Some Wondering If $180M Would Be Too Little For The Angels
 | | Angels Sale Price Thought
By Some As Too Low | MLB Commissioner Bud Selig indicated that the reported $180M price prospective Angels Owner Arturo Moreno will pay for the club "does not indicate that the new [CBA] is not working," as it is "far too soon to conclude that the labor agreement has failed to prop up franchise values," according to Bill Shaikin of the L.A. TIMES. Selig: "This is the beginning of the first year. One of my jobs is to increase asset value and, I assure you, we will do that" (L.A. TIMES, 4/22). But Selig also said of the sale price, "If nothing else, this merely reinforces what I maintained about the game's economics (during the labor negotiations). So much has been said about franchises selling for huge profits, we're having problems just finding buyers now." In N.Y., Bill Madden noted the price "marks the first time in a long time that a major league franchise has been sold for a loss," as Disney purchased the Angels for $147M "and then sank nearly $100[M] into the renovation of Edison Field" (N.Y. DAILY NEWS, 4/20).
PRICE IS RIGHT? Moag & Co. Chair John Moag: "We saw great prices (for NBA expansion) in Charlotte and for the Red Sox. You can go down the list of franchises that have sold in this bear market and values have held up very well. So it begs the question: What's going on here? Why can't this franchise get the money that it's worth?" The SPORTSBUSINESS JOURNAL's Bill King writes industry analysts "suggested that it's because the Angels continue to lose cash in spite of an improving revenue picture" (SBJ, 4/21 issue). Smith College economist Andrew Zimbalist, on the Angels' $180M sale price: "If this is the full asset figure, then, yes, I'm very, very surprised. Given normal multiples and market conditions, I would have thought $275[M], give or take $20[M]" (WASHINGTON TIMES, 4/20). The L.A. TIMES' Shaikin noted analysts "typically determine franchise value as a multiple of revenues, but the widely cited figures of [$225-250M for the Angels] are based on unprecedented revenue — including record ticket sales — that may not be sustainable if the Angels fail to return to the playoffs and fan enthusiasm wanes." Game Plan LLC Chair Robert Caporale said of Disney, "I think they're getting the market price. I do not believe you were going to get substantially more, given current economic conditions and given projections of team financial performance." Caporale added that he could "not imagine a new owner generating much more revenue than Disney had" (L.A. TIMES, 4/19).
SHEDDING SOME LIGHT: In a Q&A with Bernard Wolfson of the ORANGE COUNTY REGISTER, former Angels co-Owner Jackie Autry said, "I looked at the records going clear back to 1961 and the club never made money. Actually, it made $85,000 in 1982. ... In 1990, we started losing big-time. It just started to escalate to the point that we were $40[M] in debt by the time we sold the club." Autry added, "Until baseball corrects its financial problems, you will continue to see the escalation of turnover in ownership. In football and basketball you don't see the constant churning of ownership that you do in baseball. The cause is that the (baseball) clubs are in such big debt because of the stupidity of the owners in paying salaries that they can ill afford. At some point in time, I think that [MLBPA Exec Dir] Don Fehr and the players and the agents are going to have to understand they are killing the goose that laid the golden egg, and they're going to have to take a different position if they want the industry to flourish and survive" (ORANGE COUNTY REGISTER, 4/19).
WILL ANGELS DEAL AFFECT OTHER SALES? In Hartford, Jack O'Connell cited analysts as saying that "the market for major league franchises has gotten so soft the Dodgers and the Braves, both up for sale, might also sell for below market value" (HARTFORD COURANT, 4/20). In DC, Eric Fisher wondered, "How does this affect the sale of the ... Expos? [MLB officials] have made no secret of their desire to beat the $120[M] owners paid last year for the Expos, as well as recoup heavy operating losses since then." But "it stands to simple reason that if the [Angels] ... can't even fetch twice their average annual revenue of about $100[M], neither can the Expos. Using that revenue-multiple formula, the Expos would sell for less than" last year's $120M price (WASHINGTON TIMES, 4/20). In DC, Thomas Boswell wrote the "biggest issue isn't what the Expos would fetch. It's how much [Orioles Owner Peter] Angelos can get on the open market for his Orioles. The worst-kept secret in baseball is that he wants to sell." But one "stumbling block" has been Angelos's asking price (WASHINGTON POST, 4/18).
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