A Record $173 Million Buys Orioles
Two competing groups merged resources Monday and won a bankruptcy auction for the Baltimore Orioles at a record $173 million.
The previous baseball record was the $106 million paid for the Seattle Mariners last year, and the $140 million sale of the Dallas Cowboys and Texas Stadium in 1989 was the highest ever for a sports franchise.
The Orioles price seems to belie the claim by some major league owners that the game is experiencing economic distress, with diminishing franchise values.
“We certainly know that isn’t the case,” former Oriole shortstop Mark Belanger, a special assistant to the executive director of the players’ union, said at Monday night’s game here.
Belanger said no one would pay a record price for a small-market team if they couldn’t make a go of it.
“We’ll hear all the buzzwords that this is an aberration, that this is not the real situation because of the bankruptcy proceeding, but a franchise value is that which someone will pay,” Belanger said.
“I don’t think a good businessman would make that kind of investment with the idea of losing money.”
Baltimore attorney Peter Angelos confirmed that. Angelos, whose group merged with that of a group headed by William O. DeWitt Jr. to enter the winning bid, said it was more than he expected to pay, “but the Orioles are an exceptionally successful franchise and can support the price. We still have sufficient resources to give the fans of Baltimore a championship team.”
The Orioles drew 3.5 million in their first year at Camden Yards and are on a similar pace this year. Angelos added that a factor in the premium bid was the desire to re-establish ownership stability after the Orioles became a pawn of the court when owner Eli Jacobs, who bought the club for $70 million in 1989, filed for bankruptcy protection under Chapter 11, declaring assets of $146.7 million and liabilities of $320.7 million.
The Angelos group includes novelist Tom Clancy, tennis player Pam Shriver, broadcaster Jim McKay and movie director-producer Barry Levinson.
DeWitt, a Cincinnati investment banker who owns a piece of the Texas Rangers, is the son of the late general manager of the Cincinnati Reds, in which capacity the elder DeWitt once traded Frank Robinson to these same Orioles, contending he was an “old 30.”
The senior DeWitt also owned the St. Louis Browns at one point, having to sell off players to meet the payroll before selling the team that eventually became the Baltimore Orioles to Bill Veeck for about $2 million.
Under the merger, arrived at Monday just before the auction conducted by U.S. Bankruptcy Court Judge Cornelius Blackshear in Manhattan, Angelos is expected to be managing general partner, with DeWitt handling the daily baseball operation in a position apparently over that of General Manager Roland Hemond.
Larry Lucchino, who owns 9% of the club and will be paid out of the proceeds of the sale, is expected to remain as club president, with the opportunity to buy back in as one of at least 15 owners.
Both the Angelos and DeWitt groups have undergone extensive background and financial checks by the major league ownership committee. The merged group requires three-fourths approval of the clubs in the American League and majority approval in the National.
Bud Selig, owner of the Milwaukee Brewers and chairman of the executive council, said it was a “fine group that should carry on the proud tradition of the Orioles,” and he expected it to be approved.
Jacobs, who owns 87% of the Orioles, reached an agreement to sell his principal asset to the DeWitt group for $141.3 million before his bankruptcy filing, which gave Angelos time to organize a competing group. In a June hearing before Blackshear, the Angelos group submitted a $148.1 million bid to top what had become a $146.25 million bid by the DeWitt group.
Blackshear established new procedures and brought the interested parties back to his court Monday, but two of the original bidders did not participate.
Bowing out were Douglas Jemal, who owns the Nobody Beats the Wiz electronics chain with his three brothers; and Jean Fugett, the former NFL tight end and chairman of the New York-based food conglomerate, TLC Beatrice International Holdings Inc.
Jeffrey Loria, a New York art dealer and owner of the Oklahoma City team in the American Assn., went to $172 million through 16 rounds Monday before telling the Angelos-DeWitt group, “good luck, bring back a championship.”
The final score was recorded at $174 million for Angelos-DeWitt to $173 million for Loria, with Angelos-DeWitt credited for $1 million of legal work on the sale papers.