SBJ/September 26 - October 2, 2005/Other News

MLB faces yet another deadline for D.C. sale

Major League Baseball is racing against the clock to complete the sale of the Washington Nationals, with D.C.-area officials, team executives, industry observers and newly created Nationals fans all anxiously awaiting the long-delayed decision.

MLB, which has owned the team since early 2002, missed several self-imposed deadlines to name the club’s new owner, most recently mid-July, August and Labor Day. Baseball officials aiming for resolution by the end of the regular season have left themselves just days to make good on that.

Nationals President Tony Tavares is awaiting instructions for the offseason from MLB officials.
Holding up the decision in recent weeks has been slow-moving negotiations with the D.C. Sports & Entertainment Commission on a master lease for the Nationals’ new ballpark in Southeast Washington. MLB Commissioner Bud Selig has mandated the lease be done before moving forward on the ownership decision, and internal squabbling and control issues among local political leaders has not helped.

D.C. political sources said it could be mid-October before that lease is signed, but MLB hopes that completion will arrive sooner rather than later.

“I don’t believe our mandate has changed,” said John McHale, MLB executive vice president. “We’re all trying to move forward, given the prerequisites with the lease put in front of us. The ultimate determination, of course, is with the commissioner, but I remain optimistic we can soon move forward.”

Last week, Selig and MLB President Bob DuPuy met in New York to discuss the Nationals bidding, perhaps edging closer to the decision.

The stakes of the decision, both who and when, are enormous. MLB intends to sell the Nationals for $450 million, which would be a record for the sport when excluding the Boston Red Sox and the significant media and stadium assets packaged in that 2002 sale. Beyond money, MLB wants the Nationals to be a flagship franchise for the sport and a conduit toward better relations with Capitol Hill.

If a choice is not made within the next week, that would challenge MLB’s typical reluctance to make major business announcements during the postseason. Baseball broke its own edict last year by trumpeting its massive deal with XM Satellite Radio hours before Game 7 of the American League Championship Series, and McHale said there may be some flexibility to make the decision during the divisional playoff series.

Waiting until November and after the World Series would carry a different set of circumstances. MLB’s operating profit for the Nationals in 2005, estimated at $25 million, would be steadily eroded in the offseason when revenue flow is suspended. Waiting that long also would keep team President Tony Tavares and general manager Jim Bowden in their current posts and making decisions in preparation for the 2006 season, something not palatable to some prospective owners.

Tavares said last week that he is awaiting operating instructions for the offseason from MLB executives. Once the regular season ends this weekend, a number of decisions will need to be made in weeks, if not days, such as staffing and 2006 ticket pricing.

“In baseball, things just take longer sometimes than you’d like,” Tavares said.

Meanwhile, several of the eight bidding groups are bolstering their efforts to win MLB’s favor and create more local connections. Former Seattle Mariners owner Jeffrey Smulyan recently added several D.C.-area businessmen to his bidding group and met with several D.C. Council members, seeking to downplay concerns that he is an out-of-towner ill-equipped to work with local leaders.

Also believed to be still firmly in the mix are bids from Maryland developer Mark Lerner and a team of former Texas Rangers partner Fred Malek and Washington businessman Jeffrey Zients.

Even when a lease deal between MLB and the D.C. Sports & Entertainment Commission is signed, there is a possibility of further hiccups with the D.C. Council, which must approve the pact. The council last year nearly derailed the relocation deal bringing the Montreal Expos to Washington.

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