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SBD/November 18, 2011/FranchisesPrint All
MLB owners on Thursday in Milwaukee unanimously approved the $610M, long-delayed sale of the Astros from Drayton McLane to Houston businessman Jim Crane. The sale, set to close formally early next week, represents a reduction from an original $680M figure. Crane negotiated the reduction, arguing the likelihood of higher operating costs given heightened travel within the AL West, the need to pay for a DH, and larger overall salaries in the AL. Responsibility to fund the $70M decrease will be split between McLane and MLB. Still, McLane netted more than five-and-a-half times the $117M he paid for the Astros in '92. "It feels very good," said Crane, who succeeded on his fourth attempt to purchase an MLB team and successfully shook off numerous questions regarding his business background. "I've been trying for a long time. I'm from Missouri. I'm stubborn. Now we've got it done. I want to thank Drayton for all he has done. He's a big part of getting us over the finish line" (Eric Fisher, SportsBusiness Journal). MLB.com’s Barry Bloom noted the deal “includes $385 million in equity, of which Crane is contributing about 20 percent.” The remainder “came from $25 million commitments from investors and through bank loans.” There will be “an 11-person board of directors” (MLB.com, 11/17). Crane said his group has “approximately 48” investors. Crane: “The names that will come out are very prominent business people. We have a lot of very smart people in the group and a very solid board. I think they’re engaged in ownership in Houston. The support will be in Houston. We’ll have a lot more involvement from the corporation side, which is what is needed to be successful” (CHRON.com, 11/17).
CHANGES ON THE HORIZON: In Houston, Zachary Levine noted with the ownership “officially transitioning Tuesday, Jim Crane spoke of the need to evaluate everything from the management behind the sputtering baseball team to those whose jobs it is to get fans into seats.” Crane: “Starting Tuesday when we get in the office, we’re going to review everything, not only the baseball operation but the marketing operation. Everything from soup to nuts. We’ll sit down with all the executives ... ask them what they think we’re doing right and what we’re doing wrong. We’ll make some very quick adjustments” (CHRON.com, 11/17). Crane “strongly hinted Thursday” that he “will lower ticket prices for 2012.” Crane: “We want to do whatever we can [to] get the people back. In loading a truck, if you’ve got a little empty space, $2 is better than nothing.” He added, “We want to reach out to the fans. We’ll do some things for the fans immediately when we get running. We understand the tradition in baseball. We understand the NL, and people are tied to that. But that wasn’t an option for this town” (CHRON.com, 11/17). Crane said that he “would be honest with fans about the work that needs to be done.” He “promised to listen on things like uniforms, colors, logos and even prices, but he emphasized some things could not be compromised.” In Houston, Richard Justice wrote for “his first day on the job, Crane hit all the right buttons.” Crane acknowledged that fans “were upset about the move to the American League but said he had no say in the matter.” Justice: “Crane is off to a good start. His first hire, chief executive officer George Postolos, is a brilliant man and an experienced executive.” His challenge “will be to bring more smart people into the front office and to evaluate the people he already has” (CHRON.com, 11/17).
NO COMPLAINTS HERE: In Ft. Worth, Jeff Wilson wrote the Rangers “aren't complaining” about the Astros' move to the AL West. They believe “the advantages of having a second Texas team in a West Coast-heavy division far outweigh the disadvantages, especially a team that is coming off a 106-loss season.” A second Texas team in the AL West “should boost the Rangers' TV ratings with fewer road games starting" at 9:00pm ET. More Astros games at Rangers Ballpark “could lead to a bump in attendance.” The Rangers “already considered the annual three-game interleague series a premium ticket.” Rangers Assistant GM Thad Levine said, "It's a win for us all the way around. If that cuts down on one trip to the West Coast and allows us to stay in-state to play a handful of games, that is a huge benefit" (STAR-TELEGRAM.com, 11/17). SI's Tom Verducci said after 50 years in the NL, the Astros never "developed a true natural rival." Verducci: "They have the possibility of that with the Texas Rangers. All it takes now is some history going forward, but all things in Texas there’s a rivalry within the state, I think it could be a good one” (“Hot Stove,” MLB Network, 11/17).
The Chiefs will “soon announce that prices of the 2012 season tickets in the lower and upper levels of Arrowhead Stadium will either decrease or remain the same,” according to Adam Teicher of the K.C. STAR. Seats in those levels along the sideline “will remain the same price as in 2011.” Chiefs Exec VP & COO Mark Donovan said that “seats in the end zone, making up more than 20 percent of those in the stadium, will decrease.” Donovan: “We’re coming off a season where we did very well in season-ticket sales. We’ve grown the base. We’ve gotten to the point where we’re announcing (an attendance of) 70,000-plus every game because of where we are from a sales standpoint. But we’re still looking at the building and knowing the economy is tough.” The Chiefs sold “about 50,000 season tickets in 2009, the most recent year for which figures are available, though that number declined for 2010.” Donovan would not provide an exact figure for this season but said that the Chiefs “had double-digit percentage growth and that they led the league in new season-ticket sales.” He indicated that season-ticket holders “would receive by mail information outlining the pricing plan within two weeks.” Ticket holders who renew “by Dec. 18 will be entered into a sweepstakes in which the Chiefs will give away a prize each day for 30 days.” Single-game ticket prices “will be determined at a later date” (K.C. STAR, 11/18).
