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Thursday, July 02, 2009

D Magazine: Rangers borrowed $15M from MLB to make payroll

Amid increased internet chatter Wednesday that Tom Hicks financial woes are deepening and that the club has borrowed money from MLB’s rainy-day fund, club officials took a strange approach.

They went silent.

The chatter arose Wednesday after a local blog reported hearing on a national radio broadcast the team had borrowed $15 million from MLB to make its most recent payroll obligations and to fund ongoing operations. Asked about the reports, owner Tom Hicks referred questions to team spokesman John Blake, who said the team would have no comment on Hicks’ financial situation.

Tom Hicks needs to be the next to go in the name of financial flexibility.

Pat Rapper's Delight Posted: July 02, 2009 at 01:40 PM | 66 comment(s) Login to Bookmark
Tags: business, obituaries, rangers, rumors

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1. billyjack Posted: July 02, 2009 at 03:18 PM (#3240273)

Three Rangers threads this morning, and no comments on any of them (except this one).

2. The District Attorney Posted: July 02, 2009 at 03:23 PM (#3240279)

We can fix that. Too bad George W. Bush doesn't own the team anymore, that guy could really manage a budget!

3. Davo Malvolio Posted: July 02, 2009 at 03:24 PM (#3240281)

I.... I don't understand what this means.

4. billyjack Posted: July 02, 2009 at 03:25 PM (#3240283)

Teachers, laborers, farmers, lawyers, shopkeepers, etc...

5. Home Run Teal & Black Black Black Gone! Posted: July 02, 2009 at 03:39 PM (#3240308)

It's only proper that an ownership group following George W. completely destroys the fiscal state of the team.

6. Obi One Kenobi Nil

Posted: July 02, 2009 at 03:44 PM (#3240320)

Glen Johnson caused this!

7. Los Angeles El Hombre of Anaheim

Posted: July 02, 2009 at 03:46 PM (#3240322)

The Rangers should have borrowed from the Chinese.

8. Jolly Old St. Neck Wound, Moral Idiot

Posted: July 02, 2009 at 03:46 PM (#3240323)

Couldn't they just have borrowed it from A-Rod?

9. Tim Stauffer, Trot Nixon's Coming (Dan Lee) Posted: July 02, 2009 at 03:55 PM (#3240332)

MLB should have demanded collateral. I can see it now...an utterly confused Fernando Torres gets a call that he's to fly from Liverpool to New York and sit in Bud Selig's office until Hicks comes up with the cash.

10. RoyalsRetro (AG#1F) Posted: July 02, 2009 at 04:00 PM (#3240339)

As part of any bailout, MLB should require that Nolan Ryan be fired, and the Rangers sell off Kevin Millwood to Fiat.

11. fra paolo Posted: July 02, 2009 at 04:03 PM (#3240342)

an utterly confused Fernando Torres gets a call that he's to fly from Liverpool...

At this time of year he's probably sunning himself on a beach somewhere in Spain. I wouldn't want to spend my summer vacation on Merseyside.

12. Obi One Kenobi Nil

Posted: July 02, 2009 at 04:04 PM (#3240344)

heck no.

although a scally has probably robbed his house by now.

13. Bitter Calculus Instructor Posted: July 02, 2009 at 04:07 PM (#3240347)

The roster doesn't even look that expensive. Millwood, Padilla, and Young are making $12-13 million. Then there's Blalock at $6.2, Byrd, Kinsler and Benoit at $3-4, then a bunch of cheap guys.

14. Moneyball can't buy you love (Joey B.) Posted: July 02, 2009 at 04:23 PM (#3240359)

He can't even pay back the interest on the loans he has now, and MLB is loaning him even more money? Talk about your toxic assets.

He's f*cked. Bankruptcy can't be much more than 4-6 months away.

