SBD/March 23, 2012/Franchises

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  • Padres' Moorad Steps Down As CEO Leaving Doubts About Future Ownership Of Team

    Moorad will retain Vice Chair title and continue work on a 20-year deal with FSN

    Padres Vice Chair Jeff Moorad Thursday said he will relinquish the CEO title, perhaps ending his lengthy, staged bid to purchase the franchise from Chair John Moores and further extending the ownership soap opera that has enveloped the team for roughly a half decade. Moorad earlier this month tabled his bid to accelerate the purchase from Moores and gain designed control status of the team, a move at the time that was said to be more of a procedural step. But in the face of continued opposition from current team owners, according to industry sources, Moorad has taken the further step to remove himself from day-to-day operations of the club. Moorad, however, will retain the vice chair title and continue work on a 20-year deal with FSN worth an estimated $1B to create a new regional sports network in San Diego. The network, not yet formally approved by MLB, aired its first Padres Spring Training game last week. Padres President & COO Tom Garfinkel will assume the CEO title and duties on an interim basis. Moorad had wanted to complete the estimated $530M acquisition of the club since early January, but a scheduled vote on the deal was tabled at league quarterly meetings due to what MLB Commissioner Bud Selig described as "economic concerns." Moorad, who currently owns 49% of the club, and Moores, owner of the other 51%, both declined to comment further, and it is not fully clear what will happen to the proposed deal between them, or their existing partnership that also includes several other investors brought in under Moorad. Under the original deal signed in early '09, Moorad had a five-year timetable to buy the club from Moores. If Moores were to put the Padres back out on the open market, perhaps enticing one of the soon-to-be-unsuccessful bidders for the Dodgers, it is highly likely he would be able to command a far higher price than what he agreed to with Moorad given the ongoing rise in baseball cable TV rights fees (Eric Fisher, SportsBusiness Journal).

    RESISTANCE IS FUTILE? In San Diego, Tim Sullivan writes at the least, Moorad's decision "casts serious doubt on ownership control of the team." The ultimate meaning of Thursday’s news "may take months to unravel." Padres P Clayton Richard: "Shocker is a good word." The prospect of Moorad gaining controlling interest in the club was "met with stern resistance" from a group of MLB owners spearheaded by White Sox Chair Jerry Reinsdorf and D'Backs Managing Partner Ken Kendrick. Moorad served as CEO and part Owner of the D'Backs from '05-09. Sources believe that Moores himself "ultimately joined the ranks of Moorad’s opponents" (SAN DIEGO UNION-TRIBUNE, 3/23).

    FACTORING IN FRANK: FOX SPORTS' Jon Paul Morosi noted the Padres will "never be as popular or as rich as their neighbors to the north," but now the "franchises are linked." MLB officials are "wary of highly leveraged owners" because of history with outgoing Dodgers Owner Frank McCourt. Morosi wrote, "Right now, the wise play for Moores is to wait for another 10 days. After that, Moores will be able to say he owns the only baseball franchise known to be for sale." Reports indicate that the Dodgers "could sell for more than $1.5 billion." Moores "won’t be able to get anything close to that for the Padres." But if he lets the Dodgers "set the record for the highest franchise sale price, he can engage the L.A. runners-up and offer his wares for more than Moorad was willing to pay" (FOXSPORTS.com, 3/22). The SAN DIEGO UNION-TRIBUNE's Sullivan notes capital gains tax breaks scheduled to expire next year "could provide Moores a multimillion dollar incentive to sell sooner rather than later." But since Moorad’s investment group "retains an option on the 51 percent of the franchise it doesn’t already own for two more years, Moores’ exit strategy might be encumbered" (SAN DIEGO UNION-TRIBUNE, 3/23).

    CALIFORNIA DREAMIN': In California, Dan Hayes notes it remains unclear "how Moorad's stepping down will affect his group's attempt to move the organization's Triple-A franchise" to Escondido, Calif. Moorad's group purchased the PCL Tucson Padres in Dec. '10 with the "intention of moving them into a city-funded downtown ballpark" (NORTH COUNTY TIMES, 3/23).

