Why the Rangers Cut Chuck Greenberg
Just seven months after buying the team, owners Nolan Ryan, Bob Simpson, and Ray Davis deep-sixed their new CEO.
Before the March 11 political tsunami that rolled in from Surprise, Ariz., and drowned Texas Rangers CEO Chuck Greenberg in Arlington, a savvy observer might have seen a few ripples of warning.
Less than six weeks after the first-ever Rangers World Series game, for example, the same newspaper columnist who earlier anointed Greenberg the “ideal” MLB owner criticized the chief executive’s meddling in the attempt to re-sign ace pitcher Cliff Lee under the headline, “New Rangers owner follows Hicks’ lead.”
Next came the New York Yankees’ turn at bat. “I think Chuck is delusional,” Yankees boss Larry Levine proclaimed. “He has been in the league for a few minutes, and yet he thinks he knows what everyone is thinking.”
In between these small stories, Greenberg, 49, reportedly turned a few high-ranking Rangers baseball heads at the MLB Winter Meetings in Florida. Over the last few years, Rangers General Manager Jon Daniels had presided over a daily conclave of scouts, coaches, front office staffers, and just “baseball people” there. This last winter, though, Greenberg reportedly took the gavel and ran the meetings himself.
Then there was the matter of renegotiating Daniels’ contract as GM. Rangers President Nolan Ryan had publicly stated that this was an off-season priority. However, even after pitchers and catchers had been in spring-training camp for more than two weeks, Daniels still had no deal. Rumors spread that Greenberg had sold off Daniels’ suite at the stadium—an important perk. The GM finally won a four-year extension around the same time that the club’s board of directors convened for a meeting in Scottsdale.
According to a source close to key ownership within Rangers Baseball Express LLC—oilmen Ray Davis of Dallas and Bob Simpson of Fort Worth—the dustup over Daniels’ contract, and Greenberg’s last-gasp trip to re-sign Lee, were “not as big a deal” as they were made out to be. And, the source added, the troubles at the top began “not until the first of the year … and really not until February.”
When word leaked out that before spring had officially sprung, Greenberg had missed all or part of that Scottsdale board meeting—then failed to co-host a scheduled party for advertisers the next day—blood was in the water. Ryan basically told the powers-that-be that a “him or me” situation had developed. And Greenberg could not win that battle.
Ryan, Daniels, and the serious money behind Rangers Baseball Express had no intention of working “through our differences,” as Greenberg had urged. At least one owner was acutely aware of the way Jerry Jones had been reviled in Dallas early on for his treatment of Tom Landry, another Texas legend like Ryan. So Ryan would stay, and Greenberg would be offered a subordinate position that he would likely refuse. The upshot: The sports attorney from Pittsburgh was abruptly and unceremoniously sacked as Rangers CEO and replaced by Ryan.
At that, the all-knowing national media swept in to peck at the carcass. With little attribution and few specifics, somehow the affable Greenberg had just never “fit in,” they claimed. The Rangers CEO who had long deferred all baseball questions to Ryan and Daniels was a “meddler” who “ran his mouth.” The lawyer who’d recruited the financial team, forged a colossal media deal, and set the winning strategy for owning the ball club had become just a “small-timer from out of town.”
So, who was this guy Chuck Greenberg, really? Was he indeed just a meddling owner wannabe? Or was he the ideal one who merely rubbed wrong an increasingly prickly Texas legend? And, how was it that his tenure as CEO so quickly imploded?
“A Natural Leader”
To start with, we give you Marc Deflin. He was one of three inseparable pals growing up with Greenberg near the St. Clair Township outside of Pittsburgh, and perhaps now the most surprised that his childhood friend is probably selling his house in Westlake to move back home to Pennsylvania.
“Chuck was the sharpest and a natural leader, always very persistent but with a smile on his face,” Deflin says. “I remember when we were about 17. We all kind of dreamed about playing in the adult softball league—the beer league. Well, Chuck just made it happen. Next thing you know, we had a sponsor and jerseys. All Chuck wanted was to play first base and bat third in every game. Nobody begrudged him.”
Notice the formula? Put it all together, handle the details, everybody gets what they want. In the case of the Rangers, Greenberg wanted to invest a little money for a minority ownership position and have the title and responsibilities of a CEO. The new owners got their team and a fat new TV contract, thanks to Chuck. And that is just how it played out—for seven months, anyway.
