Thursday, August 05, 2010

The Good Guys Won--On and Off the Field

A few random thoughts regarding the Rangers auction, which ended around 12:45 this morning with the Crane-Cuban group pulling out, thus awarding the team to the Greenberg-Ryan group:
  • As I've noted all along, Greenberg-Ryan were the good guys in this whole thing. The list of bad guys could be many: Greedy creditors, greedy ex-players (c'mon, A-Rod, are you really having trouble feeding your family on your current salary?), a judge who might have been a bit of a publicity-seeker, and of course, Tom Hicks, for getting the team in this mess in the first place.

  • Mark Cuban noted that if his group had won, he would have invited Greenberg and Ryan to be part of the process. But there's no saying whether they would have accepted such an arrangement or how long they would have stayed if they did. And as I've said all along, any scenario that didn't have Ryan as the long-term team president would be unacceptable; just look at how much he's turned the team around in a few short years.

  • And if Cuban-Crane had won, there was no guarantee that they would have been approved by Major League Baseball owners in the first place. After all, a major player in that group was Jim Crane, who left a bad taste in a lot of people's mouths a few years ago when he made an agreement to buy the Astros and then pulled out at the last minute. Crane had also hinted last year, when he was among the original, pre-bankruptcy bidders for the team, that he would let Ryan go, serving as his own team president. Again, unacceptable.

  • I've long been a defender of Cuban as Mavericks owner, but I was skeptical of how he might turn out as a baseball owner. I don't see the same passion for baseball in Cuban that he has for basketball, and his overly-hands-on style wouldn't work as well as it does with the latter.

  • And finally, I've said this before, but it bears repeating: This bankruptcy process shows that there's a real need for some serious reform in the financial sector in this nation. The company that was squawking the loudest about Greenberg-Ryan's original bid being "too low" was Monarch Alternative Capital, which bought a lot of Hicks' debt at pennies on the dollar, yet they seemed to demand to recoup the original price of the debts in this auction.

    This brings up two questions: 1) Should a debt buyer in this situation be able to demand full compensation for the original price like this (which would be an amount exponentially larger than they originally paid), or should they be satisfied with "only" making a handsome profit? (And believe me, I'm as big of a capitalist as anyone here, but this demand just struck me as excessive.)

    2) Should firms like this--which buy debt from other lenders--even be allowed to exist in the first place? It seems like lenders would be much more responsible in their lending if they knew they would have to follow through with their loans to the end, rather than being able to sell them at bargain-basement prices and then write off the loss.
But at any rate, I'm happy. Now let's look forward to the rest of a great season on the field, without all these distractions.

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