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Columnist Mike Ozanian of Forbes Magazine says today (Jan. 16) that "The sale of controlling interest of the San Diego Padres to Jeff Moorad by John Moores has been delayed by Major League Baseball because the league is not convinced of the net worth of Moorad's limited partners."

Ozanian says he has been told by sources that league commissioner Bud Selig put the deal on hold because has been burned by financial debacles of the Los Angeles Dodgers and New York Mets. So the league "is putting Moorad's partners under a microscope."

Says Ozanian, "The Padres would have lost a lot of money last season if it were not for the money the team got from the league's revenue-sharing system and the team's low payroll." The Padres may soon get a fatter TV deal from Fox, but "[the league]wants to make sure that Moorad's group has the money to field a competitive team without relying on the high-revenue teams." The league is eyeing $200 million of debt that the Padres carry.

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Comments

Burwell Jan. 16, 2012 @ 11:08 a.m.

It appears that Moorad is trying to acquire the Padres using an LBO structure that would leave the Padres with huge debts and staggering interest payments. The payroll would likely have to be cut even further to free up cash to pay the interest on the loans. It is clear the Padres will not be a viable team with Moorad as owner. Major Leage Baseball should put the kibosh on Moorad and force Moores to find a new buyer who can pay cash for the Padres.

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Don Bauder Jan. 16, 2012 @ 3:03 p.m.

It's possible that Moorad is buying the Padres with a scheme that is similar to a leveraged buyout (LBO). I can't say that for certain. If it is true, then you are quite correct: more debt would be piled on the team. The Forbes columnist noted that MLB owners are already concerned about $200 million of Padres debt. This suggests that the owners may be worried that the Moorad group's scheme will pile on even more debt. I think the owners are rightfully concerned that the Padres will become -- or have already become -- similar to the Pittsburgh Pirates, who don't care if they win or attract customers; they are living off the revenue sharing. The Pirates are making a nice living off money they get from the healthier teams. Are the Padres lining up to do that -- or have they already done it? Great question that the owners appear to be worried about. Best, Don Bauder

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sdsocialdiary Jan. 17, 2012 @ 4:39 a.m.

Don, you might not have seen my home page....had an interesting chat with Jerry Kapstein who was in town... very, very smart man.

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Don Bauder Jan. 17, 2012 @ 8:55 a.m.

I will check it out. Best, Don Bauder

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ImJustABill Jan. 22, 2012 @ 8:11 p.m.

I think for all intents and purposes Moorad admitted in the U-T http://www.utsandiego.com/news/2011/aug/09/moorad-padres-increase-payroll-2012/ that this aquisition was highly leveraged and that at present they cannot afford to put a decent team on the field.

“As revenues increase, profits will flow back into the club and ballpark improvements. We will operate at break-even every year. If we create more revenue, we will spend more.

“There is nothing to hide here. It’s a solid corporate business model. The plan is so simple it confuses people.”

So Moorad is basically saying that he can't afford to have a decent payroll right now but that after several years of revenue and the value of his investment increases then maybe the Padres will have some chance of having a good team.

Sorry, but MLB ownership should not be for the marginally wealthy seeking to increase their wealth with leveraged investments. Look at what happened to the Dodgers. I don't think Moorad can afford the Padres and MLB is right to turn down this deal.

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ImJustABill Jan. 22, 2012 @ 8:15 p.m.

Actually I mean't to say marginally super-wealthy. Mere multi-millionaires need not apply. Better have a B next to the number of your net worth - or at least something approaching that.

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shawpit May 7, 2012 @ 8 p.m.

Shawn The mechanics on how the various teams in the MLB share their revenue is still a mystery to me. How did a team like the Padres end up with so much debt? I guess it was a good decision to put the sale on hold because there have been other controversies surround the financial statuses of other clubs. Best to make sure the the Moorad partners have the financial backing.

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