Rangers fans have to wonder whether Greenberg’s departure will bring back the demons that haunted the franchise faithful for decades while provoking deep belly laughs from other baseball fiefdoms. After all, this is the team that featured in its annals:
- Three different managers in three days—including one that ran off to Alabama because he was homesick.
- An individual disrupting the Ranger clubhouse while in a 90-minute catatonic trance (and this was even before Dale Hansen arrived).
- A helicopter that crashed into the outfield while trying to dry the Arlington turf.
- A sportswriter comparing an outbreak of Ranger defensive miscues to a “yeast infection.”
Greenberg, if he were still talking, would tell you that it was the club’s lack of success—and its low expectations—that first piqued his fascination.
“DFW loves its sports,” he told D CEO in an interview before his ouster. “In baseball here, the bar of expectations was set low, but there were waves of talent. I saw this as maybe the biggest sleeping giant in sports.”
So he went after it.
Observers can say what they want now about Greenberg’s operational abilities, but the sports attorney rose to his position with the Rangers not because of personal wealth, but because of a wealth of experience. He had worked as outside counsel to the Pittsburgh NHL team, the Pittsburgh Penguins, and was instrumental in winning them a new arena. But it was his ownership of three minor-league baseball franchises that gave him the chutzpah and experience to approach Ryan, the face of the Rangers franchise.
Before approaching Ryan, Greenberg had been in North Texas in what he called “something of an undercover capacity.” He would interview the folks on the next barstool and question flight attendants and cabbies on their perception of the Rangers.
He met Ryan in the summer of 2009. A one-day trip turned into three days and a handshake on a partnership agreement that eventually included Greenberg becoming the team’s CEO and managing partner. To Greenberg, Ryan was the key to the deal.
“If Nolan had wanted to put his own group together, I would have dropped out,” Greenberg said. “We are different but complementary and, from the beginning, I noticed that from the minors to the front office, there was this really strong work ethic.”
By all accounts, Ryan maintains a B.S. meter that serves him as well today as his “high hard one” did during his pitching days. How he did not see his new managing partner as a hands-on guy is baffling. Ryan, through his son Reid, knew all about Greenberg’s minor-league experience. Here was a guy that advertised himself as having pulled the tarp back on rainy nights and served ice cream from the concession stands—two “very sophisticated and technical jobs” Greenberg joked.
“Greenberg was very talented, and should be credited for the majority of what got the deal done,” says the source who’s close to Rangers Baseball Express. “Whether anyone will say that or not, he was the salesman and the businessman who held it together. His record with the Pittsburgh Penguins and minor league baseball is far more compelling than anyone has made it out to be.”
Clearly, the Rangers ownership, especially Ryan, must have admired some of Greenberg’s front-office prowess. It was Greenberg, after all, who lured PGA heavyweight and chief operating officer Rick George away from the professional-golf tour and gave him the identical title with the Rangers. Together, they hired three more crucial vice presidents to oversee ticket sales and marketing. These included Executive Vice President Joe Januszewski, who was snatched up from the Red Sox to guide business partnerships and development.
A candidate who interviewed for one of the critical new positions told D CEO, “I didn’t even see Nolan Ryan. Chuck pretty much ran the meeting.”
These hires make up much of the “deep bench” on the business side that Ryan, Davis, and Simpson bragged on during their March 11 press conference to announce Greenberg’s departure. Perhaps this new leadership team, much of it assembled by Greenberg, is the reason Ryan has appeared so nonchalant about adding the CEO position to his responsibilities. The Hall of Famer has likened his new role to the one he enjoyed before the team’s August bankruptcy, when he was serving merely as club president.
A Fan-First Mentality
September and October 2010 brought giddy times to North Texas. Somehow, the bankrupt Rangers acquired one of the top pitchers in the game in Lee. Then came the far-fetched vanquishing of the hated Yankees en route to their first World Series appearance.
