SBD/Issue 56/Franchises

Red Sox Bidders Add Strength To Groups; NESN Jewel Of Deal

Red Sox bidder Miles Prentice indicated that he "expected" Quadrangle Group to become an investor in his group, according to Meg Vaillancourt of the BOSTON GLOBE, who cited a source as saying that the pairing "was likely." Vaillancourt: "The addition of Quadrangle would be a major boon to Prentice, whose interest in the Red Sox has been viewed with skepticism by rival bidders who questioned whether he had the funds to make a credible bid." Quadrangle's investors include former Lazard Freres & Co. partner Steve Rattner, USA Networks Chair & CEO Barry Diller, Comcast President Brian Roberts, Netscape co-Founder Marc Andreessen, former McCaw Cellular Communications Chair Craig McCaw and RealNetworks CEO Rob Glaser (BOSTON GLOBE, 12/1). In Boston, Scott Van Voorhis cited sources as saying that one Red Sox bidder "may have laid down an offer of more than" $400M, and speculation about the highest bidder focused on Cablevision Chair Charles Dolan. However, sources believe that Prentice "might also be a potential candidate for such a go-for-broke bid." But sources added that Prentice would "have a difficult time winning approval" from other MLB owners (BOSTON HERALD, 12/1). In N.Y., Mitch Lawrence reported former MSG CEO Dave Checketts "has surfaced as a major player" in a group trying to buy the Red Sox, and noted Checketts is part of the Joseph O'Donnell-Steve Karp bid group. Checketts said, "It'll be a great opportunity if it happens. We might find out by the middle of next week if we're going to get it. ... Originally, the (O'Donnell group) approached me and asked me to look at the finances, the whole operation and the question of a new ballpark for the Red Sox. I did that and when I told them what I thought, they said, 'How would you like to put some of your money in and come in with us?' I figured this is a tremendous opportunity." If the O'Donnell-Karp bid group is selected, Checketts would become the club's CEO. Meanwhile, Lawrence added Checketts' group could outbid Charles Dolan's group. Checketts: "When I told Mr. Dolan that I was part of the group, he was stunned" (N.Y. DAILY NEWS, 12/1).

HOW NESN FACTORS IN: In Boston, Jim Baker wrote that New England Sports Network (NESN), 80% of which is expected to be included in the Red Sox sale, "is definitely a jewel and its prize status is no longer hidden, but its value is still being underestimated as many haven't grasped why its potential is soaring." Baker noted published reports put NESN's '01 revenues at $3M and projected them to reach $40M in four years. Baker: "But present and former NESN officials tell the Herald revenues will rise much faster and to much higher levels." One former NESN official said, "NESN will become a $100 million operation and sooner than you think." Baker noted the Red Sox-Bruins' ownership structure in NESN "is 80-20, boosting Sox power in NESN" (BOSTON HERALD, 12/2). Meanwhile, the N.Y. DAILY NEWS' Lawrence wrote it "wouldn't surprise anyone if Checketts' group ... also makes a run at the Celtics, if the Sox' bid is accepted." Lawrence: "With the [NESN] being part of the Red Sox sale, we could see the ex-Garden boss looking to start an MSG-like empire in Boston" (N.Y. DAILY NEWS, 12/2).

WHO'S IN FIRST? In Boston, Steve Marantz reports MLB Commissioner Bud Selig "favors the [Red Sox] being sold to the group of Tom Werner, Les Otten, George Mitchell and Larry Lucchino — with the possible and pivotal addition of ... John Henry — because it is expected to support him in collective bargaining this winter." MLBPA sources say that the fate of the Werner-Otten group "may be intricately tied to Selig's labor strategy." Another MLBPA source adds that without Henry, the Werner-Otten group "may be significantly outbid" (BOSTON HERALD, 12/3). In Boston, Will McDonough, on the Red Sox' desire to sell to the highest bidder: "Why can't it be that the team will be sold to the group that combines the best of these two — money and love of the Red Sox?" If Red Sox CEO John Harrington did this, he would "choose the [O'Donnell-Karp] group, because their local roots and financial stability combine the best of what that tradition wanted to champion" (BOSTON GLOBE, 12/2).

DON'T FORGET THE PARTNERS: The BOSTON GLOBE's Vaillancourt noted Harrington "must consult with six people destined to help pick" the winning bidder. Vaillancourt: "They are the team's other limited partners. And after years of having little say in how the team is run, they are crucial to deciding who will occupy the owner's box at Fenway Park next year." John Hancock President & CEO David D'Alessandro said, "The limited partners are sitting in the catbird seat now." Meanwhile, two other partners said that they will "consider selling their stakes if someone offers the right price." Another said that he hoped to "obtain a change in the ownership structure that would give the limiteds more financial security" (BOSTON GLOBE, 12/2).

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