UTK Flash 1/31/24

The Orioles Sale

The Baltimore Orioles were reportedly sold by the current David Angelos led group to a group led by David Rubenstein for $1.75 billion.

That sentence, first reported by Puck, is simple. Everything else is pretty complicated.

To start, the Angelos group has its own family issues. Peter Angelos bought the team in 1993 for $173 million, but only put $40m of his own money. The rest came from a large and diverse group of partners, including Pam Shriver, Tom Clancy, Barry Levinson, and a number of others. At the time, it was the highest price for a pro sports team, one that’s been passed many times since.

Angelos, who is still alive, but said to be incapacitated since a 2017 heart surgery, has a wife and two sons - John and Lou - who have been fighting over control of the team. John has been the controlling partner of the team, while Lou said he’s taken over, to the point of firing Brady Anderson (!!) and testing the waters for moving the team to Nashville, where he and his country singer wife live.

Whether this sale ends the lawsuit and whether the nearly 20 partners agree to the sale remains to be seen, but it may not be a quick closing. But wait, there’s more.

David Rubenstein also has a partner in this deal, Mike Arougheti. Like Rubenstein, Arougheti is a hedge fund billionaire, part of Ares Management. Arougheti’s boss at Ares is Antony Ressler, who owns the Atlanta Hawks and is married to 80’s icon Jami Gertz (who is, as Tony Kornheiser says, still getting it done.) There’s a small question about whether there’s any overlap, but this should end up being a hand wave in the vetting.

Oh yeah, Cal Ripken Jr is part of the ownership group, but like Magic Johnson and Alex Rodriguez, the percentage is vanishingly small and he’s more window dressing than involved.

On top of all that, the initial sale is not for a majority. Instead, the Rubenstein group will get 40 percent of the team and have the option to buy the remainder when Peter Angelos passes. This is simply for tax reasons and we can leave it there.

Then we get to the price. $1.75 billion is a big number and very near the most recent Forbes valuation of $1.713 billion. (Very specific, Forbes!) Remember that’s the valuation and at 40 percent, that’s only $700m the Rubenstein group needs now. While MASN isn’t going to be the holdup to a sale it has been, it puts the O’s at the midpoint between the Mets and Dodgers prices, and the Mariners 2016 sale at around $1.4 billion. That isn’t going to make either the Lerner family or Arte Moreno very happy. Both have been in process to sell their teams recently, both reportedly looking for $2b and passing on offers less than that.

Moreno has taken his club off the market, for now, but the loss of Shohei Ohtani and the loss of many games this season isn’t going to raise the value. The Lerners have had offers from Ted Leonsis’ Monumental Sports group, which is now seeking to build a new complex in Virginia for his pair of DC-branded teams, but have held out. We’ll see whether or not the O’s sale changes their mind about valuation.

Finally, this does put a team with actual Nashville connections off the relocation market. Rubenstein is a Baltimore native and is expected to sign the 30 year lease that John Angelos has been pushing, with additional land development.

So what does this all mean for the 2024 Orioles? This is a team expected to lead the AL East and make it back to the playoffs with a young core. Jackson Holliday could start the year in Baltimore after blasting through the minors. MLB Pipeline recently named him the #1 prospect in baseball, the third straight Oriole to be so named, after Adley Rutschmann and Gunnar Henderson.

It’s unlikely that Rubenstein could exert enough control to make a late push to sign Blake Snell or Jordan Montgomery, but both would be a big addition to the weakest spot in a strongly built team. It’s not impossible, but these negotiations didn’t happen quickly and have been hinted in the media for months. Rubenstein and Angelos could have made a move at any time and haven’t, so it’s unlikely to happen this late in the game.

My hope is that Rubenstein is not only a good owner for the team built on my family’s land, but that he keeps his talk show going. We’ll see whether both happen, but it’s nonetheless a complicated but interesting time in Charm City.