Business of Baseball Reportby Brian Borawski
April 26, 2006
Washington Nationals Ownership Sweepstakes Appears to be Two-Team Race
Eight prospective ownership groups put in bids for the Washington Nationals several months ago, and now a decision by MLB appears to be imminent. Sources familiar with what’s going on with MLB’s sale of the team have reported that it’s now down to two groups. MLB President Robert DuPuy appeared to be tipping his hand as to which of the two groups will win by visiting the Lerner family in Washington, D.C. DuPuy paid the Lerners a visit in order to meet some of the newer minority investors that have been added to the group.
The Malek-Zients group appears to still be in the running though. Fred Malek and Jeffrey Zients, who are spearheading the group’s bid for the team, flew to Milwaukee to meet with MLB commissioner Bud Selig. Like DuPuy’s visit with the Lerners, the meeting is happening so the ownership group can introduce some new investors to Selig.
The group led by Indianapolis media mogul and former Seattle Mariners owner Jeffrey Smulyan still has an outside shot. Smulyan has close ties to White Sox owner Jerry Reinsdorf, and Reinsdorf has been heavily involved in the entire situation in Washington, D.C.
It’s been rumored that a final decision as to who will be the Nationals’ owner will be made this week. As always though, MLB works on their own time table so I’ll be interested in seeing if it really happens.
Atlanta Braves Sale Progressing
Similar to the sale of the Nationals, Time Warner’s sale of the Atlanta Braves appears to be down to two people. Arthur Blank, who owns the Atlanta Falcons, broke off negotiations with Time Warner in February because of the team’s price tag, but since then he’s thrown his hat back into the mix. Liberty Media, a Colorado based media conglomerate, is also now involved in the negotiations for the team.
Time Warner is looking to reel in at least $400 million for the 14-time defending National League East champion Braves. The one thing that might push Blank out of the running is the fact that Liberty Media is looking to expand the deal with Time Warner to include more than just the baseball team. Liberty Media holds $3 billion worth of Time Warner stock, and there’s some speculation that Time Warner might unload some operating assets in exchange for Liberty Media's holding in Time Warner's stock. Speculation is that a stock deal could be accomplished that would save both parties a significant amount in taxes.
Hyundai, Minor League Baseball Team Up
Hyundai Motor America recently signed an exclusive deal that will make it the official automotive sponsor of Triple A Baseball. The dollar figure of the deal wasn't discussed, but this is major deal for both parties. Last season, Triple A Baseball drew 14.1 million fans, an all time best, and minor league baseball continues to grow in popularity.
San Antonio Pessimistic About Baseball Prospects
Last week, Bexar County issued a May 15, 2006 ultimatum for the Florida Marlins to decide on whether or not they're going to move to San Antonio, TX. Shortly after that, county officials began speaking out about the diminishing chances of San Antonio landing the team.
One precinct commissioner, Lyle Larson, warned about how local leaders have been groveling in order to land a MLB team. Larson has now said that he feels the chances of landing the team are pretty slim because neither MLB nor the Marlins have given them any indication to the contrary. Larson said at one point that he thought there might be a 30% chance the team would relocated to San Antonio, but he’s now hedged that by saying he feels the chances are much less.
While the deal isn’t completely dead, it looks like the Marlins were using a common ploy used by teams looking for a stadium deal. They’re using San Antonio as a bargaining chip to get what they want back home. As long as cities like San Antonio step up and court teams like the Marlins, this will continue to go on.
Forbes Releases 2006 Baseball Franchise Values
Maury Brown broke down Forbes' recent release of the franchise values of all 30 major league baseball teams at the Baseball Journals. The Washington Nationals saw the biggest increase from the year before and are now valued at $440 million, which is just below the price that MLB is looking for unload the team. The Yankees are still on top of the list and for the first time ever, the team is worth more than a $1 billion. The difference between the Yankees at $1.026 billion and the Boston Red Sox at $617 million is $1 million more then the difference between the Red Sox and the last place Tampa Bay Devil Rays ($209 million).
MLB has issued a statement saying that Forbes numbers "materially misstate" the value of the MLB franchises. The press release states that Forbes was never given access to the various team's books and records and that the estimates weren't even close.
Brian Borawski is a member of SABR's Business of Baseball Committee and writes about the Detroit Tigers at his own website, TigerBlog. He welcomes comments, questions and suggestions via e-mail.