The commissioner of Major League Baseball says the bidding war for the Miami Marlins is still ongoing and the team will be eventually sold. But others aren’t so sure.
People with knowledge of the process say groups led by Tagg Romney, the son of 2012 presidential candidate Mitt Romney and managing partner at Solamere Capital, a Boston-based investment firm, and another other led by former Yankees All-Star Derek Jeter remain woefully short of collecting enough cash to satisfy the more than $1 billion each has bid for the troubled baseball franchise.
Meanwhile, several other investment groups that have enough cash on hand want Marlins owner Jeffrey Loria to lower his price tag to around $900 million given the difficult financial affairs of the team, these people add.
The pending impasse of the sale comes as Major League Baseball Commissioner Rob Manfred told SiriusXM Radio that he believes the Marlins will be sold, and left open the possibility of other potential buyers being interested in making a move for the team.
“People kind of focused on the Jeter group and Romney group. There are other interested buyers out there. There is by no means just those two. They are the furthest along. They’ve made robust offers, both of them. I remain of the view that one of them is probably the most likely to end up as the new owner of the team. Even if it’s not one of those two, I am convinced the Marlins are going to sell,” Manfred said.
The Miami Marlins, Derek Jeter, Jeb Bush and Tagg Romney did not respond to calls for comment. Major League Baseball had no comment.
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The sales of the Marlins – a perennial middling franchise that currently has one of the worst records in their division—has transfixed Major League Baseball since the moment FOX Business in April first reported that a number of prominent people including Bush, Jeter and Romney have expressed interest in buying the team.
The bidding war reflected the scarcity value of a Major League Baseball franchise, and the post-career desire of Jeter—a future Hall of Famer—to get involved in the business side of the sport. Others like Bush, the former Florida governor, saw great potential in the franchise as a gateway to bringing the sport to Latin America particularly at a time when there is thawing relations between the United States and Cuba, a country that for decades has been a source of U.S. baseball talent and whose citizens love the sport.
But the Marlins as a franchise face significant problems. To some baseball executives Manfred’s statement today underscores the dicey situation facing Loria, who purchased the team in 2002 for $158 million and is looking to unload it at a considerable premium. Since the bidding began, analysts have investigated the team’s financial condition and here’s what they have found: significant levels of debt, poor attendance, operating losses, and player contracts that are back loaded, meaning their full financial impact will be felt by the new owners.
On top of all that, the Marlins, like every other Major League franchise, face the dismal prospect of declining television revenues as younger people increasing cut their cable subscriptions and view sports through mobile devices.
In fact, these financial issues caused former 2016 GOP presidential candidate and Florida governor Jeb Bush to drop out of the bidding group led by Jeter, which at first was considered the “preferred bid” of $1.34 billion. That is until the Jeter-Bush group revealed it didn’t have the necessary commitments from outside investors to meet the league’s requirement that any new owner acquire the team without significant levels of debt.
The disarray in the Bush-Jeb camp put Romney’s team at the top of the bidding list with an offer of around $1 billion, but baseball executives say like Jeter, Romney at least for now remains well short of coming up with the necessary cash to complete the deal unless Loria agrees to a lower price or they attract additional investors. Jeter’s investment banker Greg Fleming, a former senior executives at Morgan Stanley, has significant contacts with super rich investors particularly in China.
“The numbers just don’t work if you want to sell this for more than $1 billion,” said one baseball executives who spoke on the condition of anonymity because he is privy to confidential information regarding the sale. “On top of that neither Jeter nor Romney have firm commitments for cash. Those with the money want to buy it for less.”