To see Rangers headlines around NFL playoff time is unusual for this city. More bizarre still was the chant inside Dallas Cowboys stadium: “Let’s Go Rangers!” Outright craziness was the selling of 360,000 t-shirts emblazoned with the claw (for a good play) and antlers (for speed), the offbeat symbols that quickly became 2010 Rangers trademarks.It is quite possible that the Rangers’ 2010 success and subsequent short off-season worked against the Ryan/Greenberg business relationship that Ryan called “kinda like a marriage.” The short off-season was a blur. “We [were] running downhill with no off-button,” George recalls.
Greenberg stood in the middle of it all. He promised fair prices for tickets and concessions. He touted the arrival of a giant scoreboard for the stadium, but soon a rumor circulated that Ryan was worried that the $13 million behemoth might be used to “show up” opposing players. It seemed that Greenberg and Ryan had no time to just relax and get to know each other.
When Greenberg was finally able to take control of the Rangers, he quickly moved to separate his regime from previous ones. A first order of business was to enroll 100 percent of the eligible office staff in the MLB Pension Plan for Non-Uniform Personnel. It was an imprint move and a morale boost that John Blake, the Rangers communications head, calls, “truly a great deal.”
Yet, there seems no denying that while Greenberg was roaring down the tracks at break-neck speed, Ryan—and maybe Daniels and others too—were seething at what Ryan called “management styles and chemistries.” Ryan had already dismissed Josh Lewin, the energetic Rangers TV broadcaster, because of clashing styles.
Indeed, Ryan was said to have told the ownership group, “I did not sign on for this,” referring to the management and chemistry clashes with Greenberg. “It’s safe to say Ryan said nothing less than, ‘I didn’t sign on for this,’ ” says the source who’s close to Rangers Baseball Express. “Short of that, I don’t think we’d have a personnel change.”
Still, not everyone blames Greenberg alone for the high-profile, front-office foul-up. Ryan did not merely find a carpetbag under Greenberg’s desk one day and show him the door the next. By all accounts, Greenberg’s energy and passion amazed. He gladly attended cocktail parties, exuding a fan-first mentality while shaking more hands than a county judge candidate. His Facebook page remains a testament to the many fans and friends he won over in North Texas.
On Tuesday, March 15, at 7:56 p.m., he wrote there: “I want to extend a heartfelt thanks to everyone for your unwavering support over the last year and a half—especially the past few days. I was honored to be a part of the Texas Rangers at a historic time—and am enormously proud of all we accomplished together. What extraordinary memories. I wish only the best for the franchise and look forward to many memorable Octobers for Rangers fans. You deserve it...chuck”
He also changed his profile picture to an image of a vintage typewriter with the words “Thank you!” typed on an otherwise blank sheet of paper.
The day before, he updated his “current city” to Westlake, Texas. Later that night one of his friends wrote, “You’re a TEXAN.”
Another added, “Could you buy the Cowboys and get them in the Super Bowl???”
No doubt the two main characters in this power struggle—Ryan and Greenberg—arrived at the scene from remarkably different backgrounds. One is a lanky baseball lifer from the South Texas region of Alvin, Texas, where the spotting of the odd redneck would not cause a fuss. The other is from a Jewish neighborhood up nawth who attended law school at the University of Michigan, among other Yankee influences.
“Nolan says I am the one with the accent,” Greenberg laughed before their breakup.
Prior to the split, when George, the new Rangers COO, was asked to talk about Ryan and Greenberg, he said, “Nolan and Chuck are just different people, but both are passionate. What they have most in common is that they will give you direction, the tools, motivate you, and help eliminate any barriers that are in the way. Then they let you do your job.”
Perhaps, Greenberg would have been better off with Mark Cuban as a partner. It could have happened. Cuban, who did not respond to requests for comment for this story, had asked Greenberg to join his forces and to dump the ownership group he had put together, Greenberg says. The behind-the-scenes story of how and why Greenberg deflected that offer is instructive now in the wake of his ouster—especially since apparently it was Greenberg’s business acumen that put Ryan & Co. in the Rangers’ driver’s seat in the first place.
Calling All the Shots
Twenty-five or 30 years ago, it wasn’t uncommon to see powerful political opponents Dallas Mayor Robert Folsom and Dallas County Judge Garry Weber locked across a poker table waiting for the other guy to blink. In those days, one of the political giants might submit a simple call, or raise the bet by tens of thousands of dollars, and commentary on the game’s stakes and strategy would circulate through town in awed tones.