PREVENTING BLACKOUTS: In Ft. Lauderdale, Craig Davis reports the Dolphins “continued the practice of joining with partners to buy up unsold tickets and ensure Sunday's game against the Bills will be on TV in South Florida.” Indications are that fans “will be able to watch the season's remaining home games on local television even if sellouts are not reached.” A team source said that the Dolphins “consider it important to have the games on TV to remain relevant in the market and view it as a long-term investment in the relationship with fans and sponsors.” Sunday will mark “the 106th consecutive regular-season game on local television.” However, this is the “fourth time this season that thousands of tickets remained at the blackout deadline.” The Dolphins and Miami’s WFOR-CBS “picked up an undisclosed number of tickets for Sunday, believed to be about 10,000, similar to last week's surplus for the game against the Redskins.” Dolphins CEO Mike Dee has repeatedly stated that the decision to buy up tickets "is made on a game by game basis” (South Florida SUN-SENTINEL, 11/18).
Rhode Island-based Providence Equity Partners has "reached out to Wayne Gretzky to be part of their group," which is "interested in purchasing a majority stake" in Maple Leaf Sports & Entertainment, according to SPORTSNET.ca. Sources said that Gretzky “has been approached by multiple groups interested in purchasing the majority stakeholder of MLSE.” Gretzky “would not give any details on potential roles or which specific groups have targeted him.” He has also “been on the record as saying he was still unsure if and when he would return to the NHL.” Gretzky’s agent, Darren Blake, said, “Wayne is often approached about becoming involved in various hockey opportunities. At this point in time there is nothing happening involving the purchase of the Toronto Maple Leafs” (SPORTSNET.ca, 11/17). The GLOBE & MAIL’s Morrow & Shoalts report several groups interested in purchasing a controlling stake in MLSE approached Gretzky, but there are "no serious talks under way." A source said that Providence Equity Partners “is considering a bid,” and added that he “did not know of any attempt to solicit Gretzky’s participation.” Prospective owners “would likely be interested in bringing Gretzky on board as a front man rather than an active chief executive officer” (GLOBE & MAIL, 11/18).
RIGHT MAN FOR THE JOB? In Toronto, Damien Cox writes Gretzky being a part of a group bidding for control of the Maple Leafs “just makes sense.” That U.S. investors, “who would almost certainly face criticism from fans, media and Canadian nationalists for scooping up hockey’s most valuable franchise, would want Gretzky as their front man makes even more sense” (TORONTO STAR, 11/18). However, SPORTSNET.ca’s Michael Grange wrote what the Maple Leafs “don’t need, necessarily, is Wayne Gretzky in an unspecified role as the figurehead of a US-based bid for MLSE.” Grange wrote, “If you’re an anonymous pile of U.S. money looking to squeeze a return out of a sacred local trust such as the Toronto Maple Leafs, perhaps one way to soften the inevitable local blowback is to get in bed with one guy most Leafs fans -- most hockey fans -- can agree on.” So Gretzky “isn’t the wrong guy.” But, "is he the right guy?” What Gretzky can bring “besides goodwill is an open question” (SPORTSNET.ca, 11/17). In Toronto, Steve Buffery writes Gretzky “was one of the all-time greats, but he hasn’t proven that he is able to translate his on-ice magic into off-ice magic.” Perhaps Maple Leafs fans “shouldn’t get too excited” (TORONTO SUN, 11/18).
The Dodgers plan to bring their merchandise operations in-house following a settlement with Facility Merchandising Inc. to end an eight-year concessions agreement after just two years. The Dodgers and FMI had battled over contract terms on several occasions during the '10 and '11 seasons, particularly as club attendance plummeted. FMI in August unsuccessfully sought to have the U.S. Bankruptcy Court for the District of Delaware force a decision on the contract status in advance of the Dodgers' overall reorganization. The settlement, struck with the aid of a mediator, calls for FMI to vacate Dodger Stadium by Dec. 1 and transfer its current holdings of Dodgers merchandise, valued at about $740,000, back to the team. In addition, the Dodgers will advance $300,000 to "repay obligations of FMI under a separate financing agreement." The club by March 1 will then receive $250,000 of that advance back, plus interest. FMI had been paying the Dodgers a minimum of $4.5M per year in royalties and signing bonus installments. Beyond ending a thorny dispute with a key vendor, the Dodgers' move to bring their merchandising business in-house represents yet another potential tool for outgoing Owner Frank McCourt to elevate team assets in advance of the planned sale. "Potential purchasers will have the opportunity to handle a significant component of the operation of a professional sports team as they see fit, thereby maximizing value," the club said in a filing with the bankruptcy court (Eric Fisher, SportsBusiness Journal).
