Houston businessman Jim Crane (above), who failed last year in his attempts to purchase the Texas Rangers, has reached an agreement to buy the Houston Astros from Drayton McLane. In addition to Crane’s prior run-ins with the Equal Employment Opportunity Commission, The Biz Of Baseball’s Maury Brown raises the spectre of Frank McCourt in pointing out Crane’s acquisition “is heavily debt laden”.
Of the $680 million purchase, just under half ($300 million) is going to be financed with debt. According to Mike Ozanian of Forbes, “In 2010 the Astros had operating income of $14 million, so if Crane parks $300 million of debt on the team the franchise would be in technical default of the league’s debt limit, which is 10 times earnings before interest, taxes, depreciation and amortization.”
Whether it’s to keep partial ownership or get around MLB’s debt rules, Drayton McLane will reportedly keep a $65 million minority stake in the club. Crane will have just $70 million and $125 million skin in the game. Crane’s partners are pitching in $300 million, and believe it or not, the rest will be a loan out of Major League Baseball.
You have to ask yourself this: The sale of the Astros will be the highest after only the Cubs sale to the Ricketts. Is McLane and MLB more concerned about setting market value than possibly setting themselves up for another debacle, such as McCourt wound up in?