Wednesday, June 13, 2012

The Ownership Roller Coaster

As the 2012 season winds along, the unsettled ownership issue percolates in the background. Yesterday, as Padres fans everywhere turned their energy to winning the Vedder Cup, the story broke that Thomas Tull has withdrawn his bid to buy the franchise.

The 'it doesn't economically make sense' comment caught my attention.  Just how much is John Moores asking for to buy this team?  Forbes valued the franchise at $458 million back in March, and although I would not be surprised to learn he's trying to sell the team for more than that how much more does he want?  Is the team asking $750 Mil?  $1 Billion?  Some other amount even more obnoxious?

The Dodgers could fetch $2 billion because they have cachet.  They are the team of Robinson, Koufax, Drysdale, and Scully.  They have a storied, successful history.  The Padres?  We have Gwynn, Hoffman, Jones, and Joe Randa.  They've been to 2 World Series in their history and won one game.  Sorry -  no one is going to pay an exorbitant price for a team that's been a doormat for most of its existence.

The other variable in this equation, the wild card, and the one that prompted this post, is the Jeff Moorad question.  Near as I can tell his ownership group still controls 49% of the team.  What do they plan to do with their shares?  I see two options:
  1. They sell their stock in the Padres along with Moores and get completely out, recouping whatever money they can.
  2. They don't sell any of their stock in the Padres and remain as a minority owner.
What makes this fascinating to me is my belief that Moorad got played.  Having someone get denied form buying a major sports franchise is not without precedent in North America but it certainly is rare in baseball.  Baseball is much more likely to force an owner to sell (see McCourt, Frank; Schott, Marge; and Veeck, Bill) than to prevent a group from buying.  Even though all the reports state it was because of questions about his finances I can't help but think Jeff Moorad doesn't own the Padres today because people didn't like him (fairly or unfairly).  Either way it was a stinging rebuke for a powerful man.

He has absolutely no requirement to work with Moores to finalize the sale.  It also makes you wonder if his side of the aisle is the one driving the price way up.
Moores only controls 51% of the team.  Fifty-one percent of $500M is $255M.  Heck, Phil Mickelson could buy the team himself for that price.  Yet the Tull group left the bidding because the asking price doesn't economically make sense to them.  That tells me Moorad's shares are for sale, and that the total asking price for the entire team is way up from what Moores agreed to sell it at in 2009, thanks to the $2B price the Dodgers sold for this spring.

This morning the Dave & Jeff show relayed a report from Ken Rosenthal that MLB expects to be ready to announce a winner by next Friday, which would finally bring this whole soap opera to a close.  I prefer to spend my time looking at the product on the field, but I am looking forward to seeing who wins the bidding and how much they pay for this franchise.

Then, I'm looking forward to how they go about making the San Diego Padres the franchise we all want it to be:  Competitive.  Savvy.  Successful.

1 comment:

  1. Moores and all the minority partners agreed to sell 100% of the Padres, including the Tucson franchise. Moorad was refused ownership because he was underfunded and tried to take $200 million from the TV deal to repay his partners.

    Moores can't do that either, so he restructured the TV deal for higher annual payments and 20% of FSSD. He's recouping the money by including the TV deal and asking for a higher price.