Major League Baseball received seven bids to buy the Washington Nationals yesterday, the biggest step to date in the high-stakes process designed to end the franchise’s four-year stint as the property of the other 29 MLB team owners.
MLB executives declined to discuss the details of any of the bids. But industry sources said the initial offers generally hovered between $310 million and $350 million for the franchise itself and at about $400 million for the Nationals and a minority stake in the Mid-Atlantic Sports Network (MASN).
Baseball asked for the two separate bids to get a read on how the prospective owners feel about the equity in the regional sports network, which is controlled by the Baltimore Orioles.
The arrival of only seven bids provided a late surprise, because nine had been expected. As of late yesterday, a bid from New York real estate executive David Walentas had not been confirmed, and another from one of the expected bidders had not officially arrived. MLB executives appear to be bending slightly from yesterday’s deadline for initial offers for the Nationals.
One prospective bidder, speaking on the condition of anonymity, said yesterday that a critical element of the nascent sales process was to submit an offer for the Nationals franchise higher than the $310 million that Forbes magazine said it was worth earlier this year.
“Getting north of Forbes was certainly important,” he said.
The sales process, however, now ventures into unmarked territory. MLB has not notified the bid groups of when or how it will respond to yesterday’s bids. But it is expected that at least several of the seven suitors will be invited to MLB’s Manhattan headquarters to discuss their vision for the Nationals and a new stadium planned for the Anacostia River Waterfront. From there, additional bidding is likely.
“I’m not sure even baseball knows exactly how they’re moving forward from here,” said one industry source close to the Nationals auction.
MLB Commissioner Bud Selig intends to select the team’s new owner by midsummer, but some baseball insiders say fall is a more likely target. Baseball originally intended to find a new owner for the Nationals by New Year’s Day and then early April, with elongated negotiations with Orioles owner Peter Angelos over MASN as the chief reason for the repeated delays.
The Washington Baseball Club, led by local businessmen Fred Malek and Jeffrey Zients, widely has been seen within the sports industry as the early favorite to win the Nationals auction.
“We’re glad to be part of the process and certainly look forward to playing a role in the development of baseball in D.C.,” said Winston Lord, Washington Baseball Club executive director.
But the other bidders also arrive with plenty of available cash, strong relationships with key leaders within baseball and operational philosophies similar to Mr. Selig, all of which will be important considerations. Among those also seeking the Nationals are former Atlanta pro sports executive Stan Kasten, Northern Virginia businessman William Collins III, local developer Mark Lerner, financier and builder Franklin Haney Sr., local entrepreneur and philanthropist Jonathan Ledecky and a team of California billionaire Ron Burkle and attorney Yusef Jackson.
“The Haney family was pleased and honored yesterday to submit a very serious offer for the Nationals,” said Bill Mashek, a spokesman for the group. “They have a long-term vision for the club and its impact upon the city of Washington, and they want the team to be fully accountable for what they do both on and off the field and be a true asset to community. The bid submitted reflects that desire.”
Said another bidder: “Don’t hold the coronation for [Malek and Zients] just yet.”
Meanwhile, the Collins group has made a structural change, anointing Sallie Mae Chairman Albert L. Lord to lead investor. Mr. Collins will remain as vice chairman and chief executive of the bid entity, called American Baseball Capital.
MLB paid $120 million for the Montreal Expos in early 2002 and has run up more than $60 million in operating losses during a protracted search for the club’s new home. The Nationals, however, are expected to become one of baseball’s more profitable teams this year. MLB paid the Orioles $75 million earlier this year for the minority stake in MASN, which sits at 10 percent and slowly will rise to 33 percent.