Now Up for Bids, the Nationals: Let's Begin at $300 Million
Tuesday, May 31, 2005
Major League Baseball will accept nine initial bids today for the Washington Nationals, launching a franchise sale that could last for months and bring up to $400 million, one of the highest prices ever for a baseball team.
Several bidders, who spoke on the condition of anonymity because MLB has asked them not to speak, said the serious money is expected to begin around $300 million and rise from there.
"There are several strong groups out there, and that's good news for baseball," said Andrew Zimbalist, a professor of economics at Smith College who writes and speaks about baseball. "When groups bid against each other, anything can happen. I could see prices between $350 million to $400 million."
Forbes magazine places the Nationals' value at $310 million, based on the wealth of the Washington market and the $535 million stadium project the city plans near the Anacostia River waterfront. On top of the profitability of the team is the heightened visibility and cachet of owning a franchise in the nation's capital.
"The prestige premium for the Washington baseball franchise, where the new owner would have so much visibility and access, could add upward of $50 million to the price of the franchise," said Marc S. Ganis, president of Sportscorp Ltd., a Chicago-based sports advisory firm.
Although there are no clear front-runners and a last-minute entry is possible, Zimbalist said he believes a few groups may have a slight edge, including former Atlanta Braves president Stan Kasten, who has a proven track record as a sports executive; Fred Malek and Jeffrey Zients, leaders of a District-based group favored by Mayor Anthony Williams; and local entrepreneur Jonathan Ledecky, a former partner in the Washington Capitals.
"We have been working hard on this for six years and plan to compete aggressively," Malek said.
But at this early stage, before bids are in, it's difficult to know how groups will jockey for position. Dan Snyder came out of nowhere to bid on the Redskins, then partnered with a New York billionaire to win the team for $800 million. After the NFL turned down Snyder's associate, Snyder resurrected the bid and won the team alone.
Something like that could happen here. Although money is a primary mover in a sale, Commissioner of Baseball Bud Selig likes owners he is comfortable with, who view the game through the same prism as he does. He likes owners who won't make waves or drive up player salaries by spending crazily. To fashion the group he wants, with a "point person" baseball will view as a welcome addition to team meetings, Selig will move his bidders like pieces on a chessboard.
"The bat is in baseball's hands," said Paul J. Taubman, head of mergers and acquisitions for Morgan Stanley, who has worked on many team sales, including the Redskins.
Washington's Lerner family, a local real estate dynasty, is very serious about purchasing the team and has hired top strategists, including Mike Shapiro of San Francisco, to help them; the team of Yusef Jackson and billionaire Ronald Burkle has the money to write a check, as does Franklin Haney Sr., a Tennessee-based financier and developer who has strong business ties to Washington; Alexandria businessman William Collins has been strengthening his group lately, including the addition of former Sen. Peter Fitzgerald (R.-Ill.).
Zimbalist said the price could reach $500 million if the sale includes baseball's portion of Mid-Atlantic Sports Network (MASN), a regional sports network owned by MLB and the Baltimore Orioles. MASN controls baseball's television rights in the mid-Atlantic region, including both the Nationals and the Orioles.