Friday, March 9, 2012

Ownership Q&A

This blog has written several lengthy stories about Jeff Moorad's attempt to become "control" owner of the Padres. In contrast to prevalent reports in the mainstream national media and the local print media, none of those articles conveyed rosy optimism about Moorad's chances. Pressed for time today, I'll use a question/answer format in response to this morning's announcement that Moorad, the Padres Vice Chairman and CEO, "has withdrawn his application to Major League Baseball for a control transfer, in order to expedite MLB approval of the club's television broadcasting agreement."


Q Is Moorad still the club's Vice Chairman and CEO?

A Yes.

Q Is John Moores still majority owner of the Padres?

A Yes. That hasn't changed since the winter of 1994-95, when Moores put up about $80 million to buy a controlling interest in the club. Since 2009, Moorad's group had made two payments, reducing Moores' stake to 51 percent.

Q Is MLB likely to approve the 20-year pact between the Padres and FOX?

A  Yes, as I wrote last week, the TV deal should be approved by mid-March. The deal's total economic value could approach $1 billion, which reflects well on Moorad's negotiating skills.

Q Does Moorad still have time to buy out Moores as control owner?

A The sales agreement announced by the two in March 2009 stipulated that Moorad had until March 2014 to pay off Moores. Key point: Moorad still would need 22 of MLB's other 29 owners to approve him.

Q Are 22 ownership groups willing to vote for Moorad?

A In January, the vote was tabled. Another vote was considered for this month. Two weeks ago I was told Moorad didn't have enough votes, according to someone at the ownership level of a club neutral about Moorad.

Q If Moorad had until 2014, why did he and his partners attempt to pay off Moores in recent months?

A  MLB's approval was needed for both Moorad to become control owner and the TV contract to become reality. As this blog wrote last month, I also think it probable that Moorad, per his agreement with Moores, would've received an eight-figure discount for accelerating the purchase.
     What I've never believed is that Moorad's attempt to speed up the purchase had anything to do with allaying perceptions that he was an underfunded owner.

Q Did Moorad and his partners come up with the money to pay off Moores?

A Yes. In mid-December, the money went into escrow. I'm told the amount was $152 million.

Q Who among the owners opposed Moorad?

A As I wrote exclusively on Jan. 20, White Sox owner Jerry Reinsdorf spoke against Moorad to other owners leading up to the scheduled vote on Jan. 12. Reinsdorf, a longtime friend of Bud Selig's, may be the most powerful owner within MLB. Again, it's difficult for me to envision Moorad ever becoming control owner without Reinsdorf's consent or neutrality.

6 comments:

  1. Thanks. So then, there is no material reason why Reinsdorf is opposing the sale other than personal dislike of Moorad, and with that, he is able to bully 6 or more other owners (I would guess Moores doesn't get to vote) to disapprove the sale.

    That sucks.

    How did Reinsdorf become God-of-the-owners anyway?

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  2. Londog, Reinsdorf, to be sure, has reasons for his actions. What those reasons are, I do not know; nor do I know what his endgame is. As for what makes him so powerful, his strong relationship with Selig is certainly a part of it. FWIW, in other accounts, I've mentioned Selig said he had a economic concerns about the deal, and MLB is being extra cautious in the wake of the McCourt troubles. Best, TK

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  3. Why has MLB allowed the sale of the Padres to be strung-out for 5 years?

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  4. Padres fan, Moorad and Moores negotiated a payment plan that spans three to five years. MLB was informed of the time frame. Whether it raised objections, I do not know.

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  5. Tom- Have you heard any word on the tv contract getting approved on Monday or Tuesday? Also, John Maffei of the NC Times was on the radio today, and he mentioned that FOX was going to broadcast the March 17th spring training game whether or not the tv deal was approved (he did say that FOX would prefer to have it approved, but that they were pretty adamant about getting going). BTW, I really enjoy the blog, thanks for sharing.

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  6. Tom, thanks for responding.

    Obviously there is more unknown than known about the reasons for the holdup.

    As for monetary concerns, I don't see that MLB has a better option; potential Padre owners with deep pockets (or deeper than Moorad's group) don't seem to be lining up. Also, Moores isn't a viable option to continue operations (long term), either. While we don't know the exact terms, it was clear that his abandonment of the Padres was driven by his divorce proceedings and ultimate settlement (remember, the salary drop started while he was still sole owner--when we dealt Peavy away and let Trevor walk without even talking to him). If there are thoughts that Moores could simply resume ownership, now that Moorad and Company have obtained a new, lucrative TV contract, I don't see how that is any more likely to be a good bet--what assurance does MLB have that Moores would devote 100% of TV revenue to baseball operations? On the flip side, why do they think Moorad and company wouldn't use it for baseball ops?

    The new ownership group has radically improved the farm system, has raised payroll (a little, but still) every year, has implemented all manner of community outreach to try to make the Petco experience better and to foster goodwill. All while paying for the club and also servicing the debt on Petco Park.

    Selig, Reinsdorf and the Diamondback's owners aren't just hurting Moorad and his group--they're hurting Padre fans.

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