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  • Amid League Suspensions, Saints Owner Tom Benson Pledges Support To Loomis, Payton

    It is unclear who Benson leans on outside Saints organization for football advice

    Saints Owner Tom Benson “is standing by the men in charge of his football team” despite their implication in the NFL bounty scandal," according to Jeff Duncan of the New Orleans TIMES-PICAYUNE. Benson's loyalty "should surprise no one.” But head coach Sean Payton and GM Mickey Loomis have led the team “into an embarrassing abyss” that “dwarfs anything the club endured during Benson’s 26-year watch.” Duncan writes it is “admirable" for Benson to stand by Loomis and Payton, but what he “really needs to do is step forward and stand in front of them.” He “needs to lead” and the “time is now.” Duncan: “The situation demands it.” Benson's inner circle “has always been small” and longtime advisers Stanley Rosenberg and Tom Roddy “undoubtedly are at his side.” Saints CFO Dennis Lauscha “remains a trusted source,” but their expertise “lies with the business side of the operation.” Whom Benson leans on “outside the organization for football advice is unclear” (New Orleans TIMES-PICAYUNE, 3/23). Duncan wrote the Saints essentially “told Goodell: ‘It’s our universe’ and to go away.” Payton and his team “now will pay the price for this hubris.” The outcry from many Saints fans in the aftermath of the announcement of the suspensions “was predictable,” but it “also was disturbingly misguided.” Duncan: “This wasn't a mistake. A mistake is a typo in a league memorandum. This was conspiracy, institutional insubordination of the highest order” (NOLA.com, 3/22).

    LOCAL SUPPORT: ESPN’s Josina Anderson reported that the t-shirts supporting suspended Payton at New Orleans-area store Skip N’ Whistle “were hot sellers.” Store Manager Kristen Romig: “One thing I’m really surprised by is the first day we put them up … they were all local sales and now we’re getting orders from Las Vegas, Hawaii, New York. We’ve even had a few international orders which I think is crazy that so many people are just really affected by this” (“SportsCenter,” ESPN, 3/22).

    NOT THE LONE RANGER: In New Orleans, Mike Triplett noted the Saints “weren’t the only team to be investigated by the NFL for violations of the league's ‘bounty rule’ in recent years.” The Packers were investigated in ‘07 “for lesser infractions and wound up suffering no punishment after agreeing to discontinue their actions.” Clearly the NFL felt the Saints’ violations “were much more egregious” (NOLA.com, 3/22).

    Print | Tags: Franchises, New Orleans Saints
  • Steven Cohen Seen As "Clear-Cut Favorite" In Bidding For Dodgers' Ownership

    SAC Capital Advisors Founder and Mets investor Steven Cohen “has made himself the clear-cut favorite to wind up owning the Dodgers next month,” according to sources cited by Bill Madden of the N.Y. DAILY NEWS. A source said that Cohen is “best positioned to structure his bid with sufficient equity to offset the $400 million in Dodger debt accumulated” by outgoing Owner Frank McCourt. Because all five of the bidders “have insisted that the parking lots surrounding Dodger Stadium and their revenue -- which McCourt placed in a separate company exclusive from the bankruptcy process -- be included in the deal, it has been speculated that the April 1 deadline for McCourt accepting the winning bid might be extended a few days” (N.Y. DAILY NEWS, 3/22). FORBES' Mike Ozanian cited a source as saying that the bidders “do not simply want the right to lease the parking lots at Dodger Stadium from team owner Frank McCourt, they want outright ownership of the land.” Bidders have been “adding partners over the past several days to increase the cash component of their offers and prepare for the final auction of the team” (FORBES.com, 3/22).