That was mere chump change, though, compared to the stakes bouncing around Judge D. Michael Lynn’s Fort Worth federal courtroom on the night of Aug. 4, 2010, and into the wee hours of Aug. 5. Certainly Folsom and Weber were lesser fry compared to the big fish bidding on the ownership of the Rangers baseball team for more than 15 steamy hours. Many in the business and sports world were entranced by the hundreds of millions of dollars unabashedly tossed in the pot by groups linked to Greenberg and Ryan and the brazen but shrewd Cuban, owner of the NBA’s Dallas Mavericks.
It wasn’t supposed to be this way. Months earlier, fireballer Ryan and the fireball Greenberg had managed to put a deal in place with former Rangers owner Tom Hicks that seemed certain to pass through bankruptcy court and win the imprimatur from MLB owners. Greenberg would be CEO and run the business side, while Ryan and Daniels, the general manager, would continue to handle the already burgeoning baseball elements.
But, as Greenberg told D CEO, “I could never have imagined such odd twists and turns. At times I felt like the guy trying to pick up a soda can with a piece of string.”
The task was made that much harder by the emergence of two distressed debt buyers. First, and not all that surprisingly, came longtime hedge fund predator Monarch Alternative Capital, which became the largest creditor, buying up about $100 million of the $525 million in defaulted Hicks debt.
Next up to buy a debt position was Cuban, Greenberg’s former fellow worshipper at Temple Emanuel synagogue in Pittsburgh. Greenberg knew at the time that bidding on the Rangers was something the Mavericks owner “had contemplated,” Greenberg says, and that Cuban had purchased a small piece of the debt to get a window into what was going on, possibly to align himself with the lenders.
Some assume the media-savvy Cuban’s ownership bid was driven by his desire to start a regional sports network. Certainly that would make sense. Cuban’s Mavericks have averaged playing about 100 contests a year. A regional TV sports network that would feature the Rangers and his Mavericks—even with some seasonal or post-seasonal overlap—could fill up nearly 250 dates and be quite lucrative. If Cuban’s real motivation, as he contended later, was to cause another network to pay “an ungodly” amount of money for the broadcast rights, the Mavs owner was clearly a player who knew that side of the game.
Trouble was, Greenberg already had a deal with Fox Sports in his hip pocket. It was a deal Greenberg had nurtured and one he felt belonged to his group alone. The Pennsylvania lawyer doubted if Cuban, a late arrival to the auction, had any broadcast agreements truly pinned down. “I would be very surprised if his expectations and mine were the same,” Greenberg recalled.
During baseball telecasts, there was no doubt that Ryan was the public symbol of the American League West-leading Rangers. If Greenberg were sitting next to Ryan, his face would quickly be dialed out as the camera focused on the Rangers president and perhaps his wife, Ruth, or maybe George W., if he were in attendance. But in the side rooms and halls outside of judge’s chambers—truly all over the Fort Worth courthouse—it was Greenberg who was calling the shots.
Two old pals from Pittsburgh doing combat in Texas? Not really. Greenberg pooh-poohs the notion that he and Cuban were longtime friends. “Pretty soon the media is going to have us sharing the same baby crib or something,” Greenberg said. “The truth is, yes, we lived about 3 miles from each other, but I never met Mark until 1999 and maybe saw him once or twice until 2009.”
The year 2009 is important because, although Cuban had not weighed wholeheartedly into the fray, he made several mind-numbing moves during the acquisition process that Greenberg would never forget. In December 2009, Greenberg was texting back and forth with the Mavericks owner when, “literally out of nowhere,” Greenberg said, “came the notion that I would jettison my partners and join with him.”
Greenberg was both aghast and flattered by the suggestion, but managed to convey that his partners remained supportive and would go all the way to the finish line together. “I mean that as a compliment to my partners and not a criticism of Mark,” Greenberg said. “He was probing me.”
Despite his spurned overture, Cuban continued to send texts and other missives—which eventually might have been his undoing, Greenberg believes.
First though: the chaos. The Greenberg team moved early to disqualify the Cuban bid—mounted with Jim Crane, a Houston businessman—for a variety of reasons. “There were many days I thought we were the only ones playing by the rules,” Greenberg said, thinking back to the card games big leaguers once played to pass the time. “It was a card game with no rules respected or followed. Players would sit and lure fans and tourists to their tables in the hotel lobbies or train stations on the road.”
