Bud Selig probably has a combination of Cerberus and sharks with frickin' laser beams attached to their heads guarding MLB's Central Fund. Still, that hasn't stopped him from giving to someone in need. This time, it's Rangers owner Tom Hicks, whose team has been rumored to have trouble keeping up with payroll. A $15 million cash infusion from the fund should keep the team afloat, at least until a new owner/partner is found.
Before Hicks Holdings' current troubles, the company went on an acquisition tear, buying the Rangers, Dallas Stars, and the Liverpool FC premiership soccer club. This is despite rumblings of Hicks not having enough cake to be a big time player in MLB. In April, the sports subdivision had to sell a local rodeo at a probable loss. It was reported that Hicks stopped making interest payments on both the Rangers and Stars while trying to restructure the debt. Hicks and the Rangers are leveraged to the hilt even though they have zero stadium debt. While the Rangers have an excellent TV contract, slumping attendance has caused the team to sit in the lower half of the revenue pool. According to Forbes, Texas pulled in $176 million net of revenue sharing. Compare that to the A's, who pulled in $160 million.
Dallas media speculates that the team's fiscal malaise will keep them from pursuing any midseason rentals, it may even hamper their ability to sign high draftees. Without some kind of angel investor group, it's hard to see how they pull out of it.
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3 comments:
MLS single-entity structure leading the way...
If I recall correctly, Tom Hicks was the beneficiary of a sweetheart deal when Gov. GW Bush privatized the Texas state employees retirement system and handed Hicks that plum, which he plundered by charging excessive management fees, eventually running the enterprise into the ground.
Hicks was also very kind to Bush by buying the Rangers at an inflated price. Bush put in very little money, but received a disproportionately generous share of the profits, making him a very rich man.
I no longer remember which action came first, but both deals pretty obviously constituted a quid pro quo.
So now it turns out that Hicks ran the Rangers into the ground as well.
Gosh! You'd think that somebody, somewhere would have looked at this whole thing at mid-point and said "Hey! This is as close to overleveraged as can be without saying the word. Let's start paying down some of that debt while we still have cash flow." But nooooooooo....none of these geniuses thought that was important. Yes, there were voices who were sounding the alarm bells but none of the people "on the inside" cared.
Sell the Rangers and the Stars or someone pry them from Hicks' hands!
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