The $1.725B sale of the Orioles includes “three billionaires and a handful of other partners” as part of the ownership group under David Rubenstein’s lead, “hailing from sports, political and business backgrounds,” according to Andy Kostka of the BALTIMORE BANNER. The group includes former N.Y. Mayor Michael Bloomberg and Ares Management co-founder & CEO Michael Arougheti. The rest of the team is made up of Orioles legend and Baseball HOFer Cal Ripken Jr., Basketball HOFer Grant Hill, Washington Spirit owner Michele Kang, former Baltimore Mayor Kurt Schmoke and co-heads of the Ares Credit Group Mitchell Goldstein and Michael Smith. Under the terms of the deal, Orioles Chair John Angelos “will remain in a senior advisor role with the Orioles,” and the family “will continue to be major investors.” A source said that Rubenstein began “expressing interest in purchasing the Orioles about six years ago.” He also showed “interest in purchasing" the Nationals at one point in a "joint effort" with Monumental Sports & Entertainment founder & CEO Ted Leonsis (BALTIMORE BANNER, 1/31). The WALL STREET JOURNAL’s Diamond, Gottfried & Adler wrote the deal is the “culmination of a long quest to land the Orioles.” Rubenstein “spent about three years negotiating on and off with the Angelos family” and “had his eyes on the Orioles for much longer.” Though he considered joining a group interested in buying the Nationals, he “ultimately decided to wait for the Orioles to become available.” The Orioles “were his top priority” (WALL STREET JOURNAL, 1/31).
TAX TALK: In Baltimore, Jeff Barker wrote the timing of the Orioles sale “came as a surprise to some who advise clients on tax and accounting matters.” Owners could be hit with “steep capital gains taxes on their portions of the sale,” based on how much the club’s value has appreciated over the years. But they “would avoid those income taxes by waiting to sell until shortly after Peter Angelos’ death.” Just how "substantial the tax bite will be” would “depend on the sales agreement.” If Rubenstein’s group will acquire 40% of the ball club from only the Angelos family, the taxes “would be assessed on that 40%.” But if the buyers’ 40% comes from a combination of Angelos and minority owners, Angelos “would be taxed on that smaller portion of the family’s share, or 28%” (BALTIMORE SUN, 1/31).
FINDING OUT IN THE PRESS: In Baltimore, Hayes Gardner reported that Maryland leaders did "not learn of the sale until Tuesday evening when news outlets began to report on it.” Sources said that the deal comes less than two months after Angelos told Maryland Gov. Wes Moore in a phone call that “he would not be selling the team.” When asked Wednesday if he felt he was lied to by Angelos, Moore “answered in the affirmative” and said transparency was “not there.” Moore then emphasized that the lease agreement signed last month “remains intact, regardless of owner.” Moore: “It’s disappointing, but it’s also the reason why we wanted to carve the deal that we carved, that says no matter who the ownership group is that this was not going to be a chance for a person to be able to relocate this team.” State Treasurer Dereck Davis said, “I feel lied to. I feel misled” (BALTIMORE SUN, 1/31). A source said that Rubenstein has been “actively communicating with the governor” including on Tuesday night when news of the sale broke. Moore said that the situation “underscores the importance of the state striking a long-term deal with the Orioles on the lease” and had there been a short-term extension of the lease, the state “would have faced even more uncertainty over the future of the team and the ballpark with a sale” (BALTIMORE BANNER, 1/31).
OWNERSHIP TIES: A BALTIMORE SUN Editorial stated the “first question on the minds of fans would be whether the new owner would have Charm City roots or not.” The “good news” is that Rubenstein is a “Baltimore Native.” Meanwhile, Ripken -- “easily the most Baltimore of any living Hall of Fame baseball player on the planet” -- is among the minority investors and “may prove even more reassuring” because Rubenstein “thought it important to include him.” The editorial stated “we have no idea what kind of owner Rubenstein will turn out to be,” but if anyone “has the tools to appreciate the economic-based challenges ahead, surely Rubenstein does.” The editorial added "we would encourage the newcomers to be open, to be honest and to be consistent," as fans “would appreciate getting a bit more respect from the O’s front office” (BALTIMORE SUN, 1/31).
