chicago Cubs sale has dragged on and continues to hit roadblocks due to the credit crisis but the Cubs, along with Wrigley Field, should net over $1 billion. The Padres were last valued by Forbes at $385 million while the Cubs came in at $642 million, so an ultimate sales price somewhere in the neighborhood of $600 million for the Padres isn’t out of the question.
As with anything in baseball, this probably isn’t going to happen quickly. It doesn’t even look like the potential buyers are going to be presented with the details on the team until sometime next year, so we’re probably looking at a late-2009 or early-2010 event.
Mets owner burned in fraud case
New York Mets owner Fred Wilpon appears to be one of the losers in the Bernie Madoff Ponzi scheme that broke last week. The dynamics of a Ponzi scheme are pretty simple. Money goes into the “investment company” and at some point in time, either massive losses occur or the owner spends the money. He then fabricates the performance of the investments over time and he hopes that as people ask for their money back, there’s enough money coming in to cover those redemptions. Of course, eventually you have the proverbial you-know-what hitting the fan, and the redemptions force the scammers’ hands into revealing nothing is left. If you were one left holding the bag when the thing collapses, there’s no money left to cover what you thought you had.
One of those people left holding the bag was Wilpon. For now, Bob DuPuy, the president and chief operating officer of MLB, has come out and said that the losses Wilpon took shouldn’t affect the team, but there’s some question as to whether the losses incurred could affect Wilpon’s payment of the debt he used to purchase the Mets. There’s also speculation that if Wilpon needs to come up with some cash, one of the things he will eventually sell is a piece of the team.
For now, it looks like we just have to wait until the dust settles because the regulators are still sifting through a fabrication. It’ll take time to fully determine how much Wilpon lost in the scandal.
Cisco Field hits snag
The Oakland Athletics may need to look elsewhere because their pursuit of a ballpark in Fremont, Calif. has hit a major snag. It seems that the owner of the site that has been targeted for the ballpark village is against the ballpark altogether. Aidan Berry, the vice president for Catellus Development Corp., has come out and said that the stadium would cause both traffic and parking problems at a nearby shopping center that’s also owned by Catellus.
The good news is, if you’re a fan of the prospective ballpark, that both the Athletics and Cisco have an option to buy the land which was earmarked for an office complex. The problem is that Catellus could go legal and tie things up for quite some time. For now, it looks like the Athletics are optimistic, but already there’s talk of the team looking for an alternative site in San Jose.
Cubs look to once again sell Wrigley Field to state
A deal that was once thought dead has now resurfaced as a plan to sell Wrigley Field to the State of Illinois has gotten new legs. A previous deal fell through last spring because the Illinois Sports Facility Authority (ISFA) and the team had a disagreement over the use of taxpayer dollars to both purchase and then improve the stadium. Now, it’s the Illinois Finance Authority (IFA) that’s in the mix and can issue bonds on behalf of private investors without the need for legislative approval.
Another sweet part of a deal with the IFA is that Tribune would avoid paying capital gains tax on the sale. This would save the company upwards of $100 million depending on Wrigley Field’s sale price.