- The Washington Times - Sunday, April 20, 2003

The Anaheim Angels have made a habit of shocking the sports world since they began their improbable march to last year's World Series title.
So it was in keeping with the franchise spirit last week when news began leaking about Walt Disney Co.'s sale of the Angels to Phoenix industrialist Arturo Moreno for $180million. The sale price, which is believed to be inclusive of some debt, is a full $120million less than Disney's original asking price and a whopping $143million less than what the Cleveland Indians fetched from Larry Dolan during the heady economic days of 1999.
Forbes Magazine earlier this year estimated the Angels' value at $225million. By any measure then, the $180million sale figure is astonishingly low and bad news for an industry with several other teams up for sale.
"If this is the full asset figure, then, yes, I'm very, very surprised," said Andrew Zimbalist, a Smith College economist who frequently writes on baseball. "Given normal multiples and market conditions, I would have thought $275million, give or take $20million."
Thinking more provincially, one obvious question surfaces: How does this affect the sale of the Montreal Expos? Major League Baseball executives have made no secret of their desire to beat the $120million owners paid last year for the Expos, as well as recoup heavy operating losses since then. A decision on the club's new home is expected by mid-July, with a move during the offseason, but commissioner Bud Selig is not guaranteeing that timetable.
It stands to simple reason that if the World Series champs playing in a recently renovated stadium situated in America's No.2 media market can't even fetch twice their average annual revenue of about $100million, neither can the Expos. Using that revenue-multiple formula, the Expos would sell for less than last year's $120million price.
Pro sports teams traditionally have sold for between two and 2.5 times their annual revenue and sometimes more if a sale comes with a heated auction process.
But the situation with neither the Angels nor the Expos is really that simple. The Angels' sale to Moreno, a near-billionaire and former investor with the Arizona Diamondbacks, must first be approved by MLB owners, and that formal process has yet to begin. Baseball officials have yet to confirm the sale.
No problems with Moreno himself are expected, and his being Hispanic would make him a trailblazer among sports team owners. However, local sports fans who remember the name Howard Milstein know all too well that a purchase-and-sale agreement for a pro sports team is not the end of the story.
There also are several problems with trying to make a straight comparison between the Angels and Expos. The Angels, despite their championship status and jewel of a ballpark, remain by far the second banana in the Los Angeles area. Anaheim's attendance, media contracts and overall revenue easily trail those of the Dodgers, as does its Forbes estimated value.
The magazine estimated the Dodgers, also for sale, at $449million, and reports have surfaced in California of initial offers of more than $400million.
A Washington area team, conversely, easily could become the local market's dominant baseball team. That, in turn, raises questions on the effect upon the Baltimore Orioles questions that would soften if the Orioles simply became competitive again. But it is difficult to envision a Washington area team being fiscally dwarfed by the Orioles in the same way the Angels are by the Dodgers.
Also at play is baseball's leverage, something non-existent in Disney's sometimes desperate attempt to sell the Angels. Baseball officials know all too well this area's ache in its soul over the 32-year absence of baseball and likely will want to exploit it.
In simpler terms, would a prospective local owner such as Fred Malek or Bill Collins really walk away from stewarding baseball's return to the area if the Expos aren't offered at a full, Angels-like discount?
That, of course, depends significantly on what the final stadium financing looks like, as well as where baseball starts the bidding on the Expos. Groups in both the District and Northern Virginia also profess a desire to run a local team like a responsible business.
But the short answer to the above question is no.
"I think there is a willingness to pay some premium, given the situation," said a member of one local bidding group. "If the numbers are ridiculous, we would definitely walk away, but I think there is some understanding of the uniqueness here. The first number in the selling price is probably going to start with a 2."
The other major question with the Angels' sale and a link to the Expos is one of time. Could the low Angels price convince owners to wait for broad economic recovery and pick a high point in which to sell the Expos?
There are several supporting factors for that feeling, including Selig's refusal to guarantee a move for 2004; whispers of owner hopes to eliminate the Expos in 2007, when they can do so without union interference; and the ongoing racketeering lawsuit between former Expos owner Jeffrey Loria and Quebec-based limited partners of the club.
Conversely, MLB president Bob DuPuy continues to talk up baseball's renewed desire to settle the Montreal matter once and for all. And the union must approve each season's schedule, and likely will not do so for 2004 without a permanent solution in place for the Expos.
Either way, the Angels have made the Expos even more of must-see watching.

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