Going, Going: Randy Arozarena and the Tampa Bay Rays could soon have a new owner.
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Trip Miller, founder of Nashville hedge fund Gullane Capital Partners, is looking to buy the Rays, who created the blueprint for cobbling together a good baseball team on the cheap.
Trip Miller, founder of the Nashville, Tennessee hedge fund Gullane Capital Partners, is tying to put together a group of investors to buy the Tampa Bay Rays for $1.85 billion, multiple sources have told Forbes.
Stuart Sternberg, the principal owner of the baseball team, led a partnership that purchased the Rays for $200 million in 2004. It is believed Sternberg owns 49% of the Rays. Sports bankers say it is not clear that Sternberg is looking to sell the team and believe he may be testing the market.
People familiar with Miller’s plan say he is looking to be the control person of the Rays with an investment of $200 million cash. The biggest investment would come from the family of local businessman, Dan Doyle, Jr.. The Athletic first reported about the interest by the Doyle family to buy the Rays in May, but the article did not mention a price for the team or Trip Miller’s investment.
In March, Forbes valued the Rays at $1.25 billion, 25th out of MLB’s 30 teams. For the 2022 season we estimated the Rays revenue at $248 million, including over $30 million in revenue sharing proceeds, only ahead of the Miami Marlins ($238 million) and Oakland Athletics ($212 million).
The Rays suffer from terrible stadium economics. Tropicana Field, which is owned by the city of St. Petersgerg, has been in operation since 1990 and has housed the team since their arrival for the 1998 season. The stadium was contructed for just $200 million and is widely considered the worst in baseball. The Rays pulled in under $9 million from premium seating in 2022—in the bottom quartile in MLB—and their average home attendance was under 14,000, ahead of only the Marlins and A’s.
The Rays have tried to put together a deal for a new stadium for over a decade. The best cite for access by fans would be downtwon Tampa, but that proposal fell apart a year ago. The team is now looking into building a new stadium near thier current home as part of a larger redevelopment plan.
In addition to his team’s poor economics, Sternberg is currently being sued by three of his limited partners, who claim Sternberg “Has been secretly paying himself and several 501SG investors salaries from the Partnership, leaving minority partners with large tax obligations while he “strategically” withheld distributions, devalued membership interests, and purchased shares from estates under manufactured pressure scenarios.” The Rays issued a statement saying the lawsuit was baseless.
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The Rays have, however, created the blueprint on cobbling together a good baseball team on the cheap. This year, Tampa Bay is 50-22, despite the fourth-lowest payroll in baseball. It’s not an anomoly. The Rays do this year in and year out thanks to arguably the best scouting and player development in MLB.
Another plus for the Rays is their regional sports network deal, which pays the team over $50 million a year (see table below). Diamond Sports Group, which owns and operates 19 RSNs, filed for bankruptcy protection in March. Some MLB teams that are televised on Diamond’s Bally RSNs, like the Arizona Diamondbacks and San Diego Padres, have missed rights fee payments. The Rays RSN is profitable and their rights fees are not thought to be in jeopardy.
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Source: https://www.forbes.com/sites/mikeozanian/2023/06/16/hedge-fund-founder-looking-to-buy-tampa-bay-rays-for-185-billion/