MLB Approves Transfer Of Texas Rangers To Greenberg-Ryan Group

We’re done. We’re done! WE’RE DONE!

As put rather simply by Lone Star Ball:

After a long, drawn-out auction process, Tom Hicks and the creditors of Hicks Sports Group have found an owner for the Texas Rangers. There’s still another matter to be cleared up, however. What will happen with that other sports team owned by Hicks, the Dallas Stars?

Fans of the Stars hoped that Hicks wouldn’t be forced into selling their team by the same creditors, thus avoiding the same mess that surrounded the Rangers’ sale. But a new report from the Associated Press hints that the hockey club could be next on the auction block.

We’re finished! The Cuban-Crane group countered the $365 million bid from Greenberg-Ryan with a $390 million bid, but Greenberg-Ryan came back with a $385 million offer that had a higher present value because that offer could be closed in short order, while Cuban-Crane would require MLB approval, which could take several months. The response from Cuban-Crane?

And so that’s the end of it. Or at least, that’s the end of the complicated bits of it. The sale of the Texas Rangers to the Greenberg-Ryan group should be completed within very little time, and a very deep, promising organization will find itself in strong, capable hands.

As the Texas Rangers bidding war carries on in the courtroom, the actual baseball team is locked in a tight game with the Mariners. Well, they were locked in a tight game. At around the same time the Greenberg/Ryan Group submitted their game-changing bid to own the Rangers, Michael Young hit a game-changing grand slam.

Take that as a sign if you like. Of course, they are playing the Mariners after all, so, these things happen.

And back and forth they go in the Texas Rangers bidding war…

After Mark Cuban’s group put up a bid of $355 million, including $208 million in assumed liabilities, you might have thought that would be too rich for Nolan Ryan and The Greenberg Group’s blood. But then maybe you haven’t been paying attention.

As the auction for the Texas Rangers goes into the night, Nolan Ryan’s Group isn’t pleased with the way the process has gone down.

That still hasn’t prevented the judge from allowing bids to continue. Mark Cuban’s group has gotten theirs up to $355 million, way up from his initial $335 million bid.

The showdown for the right to purchase the Texas Rangers got underway Wednesday and the group headed by billionaire Dallas Mavericks owner Mark Cuban was more aggressive than The Greenberg-Ryan group, headed up by Nolan Ryan.

Ultimately Major League Baseball can decide who they allow to buy the Rangers, even if it’s the second-highest bidder. Though if they do, they could face fines for rejecting the highest bidder without a credible reason.

It appeared for a little while that Fox News Corp. might place a bid on the Texas Rangers in tomorrow’s auction, but Bob Nightengale informs us that this will not be the case:

With Fox out, previous possibility Dennis Gilbert out, and Jeff Beck seemingly out, the Rangers were left with three potential bidders: the Greenberg/Ryan group, Jim Crane, and Mark Cuban. But wait! What’s this?

The seemingly endless saga that has been the sale of the Texas Rangers will likely reach denouement on Wednesday when the franchise will be auctioned off. But between then and now, there is plenty of intrigue about who will end up with the team.

A group led by Nolan Ryan and and Pittsburgh attorney Chuck Greenberg has lone been considered the frontrunners to buy the team, although according to the Fort Worth Star-Telegram a new bidder may emerge: Rupert Murdoch’s News Corp. According to sources, News Corp. would want to bid to protect the telecast rights Fox Sports has for Rangers games.

With regards to the sale of the Texas Rangers, US bankruptcy judge Michael Lynn has ruled that the creditors have the right to vote on the pre-packaged bankruptcy plan devised by the Rangers to facilitate the sale to the Greenberg-Ryan group.

It’s that last bit that’s the key. The creditors have maintained all along that they disapprove of the pre-packaged plan, meaning their vote is a certain no. As such, in order to push this sale through, the Rangers will have to modify their plan before going on to a vote. At that point, with an approved plan, the Rangers could proceed absent lender acceptance.

On Tuesday, a hearing will begin that should determine whether the “pre-packaged bankruptcy” deal struck by the Greenberg-Ryan group to purchase the Texas Rangers is valid, or whether the whole sale process will be re-opened to other offers. The latter would represent a victory for the creditors, who maintain that the Rangers are not being sold to the highest bidder.

Rather than Greenberg-Ryan, the creditors would like to see the Rangers sold to Houston businessman Jim Crane, who is interested in purchasing the franchise and has reportedly offered $13-20m more than the Greenberg-Ryan group. The issue is that Tom Hicks’ HSG entered into an Asset Purchase Agreement with the Greenberg-Ryan group, allowing for negotiation exclusivity.

On Monday, the Rangers and the Greenberg-Ryan group announced what amounts to a prepackaged bankruptcy plan in order to facilitate the sale of the team. This announcement was made without giving prior notice to the creditors of the Hicks Sports Group. Said creditors are mad.

It seems to me - and I am far from an expert - that the issue here is that the creditors don’t think the Rangers are being sold for fair market value. From Bloomberg:

The sale of the Texas Rangers to a group led by Chuck Greenberg and Nolan Ryan, which has been pending approval by Major League Baseball and the principal lenders holding the debt on Hicks Sports Group, has been held up for a number of months, as the creditors have thus far been dissatisfied with the terms of the transaction. On Monday, however, an end to the ordeal seems to have come into view:

The sale of the team and its ballpark lease, along with the separate sale of land around the stadium, has a total value of around $575 million. It’s worth noting, however, that while the deal allows for “all Rangers creditors to be paid in full,” it’s the creditors of the Hicks Sports Group who’ve been making all the noise. The Rangers have been on the hook for $75 million. HSG has been on the hook for much much more, and HSG’s creditors rather significantly are not part of this filing. Those creditors were not made aware of this plan prior to its announcement. As Maury Brown states:

As expected, Texas Rangers owner Tom Hicks has reached an agreement to sell the team to a group led by Pittsburgh sports attorney Chuck Greenberg which includes Hall of Fame pitcher Nolan Ryan, according to North Texas’ NBC affiliate KTEN. Despite the apparent deal, it still needs to be approved by Hicks’ creditors, which might not be a sure thing.

Hicks, who made his fortune as a private equity guru in the 1980s and 1990s, defaulted on more than $500 million in debts held by his sports holding company, Hicks Sports Group (HSG), back in April. Monarch Alternative Capital, a hedge fund that has snatched up about $100 of HSG’s debts at distressed prices after Hicks defaulted, is now Hick’s biggest lender, and could potentially block any sale. According to the Sports Business Journal, sources close to Monarch indicate that they are not pleased with the proposed deal, in part because they believe Hicks may have turned down a more lucrative deal, and also since he would apparently still own a “significant” part of the team after the sale.

From Sports Illustrated via the AP:

Check in with SB Nation’s Rangers blog, Lone Star Ball, for all the updates regarding the sale of the team.