The family of real estate magnate Ted Lerner, which 16 years ago purchased the Washington Nationals from Major League Baseball and oversaw a rebuilding process that eventually resulted in a World Series championship, has begun the process of exploring potential changes in the club’s ownership structure, including the possibility of selling the team.
Mark Lerner, Ted Lerner’s son who now serves as the club’s managing principal owner, told The Washington Post in a statement Monday that the family has hired New York investment bank Allen & Company to research potential investors, and possibly buyers, for the Nationals.
“This is an exploratory process, so there is no set timetable or expectation of a specific outcome,” Mark Lerner said in the statement. “The organization is as committed as ever to their employees, players, fans, sponsors and partners and to putting a competitive product on the field.”
The team said no options have been eliminated. Though a full transfer of ownership is possible, the Lerners also could bring on additional partners, team spokeswoman Jennifer Giglio said.
“As revenue streams around professional sports continue to evolve and the strength of the Washington Nationals brand continues to grow, the team believes it is prudent to assess all of the options out there,” Giglio said.
Still, the Lerners’ announcement puts the Nationals’ direction in question — in the short and long term. The Nationals have one of the best young players in the sport in outfielder Juan Soto, and it is unclear how the announcement will affect negotiations for a long-term contract extension for the 23-year-old. The team also is involved in a years-long dispute over revenue from Mid-Atlantic Sports Network, which broadcasts Nationals games but is controlled by the Baltimore Orioles.
“This process does not impact the team’s ability to make baseball decisions,” Giglio said. “It will not distract the organization from our goal of being a first-class organization and fielding a winning team.”
Ted Lerner, 96, transferred day-to-day control of the team to Mark Lerner in 2018. But regardless of whose name was atop the organizational flow chart, the family — which includes Ted’s wife, Annette; Mark’s wife, Judy; daughters Debra Lerner Cohen and Marla Lerner Tanenbaum; and sons-in-law Edward Cohen and Robert Tanenbaum — always has made decisions by consensus. That included the pursuit of Washington’s NFL franchise in 1999; the league eventually chose Daniel Snyder.
The decision to begin a process that could result in the sale of the team represents an about-face for the family.
“We will never sell the Nationals,” Mark Lerner told The Post in 2018, when he took on his current role. “That’s what we’ve worked to get all those years. We think we do a pretty good job of it. There’s no intention of this family — certainly while I’m alive and my sisters and brothers-in-law are alive — nobody’s going to sell this team.”
Ted Lerner built his real estate empire beginning in the 1950s. He sold homes for developers before developing properties himself. The Lerners helped develop massive Tysons Corner Center in Northern Virginia as well as other shopping destinations throughout the D.C. region, including Tysons II and Dulles Town Center.
But the coronavirus pandemic put tremendous strain on the commercial real estate business. In 2016, Forbes placed Ted Lerner’s net worth at $5.5 billion. In 2020, it had decreased to $3.7 billion. Forbes places his current worth at $4.4 billion.
Asked whether the pandemic’s impact on the family’s finances played a role in this decision, the team said the Lerners’ “real estate business continues to thrive.” Still, because the 2020 baseball season was shortened and played without fans, revenue for MLB franchises took a massive hit as well.
Ted and Annette Lerner’s grandchildren grew up during the family’s stewardship of the Nationals. Now in their 30s, at least four of them are involved in the family business. Many people who work for and with the club long have figured that generation eventually would take over. Giglio said the next generation “are enthusiastic supporters of the Nationals and are ready, willing and able to lead. But they also support this process of assessing options.”
The Nationals are in Atlanta and opened a three-game series against the defending World Series champion Braves on Monday night. Manager Dave Martinez said he got a call from Mark Lerner that morning and “to say the least, I was shocked.”
“With that being said, for me, nothing changes,” he added. “My job is to get this team ready to play today and focus on today, and that’s the way we’re going to do things, like I always do. ... I know [the Lerners are] very committed to this organization, as am I, and we’re going to do everything we can to win every day.”
Relief pitcher Sean Doolittle, a member of the 2019 championship team on his second stint with the franchise, called the news surprising but said he doesn’t expect the development to be a distraction.
“I think the Nats last year and this year have been the exception, not the norm, for what this team does,” he said of the club’s reduced payroll amid what General Manager Mike Rizzo has called a “reboot.” “The organization has gone out and spent money to put a competitive product on the field. And I think if there were more teams that were willing to do that, the game would be in a much different place — probably a better place.”
In 2006, the Lerners paid $450 million to buy the club from Major League Baseball, which had moved it from Montreal to the nation’s capital in 2005. Their winning bid edged out those from seven other groups and was championed by then-commissioner Bud Selig because of the family’s deep local roots and pledge to be fiscally responsible stewards of the game for a city that had gone more than three decades without big league baseball.
The transition from running malls and other commercial projects was bumpy at times. The family gained a reputation within the organization for questioning every expenditure, from travel expenses for scouts to stopwatches for minor league coaches to extra bats for players.
“In the real estate business and in some of our other businesses, there seems to be some sanity to it,” Ted Lerner said in 2007 during a forum at his alma mater, George Washington University. “People continue asking me the question, ‘Are you having fun?’ The answer is, ‘On occasion.’ I finally found out what ‘24/7’ means.”
But following a development plan originally laid out by Stan Kasten — the team’s president from 2006 to 2010 — and Rizzo, the Nationals became consistent contenders. From 2012 to 2019, the team won four National League East division championships and appeared in the postseason five times, winning more regular season games than any team but the Los Angeles Dodgers in that span. That culminated in the breakthrough during the 2019 playoffs, when the wild-card Nationals romped through October to the World Series title, beating the Houston Astros in seven games.
Throughout that run of success, the Lerners also committed resources to the major league payroll. In 2010, they surprised their competitors by signing free agent outfielder Jayson Werth to a seven-year, $126 million deal — the first nine-figure contract the family had issued. In 2012, they re-signed Ryan Zimmerman, the first draft pick in franchise history, to a six-year, $100 million extension, and in 2015 they landed star pitcher Max Scherzer on a seven-year, $210 million deal. After Stephen Strasburg was named MVP of the World Series, the Lerners committed $245 million over seven years to the pitcher.
Though homegrown stars such as outfielder Bryce Harper and third baseman Anthony Rendon have left in free agency and the club last year began a new rebuilding process by trading Scherzer and all-star shortstop Trea Turner, investors — and potential buyers — are likely to be numerous. Forbes valued the Nationals at $2 billion this season, up 4 percent from a year ago, making the team the 12th most valuable of the 30 MLB franchises.
In 2020, hedge fund billionaire Steve Cohen completed his purchase of the New York Mets for $2.4 billion. In 2017, businessman Bruce Sherman bought the Miami Marlins — who annually rank near the bottom of baseball in attendance — for $1.2 billion.
Allen & Company has managed the sale of several sports franchises, including that of the Mets and the NFL’s Carolina Panthers. The Denver Broncos recently enlisted the firm to run the sale of that franchise.
Jesse Dougherty in Atlanta and Chelsea Janes contributed to this report.