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Minority Interest in Texas Rangers and Dallas Stars for Sale

Dallas based venture capitalist and sports magnate Tom Hick is trimming his holdings a bit. The owner of the Dallas Stars, 95% of the Texas Rangers, 50% of Liverpool FC and 50% of the American Airlines Center, which is the Stars home, is marketing up to 49% of the Rangers and a similar interest in the Stars. Reportedly, he has retained Merrill Lynch to assist in marketing the interests.

The Rangers interest will now be the only baseball team publicly on the market. The Tribune Company is in the process of completing a sale of the Cubs to Tom Ricketts and former Diamondbacks general partner Jeff Moorad has just completed the initial phase of his stepped purchase of the Padres. No asking price for the Rangers has been publicly disclosed, although the team was valued by Forbes at $412 million a year ago. Hicks bought the Rangers in 1998 from a group including a certain recent former President for $250 million. He spent lavishly in what turned out to be vain attempts at building a winner, most notably that $125 million contract to a certain steroid using infielder. The Rangers are notorious for having, during the early period of Hicks ownership, what may well have been the most 'roid infested clubhouse in the majors. Of course, baseball didn't seem to care at the time, and seems to care little now.

The Stars may be the second team on the market as rumors have it that Hicks' partner in Liverpool, George Gillett, Jr., may be selling the Montreal Canadiens. The Stars were valued by Forbes in October, 2008 at $273 million, making the club the sixth most valuable franchise in the NHL. Hicks bought the club in 1998 for $84 million and has spent liberally to develop a winning franchise. It's difficult to determine his total investment in the team, but I would imagine a sale valued at anywhere near the $273 million, and Forbes values are traditionally lower than actual sale prices, would net him a fair profit.

One reason Hicks may be raising cash is to buy Gillett out of the Liverpool interest and end what has become a bitter ownership dispute. Full control over the storied club would give him much greater freedom of action both in negotiating any further sale and in refinancing any debt that is currently being carried by the club. Of course, he may just be raising cash because in this environment, cash is king.

Full post as published by Sports Biz on March 26, 2009 (boomark / email).