Kroc Will Sell the Padres to S.D.-L.A. Investor Group

An investment group of 10 Los Angeles and San Diego businessmen, led by television producer Tom Werner, signed a letter of intent Monday to purchase the San Diego Padres baseball team, club owner Joan B. Kroc said.

Terms of the agreement were not released, but sources have set the price at $75 million.

The deal still must be approved by the other 25 major league baseball owners. Jerry Kapstein, Kroc’s son-in-law who has been handling sale negotiations, said he sees no difficulties in getting that approval. Kapstein said the purchase could be completed within 60 days.

Werner said he was not prepared to make any announcements concerning possible personnel changes until after his group assumes control of the team. He said he will seek advice from Kapstein during the transition. Kapstein, who also took over as the team’s chief executive Feb. 22, said he has no plans to remain with the team after the sale.

The Kroc family has owned the team since 1974. Kroc said she is selling it so she can spend more time with her family.

“While I will be relinquishing the ownership of the Padres, I will never relinquish my status as a loyal and enthusiastic supporter of this fine team,” Kroc said, reading from a prepared statement at an afternoon news conference. “Being identified with the Padres these past 15 years has been one of the special privileges of my life and a source of the deepest pride.

“I trust that Mr. Werner and his group will do the utmost to represent the fans’ interest in the decisions he will be making for this club.”

Werner, 39, will serve as the investment group’s chairman and managing partner. He is a partner in Carsey-Werner Co., which produces “The Cosby Show” and “Roseanne,” two of the highest-rated shows on television. The investment group consists of Werner and nine other general partners, eight from San Diego. Individual shares were not disclosed, but sources in the group said Werner will own less than 50% of the club.

“Each one of us has a strong commitment to the San Diego Padres, and we are dedicated to sustaining the tradition of this great ballclub in the years ahead,” Werner said.

Kroc said, “From the beginning, I said it was very important to me that there would be a local connection. We never considered selling to anyone that wasn’t somehow bound to San Diego.”

One of Kroc’s considerations in selling the team was that the new owner would keep it in San Diego beyond the team’s current lease, which expires March 31, 2000. The agreement among the partners requires that 75% of the ownership approve any decision to move or sell the club, according to a member of the ownership group. He added that, since San Diego interests control more than 25% of the team, any move seems unlikely.

Three members of Werner’s group will serve as vice chairmen. They are Russell Goldsmith, chairman and chief executive officer of Republic Pictures and a former Harvard classmate of Werner’s, and Art Engel and Art Rivkin of San Diego.

Rivkin said the San Diego group came together in December, and it was through discussions with Wolfe and the offices of major league baseball that the group of San Diego businessmen merged with Werner’s interests.

The ownership group is a marriage of Werner’s business acumen in the entertainment field and the stability of local San Diego ownership. It was a deal in which each side said it needed the other.

The San Diego partners needed Werner’s interest in directly overseeing the club, and Werner needed the San Diego group to satisfy Kroc’s and major league baseball’s interest in maintaining local influence with the team.

“Tom Werner is going to be the boss,” Rivkin said. “We are going to be on the board of directors, on committees, be actively involved, but Werner calls the shots.”

Werner said he will purchase a residence in the San Diego area but will also maintain his Los Angeles home.

He said his work in the entertainment field should help him in running the Padres.

“My background is in television production,” Werner said. “I run a successful television production company, and I feel I know a lot about audiences.

“My shows in aggregate reach upwards of 150 million viewers a week. The principles I operate there are the same here: If you deliver people a quality product, the rest will come naturally.”

Kapstein said the ownership group will have 45 days from the signing of the letter of agreement to examine the team’s financial and other information. At the same time, a committee of baseball owners will continue to explore the group’s background.

Approval from the full body of baseball owners could come at their quarterly meeting June 13-14 in Cleveland or in a special meeting. Approval will require a three-quarter vote of the 12 National League owners and a majority of the 14 American League owners. Kapstein said the deal also must be approved by San Diego City Manager John Lockwood.

Kroc, 61, announced Oct. 17 that she wanted to sell the club, which was purchased for $12 million in 1974 by her late husband, Ray, who founded McDonald’s Corp.