Newspaper article St Louis Post-Dispatch (MO)

Cards' Package Expected to Get Handsome Price

Newspaper article St Louis Post-Dispatch (MO)

Cards' Package Expected to Get Handsome Price

Article excerpt

If the recent marketplace holds, Anheuser-Busch Cos. Inc. will command a handsome price for the Cardinals, Busch Stadium and its adjacent parking garages.

In the 1990s, major-league baseball clubs have sold for $85 million to $173 million. David Presson of Edward D. Jones & Co. predicts that bidding for the Cardinals will start at $150 million.

"Nobody ever loses money selling a baseball franchise," said sports historian Chuck Korr of the University of Missouri-St. Louis. "They have always been a valuable commodity whose book value keeps going up."

The Baltimore Orioles sold for $12 million in 1979, $70 million in 1988 and $173 million in 1993. John McMullen bought the Houston Astros for $18 million in 1979 and sold the club for $115 million in 1992.

South Florida and Denver got expansion franchises for the 1993 season for $95 million; this time around, groups in Tampa and Phoenix are paying $155 million.

How much are the Cardinals worth? In 1992, before the bottom fell out of the club's attendance, Financial World magazine pegged the Cardinals' value at $132 million. This year the publication estimated the value at $110 million and projected operating losses of $12 million in 1995.

At the low end of the major-league spectrum, the financially strapped Detroit Tigers, Pittsburgh Pirates and Oakland A's have exchanged hands for about $85 million in recent years.

The A's typified the economic crises facing the lesser franchises; club officials estimated 1995 losses at $20 million to $25 million. But new owners Steve Schott and Ken Hofmann bought in anyway.

"As businessmen, we felt we could go up from here, and I think we can go up from here," said Ed Alvarez, head of the new regime's transition team. "That's the only way we can look at it."

Franchises typically command more from out-of-town groups looking to move a club to their sports-starved city. A Tampa group offered $115 million for the San Francisco Giants in 1992, only to see its effort blocked by the National League.

The team was later sold to Bay Area investors for $15 million less.

Who is buying these teams? "First of all, it's somebody who believes buying a baseball franchise is a good, sound investment," Korr said. "It may not be profitable in any given year, but the equity will go up.

"It's hard to believe most franchises don't make money. Certainly the potential is there to make money."

According to major-league baseball's own records, its clubs made $762,955,000 in operating profits from 1986 to the pre-strike 1993 seasons. But, acting Commissioner Bud Selig argued, "Since 1978, this has been a virtually break-even industry, if you include interest costs. And that's predepreciation and pretaxes."

The baseball strike that aborted the 1994 season and shortened the 1995 season did substantial damage to the game. The work stoppage cost clubs $700 million in revenue and chilled attendance this season. …

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