Is anyone following this Texas Rangers bankruptcy calamity besides a few members of the media and lots of bankruptcy attorneys (and me)? The baseball team (the product) is playing a great brand of baseball, currently occupying first place in the AL West which is translating to excitement for a possible post-season appearance. Nolan Ryan, the President of the company and the General Manager, Jon Daniels are doing their jobs magnificently. However, the seemingly never ending saga of failed ownership has put what is a great product on the field in jeopardy of becoming a more interesting story due to the emotional, legal roller coaster ride it is taking publicly.
I survived an emotional, high profile, heavy media focus bankruptcy that went from a Ch 11 filing to a failed stalking horse bid to a Ch 7 liquidation. That experience taught me so many things but the one thing I will offer - whatever is being reported in the media is probably about 1/10 of what is really happening. Most often it is not nearly as enticing as the media portrays it to be. However, what is a reasonable hypothesis is that when the “B” guys (billionaires) are involved in selling expensive assets, buying big toys like professional sports teams or lenders trying to recover large, lost loans, emotions will run high. Which is why this is great entertainment off the field. And when those HNW’s (high net worth individuals) are involved, the media will write things and report things that may frustrate Judge Michael Lynn and the lawyers from both sides.
To date, since the Texas Rangers Baseball Partners company (Tom Hicks holding company who actually owns the Rangers) filed for protection under Chapter 11 of the Federal Bankruptcy Code on May 24, 2010, the product on the field has not seemed to be affected by the legal goat rodeo going on in the Fort Worth, Texas courthouse. Which suggests that the real asset of the Texas Rangers is the President of the ballclub, Nolan Ryan. He is the architect and the experienced, respected baseball person that can continue to make this a non-event for the product on the field. Look at one metric of customer satisfaction – home ticket sales since 2008 when Nolan took over as President:
• Up 17% from the 2007 season
• From 25th place to 15th place in attendance amongst all MLB clubs
• Approximately $8.6 million per year increase in ticket sales revenues
It is climbing because the product on the field is improving and not affected by the bankruptcy. A difficult thing to accomplish for any leadership team yet Nolan's team is succeeding.
[ Interestingly, one quant analysis attempts to predict this attendance based on multiple variables and has been very accurate in the past: http://www.texasleaguers.com/home/2010/4/5/2010-texas-rangers-wins-attendance-and-playoffs.html. The author’s formulas are based on Vince Gennaro’s book, Diamond Dollars, The Economics of Winning Baseball. http://www.amazon.com/gp/product/0977743632?ie=UTF8&tag=texasleaguerscom-20&linkCode=as2&camp=1789&creative=390957&creativeASIN=0977743632 ]
August 4th, 2010 is the scheduled date of the bankruptcy court auction if other bidders come forth with acceptable offers for the assets. The beauty of this potential auction is it would be made public. Only then would the public see who the bidder(s) is/are, if Mark Cuban will be a friend or villain in the end, and whoever becomes the new owner of the Texas Ranger Baseball team, will that group retain Nolan and will Nolan work for them.
Troy Aikman once said that “Dallas is not a sports town, it is a winner’s town.” Nolan Ryan is a winner and he should remain part of the winning bidder’s plans or they risk losing money, plus the fan’s hearts and minds. Next to go will be the players. And ultimately, that is the product they are buying.
Updates from August 5, 2010 - post auction -
The Chuck Greenberg and Nolan Ryan Group won a dramatic and heated auction bidding against Jim Crane from Houston and Mark Cuban, the owner of the Dallas Mavericks from Dallas. The courtroom drama and actual bidding commenced at 9am on Wednesday August 4 and ended at 1am Thursday morning. Read Mark Cuban's blog (listed on the right) about CHASING THE RANGERS. This should put to rest the media's villian or friend concerns. He is a businessman geared to make money. His posting describes eloquently how he assessed the risks identified and worked to minimize those risks.
The Dallas Morning News did a nice job of reporting the details for the non-BK educated person. Channel 11 in Dallas/Ft Worth did an excellent job of live blogging the auction details from the courtroom as they happened.
Did Greenberg/Ryan pay too much? Their winning bid early Thursday morning was $130M more than their stalking horse bid from May 24, 2010 and $30M more than their offer made on August 3rd to avoid the auction. http://www.dallasnews.com/sharedcontent/dws/spt/baseball/rangers/stories/080710dnosporangerssale.2d77bf3.html
Nolan Ryan was seen as the good guy by the media and Texas Rangers employees - http://www.dallasnews.com/sharedcontent/dws/spt/baseball/rangers/stories/080610dnspograntcol.2a19b7a.html
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