15. bfan Posted: July 02, 2009 at 04:36 PM (#3240372)

I am not sure how big a deal this is. I think 10-12 NBA teams also tapped into a league arranged credit facility this winter, to presumably make payroll. Those teams all seem to have survived at this point. If the issue here is that Hicks has debt that came due and he cannot get any traditional debt to replace the debt terming out, because the debt markets are still locked up, then this is sort of a non-event. If he is incurring additional debt on top of what he currently has, and is just digging a deeper debt whole, it could be a problem.

16. Bob Dernier Cri

Posted: July 02, 2009 at 04:40 PM (#3240381)

I doubt that the Texas Rangers per se are losing money: they will draw >2M fans again this summer, attendance is even up a bit because they're winning, and they have all the usual revenue sources purring along. And as Dewitty points out, the payroll isn't outrageous. The problem is the collapse of Hicks's own finances, which once seemed inexhaustible.

17. puck Posted: July 02, 2009 at 04:53 PM (#3240397)

and the Rangers sell off Kevin Millwood to Fiat.

Wouldn't they prefer Jason Grilli?

18. Shooty: Applying to be Fearless Leader

Posted: July 02, 2009 at 04:56 PM (#3240403)

I know one thing--the Rangers will be signing draft picks for slot next year.

19. Ron Johnson Posted: July 02, 2009 at 05:02 PM (#3240414)

Hicks reminds me a lot of Nelson Skalbania (and plenty of others) of whom a friend once said something close to, "If you find a dime you think, 'Great -- free phone call'. Nelson thinks, 'great -- down payment on a high rise'" (And yes I know, the quote's dated. Still makes an understandable point)

Sometimes the juggling just gets too complicated and everything comes crashing down.

20. greenback

Posted: July 02, 2009 at 05:11 PM (#3240426)

The problem is the collapse of Hicks's own finances, which once seemed inexhaustible.

Yeah, the supply of idiots with money to burn seems to have diminished. Or at least Hicks can't find them any more.

So what do the libertarians here think of 'limited liability'?

21. bfan Posted: July 02, 2009 at 05:16 PM (#3240436)

So what do the libertarians here think of 'limited liability'?

That is pretty easy for me; if it is clear that is the structure, and the lender loaned the money knowing that they only had the assets to look to to recover unpaid debt, then there is no problem. They may have made a mistake in their underwriting, or they may have been agggressive in their underwriting in hopes of booking the fees and spread on the loans, but that is their mistake, for them to live with.

I feel a LOT better than lenders getting unilaterally crammed down by a bankruptcy judge or our own government, who decide that lenders cannot exercise remedies spelled out in the documents or cannot get the interest rate or return of principal they bargained for, because the consequences of the exercise of those remedies affects a voting constituency.

22. RB in NYC (Now with New iPhone!) Posted: July 02, 2009 at 05:17 PM (#3240439)

MLB should have demanded collateral. I can see it now...an utterly confused Fernando Torres gets a call that he's to fly from Liverpool to New York and sit in Bud Selig's office until Hicks comes up with the cash.

This is easily a top ten comment all-time

23. Dewey, Steven Wright Wannabe and Soupuss Posted: July 02, 2009 at 05:26 PM (#3240450)

The chatter arose Wednesday after a local blog reported hearing on a national radio broadcast

This is what passes for hard news these days?

24. The Yankee Clapper Posted: July 02, 2009 at 05:28 PM (#3240453)

When does MLB pay out the TV revenues and other centralized disbursements? If the Rangers have already blown through that, this would appear far more serious than if they are due $25M from MLB between now and the end of the season.

25. vortex of dissipation Posted: July 02, 2009 at 05:38 PM (#3240466)

At this time of year he's probably sunning himself on a beach somewhere in Spain. I wouldn't want to spend my summer vacation on Merseyside.

Blackpool's much closer than Spain. I'm sure Fernando could have a ripping time on the Golden Mile.

26. bfan Posted: July 02, 2009 at 05:42 PM (#3240476)

When does MLB pay out the TV revenues and other centralized disbursements? If the Rangers have already blown through that, this would appear far more serious than if they are due $25M from MLB between now and the end of the season.

