At-Risk Sports Teams: Texas Rangers

By Mike Schuster Jul 14, 2009 8:55 am

Lone Stars might as well be called Loan Defaulters.

Comment

Texas Rangers Chairman and owner Tom Hicks is truly a man of the people: Overseeing significant layoffs, defaulted loans and plans for a buyout, Hicks is facing financial woes on par with those of the rest of the country.

But since it's all happening during one of the best seasons in Rangers history, Hicks may be able to turn this to his advantage.

In April of this year, it was reported that Hicks Sports Group -- a holding company that owns the Texas Rangers and the Dallas Stars -- was defaulting on $525 million in syndicated bank loans. Hicks has said that defaulting on the loans was a purposeful action, designed to force lenders to renegotiate the terms. He called it a "non-event."

How reassuring. Just a $525 loan default. Nothing to see here. Keep moving, folks.

Originally hoping to sell off a minority interest in the Rangers, Hicks later reevaluated his stance. In May he told the Dallas Morning News:

"I've been trying to do it for about 6 months, and I have dialogue going with several parties, but I think it's just responsible to expand the process. There are wealthy people all over the country with a big interest in baseball. A lot of them are turned off by only being minority investors. If I have the right partners, I don't mind giving up total control."

Hall of Famer Nolan Ryan is rumored to be interested in making a purchase.

Roughly 2 weeks after Hicks announced an interest in selling off a majority stake in the team, the organization announced that several staff members in the front office were being let go. According to Rangers Spokesperson John Blake, the layoffs amounted to less than 10% of the staff -- which totals 275 people.

"Like any business, we're trying to focus our energies on finding cost-effective solutions and finding efficiencies for the team without sacrificing our on-field product or our customer service," Blake told the Dallas Morning News.

While Hicks is responsible for some extremely poor financial planning, he's very lucky that these money troubles are occurring now. The Rangers are a few months into an amazing season. The team's consistently near the top of their division, and attendance is up 11% from a year ago. If ever there was a time to sell off the Rangers, now's the time.

However, for an an industry rife with superstition, the Rangers organization made an astonishing blunder on June 18, when it renewed its association with an individual who portends certain financial doom.

The owner's suite at the Rangers ballpark was renamed for President George W. Bush.