Three bankruptcy cases in sports franchises

BY SUZZANNE UHLAND

Three bankruptcy cases in sports franchises

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We have seen in other posts, multiple bankruptcy cases in different industries, like oil and gas, technology, or communications. We have also talked about the bankruptcy legislation in the United States, seeing some of the most important concepts about it. Thanks to all these articles, we can have a better understanding of what bankruptcy is and how companies from any sector should know what it means and how to assume a bankruptcy process if they have liquidity problems or credit payment issues.

In this article, we will talk about a huge business in the world and some of its most important bankruptcy cases in it; the


sports industry. It could be considered one of the biggest businesses in the world, moving not only tons of money in every nation of the planet but also passion and the most important fan's feelings. Due to this, different teams, from any sports discipline, have great responsibilities and duties, fulfilling with the most significant commitments and desires of their fans, but when they do not take the adequate decisions, liquidity problems can appear.

As we mentioned, bankruptcy could be present in any company, no matter what its industry or size is. If it has a bad administration or takes unwise decisions, they could face a bankruptcy process. We will see now some of the


most notable bankruptcy cases in the sports industry, where the bad decisions have made that even great and very recognized sports franchises face solvency processes.

The Texas Rangers in 2010Founded in 1972 after being known as the Washington Senators, the Texas Rangers have been one of the most important and traditional teams in the Major-League Baseball. Currently, they have two American League titles (2010 and 2011) and seven West Division Titles. In addition, this team has had amazing players like Johnny Oates, Nola Ryan, Fergie Jenkins or Tom Schieffer.


In 2009, after an amazing season, the club owner Tom Hicks, who is a recognized investor and sport executive, who had participation in significant sport franchises besides the Texas Rangers, like Liverpool F.C., the Dallas Stars and the Mesquite Championship Rodeo, had different financial problems with his sport holding called Hicks Sports Group. Due to these liquidity issues, the Hick Sports Group reached unpaid debts for more than $525 million dollars, making to its owner to sell the majority participation of the team.

In 2010, the Texas Rangers franchise was sold to a business group formed by the lawyer Chuck Greenberg


and the team’s president Nolan Ryan for almost $570 million dollars. The team was auctioned and other great businessmen like Mark Cuban, the Dallas Mavericks owner or James Crane, offered for the team but was Goldberg and Ryan who made the best offer to buy the team.

The Phoenix Coyotes in 2009Founded in 1996 after being known as the Winnipeg Jets, this team faced bankruptcy in 2009 due to the financial crisis of the club owner, Jerry Moyes’. In that year, Jim Balsillie, a Canadian businessman and CEO of the technology company Research in Motion, wanted to buy the team to moving it to Canada, but the National Hockey League board did not approve this initiative.


In that same year, after different failed negotiations and propositions, the National League bought the team for more than $140 million dollars, so it played the 2009-2010 season. In 2013, the Glendale City Council arranged with the Renaissance Sports and Entertainment group for almost $225 million dollars for managing the team during 15 years. In 2014, under this administration, the Phoenix Coyotes changed its name to the Arizona Coyotes. Moreover, the Renaissance Sports and Entertainment group is building a new stadium for the team, which will be finished in 2020.

https://www.nhl.com/coyotes


The Baltimore Orioles in 1993This team is one of the most recognized and traditional in the Major-League Baseball. Founded in 1901, and having won three World Series Titles (1966, 1970 and 1983), seven American League trophies, and nine East Division Championships, the Baltimore Orioles faced bankruptcy in 1993.

After years of success and incredible seasons, in 1993, the club had liquidity problems when its owner, Eli Solomon Jacobs, a recognized American investor and lawyer, faced financial issues due to his debts and unpaid credits. In this same year, the Baltimore Orioles


was auctioned, being bought by the Baltimore-based attorney Peter Angelos for more than $170 million dollars. Angelos is the current owner of the team and has made important and good investments in it.

Another well-known sports teams’ bankruptcy cases have been Los Angeles Kings, who faced financial issues in 1995, being sold by its owner Bruce McNall and bought by Ed Roski and Phil Anschutz for more than $120 million dollars. Other cases are the Pittsburgh Penguin, who faced bankruptcy in 1975 and 1998, the Ottawa Senators and the Buffalo Sabers in 2003.

Related: Four bankruptcy cases in the technology industry by Suzzanne Uhland

https://www.slideshare.net/suzzanneuhland/four-bankruptcy-cases-in-the-technology-industry

Economy & Finance

Three bankruptcy cases in sports franchises