Greenberg believed the court was allowing deadlines for bids to be ignored and not counting the value of his promised quick close. There also was no guarantee that the Cuban and Crane ownership would be blessed by MLB.
“The Crane and Cuban bids came with no business plan, no structure, not even a partnership agreement,” Greenberg said. “I was beginning to think the whole thing was a bluff.”
Late on the afternoon of Aug. 4, while Greenberg’s team was waiting to review the actual bid documents, lawyers from both sides dropped
F-bombs on each other in the hallway. Then, after Greenberg’s team described Cuban’s bid as “illusory,” the presiding judge finally and pointedly addressed Greenberg counsel, overruling its arguments while saying it could characterize Cuban’s bid “any way you want.”
“At that point,” Greenberg said, it “turned into a kind of old-fashioned shootout to see who had the most money.”
Earlier in his sports-business career, Greenberg had seen the mistakes made by the NHL’s Penguins, a team that was badly undercapitalized. As a result, he made sure his side in the Rangers bid would not be under-gunned. By November of 2009, he had most of his investor group together. That group included Ray Davis, the elusive pipeline billionaire, and XTO Energy founder and chairman Bob Simpson.
To this day there exists among both the local and national media the notion that Davis and Simpson were “Nolan’s guys.” But that is not the case. The source close to Rangers Baseball Express told D CEO that Greenberg first contacted an entity that’s owned by Davis and his family. “They began working with Greenberg prior to Nolan deciding to work with Greenberg exclusively,” the source says. Simpson later hopped on board as an equal partner shortly after stockholders approved the sale of his company to ExxonMobil for $31 billion in the summer of 2010.
In the old glory days of the floating Dallas poker games, even the best players sometimes needed financial help to stay in the late heavy action. At the old VFW hall on Greenville Avenue, that was a beefy guy called “Ace” or “Tiny.” In the courtroom on the muggy evening of Aug. 4, as the bidding rose, Ryan and Greenberg paraded their own money muscle—about $2.5 billion of it.
The offers on the table were all-cash, and the bidding started with modest raises. The Greenberg group bumped Cuban just $2 million to take the lead at $320 million. In a matter of minutes, Cuban raised the offer by $15 million. In between bids, creditors huddled to figure out the value of each tender. Around midnight, after yet another Cuban bid, Greenberg reflected back to a series of text messages he’d received earlier from the Mavs owner during the “probing period.”
As reporters blogged about a “smiling and remarkably cool” Cuban, Greenberg wondered if perhaps his fellow Pittsburgher hadn’t made the worst of poker mistakes—showing his hand to the opponent.“I thought back to the Cuban texts to me of a month ago,” Greenberg said. “He said he would certainly take the real estate out of the deal [something that had already occurred] and that would leave a particular value to the team. I wanted our last bid to be beyond that threshold.”
With no time to debate, Greenberg found Davis and Simpson and headed down the hallway. “We are at a real crossroads,” Greenberg told them. “We might prevail on the point that Judge Lynn’s rules had not been followed, but that would be like winning on a technicality.’’
Then Simpson said: “Blow them out of the water.”
That is effectively what Team Greenberg did, with a demoralizing bump of $35 million. That meant the final Greenberg bid would be $385 million; assumed debt and other obligations would take the purchase price to $593 million.
Cuban did not ponder long. To get out of the breakout room and adjourn to the hallway, it was necessary for Cuban to walk past the Greenberg table. Shortly after midnight on Aug. 5, “Cuban nodded his head and whispered, ‘Good job,’ ” Greenberg recalled. “I think now that may have been his concession speech.
“In the end we had the deepest resources and the greatest will,” Greenberg added. “There was no way we were not going to win that auction.”
A few days later, on Aug. 12, Greenberg took his place at the Rangers table and MLB Commissioner Bud Selig said: “Chuck, congratulations. Enjoy this moment, because it is the last time everyone in this room will ever stand and applaud you again.”
In light of the subsequent bean ball that knocked Greenberg out of the game in the early innings, Selig didn’t know how true those words would turn out to be.