Billionaire Dallas Mavericks owner Mark Cuban launched an aggressive bid to buy the Texas Rangers on Wednesday, challenging Hall of Fame pitcher and team president Nolan Ryan and his group of investors in a rare and contentious bankruptcy court auction.
The stop-and-start showdown was delayed for hours by closed-door haggling over the complicated nature of each bid. A 45-minute break became three hours after Cuban's group left a $335 million cash offer — only a portion of the its total bid — on the table.
U.S. Bankruptcy Judge Russell Nelms said he wanted to keep the auction on track, rejecting a request by attorneys for Ryan and sports attorney Chuck Greenberg for a 12-hour break to review documents. But Nelms said he anticipated a lengthy process and even obtained permission to leave on the courtroom air conditioning, which usually shuts off at 5 p.m.
"We're going to work through the night," Nelms said.
The Greenberg-Ryan group, endorsed by Major League Baseball, had the base bid because it was named as the team's buyer months ago, before the deal was put in limbo by angry creditors and then by the team's May filing for Chapter 11 bankruptcy protection. If that group ultimately does not win, it will get a "breakup" fee of $10 million to $13 million.
Court documents indicate the Greenberg-Ryan group's starting offer was about $520 million, including more than $300 million in cash and more than $200 million of the team's debt — including $24.9 million in deferred compensation owed to Alex Rodriguez six years after he was traded to the New York Yankees.
The Greenberg-Ryan offer, which officially started the auction, came hours after Cuban's group was announced as the highest starting bidder.
Rangers attorney Martin Sosland said the bid by Cuban's group — which includes Houston businessman Jim Crane — was about $25 million more than the bid submitted by the Greenberg-Ryan group. Sosland did not reveal the total amount or what it included.
Later, Greenberg-Ryan offered $2 million more than Cuban's group, which then upped the ante by $15 million — to about $335 million as the cash portion of the total offer.
As the night dragged on, attorneys scurried back and forth between small rooms set aside for the team, creditors and each bidder. Reporters and courtroom spectators wandered the hallways and at one point, 10 pizzas and a case of bottled water and soft drinks were delivered to Cuban's camp.
Earlier, Ryan signed autographs for some fans, many who said they arrived after work to take in the action — only to end up sitting for hours on wooden courtroom benches.
The snail's pace auction is the latest twist in one of the most contentious sales of an American professional sports team. The last Major League Baseball team to be auctioned off in such a way was the Baltimore Orioles in 1993.
Final approval of the Rangers sale rests with MLB, which has the option of choosing the second-highest bid instead. But if that happens, the league could face hefty fines or other sanctions if the judge determines it did not have a valid reason for rejecting the highest bidder.
According to the team's bankruptcy plan, creditors will only get about $75 million from the team, no matter who ends up buying it. But the judge has said lenders, who are owed about $525 million after team owner Tom Hicks' financially strapped ownership group defaulted on loans, can go after Hicks' other companies.
The auction was delayed for hours because team attorneys said they were trying to determine the values of each proposal, which included different provisions. Nelms later said the Cuban-Crane bid had been revised to more closely resemble the Greenberg-Ryan bid.