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RANGER SALE
In recent days, information on the potential sale of the Rangers has come to light. The financial advisor for the Hicks Sports Group prepared a prospectus for potential purchasers with a $600 million asking price. In recent months, interested parties have followed up with due diligence inquiries. An August 18 bid date was set, and the team received six offers. None of the prospective buyers were identified, but it is almost certain that one of the bids is from a group that includes team President Nolan Ryan.
The asking price is generally viewed as a pipe dream. This team has drastically underperformed on an economic basis, and it is unlikely that the eventual taking price will even reach $500 million. The San Diego Padres recently sold for $500 million, and the Rangers are probably worth less than the Padres. Hicks paid approximately $250 million for the team in 1998, and after adding in operating deficits for the past 12 seasons, he may or may not break even at a price near $500 million.
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The valuation points up at least two alarming aspects of the team. First, and probably foremost, the Hicks Sports Group has done a miserable job of running the team. In the late 90’s, attendance neared the 3,000,000 mark, but last season they drew only 1,800,000. It was the first time in 20 years that the team had drawn fewer than two million fans, a span that includes five seasons in the old Arlington Stadium. Certainly, the product on the field has left much to be desired. Since making the playoffs in three of the last four years of the 20 th century, the Rangers have been under .500 record-wise every year but one. However, the marketing group at times has worked overtime to alienate their best customers – their season ticket holders.
The other situation that is now perceived to be a problem is the ballpark. Rangers Ballpark in Arlington is now in its 16 th season. It was one of the early retro ballparks, and it is far from outdated. The Hicks group has made many changes to the interior, and it can be argued that much of the charm of the original park has been lost, or that it is actually better for the updating. Either way though, the two big problems are not having a retractable roof and the stadium’s location. A retractable roof was not seriously contemplated when it was built. Given the North Texas climate, a retractable roof is almost a necessity at this point in time. Certainly, if a new stadium were to be built it would be a must.
The original Ranger ownership included significant interest from Ft. Worth. There has always been a jealousy between Dallas and Ft. Worth. Arlington, which is approximately halfway between the two, was thought to be an acceptable compromise. The reality is that a stadium in Dallas would be a far superior location. Dallas has always grown north, and high end suburbs such as Plano, Frisco and McKinney are simply too far away from Arlington to make attending weekday games with any regularity feasible. A significant and wealthy segment of the potential market is lost with the Arlington location.
Hicks also missed the boat on the team’s television rights. When he initially bought the team, there was talk of a team network, but in the end, he sold out to Fox Sports Net, a deal that looked lucrative when inked, but at this point in time is costing the team money.
There is speculation that more than one of the prospective purchasers is making economic projections based upon the idea of breaking the lease with Arlington and moving the team to a new stadium to be constructed in Dallas. Who knows if the lease can be terminated? A major hurdle would be getting the stadium built. The city of Dallas always seems to fumble the ball when it comes to constructing sports venues. Mayor Ron Kirk ramrodded through the deal that brought the American Airlines Center to Dallas, but he is no longer Mayor. His successors were unable to come to terms for the new Cowboys football stadium, lost to Arlington, just as Texas Stadium was lost almost 40 years ago to Irving.
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There is no way to predict when the sale of the team might be finalized. After selecting an offer, the transaction will take some time to be reduced to formal writing. The big unknown though is getting approval from Major League Baseball. The sale of the Cubs was just concluded, in what seemed like years of getting the approval.
The impact on Ranger fans is not good. The team on the field appears to be on the cusp of being really good. This season, they are certainly competitive in both the A. L. West and Wild Card races on Labor Day. To move forward, decisions will need to be made to maintain the momentum. It is doubtful that a lame duck Tom Hicks administration will have the motivation or the financial wherewithal to make the difficult personnel decisions to improve the team and move forward with an even better season next year. Tom Hicks has not been a popular owner with fans, so his departure will be viewed as a positive overall. However, the timing isn’t good, as in the short run the team may suffer damage with long term ramifications.
By: Richard W. Humphrey
MLBcenter.com Texas Rangers Correspondent
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