Hicks is officially a deadbeat

In 2002, Tom Hicks famously sat on the deck of his yacht — less than a year after signing Alex Rodriguez to a $250 million contract, mind you — and excoriated fellow owners for not being more careful with their money. The levels of hypocrisy there were already off the charts, but it has only gotten better and better as time has gone on:

Creditors to Texas financier Tom Hicks’s Hicks Sports Group have declared the company in default, a measure that could eventually dislodge the Texas Rangers baseball club and Dallas Stars hockey franchise from his control.

The default notice is the strongest sign yet of the economic perils awaiting the country’s professional sports leagues, where owners have spent lavishly on player salaries. Many owners’ personal fortunes are also on the wane, creating uncomfortable standoffs between the owners and lenders.

As Rovell notes, there’s a six-month cooling off period of sorts before banks can take over the Rangers, but for all intents and purposes, the team is in foreclosure. What to do? Again, Rovell:

So the immediate solution for Hicks is to sell pieces of his teams to raise enough cash to remain the owner or eventually just hand them over to the banks. But, trust me, the banks don’t want the teams. They want the money . . . but the person who is buying has to have more cash than ever before. And someone who doesn’t have a sports team who is going to buy now is going to want majority ownership, if not immediately upon purchase, within a couple years.

If only there were someone who (a) lived in Dallas; (b) was interested in owning a sports team; and (c) had a lot of money.

If only, if only, if only . . .

(Thanks to Pete Toms for the heads up)

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Comments

  1. MooseinOhio said...

    Hicks also showed poor judgment in signing Bill Guerin to a three or four year deal for almost twice what any other hockey team was willing to spend.  So Hicks got to look foolish in two sports and led me to wonder how some of these owners became billionaires in the first place. 

    As for the unnamed, yet known, Dallas billionaire – he may be getting the Martha Stewart suite in the federal prison for his insider trading shannigans.  However, Martha seems no worse the wear for her legal problems so maybe there is hope for him.  Of course he still has to get the approval of Selig, Reinsdorf et al … never mind.

  2. Craig Calcaterra said...

    The case against Cuban is a civil case, not a criminal one. He’ll likely settle it for a fine that would make our jaws drop, but that won’t materially affect his bottom line.

    As for Selig: they already inserted a patsy, er, I mean an investor into San Diego in order to keep Moores from having a fire sale, and I suspect that they’ll want to do everything they can to avoid any other team from having to sell franchises in distress as well.  One way NOT to do that is to continue to be so snobbishly selective about who can and who can’t buy in.

    Sure, they’d rather find a friendly person to save Hicks’ bacon here, but eventually more teams are going to face the situation Hicks is facing, and eventually Bud Selig is going to run out of wealthy friends.

  3. John said...

    Am I wrong for thinking about Bush before you linked to Cuban?

    Clearly I have politics on the brain.

    Although it’d be hilarious (for me as a Democrat admitedly) to see Bush make amends for the economy in this one small way.

  4. Jon said...

    Why does Bush need to make amends for the economy? Congress spends the money…they play a larger role in the economy. Which party has been in charge over there of late?

  5. Craig Calcaterra said...

    I don’t think he has the money. His original ownership of the Rangers came as part of an ownership group.  His personal investment was $800K, and he realized $15M when he sold his stake in the team.

    Back in 2004, it was estimated that Bush was personally worth somewhere between $10-25 million depending on how you measured it.  Even assuming it’s double that now—not a safe assumption—he’s nowhere near baseball owner wealth in his individual capacity, and I’m guessing that he’s no longer positioned to be able to bring a bunch of people together to make that kind of thing happen.  Those kinds of coalitions happen among people who are thinking about big things in the future.

    Once you’ve been president, the rest of your life is pretty much an exercise in calm resolution and playing out the string.

  6. Pete Toms said...

    Rovell speculates that the league(s) might foot the bills until the fortunes of the uber wealthy turn around.  I think that is likely.

    Haven’t read this anywhere but what if Hicks pulls a Charlie O and starts auctioning off Hamilton, Andrus, Perez, Borbon, Holland et. al?  Wouldn’t that be fun?

    I agree with Craig, there is likely to be more of this.  Pro sports ownership and the bidding up of franchise values has been a lot about cheap, easy credit.

  7. CH said...

    John and Jon, please don’t turn this into a political discussion.  Both parties suck and you know it.  It’s like debating “who’s better” between Pol Pot and Hitler.  This is a baseball site.  I come here to get away from political nonsense, not to talk more about it.

  8. Jake said...

    yes, both the Democrats and the Republicans are as bad as Hitler.  Don’t forget Ralph “Goebbels” Nader!

  9. Richard Gadsden said...

    He might sell his shareholding in Liverpool FC to DIC (Dubai Investment Corporation) – they apparently tried to buy out his co-owner Gilett, but Hicks had a veto on that sale.  That should raise a few hundred million.

  10. William said...

    A-Rod Went fron 1 team (Mariners) who he’d been with for 7 years,then went to the Rangers for about a year,Now,he’s a Yankee.Although,he wasn’t really a Yankee to start out with.Only Don Mattingly,Derek Jeter and Andy Pettite were in the minors when they got called up to play in the Bigs.There were a few other Yankees that were in the minor’s,then went to the big’s.A-Rod got called up from the minors to the Majors from the Mariners in ‘95. Adding CC Sabathia,A.J. Burnett, and Mark Teixeira may or may not help them.Only time will tell.

  11. APBA Guy said...

    The finances of the super rich aren’t the same as they are for you and me. Remember how Trump defaulted in the early ‘90’s, got relief from the major NY banks, and kept his gains when the economy recovered?

    One of the points of the discussion above is that Hicks has options. I don’t think Selig et al will accept Cuban into the club, but the Bush thing may have legs. He doesn’t have to be the principal owner, but the front guy for a coalition of wealthy Texans. Of course, he may not be interested in that role having done it once already.

    Hicks has options, and he can negotiate for more time. I’d expect him to try to ride this out, like Trump did.

  12. Richard in Dallas said...

    As a long frustrated Rangers’ fan, I can only hope that this is the beginning of the demise of Mr. Hicks.  He seems to be extremely aloof to the actual WORKINGS of the game behind the scenes.  It seems that he has no concept of staying the course with a plan to improve.  We have done several flips and quite a few flops over the years between drafting well and developing, and buying a talent pool.  Switching from one to the other has a tremendous cost, whether it be ridiculous contracts that are paid on long after the players are gone, or draft picks/prospects traded away or otherwise squandered.  With W as managing partner, we actually developed a team that made the playoffs, and he left the team in pretty good shape for the future.  Three years after he was gone off to Austin to become Governor, the downhill started, with the crescendo being the signing of A-Roid after a fierce bidding war between Tom Hicks and himself.  Some of the stupid things he says in the local media leave baseball people with open-mouthed dumb-face.  I don’t feel sorry for him at all, and I hope a group of kinda rich guys gets together and puts a good baseball man in charge of their new toy…..

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