Reports have members of the New York City-based Kushner family as having an interest in purchasing the Miami Marlins, but as details about a potential handshake deal emerge, it’s clear there are many questions and complications emerging.
The outline of the deal has venture capitalist Joshua Kushner and his brother-in-law, investor Joseph Meyer, leading the charge for the team. Joshua’s brother, Jared Kushner, is President Donald Trump’s son-in-law, married to Ivanka Trump. And Joshua’s father, Charles Kushner, is a real-estate developer with a past that includes convictions on charges of illegal campaign donations, tax evasion and witness tampering.
But so far Joshua Kushner and Meyer are the only family members officially interested in the team; Jared and Charles Kushner have not been involved. Even though Forbes reported earlier today there was a handshake deal to sell the Marlins for $1.6 million, other media outlets, including The New York Times, say there’s no deal and that Kushner thinks the $1.6 million valuation is unreasonable. (Indeed, most financial types in baseball think that price is unrealistic.) And the complicated structure of the proposed deal has Kushner and Meyer buying the team and only afterwards bringing in investors. This deal would have two strikes: it would run afoul of MLB’s debt guidelines and also put MLB in an awkward spot of potentially turning down additional investors down the line — an awkward situation especially if the outside capital is sorely needed by the team. Other potential owners have approached Jeffrey Loria about a sale, including Mitt Romney’s Solamere Capital. From The New York Times:
Yet it was unclear whether a deal would be reached, or whether the family would prevail in any bidding contest. Forbes reported on Thursday that the team had a “handshake agreement” to sell the team for about $1.6 billion, a figure that the people involved in the process said the Kushner family has contended was too high and refused to pay.
Any deal would have to win the approval of Major League Baseball, which would closely scrutinize the buyer’s financing and would probably seek to ensure that Charles Kushner had no role in operations….
As part of the financing for the Kushners’ bid, which was being shepherded by the boutique investment bank LionTree, the family would plan to bring in additional partners to help defray the costs.
And there is this tidbit from the Times:
Some of the people with knowledge of the Kushners’ bid said that Joshua Kushner, drawing upon his experience investing in technology companies like Instagram, saw potential profits in capitalizing on the Marlins’ digital rights.
Unless Joshua Kushner is able to completely overhaul MLBAM and claim digital rights that are under BAM’s control, it’s hard to see how digital rights could be a major factor in this purchase. The Marlins’ current deal has FOX Sports Florida paying $60 million annually for broadcast rights. And there are other complications as well: Jeffrey Loria’s ballpark deal requires him to give part of the profits from a sale to Miami-Dade County should he sell the team within 11 years of the ballpark agreement. That clause was based on a $250 million valuation and has risen since 2009.
As a economic play, a $1.6 billion for the Marlins makes no sense. Yes, there is some upside when it comes to game-day revenues and attendance (whoever succeeds Loria will have a nice honeymoon with the fans), and a much better broadcast deal is likely in the offing. And look for the team to sell naming rights before this summer’s All-Star Game. But there’s not much more unlocked value here, and whoever buys this team at $1.6 billion really wants the cachet of owning a Major League Baseball team.
UPDATE: There is some history here: Charles Kushner and Jeffrey Loria were co-owners of the Triple-A Oklahoma City 89ers beginning in 1989, a relationship that extended into the 1990s.
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