Derek Jeter’s purchase of the Miami Marlins is on hold at least for a few months. During recent owners meetings in Chicago, the league declared it will examine the former Yankee great’s $1.2 billion deal to purchase the team from Jeffrey Loria, according to Fox Business.
This is a standard process, and the fact that an examination is coming is not an indication the bid won’t hold up. But it doesn’t sound fun or quick. One league executive described what’s to come as a “proctology” exam that could delay the sale for quite a while.
Jeter himself was not present at the owners meetings. His business partner, Bruce Sherman, was present as the top investor in Jeter’s bid with a $300 million share. (Jeter has reportedly placed only $20 million to $25 million of his own cash in the bid.) Here’s a summary of what MLB told Sherman, according to one executive:
“The owners told Sherman that the Jeter bid will get what amounts to a proctology exam,” said one baseball executive who spoke on the condition of anonymity and has direct knowledge of the owners meeting. “And they indicated that exam could take a long time.”
The examination contains two main focal points regarding the finances of the deal:
Key points that will be examined by MLB officials will be whether the various investors in the Jeter group, including Sherman, will be able to meet their obligations as part of the bid, and whether the bid itself contains significantly more cash than debt, according to MLB officials.
If all goes well, the examination will conclude by the end of the postseason in November.
While the Marlins have been a mediocre franchise ever since winning the 2003 World Series, their biggest issue is their debt. Reports have already surfaced that Jeter and his ownership team plan to slash the Marlins’ payroll. That plan that could include trading away star right fielder Giancarlo Stanton, who’s been the story of the last two months as he chases an historic, 60-home-run season.
For the deal to go through, the 30 MLB owners must give their approval with a three-quarters majority. Owners addressed a few of their concerns during the meetings, namely if Jeter, who lacks business experience, will be the “control person” of the ownership team, and if any current members of the Marlins management will keep their jobs.
Here’s what Fox Business has on that:
Sherman, who is retired after a long and lucrative career on Wall Street largely as an investor, assured the owners that he would be the control person, meaning he would be the de-facto owner at least for the immediate future, people with knowledge of the owners meeting say. The Jeter bid is complex; it combines financial contributions from several other investors other than Sherman and Jeter, including a chunk of money from a firm affiliated with personal computer honcho Michael Dell in the form of preferred stock, which might pose a problem for MLB since such an investment has debt-like characteristics that the league frowns upon.
Sherman, meanwhile, also indicated he will play a hands-on role in the team’s business affairs, while Jeter will play some management role, these people add. It’s unlikely anyone from current Marlins management will keep their jobs, baseball executives with knowledge of the matter say.
The owners’ vote will likely occur during the league’s quarterly meetings in October.