By Stephen Young
By Stephen Young
By Stephen Young
By Jim Schutze
By Rachel Watts
By Lauren Drewes Daniels
"Tom's taken a pretty significant public hit, and I understand some of it, but, in my opinion, he's been a very good owner," Daniels says.
The Rangers' Chapter 11 bankruptcy plan filed on May 24 in federal court in Fort Worth was supposed to ensure the team's expedited sale to Rangers Baseball Express LLC—a group headed by Rangers President Nolan Ryan and Pittsburgh lawyer Chuck Greenberg—which signed agreements on January 23 and May 23 to buy the team and 153 acres of land surrounding the stadium for about $575 million.
The Greenberg-Ryan group had emerged from an auction process as Hicks' successor, but the lenders anxiously awaiting payment on their loans vehemently opposed the deal because they were guaranteed repayment of only $75 million under MLB rules designed to keep teams from facing foreclosure during the season. Although lenders were guaranteed only $75 million, they did stand to receive roughly an additional $150 million that would be left over once unsecured creditors were paid out of the sale proceeds, giving the lenders a total payout of approximately $225 million. Add to that another $150 million expected to go to the creditors from the eventual sale of the Stars and HSG's 50 percent stake in the American Airlines Center, and the lenders would still wind up taking a $225 million hit on the $600 million they are owed, with second-lien lenders receiving absolutely nothing.
More galling to them still was the fact that Hicks stood to walk away with $75 million from the sale of the land. Since HSG didn't own the land, it's not part of the bankruptcy, so the creditors wouldn't see one dime from that part of the sale.
The creditors wanted a sweeter deal and argued that Houston businessman Jim Crane submitted a higher bid—by at least $13 million to $20 million, according to an e-mail sent to MLB by HSG attorney Glenn West. After countless setbacks and legal maneuvers, U.S. Bankruptcy Judge Michael Lynn scheduled a new auction for August 4 to determine the new owner once and for all. Four additional bidders have shown interest, including Crane, Dallas real estate developer Jeff Beck, Dallas Mavericks owner Mark Cuban and an undisclosed bidder that a lender testified has the financial wherewithal to "write the check" for the team.
Acquiring Lee wasn't the first move Daniels made while dodging the bankruptcy. Just 32 years old but in his fifth season as GM, he also traded reliever Chris Ray and 2007 first-round pick Michael Main for veteran catcher Bengie Molina eight days earlier without adding payroll because he convinced the San Francisco Giants to add cash—$2 million—to that deal as well. And before the season started and with the team on a tight budget controlled by MLB, Daniels spent what little free-agent money he had wisely, inking nine-time All-Star slugger and former Rangers nemesis Vladimir Guerrero, Rangers 1999 first-round pick Colby Lewis and veteran bullpen lefty Darren Oliver for a combined $13.75 million.
"I think if you were to take a vote right now around the league, he'd be executive of the year for what he's done, especially with his payroll constraints," says Jamey Newberg, author of The Newberg Report, an online Rangers newsletter.
Absorbing part of Lee's remaining contract puts the organization's total payroll at approximately $70 million, Daniels says, which ranks 25th among baseball's 30 teams and hovers "pretty close" to the budget MLB has allotted the team. The Rangers' bankruptcy handcuffs Daniels' power to negotiate long-term contract extensions with Lee and Molina, who are free agents at the end of the year, and he also can't hammer out a multiyear deal with Guerrero, who has a $9 million option in his contract for next year.
"We're not in a position to address it, but it's safe to say that would be on the short list of things to do when we're in a better position," he says of Guerrero's contract.
Young says none of the players are following the bankruptcy closely because it isn't something any of them can control—a sentiment echoed by several of his teammates. He stresses that he's had a "fine" relationship with Hicks since joining the team in 2000, and he refuses to "hop on board" with those publicly denouncing Hicks.
"With our team doing so well, I don't think it's in our best interests to have any negative energy," he says. "We're going to come out here. We're going to play hard. We're going to focus on the fact that we have a good club. And I want be in the middle of that rather than in the middle of something negative."
If the club's incredible success—an MLB-best 21-6 record in June and a team-record six All-Stars—isn't enough proof that it can overcome bankruptcy, consider that it has moved past what appeared to be a disaster when during spring training manager Ron Washington admitted to using cocaine last season.
Mike Rhyner, host of The Hardline on SportsRadio 1310 AM The Ticket for 16 years, says it's "nothing short of amazing" that the players appear unaffected by both the Washington incident and unresolved ownership situation. "If they can overcome that stuff, they may have the mental strength, mental focus and mental fabric to overcome just about anything because it's very conceivable that before the season opens, the manager loses whatever credibility he may have had in the room. Some would tell you he didn't have much to begin with."