ON THE DOCKET: In L.A., Bill Shaikin reports Fox Sports "expanded its legal combatants beyond the Dodgers late Thursday, adding team owner Frank McCourt and the umbrella company for most of his business ventures as defendants in a lawsuit alleging breach of contract." Fox also asked the U.S. Bankruptcy Court "for a restraining order to prevent the Dodgers from marketing their television rights and said the team had no need to remain under bankruptcy protection now that McCourt has agreed to sell." The amended suit "names McCourt personally and the McCourt-Broderick Limited Partnership as defendants" (L.A. TIMES, 11/18).
STAYING IN TOWN: McCourt Thursday said that he "has no intention of leaving town after a new owner takes over the Dodgers." McCourt: "I love Los Angeles and plan to stay in L.A. I don't know what my plans are, quite frankly, because I haven't had time to think about that." In L.A., Mike DiGiovanna notes McCourt was in Milwaukee Thursday for owners meetings, though some "thought the right thing for McCourt to do this week was skip these meetings." But McCourt said that he "was not discouraged from attending, and he did speak to" MLB Commissioner Bud Selig Thursday. McCourt: "It was a very brief hello, but nothing of substance" (L.A. TIMES, 11/18).
The Mariners on Wednesday unveiled a new logo that will be worn on the right sleeve of players' jerseys throughout the upcoming year to commemorate the franchise's 35th season. The logo has a navy blue background surrounding the number 35, which is above a 1977-2012 banner that includes the Mariners' symbol and letter "S." The Mariners also announced they will be returning the "Northwest Green"-billed caps as part of their home uniforms on Mondays and Fridays next season, to be worn along with the Northwest Green alternate jerseys that were brought back last year. A dark navy top will continue to be the alternate jersey for road games. In one design change for next season, the front of the navy jerseys will now read "Seattle" instead of "Mariners." The road grays already said "Seattle," and home jerseys will continue to say "Mariners" (Mariners).
TO-DO LIST: Cubs President of Baseball Operations Theo Epstein on Thursday said that compensation talks between the Cubs and Red Sox “have been tabled until after the Rule 5 Draft on Dec. 8.” Epstein at the GM meetings this week said that he and Red Sox GM Ben Cherington “agreed that it makes sense to put it off until after the Rule 5 Draft." Epstein said that MLB “will not get involved unless the two teams cannot reach a conclusion” (MLB.com, 11/17). In Boston, Nick Cafardo cited an MLB source as indicating that with the MLB CBA talks going on, the Red Sox-Cubs compensation issue is “low on the to-do list.” That “doesn’t mean the sides can’t decide the compensation in a flash, so MLB continues to encourage them.” It is “difficult to predict whether MLB would want to discourage the future raiding of staffs by making the Cubs surrender a significant player, or whether they would go the midrange prospect route, which may upset the Red Sox but satisfy the Cubs” (BOSTON GLOBE, 11/17).
THE NEXT LEBRON? ESPN's Dan Le Batard said the Marlins view free agent 1B Albert Pujols "as their LeBron for a couple of different reasons." the team has reported offered Pujols a nine-year, $225M deal, and Le Batard said, "Never mind spending lot of money, the idea that they would be offering eight or nine years, they never do that. ... On the front end, the first three or four years, they can make all the money back, so it doesn’t matter what happens on the back end. And they think they can make it (with) Latin American sponsors, international sales. They think they can make money by making him their LeBron” (“Dan Le Batard Is Highly Questionable,” ESPN2, 11/17).
ON THE UPTICK: MLB.com’s Ken Gurnick reported team owners "formally approved CEO Larry Baer as the control person" of the Giants, “culminating his climb to the upper echelons of the game.” Baer succeeds retiring CEO Bill Neukom (MLB.com, 11/17). Baer said that season-tickets prices “will rise an average of 5-6 percent, though he acknowledged that a handful of customers will see double-digit increases because the team determined that those tickets were undervalued.” He said that single-game ticket prices “will be ‘pretty much in line with last year,’ though they will fluctuate with dynamic pricing” (S.F. CHRONICLE, 11/17).
WEATHER OUTSIDE IS FRIGHTFUL: YES Network's Bob Lorenz reported the Yankees are “taking part in an effort to help the needy stay warm as the weather gets colder in New York City.” New York Cares kicked off its annual coat drive with the help of the Yankees at the Hard Rock Cafe in Times Square. The Yankees “gave out tickets to last Saturday’s Rutgers-Army game” to donors. Yankees Senior VP & GM Brian Cashman said, “Winter is coming and the homeless problem here in New York alone, let alone worldwide, it’s a very serious issues and people need help. So this is a small way people can help” (“Yankees Baseball Daily,” YES, 11/16). Meanwhile, Cashman Thursday night slept outside as part of a charitable effort for Covenant House Int'l.