    DIVORCE COURT: BLOOMBERG BUSINESSWEEK’s Steven Church noted the Dodgers are “seeking dismissal of Jamie McCourt’s $131 million claim, saying owner Frank McCourt must pay his ex-wife.” Court records show that the McCourts signed a divorce settlement “requiring Frank to give Jamie $131 million by April 30 or sell team assets to make the payment.” The Dodgers in a filing on Thursday in U.S. Bankruptcy Court in Wilmington, Delaware, said that since the team “isn’t a party to the settlement, it cannot be forced to pay Jamie.” Jamie McCourt had “filed a so-called proof of claim in the bankruptcy case, demanding that the team pay her $131 million” (BLOOMBERG BUSINESSWEEK, 3/22).

    Print | Tags: Franchises, Los Angeles Dodgers, Baseball
  • Increases In Forbes MLB Team Valuations Being Driven By New Local TV Deals

    MLB is “flourishing thanks to cable companies’ desire for live baseball programming,” according to FORBES’ Mike Ozanian, who outlined the latest team values for the ’12 season. The average MLB team “rose 16% in value during the past year, to an all-time high of $605 million,” and rights fees paid by cable television channels are “behind the growth in team values.” Aggregate cable television revenue for baseball’s 30 teams “has increased to $923 million from $328 million over the past 10 years,” and local TV revenue “could exceed $1.5 billion in 2015.” The Yankees are the “most valuable team in baseball, worth $1.85 billion,” tying them with the Cowboys for the “top spot among American sports teams and placing them second in the world” to EPL club Manchester United’s worth of $1.9B. YES Network generated a “staggering $224 million in operating income and paid the Yankees a $90 million rights fee in 2011.” The Red Sox, whose parent Fenway Sports Group owns 80% of NESN, “generated $60 million from NESN in 2011, at $1 billion this year.” Both the Cubs, who rose 14% in value, to $879 million, and the Phillies, who increased 19% in value, to $723 million, "are expected to enjoy huge increases in local television revenue when their current deals expire.” The Cubs “contract with WGN, which televises about half the team’s games, ends following the 2014 season and its deal with Comcast SportsNet Chicago expires after 2019.” The Phillies’ TV deal with Comcast SportsNet Philadelphia “expires after the 2015 season.” Only the Mets and Rays “went down in value” this season (FORBES.com, 3/21).

    RK
    TEAM
    VALUE
    1-YR
    % +/-
    DEBT/
    VALUE
    REVENUE
    OPERATING INCOME
    1 Yankees
    $1.85B
    9%
    2%
    $439M
    $10M
    2 Dodgers
    $1.4B
    75%
    41%
    $230M
    $1.2M
    3 Red Sox
    $1.0B
    10%
    24%
    $310M
    $25.4M
    4 Cubs
    $879M
    14%
    66%
    $266M
    $28.1M
    5 Phillies
    $723M
    19%
    24%
    $249M
    -$11.6M
    6 Mets
    $719M
    -4%
    69%
    $225M
    -$40.8M
    7 Rangers
    $674M
    20%
    55%
    $233M
    $15.3M
    8 Angels
    $656M
    18%
    3%
    $226M
    -$1.2M
    9 Giants
    $643M
    14%
    16%
    $230M
    $8.8M
    10 White Sox
    $600M
    14%
    7%
    $214M
    $10.7M
    11 Cardinals
    $591M
    14%
    47%
    $233M
    $25M
    12 Mariners
    $585M
    30%
    0%
    $210M
    $2.2M
    13 Astros
    $549M
    16%
    41%
    $196M
    $24.3M
    14 Twins
    $510M
    4%
    20%
    $213M
    $16.6M
    15 Braves
    $508M
    5%
    0%
    $203M
    $20.7M
    16 Nationals
    $480M
    15%
    52%
    $200M
    $25.9M
    17 Tigers
    $478M
    24%
    39%
    $217M
    $8.2M
    18 Rockies
    $464M
    12%
    15%
    $193M
    $14.4M
    19 Orioles
    $460M
    12%
    33%
    $179M
    $12.9M
    20 Padres
    $458M
    13%
    44%
    $163M
    $23.2M
    21 Marlins
    $450M
    25%
    32%
    $148M
    $8.9M
    22 Brewers
    $448M
    19%
    27%
    $195M
    $19.2M
    23 D'Backs
    $447M
    13%
    39%
    $186M
    $27.2M
    24 Reds
    $424M
    13%
    10%
    $185M
    $17.1M
    25 Blue Jays
    $413M
    23%
    0%
    $188M
    $24.9M
    26 Indians
    $410M
    16%
    27%
    $178M
    $30.1M
    27 Royals
    $354M
    1%
    14%
    $161M
    $28.5M
    28 Pirates
    $336M
    11%
    38%
    $168M
    $15.9M
    29 Rays
    $323M
    -2%
    36%
    $161M
    $26.2M
    30 A's
    $321M
    5%
    28%
    $160M
    $14.6M