Good point. I am trying to figure out whether or not this is a cash flow issue (which could be a real problem) or just replacing existing debt that cannot be replaced in today's debt markets.

27. Barry`s_Lazy_Boy Posted: July 02, 2009 at 05:44 PM (#3240480)

The Rangers playoff ticket sales will solve everything.

28. Obi One Kenobi Nil

Posted: July 02, 2009 at 05:45 PM (#3240481)

Hicks over-stretched himself buying Liverpool and didn't appreciate the costs of running a premier league team - which he can't afford. gillett is funding Liverpool at the moment.

29. RoyalsRetro (AG#1F) Posted: July 02, 2009 at 06:02 PM (#3240495)

This explains Nolan Ryan's pitching philosophy. They're going to have all their starters go nine innings, to save money on relievers by not having a bullpen.

30. Halofan Posted: July 02, 2009 at 06:09 PM (#3240504)

Three game series with the Angels, neck and neck in the AL West and they are drawing crowds of 16,000 - 22,000... no hope...

31. Maury Brown Posted: July 02, 2009 at 07:24 PM (#3240666)

For those interested, comments from the league and Kevin Kennedy on this story

32. Jeff K. Posted: July 02, 2009 at 07:34 PM (#3240685)

Hicks is probably a toxic asset, though I'm sure MLB has some sort of preferred creditor status in the event of bankruptcy proceedings. If they didn't at least get that, they're idiots, though Hicks' innumerable existing credit deals very likely prevent this.

But of course, the money isn't the point, the point is perception. Hicks taking a tumble and being forced to sell a team on the cheap costs each owner way more than 15 MM apiece. And I doubt baseball wants to do another Expos thing again, though if they do, I sincerely hope that Brattain's ghost is around to ######### Loria into not having any piece of any part of it.

33. Moneyball can't buy you love (Joey B.) Posted: July 02, 2009 at 07:38 PM (#3240691)

Wow, thanks for those enlightening and informative updates there, Maury {eyeboll roll to the ceiling}.

34. Jeff K. Posted: July 02, 2009 at 07:45 PM (#3240705)

Apparently my ignore of Joey went away at some point, so I see that.

I'm sorry, but that's well past the line of being a dick for no other sake than being a dick. Perhaps you should start your own blog and report things, Joseph. Until then, it's one thing to be a dick as a joke, or to be a dick while making another point. It's another just to be one. I'd suggest you owe Maury an apology, but I won't waste my breath.

Back to ignore.

35. Moneyball can't buy you love (Joey B.) Posted: July 02, 2009 at 07:54 PM (#3240733)

Seriously, just go f*ck yourself, as*hole.

I don't mind somebody pimping their own blog once in a while, that's to be expected, and lots of people around here do it. But it's pretty rude to do it if you have no valuable information at all to add to what we already know. You're just wasting my time, and everyone else's also.

36. pkb33 Posted: July 02, 2009 at 07:58 PM (#3240742)

For those interested, comments from the league and Kevin Kennedy on this story

Actually, it's 'no comments' from both...lame.

37. FBI Regional Bureau Chief GORDON COLE!!! Posted: July 02, 2009 at 08:01 PM (#3240753)

Jeff, as a direct result of Maury's linking to his blog, there are at least three people who, over the span of the five minutes it took Joey to read the entry, were denied the privilege of being called "Bonds sycophants" by Joey. Please do not attempt to minimize the seriousness of this.

38. Randy Jones

Posted: July 02, 2009 at 08:10 PM (#3240767)

there are at least three people who, over the span of the five minutes it took Joey to read the entry, were denied the privilege of being called "Bonds sycophants" by Joey.

There are people who read this site that don't have Joey on ignore?

39. The Good Face Posted: July 02, 2009 at 08:15 PM (#3240773)

There are people who read this site that don't have Joey on ignore?

