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National League All-Star Huston Street of the San Diego Padres looks on during the Gatorade All-Star Workout Day at Kauffman Stadium. Why is it taking so long to sell his team?
The simple answer is: It's complicated.
You can't just sell a Major League Baseball franchise for $800 million (the widely reported sale price, about $400 million more than what Forbes says the team is worth) and expect negotiations to go off seamlessly. So reports that the Padres were going to be sold by the All-Star break have now turned out to be exaggerated, even though the O'Malley family and their investors have been in an "exclusive" negotiating period with John Moores, the Padres' current majority owner.
That negotiating period has been extended by what the Chicago Tribune said on July 8 would be another 10 days. The O'Malley Group is still the only bidder, and based on his recent public comments, it sounds like MLB Commissioner Bud Selig has given the deal his blessing.
"Bud Selig doesn't take that kind of position if he hasn't already counted the votes," said David Carter, a professor of sports business at the USC Marshall School of Business and the Executive Director of the USC Sport Business Institute.
Carter thinks the deal will eventually get done, but he said that "if we've learned anything in sports lately, it's that there's no premium on speed, but there there is a premium on getting it right. These are sophisticated businesspeople. They're going to to pay a price based on their expectation that they can build long-term value."
Moores has hired Allen & Co., a well-known investment bank for sports deals, which has Steve Greenberg on the case. Greenberg's reputation is sterling in this field. Carter cautioned that it "always always takes longer than people hope it will." He pointed out that minority owner Jeff Moorad — who at one time had hope to complete an installment-plan purchase of the team for around $500 million that was initiated in 2009, but dropped his ownership efforts earlier this year and stepped down as the Padres' CEO — probably has a number of limited partners who have to be dealt with.
There's also the Padres recently completed 20-year, $1.4-billion broadcast deal with Fox Sports to take into account. $200 million of that will be part of the payout that Moores will receive. "That has to be factored in," Carter said.
Carter said that the deal might stretch beyond the 10-day extension period, even though the purchase price and various other details could be settled. "It could get held up my Major League Baseball issues, by not being able to get the owners to vote in a timely fashion at this time of year."
One interesting wrinkle to the sale is the role of Ron Fowler, a prominent San Diego businessman who is part of Moorad's minority ownership group and had been named as the frontman for the O'Malley bid. He denied that, but a subsequent report from CBS Sports indicates that he was instrumental in closing the O'Malley's financing gap and will play a role in the new ownership group.