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Potential Minnesota Twins Buyers Spooked by Massive Debt
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- Potential Minnesota Twins Buyers Spooked by Massive Debt
Matt Krohn-Imagn Images Matt Krohn-Imagn Images
There has been positive steam regarding a sale of the Minnesota Twins in recent days. Last week during the All-Star Break festivities commissioner Rob Manfred said he believes a transaction is imminent.
A few days later, after calling around, Star Tribune columnist LaVelle E. Neal suggested that the Pohlad family may have found their anchor investor . The Tampa Bay Rays are close to crossing the finish line on a $1.7 billion transaction. That is the same amount Minnesota is said to be targeting.
Credit: Matt Blewett-Imagn Images
It would be great for fans if current ownership moved on sooner rather than later. That doesn't mean it will be straightforward, especially with all the debt the Pohlad family rolled into their baseball team.
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Pohlad's debt causing issues for MN Twins sale
Despite Forbes providing a valuation of $1.5 billion for Minnesota, the Rays selling for more is a positive. That could help the Pohlad's reach their $1.7 billion asking price. They'll lose some of those funds on the bottom line thanks to the debt they are currently carrying. That's also something that USA Today columnist Bob Nightengale said is a detractor for interested parties.
"While MLB is still confident that the Minnesota Twins will be sold in the near future, potential buyers are balking at the approximate $450 million in debt on the Twins' books, to go along with their $1.7 billion price tag."
The Pohlad's have a number they are looking to generate. Each member of the family is looking to get their share. Although Carl Pohlad paid just $44 million for the team in 1984, his family members want to squeeze every last cent out of the transaction.
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Part of the problem complicating a sale is the Pohlad's have other business ventures. They have ownership stakes in commercial real estate and other businesses that haven't always gone as smoothly as they would have hoped. Last winter they sold off their car dealerships , and the debt they have folded into the baseball team is likely allocated from those ventures more than it is related to baseball operations.
Related: Secret High Roller Emerges to Anchor New MN Twins Ownership Group
It's more than likely a new ownership group will find a way to be more fiscally responsible than the Pohlad's. After all Joe Pohlad, the current executive chair, is not a successful business person in any way. The transition of leadership is now largely at a generation benefitting from the family's previous success rather than anything they have done on their own.
What Minnesota eventually sells for remains to be seen. How the debt is accounted for, and the impact it has on the bottom line is something any seriously interested buyer will be conscious of. This saga needs to end, and at this point I'm good with virtually any new party being awarded as the winner.
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