I don't have anyone on ignore. Even the dumbest, most objectionable posters here will say something funny/interesting once in a blue moon, and it's easy enough to skim over crap posts.

40. Obama Bomaye Posted: July 02, 2009 at 08:26 PM (#3240787)

I don't ignore anyone, but find Joey an utter #######. Much like his banned alter ego.

41. Barry`s_Lazy_Boy Posted: July 02, 2009 at 08:50 PM (#3240826)

I don't have anyone on ignore. Even the dumbest, most objectionable posters here will say something funny/interesting once in a blue moon, and it's easy enough to skim over crap posts.

You just made the list, buddy.

42. Maury Brown Posted: July 02, 2009 at 09:46 PM (#3240915)

But it's pretty rude to do it if you have no valuable information at all to add to what we already know.

You knew it? Cool! That means you're in bed with the Commissioner's Office and Kevin Kennedy.

Evans got the Rangers (very, very good reporting), I got the league and Kennedy (not so much, but no one else had at that stage). If the league response and Kennedy's was reported before I did, please send me a link and I'll eat my hat. I know that no one got the quotes on Kennedy because I got them straight from Sirius/XM as was the response from Kennedy. We now return you to baseball.

43. bads85 Posted: July 02, 2009 at 09:53 PM (#3240920)

That means you're in bed with the Commissioner's Office and Kevin Kennedy.

Now that is quite a visual.

44. FBI Regional Bureau Chief GORDON COLE!!! Posted: July 02, 2009 at 10:28 PM (#3240940)

Now that is quite a visual.

No kidding. Maury's posting his link didn't piss me off, but THIS did. My poor mental eyes!

45. Bob Dernier Cri

Posted: July 02, 2009 at 11:09 PM (#3240975)

Well, at least he didn't include Jeanne Zelasko.

46. Los Angeles El Hombre of Anaheim

Posted: July 02, 2009 at 11:15 PM (#3240980)

Man, compared to Kennedy and Bud? Zelasko would be the one person in that group I'd be able to stomach being in bed with.

47. pkb33 Posted: July 02, 2009 at 11:22 PM (#3240983)

48. Jeff K. Posted: July 03, 2009 at 12:41 AM (#3241043)

Joey is not kevin's alter ego, nor sock puppet. If I didn't already know this, I'd be assured by the response upthread. kevin and I had our share of disagreements, but we also agreed on many things, and whichever case was at hand we were capable of civil discourse. He and I used to occasionally be the early arrivers for Primer IRC, and I've many more than one time spent a good half hour pleasantly chatting, just me and him.

I actually had a notion that Joey was another of BL's characters, but that's out too. Whomever he is, he's more than welcome to his opinion, even the one where I stalk him, obsessed like he was Selena and I were an unrequited fan club president. I don't think it's too much to ask from those capable of a modicum of civility that outright dickishness be tempered in some way by something else, humor or facts or poetry or a funny voice, because without that something else then the whole thing devolves in a way that it quite miraculously hasn't done over the years. But que sera, sera.

49. Pat Rapper's Delight Posted: July 03, 2009 at 01:04 AM (#3241059)

More info in <a >this article.</a> (emphasis mine)

Major League Baseball within the last week loaned millions to Tom Hicks, the evidently cash-strapped owner of the Texas Rangers, and will continue to offer financial assistance to Hicks until he is able to sell the team, a major league source with direct knowledge of the situation told Yahoo! Sports on Thursday.

“He won’t be running the team much longer,” the source said. “Major League Baseball is helping him through this until someone else can be put in place to run the club.”

50. Pat Rapper's Delight Posted: July 03, 2009 at 01:27 AM (#3241079)

Damn. E - TWO!-OH!-OH!-OH! CLAP!-CLAP!-CLAP!CLAP!CLAP!(1).

51. Dewey, Steven Wright Wannabe and Soupuss Posted: July 03, 2009 at 01:39 AM (#3241094)

"Source" sure knows a lot of stuff. "Source" must get tired from talking to reporters all the time.

