Marlins Rumors

We have heard some conflicting reports recently about just how likely it is that a Derek Jeter and Jeb Bush-led investment group will complete a purchase of the Marlins, but the latest signs point toward a deal. Most notably, the funding for the buyer’s group is now all lined up, according to Daniel Kaplan of the Sports Business Journal (via Twitter).

If the financials are indeed in order, that would represent quite a significant step. Last we heard, Jeter and Bush were looking for additional investors to join their team, but it seems that’ll no longer be an issue. Citibank is advising the would-be owners, Kaplan notes, and presumably will be involved in any financing that’s needed.

There’s also an important note on the reported $1.3B purchase price, which seems more accurately described as a valuation for purposes of the deal. Per Kaplan, that’ll be offset by the organization’s current debt and anticipated operating losses. Joel Sherman of the New York Post had previously noted that possibility while breaking down the significant numbers involved.

Such adjustments will also take a bite out of the share of the sale proceeds that Miami and Miami-Dade County could stand to earn, as Douglas Hanks of the Miami Herald writes. So long as the deal closes by April of next year, five percent of the profits would be sent over to those municipalities — a clause in the deal in which the Marlins obtained massive public financial support for the construction of Marlins Park. But debt, closing costs, and taxes will all first be deducted, and the sale price will also be offset by the agreement’s valuation of the organization (per Hanks, that figures to stand at around $500MM). In other words, while it could still be a significant amount, there are some limits to how much the taxpayers can recoup.

Bush, meanwhile, had some very notable comments of his own, as Tim Healey of the Sun-Sentinel reports. Speaking for the first time, the former Florida governor — who’d be the official control person of the organization — discussed the groups vision. Most interestingly, perhaps, he suggested that Jeter might actually take over the baseball operations department, though certainly the details of just how that would work remain to be seen. Generally, he expressed an interest in “patiently” building a roster — no word yet on what that might mean at the outset of a new ownership — while pushing to take advantage of the Miami organization’s proximity to Latin America.

11:35pm: The group led by Tagg Romney, which reportedly also includes Hall of Fame left-hander Tom Glavine, is still alive in the bidding for the Marlins, reports Ken Rosenthal of FOX Sports (Twitter link).

Charles Gasparino and Brian Schwartz of FOX Business provide a slew of new information, reporting that Bush and Jeter are expected to invest “no more than $200 million combined,” leaving as much as $800-900MM to be raised to complete the purchase with what the league will term an acceptable level of debt. However, as the FOX Business duo notes, it will also be difficult for Jeter and Bush to rally that type of financial commitment while still maintaining principal ownership of the team.

Furthermore, Gasparino and Schwartz report that the Romney group — notably, they make no mention of Glavine — bid $1.1 billion for the Marlins, though that falls well shy of the $1.34 billion figure from Jeter and Bush. The Jeter/Bush group has an “exclusive negotiating window” to raise the requisite capital to complete their purchase, and that window is “expected to last at least until June,” per the report. Gasparino and Schwartz cite a “senior executive inside the commissioner’s office” in reporting that the Marlins have yet to formally approach Major League Baseball about the Jeter/Bush bid. Should that bid ultimately fall through, there are other bidders that will step in.

1:48pm: Commissioner Rob Manfred has cast doubt on certain reports that have framed the Jeter/Bush group as having a deal in place. As the Sun Sentinel reports, Manfred says “there are multiple bidders for the Marlins” at this point. Importantly, too, he made clear “there is no agreement in place” at present, with the league still “working with more than one group” of possible purchasers.

Manfred later made clear that there were two bidding groups currently involved in the pursuit of the franchise. Resolution is expected in short order. “The timeline is relatively short,” he said. “It would be measured in days, not months.”

11:35am: We learned recently that Marlins owner Jeffrey Loria had elected to try to finalize a sale of the organization with a bidding group led by Derek Jeter and Jeb Bush. As noted at the time, though, that hardly means that a deal is inevitable.

Reporting continues to emerge regarding the still-developing situation. Jon Heyman of Fan Rag writes that the Jeter/Bush group’s emergence from other bidders came as a surprise — and may not yet be backed by the needed financial commitments. The would-be owners are said to be contacting a range of sources, including some connected with other bidding groups, to bolster the amount of equity that’ll be needed to obtain MLB approval. (The league typically requires at least three-fifths of the purchase price to come from cash.)

Barry Jackson of the Miami Herald hears similarly, reporting that Bush has been on the horn with possible co-investors this week. The team, though, is apparently confident that the needed cash (and, presumably, debt financing as well) will be found in due time. As Jackson expounds further (Twitter links), that belief explains why the club struck an agreement for some form of exclusive negotiation rights — the details of which remain unknown — with the new group. Bush, who’d be the control person, will apparently sit down soon with league officials to discuss the money situation.

In the aggregate, there’s still a fair bit of uncertainty, even if the Jeter/Bush team have the inside track to move into Marlins Park. Per Heyman, a look at the books led the second-place bidders (a group led by Tagg Romney and headlined by Tom Glavine) to back down from their initial willingness to commit something on the order of $1.4B. For Jeter and Bush, convincing others to put their cash at stake will require a compelling financial argument. We have heard indication both that the league approval process ought not be a problem and that the Jeter/Bush duo can find the rest of the equity needed to lock up a deal. If not, says Jackson, Loria could circle back to other prospective buyers.