Cleveland Indians may soon have minority investor
CLEVELAND (AP) - Indians owner Paul Dolan could soon have a financial partner.
An investment banker hired by Dolan last year to search for a minority owner said Thursday that a "small group" of investors has been identified and a deal could be completed soon.
Steve Greenberg, managing director of Allen & Company, a New York-based financial boutique that has brokered sports acquisitions in the past, said the pursuit of an investor has narrowed and Dolan's goal to bring in someone to ease his financial burden and add capital could be finalized by the end of the year.
"Being a baseball guy let me describe it this way," said Greenberg, whose father, Hank, was the Indians' general manager from 1950-59. "We're in the bottom of the seventh inning. It's not over yet, but we can see the outcome if we just get two innings of relief ball."
Greenberg did not identify the group or what percentage of the team it would purchase from Dolan.
The Indians owner, whose family bought the team from Richard Jacobs in 1999, has no intention of selling the majority share of the Indians, who went 81-80 this season and missed the playoffs for the seventh time in eight years.
Greenberg has had major success in completing business deals. He created regional sports TV channels in Chicago and New York, helped the Wilpon family land a $400 million naming rights deal for Citi Field and worked with Cleveland owner Dan Gilbert on the purchase of the NBA's Cavaliers.
Because Major League Baseball does not have a salary cap, mid-market teams such as the Indians are at a distinct disadvantage when it comes to signing free agents. Cleveland has to be selective and one or two bad signings, as was the case with outfielders Michael Bourn and Nick Swisher in 2013 to deals totaling $104 million, can have a debilitating effect.
Greenberg doesn't think a minority investor in Cleveland will necessarily change Dolan's spending habits radically, but it can provide a stronger economic foothold.
"I don't think it's going to be that kind of a game changer," Greenberg said when asked if an infusion of capital will alter the Indians' philosophy in building their roster. "I wouldn't expect that, but what I do think it does, however, is broaden the base of ownership. If there are years where you lose a little bit of money, it's not as stressful and you don't feel the need to trim payroll in August and September or July if you're out of the pennant race because you're not writing the whole check."
In recent years, Dolan's spending or lack thereof has angered some Indians fans, who complain that he doesn't do enough to make his team more competitive. Cleveland's attendance has been dropped over the past decade and the team drew just 1.38 million fans - second lowest in the majors - and the lowest in 22 seasons at Progressive Field.
Greenberg believes the addition of a minority owner in Cleveland can help change any perception about Dolan.
"If we bring in the right partner, separate and apart from any capital he may bring, we're also hoping that the partner becomes a true partner in terms of running the business in terms of ideas and contributes beyond any check he writes, so I think it will be perceived as, and will hopefully also be, a positive factor," he said.