Mavs owner Mark Cuban ups ante in Texas Rangers auction, starts bidding war with Nolan RyanBy Angela K. Brown, AP
Wednesday, August 4, 2010
Bidding war starts in Texas Rangers auction
FORT WORTH, Texas — Billionaire Dallas Mavericks owner Mark Cuban and a group led by Hall of Fame pitcher Nolan Ryan were locked in a fierce bidding war for the Texas Rangers early Thursday, with each side adding millions to the pot in a rare and contentious bankruptcy court auction.
Just before midnight, the group led by team president Ryan and sports attorney Chuck Greenberg made a bid of $365 million in cash — a portion of its total bid — and dropped provisions worth $12 million.
Cuban’s group countered with a $390 million cash offer, part of a $598 million bid and that’s where things stood as the hearing stretched into Thursday, with no end in sight.
The stop-and-start showdown was delayed for hours at a time all day by closed-door haggling over the complicated nature of each bid. But the bidding picked up and the courtroom grew more crowded as the night wore on, with attorneys and even fans crammed on the wooden benches or standing along the walls.
Both bids include more than $200 million of the team’s debt — including $24.9 million in deferred compensation owed to Alex Rodriguez six years after he was traded to the New York Yankees.
The latest Greenberg-Ryan offer showed that Major League Baseball’s preferred owner was back in the game. The group had tried to stop the auction before a $355 million cash bid from Cuban and Houston businessman Jim Crane, with attorney Thomas Lauria questioning his competitor’s financing and suggesting Major League Baseball might reject them in the end.
But U.S. Bankruptcy Judge Russell Nelms kept the auction on track. He had clearly anticipated a lengthy process and even obtained permission to leave on the courtroom air conditioning, which usually shuts off at 5 p.m.
“We’re going to work through the night,” Nelms said.
The Greenberg-Ryan group had the base bid — about $520 million — 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 team’s May filing for Chapter 11 bankruptcy protection. If that group ultimately does not win, it will get a “breakup” fee of $10 million to $13 million.
Final approval of the Rangers sale rests with MLB, which has the option of choosing the second-highest bid instead. But if that happens, the league could face hefty fines or other sanctions if the judge determines it did not have a valid reason for rejecting the highest bidder.
The auction started Wednesday afternoon, six hours late, when Rangers attorney Martin Sosland said the bid by Cuban’s group was about $25 million more than the bid submitted by the Greenberg-Ryan group. Later, Greenberg-Ryan offered $2 million more than Cuban’s group, which then upped the ante by $15 million — to about $335 million as the cash portion of the total offer.
As the night dragged on, attorneys scurried back and forth between small rooms set aside for the team, creditors and each bidder. Reporters and courtroom spectators wandered the hallways and at one point, 10 pizzas and a case of bottled water and soft drinks were delivered to Cuban’s camp.
Earlier, Ryan signed autographs for some fans, many who said they arrived after work to take in the action — only to end up sitting for hours on the courtroom benches.
The snail’s pace auction, which has included tense exchanges and even yelling between the attorneys, is the latest twist 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.
According to the team’s bankruptcy plan, creditors will only get about $75 million from the team, no matter who ends up buying it. But the judge has said lenders, who are owed about $525 million after team owner Tom Hicks’ financially strapped ownership group defaulted on loans, can go after Hicks’ other companies.
The auction was delayed for hours because team attorneys said they were trying to determine the values of each proposal, which included different provisions. Nelms later said the Cuban-Crane bid had been revised to more closely resemble the Greenberg-Ryan bid.
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