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.
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.
From left, Greenberg, Tom Hicks, and Ryan appeared at a May 2010 press conference to announce a “plan to facilitate completion” of the Rangers’ sale to the Greenberg-Ryan group.photography courtesy of Getty Images
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.