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Archive for March 13th, 2011

Before buying a majority stake in the Houston Astros, John McMullen was a limited owner of the New York Yankees. When asked to describe his role with the team, McMullen once famously said, “There’s nothing so limited as a limited partner of George Steinbrenner.” In truth, the same could be said for just about any sports franchise.

Over the last two seasons, Jeff Moorad has been a minority owner of two different major league baseball teams, both of which happen to compete in the same division. After resigning his post as CEO of the Arizona Diamondbacks in 2009, Moorad led a group that purchased 35% of the San Diego Padres from majority owner John Moores. In 2010, Moorad’s group increased its stake in the Padres to 49%, but Moorad himself retained a not insignificant 8% share of the Diamondbacks.

Fortunately, that’s another issue I don’t have to worry about.” – Commissioner Bud Selig, speaking about the sale of Jeff Moorad’s minority stake in the Diamondbacks

In a recent interview, Bud Selig confirmed that this odd conflict of interest was finally resolved when the Diamondback’s current ownership group purchased Moorad’s 8% stake. According to a MLB.com report, the Ken Kendrick-led partnership paid $21 million to absorb Moorad’s stake in the Diamondbacks. Considering Forbes recently valued the team at $379 million, the price received by Moorad amounts to an over 30% discount (a price that basically amounts to value net of debt). Although it’s possible that the Forbes’ valuation was inflated, the low-ball price paid by Kendrick’s group makes you wonder if Selig exerted pressure on Moorad to divest before another season began.

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