That's what being reported, anyway. CBS Sports says that current owner John Moores has entered an "exclusive negotiating window" to sell the team for about twice its current (depressed) value of $406 million — and a lot more than Moores paid to buy the team in 1994, and to start selling it in 2009.
The sticker price is rumored to be $800 million. If the sale — to a group led by the family of former Dodgers owner Peter O'Malley, brewing tycoon Ron Fowler, and other investors including pro golfer and San Diego native Phil Mickelson — goes through, it would make the Padres the third costliest Major League Baseball team acquisition, behind the Chicago Cubs $845 and of course the recent Dodgers sale of more than $2 billion.
It would also mean that the two other potential owners — communications mogul Gary Jabara; and private-equity titan Steve Kaplan of Los Angeles' Oaktree Capital — are out of the running.
On its face, $800 million is very a rich price to pay for a team that's been underperforming of late and suffering from accusations that management isn't investing in the club. Film producer Thomas Tull, in partnership with Padres legend Tony Gwynn, couldn't take it to this level; his bid of around $600-650 million fell by the wayside a few weeks back, according to Forbes Mike Ozanian.
A big sale price isn't bad news for Jeff Moorad, who stepped in to buy the Padres on the installment plan back in 2009 for about $500 million, when Moores needed money to pay for his divorce.
Moorad was ahead on payments: the last installment of $152 million was supposed to come through this year. But Moorad's efforts to buy the team were completely derailed earlier this year. At the U-T, Tim Krasovic has a great blow-by-blow piece about how Moorad was pushed out by MLB's owners, perhaps because of his background as an agent. By late March, he'd stepped down as CEO of the Padres and by April Moores had hired investment bank Allen & Co. and noted sports dealmaker Steve Greenberg to find some buyers.
Moorad still holds 49 percent of the team, and his payout should take some of the sting out of losing the Padres. Various reports have suggested that MLB's problem with his taking full ownership involved the T.V. rights, which recently went to Fox Sports in a 20-year, $1.4-billion deal. Did Moorad want to use the TV money to buy out Moores? That's what was suspected. And that was one of the things MLB apparently didn't like. That said, if the sale to the O'Malley group goes through, Moores will get to keep $200 million from that deal.
Outwardly, the Padres look like a turnaround opportunity. Buying them for $800 million is a down-payment on gaining access to the T.V. money, which could be poured into the team. However, $800 million is a serious chunk of change. And as with the Dodgers deal, it's not entirely clear yet where the financing will come from. Forbes' Ozanian has been superb in this front, questioning whether the same funding source that went south on O'Malley when he wanted to buy the Dodgers may be doing so again.
Any team in a decent-size market will look at these deal numbers and conclude that there's a bubble building in sports franchises. How long will it last? Should we think about selling before it pops?
Or have the financial prospects of sports teams been forever altered by deals that all seem to push toward a billion? We could know by the end of the this week.
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