• Submitted by: manso
• Sports
• 08 / 03 / 2010

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As the Texas Rangers head to the auction block in bankruptcy court Wednesday in Fort Worth, two late-to-the-game suitors are poised to leap into what has been a murky and contentious legal morass.

One is Mark Cuban, the flamboyant and heavily fined owner of the Dallas Mavericks, who has created Radical Pitch as his investment vehicle in the Rangers. The second is News Corporation, which once owned the Los Angeles Dodgers.

Its possible interest has been reported by two of its subsidiaries, The New York Post and The Wall Street Journal.

Cuban made it clear in a court filing Monday that he intends to submit a bid by the Tuesday deadline, but objected to what he had been told would be a six- to nine-month approval process with Major League Baseball. In the filing, he said he “must close on or before Aug. 16th.”

Cuban is also linked to a combined bid with Jim Crane, a Houston businessman who tried to buy the Astros in 2008, according to two baseball executives.

Still, Cuban and News Corporation’s resources do not guarantee that either will succeed in buying the Rangers.

The auction’s procedures still favor the nearly $575 million bid from M.L.B.’s preferred buyer, a group led by Nolan Ryan,
the Rangers’ president, and Chuck Greenberg, a Pittsburgh sports lawyer.

Greenberg and Ryan signed their deal several months ago with Tom Hicks, whose HSG Sports Group owns the Rangers and the Dallas Stars. But Hicks’s creditors have stood up against the deal, thinking that more lucrative offers existed from Crane and possibly other investors. Last year, HSG defaulted on $525 million in loans, leading Hicks to put the team up for sale and to place it in bankruptcy to accelerate the sale.

M.L.B. has lent the team $40 million to stay afloat; some team owners objected to Texas using some of it to pay pitcher Cliff Lee’s contract. In a court hearing last month, Ryan testified that further delays in the sale could endanger his bid’s
financing and the team’s ability to sign its star hitter Josh Hamilton to a long-term deal.

“I don’t know that I want to be there,” Ryan said, according to The Associated Press, if he cannot sign Hamilton.

He has said that the deadline for some of his group’s financing guarantees expires Aug. 12.

For Cuban, buying all or part of the Rangers would give him the baseball team he has apparently coveted; he showed some early interest in the Chicago Cubs before they were acquired by the Ricketts family.

More than Cuban, News Corporation views the Rangers as a strategic asset. The team’s games are carried on its Fox Sports Southwest regional sports network. If News Corporation buys the team, it would essentially own the television rights, and prevent Cuban from possibly starting a regional network with the Rangers and the Mavericks as linchpins.

News Corporation used its ownership of the Dodgers from 1998 to 2003 to build up its Fox Sports West channel.

M.L.B. has not yet prequalified News Corporation to bid, but it has approved of Crane, Cuban and Jeff Beck, the head of a
Dallas investment management company, as well as Greenberg and Ryan.

As the so-called stalking horse in the auction, the Greenberg-Ryan group establishes the floor bid, which is estimated at $307 million, the cash portion of its overall offer.

If it is an open auction in court, it will move along like an art auction, with bids rising in increments of perhaps $500,000, $1 million or more.

“The winner is the one declared by judge to be the highest and the best,” said Peter S. Kaufman, a bankruptcy expert who is the president of the Gordian Group, an investment bank. “And that means it’s the most advantageous combination of highest price and certainty of closure at that price.”

If Greenberg and Ryan win the auction, their bid will move straight into a hearing to approve the Rangers’ prepackaged plan to emerge quickly from bankruptcy protection. Assuming the team receives Judge Michael Lynn’s approval to get out of Chapter 11, the bid would then make its path toward a vote by team owners.

If another bidder wins, M.L.B. will start a review that could take several months.

The last team auctioned from a bankruptcy courtroom was the Baltimore Orioles in 1993 after its owner, Eli Jacobs, saw his liabilities of $320.7 million overwhelm his assets of $146.7 million.

Two groups, led by Peter Angelos and William O. DeWitt Jr., merged to acquire the team for a then-record $173 mllion. Angelos took the majority interest and DeWitt a minority stake; DeWitt subsequently left the Orioles to buy the St. Louis Cardinals. Jeffrey Loria, a future owner of the Montreal Expos and the Florida Marlins, was a losing bidder.

By RICHARD SANDOMIR

Source: www.nytimes.com/20