Rangers auction delayed by bid questions (AP)

Aug 4th, 2010 | By sportsnews | Category: Sports

FORT WORTH, Texas (AP)—The much-anticipated auction of the Texas Rangers was
delayed for hours Wednesday as officials in the team’s high-profile bankruptcy
case tried to determine which of the two opening bids is higher.

A group led by outspoken Dallas Mavericks owner Mark Cuban and Houston
businessman Jim Crane is hoping to beat out Major League Baseball’s preferred
bidder, a group led by Hall of Fame pitcher and Rangers president Nolan Ryan and
Pittsburgh sports attorney Chuck Greenberg.

Terms of the Cuban-Crane group’s offer were not immediately revealed in
court, but it will be at least $15 million higher than $306.7 million, the cash
portion of the Greenberg-Ryan offer. The offers will not be identical, so their
values will be based on which assets and liabilities are included in each bid—
a review process that was still not complete Wednesday afternoon.

U.S. Bankruptcy Judge Russell Nelms said bidding cannot start until the
highest offer is determined, and attorneys for the team and the court-appointed
restructuring officer needed more time to figure that out. If the Cuban-Crane
offer is higher, the Greenberg-Ryan group wanted time to review the terms before
deciding whether to submit another bid.

“It’s safe to say we may be here a while today,” Nelms said.

The courthouse in downtown Fort Worth was abuzz early Wednesday as Cuban,
Ryan, team owner Tom Hicks and Major League Baseball president Bob DuPuy arrived
separately to hordes of television cameras on the usually quiet and deserted
sidewalk. Each declined to comment.

Final approval of the Rangers sale rests with MLB, which has the option of
choosing the second-highest bid instead.

The auction is the most dramatic development yet in one of the most
contentious sales of an American professional sports team. The last Major League
Baseball team to be auctioned off in such a way was the Baltimore Orioles in
1993.

The Greenberg-Ryan group has the base bid because it was named as the team’s
buyer months ago, before the deal was put in limbo by angry creditors and then
by the bankruptcy filing. If that group ultimately does not win, it will get a
“breakup” fee of $10 million to $13 million.

The Greenberg-Ryan group has removed a $70 million side deal to buy stadium
parking lots because those are not part of the team’s assets. That did not
change the group’s $520 million bid for the team.

Crane’s bid reportedly beat the Greenberg-Ryan offer in the Rangers’
original sale process last year, but MLB was leery of Crane since his deal to
buy the Houston Astros in 2008 fell through. Cuban got negative feedback from
MLB when he was ready to pony up more than $1 billion for the Chicago Cubs,
which wound up briefly in bankruptcy before Tribune Co. sold the team to the
Ricketts family last year.

The Greenberg-Ryan group was announced as the new buyer in January, but the
sale was stalled by angry creditors who said other bids were higher. Lenders
feared they would not be repaid the $525 million in loans that Hicks’
financially strapped ownership group defaulted on.

Hoping to push through the sale to the Greenberg-Ryan group, the Rangers
filed for Chapter 11 bankruptcy protection in May. But instead, the auction
arose during the contentious process that has been anything but smooth or
predictable.

The judge has said creditors will only get about $75 million from the team
but they can go after Hicks’ other companies. Unsecured creditors are expected
to be paid the full $204 million owed to them—including Alex Rodriguez(notes), who’s
owed $24.9 million in deferred compensation six years after he was traded to the
New York Yankees.

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