THE BOOK--Playing The Percentages In Baseball

Wednesday, January 06, 2010

Expos Timeline

Bill was talking about the Expos alot on his Q&A.  He asked for a timeline.  It’s rather long, so I’ll post it here, and I’ll send him the link:

1969: Bronfman buys Expos for 10MM$

1986: Brochu succeeded McHale as president (Brochu was an exec at Bronfman’s Seagram’s and a tennis partner of Bronfman; he was asked by Bronfman to head a search committee to find a replacement for McHale; Bronfman didn’t like any of his suggestions; Bronfman’s wife recommended Brochu)

1990: Bronfman announces intent to sell team (he came on board on an emotional level, and was leaving the same way; he said he was not having any more fun); he no longer goes to owners meetings, leaving that for Brochu; where once he was all-in, he was now all-out.  Bronfman was offered 150MM$ to move the team to the US, but he refused.  He wanted Canadians to buy the team. It was sold at the end of the year for 100MM$, with Brochu as the general partner.

1999: Loria buys out Brochu and a few other investors (24% ownership), and becomes general partner (the only guy allowed to make decisions, as far as MLB is concerned); he adds a provision for cash calls

2000: makes his first cash call, and then quickly makes his second cash call; the investors refused, and asked Loria to sell his shares to them, which Loria refused; with more cash calls, Loria increased his stake to 94% ownership (from 24%); in all, from the start, he put in 30MM$ to get 94% ownership, with the remaining owners having invested 88MM$ to get 6% ownership, all in a matter of two years

2002: sells team to MLB for 120MM$, and buys Henry’s Marlins for 158MM$ (and the Quebec consortium comes along for the ride, as they now own 6% of the Marlins!), and Henry buys Redsox; he also takes all the scouting reports, half the staff, and equipment with him to Florida, which Omar Minaya attests to

And MLB lends Loria the 38MM$ gap, according to Murray Chass at NY Times:
http://www.nytimes.com/2002/02/01/sports/baseball-loria-to-get-help-buying-the-marlins.html

“The person who spoke about the loan said Loria would pay no interest the first couple of years. If the Marlins do not get a new park within five years, $15 million of the loan will be forgiven and Loria will owe baseball only $23 million with no interest on the balance.

On the other hand, said another person familiar with the transaction, if the team gets a new park, baseball would receive 20 percent of the Marlins’ profits for the first five years.

Loria, and not baseball, would also have to pay off financial obligations that he incurred in his purchase of the Expos. He borrowed about $59 million under the industry’s line of credit, and he has a $30 million obligation to government authorities in Canada as part of the original purchase price. Loria did not return a telephone message. “

Now, tell me that it doesn’t look like Loria received preferential treatment at the least.  And, how it is at least reasonable to suspect that there was a conspiracy.