52. Richard Posted: July 03, 2009 at 01:41 AM (#3241095)

Hicks over-stretched himself buying Liverpool and didn't appreciate the costs of running a premier league team - which he can't afford. gillett is funding Liverpool at the moment.

On a similar theme, I have always wondered whether when Hicks and Gilette bought Liverpool, in the knowledge that plans for a new stadium were in the air, they thought that they could get someone else to pay for that stadium, as commonly happens in MLB and other US sports. This was never a realistic possibility, and some due diligence would have revealed that, but perhaps they did hold out hope they could get someone to pony up the money...

53. Jeff K. Posted: July 03, 2009 at 01:51 AM (#3241105)

"Source" sure knows a lot of stuff. "Source" must get tired from talking to reporters all the time.

Maybe not tired, but "Source" sure gets sore.

54. TerpNats Posted: July 03, 2009 at 01:59 AM (#3241110)

Perhaps they should start playing "You'll Never Walk Alone" (the Liverpool club anthem) at Rangers Ballpark.

55. Jeff K. Posted: July 03, 2009 at 02:12 AM (#3241116)

"You'll Never Walk Alone"

"Because the next guy will, too"

56. IronChef Chris Wok Posted: July 03, 2009 at 03:26 AM (#3241149)

Roman Abramovich will gladly pay for half the Ranger's payroll next year if we can get Fernando Torres

57. Iwakuma Chameleon (jonathan) Posted: July 03, 2009 at 03:41 AM (#3241156)

Good, maybe now they'll stop having such a kickass farm system.

58. RollingWave Posted: July 03, 2009 at 03:57 AM (#3241165)

They should trade their most expensive guy for a crazy outfielder from the Tokyo Giants.

59. Juan V Posted: July 03, 2009 at 04:03 AM (#3241169)

Roman Abramovich will gladly pay for half the Ranger's payroll next year if we can get Fernando Torres

Florentino Perez will contribute with the other half in exchange for Xabi Alonso and Alvaro Arbeloa.

60. Phil Coorey. Posted: July 03, 2009 at 04:07 AM (#3241171)

Every time Joey posts I start singing ####### Concrete Blonde - hence i might have to put him on ignore for that reason

61. Sandlapper Spike Posted: July 03, 2009 at 04:12 AM (#3241173)

The way Real Madrid's been operating, it's more likely Perez pays for the entire payroll and takes Alonso, Arbeloa, and Torres...

62. Obi One Kenobi Nil

Posted: July 03, 2009 at 05:49 AM (#3241197)

On a similar theme, I have always wondered whether when Hicks and Gilette bought Liverpool, in the knowledge that plans for a new stadium were in the air, they thought that they could get someone else to pay for that stadium, as commonly happens in MLB and other US sports. This was never a realistic possibility, and some due diligence would have revealed that, but perhaps they did hold out hope they could get someone to pony up the money...

If he thought that Hicks deserves to go bankrupt for being an idiot!

63. J. Michael Neal Posted: July 03, 2009 at 06:29 AM (#3241206)

Jim Ballsillie just made a bid on the Rangers, with the intent of moving them to Hamilton.

64. Maury Brown Posted: July 03, 2009 at 07:03 AM (#3241212)

Jim Ballsillie just made a bid on the Rangers, with the intent of moving them to Hamilton.

This gets a double Primey for pulling the NHL and attempted Coyotes relocation into the mix. I salute you.

65. RMc is the loyal supporter of the MLB event Posted: July 03, 2009 at 01:51 PM (#3241280)

Ladies and gentlemen, your 2010 Portland Rangers!

66. Maury Brown Posted: July 03, 2009 at 04:26 PM (#3241372)

On my NHL comments... Want to see the Coyotes stay in Phoenix. Now, if Reinsdorf can make it successful is another question.

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D Magazine: Rangers borrowed $15M from MLB to make payroll

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