    Print | Tags: MLB, Franchises
  • Franchise Notes

    In N.Y., Peter Vecsey cites a source as saying that Larry Bird's stint as Pacers President of Basketball Operations is "coming to a conclusion at season's end regardless" of how the team finishes. Hired six seasons ago as then-Pacers President & CEO Donnie Walsh’s "eventual replacement, Bird was paid" $5M a year for the first five years. It appeared he was "about to retire to his home in Naples, Fla., after last season." But a "strong finish, topped by a promising first round playoff showing against the Bulls, and an appeal from Owner Herb Simon to stick around convinced him otherwise, in spite of having his salary slashed" to $1M. A handshake promise was given to Simon last summer by Bird that he "would consider re-upping for another season, but that has been ruled out." Sources believe that in replacing Bird, Simon is "more apt to choose a marquee name like Reggie Miller or Chris Mullin as opposed to promoting the people on site," like GM David Morway or Dir of Player Personnel Kevin Pritchard (N.Y. POST, 3/23).

    NEGOTIATING TACTICS: PRO FOOTBALL TALK's Mike Florio wrote the fact that the NFL has stripped $46M in combined cap space from the Redskins and Cowboys for their spending habits in the uncapped '10 season was lost "in the frenetic flow of news over the past few days." A source said that the Redskins "currently plan to plead their case among the NFL's movers and shakers" at the league meetings in Florida next week, "hopeful that some momentum can be built toward reversing the outcome." Florio noted that had the Redskins taken any legal action prior to the league meetings, it "surely would have resulted in some awkward moments in Palm Beach for the Redskins delegation" (PROFOOTBALLTALK.com, 3/22).

    ARE YOU EXPERIENCED? In Tampa, Robert Trigaux notes Rays marketing execs unveiled this season's ad campaign, a "rotating theme based on the word 'Experience.'" The overall slogan is "Experience the Rays." The first print ad was set to run Thursday, featuring an image of Rays manager Joe Maddon and 3B Evan Longoria in mid-hug with the words, "Experience: History." The first TV ad runs Monday. The campaign "extends to radio and billboards." Increasingly, the Rays are "pushing into social media sites ranging from Facebook and Twitter to FourSquare, Yelp and (particularly to reach women) the pinboard-style, image-sharing site Pinterest." It is the first season the Rays "went strictly with in-house expertise." The team "skipped the outside ad agency and conjured up their own campaign" (TAMPA BAY TIMES, 3/23).

    BIG THINGS BREWING: In Milwaukee, Don Walker writes the Brewers "are well positioned for another attendance record at Miller Park." Brewers COO Rick Schlesinger said Thursday that "ticket sales are running 10% ahead of last year." Schlesinger: "It's physically impossible for us to sustain that because we won't have enough seats in the ballpark. We are capped at 3.25 million capacity at Miller Park. A 10% jump in growth from last year means we will be selling seats in the plaza." The Brewers in the '11 season "set a franchise attendance mark: 3,071,373 fans" (MILWAUKEE JOURNAL SENTINEL, 3/23).

    Print | Tags: Franchises, NFL
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