In many respects, the Angels and Nationals are quite similar. Both play in two team markets, both wear red as their primary color, and both are for sale by elder patriarchs whose children will not take over the team.
The similarities get a little deeper too. The Nationals had young phenom Juan Soto under contract at the beginning of their sales process. The Angels have Shohei Ohtani. And both went on the market while undergoing significant litigation.
I’m going to miss several layers of nuance in this piece. I do home loans not large scale corporate acquisitions. But I do think the process unfolding in Washington, D.C. could give us a glimpse of what to expect here in Anaheim.
Everyone wants to know when the Angels sale will be complete. The Nationals announced they were exploring a sale in April of this year, beating Arte Moreno to the punch by just over four months.
As of this time, no final bidders have been named and a sale does not seem imminent as no formal bids have been reported.
Assuming a similar amount of due diligence and capital acquisition from interested parties, the Nationals should sell a few months before the Angels. But they might not.
The two sales could impact each other’s timelines. The Nationals are no longer the lone team for sale. Investors might want to review both options prior to making bids. Also, a group losing out on one franchise might want to start pursuing the other. It might be smart for one side to see a formal bid on the other team so they know what that group can really offer.
Plus, each franchise has some significant litigation that will impact the timeline.
How will the sale impact the team’s ability to maintain superstar Shohei Ohtani? While the parallels aren’t exact, the Nationals went for sale with limited time on their young star Juan Soto’s contract.
Many speculate a new owner will want to build around Ohtani and reap in the millions he generates. Others will speculate that businesses generally try to pare long term expenses prior to a sale. The Nationals case seems to show that buyers in this pool want resolution so they know how to forecast.
The Nationals offered Juan Soto a massive $440 million contract extension which he rejected. The fact this offer was made less than two months after the sale of the franchise was announced indicates the Nationals brass either thinks or knows a long term contract for a superstar won’t hurt the sale.
Once Soto rejected the extension, the Nationals quickly pivoted and acquired as much talent as possible for him.
Basically, the new owners were getting something of value either way.
What this might mean for the Angels? Ideally a massive contract extension that is accepted by Ohtani. I think it is easy to speculate that a serious offer will be presented. One that should not seriously alter the projected sales price of the franchise. However, if that deal is rejected, look for a trade.
The Nationals and Orioles have been in long term litigation over the broadcast fees rights from the shared MASN TV deal. 16 years of litigation to be precise. As this relates directly to the team’s bottom line, resolution here is also key.
There’s $105 million in an escrow account earmarked for the Nats due to a judgement and yearly fees at stake. Considering the ultimate ruling in this matter will severely impact every financial consideration, this lawsuit could really slow the Nationals process.
Meanwhile, here in Anaheim the cable tv deal is rock solid for another decade. However, the team is facing a litany of other litigation and scandals.
The good news here is that these are all solved by throwing money at them and the money required for the last two is pocket change by billionaire standards. The Skaggs suit could result in a much larger settlement with some estimates pegged at $100 million. Perhaps just as damaging, a trial would result in a lot of Angels dirty laundry being publicly aired. Again.
What is less known is the impact of the stadium sale scandal. Currently the Angels are not charged in the FBI probe but Arte could be subpoenaed and then required to answer questions under oath.
The Nationals sale shows that an asset of this size will take quite a while for perspective buyers to fully evaluate and that pending litigation will slow the sale. However, the team still offered its biggest star a huge contract during that time frame and give its front office autonomy to get the best boatload of talent for Soto after the extension was rejected.
Purely my speculation here but the Nationals pending litigation has a direct impact on the cash flow of the business. I think that has a larger effect on the timeline of their sale than the rash of Arte scandals, most of which could be resolved with a few checks and none of which impact the future financial health of the franchise.
Overall, what the sale of the Nationals tells us regarding the sale of the Angels is likely this: it will be a slow process and some critical internal issues will need to resolved until it can reach a point where bidders are submitting offers.