The sale of the San Diego Padres is drawing close. The Seidler family has narrowed it down to four groups bidding to buy the franchise and is expected to choose a winner by the middle of April. Anyone who’s bought a house or a car is well acquainted with how complicated the process can be. Buyi ng a professional sports franchise? That’s a whole different level. But, over the last few years it’s actually been streamlined a bit. “It seems as though it’s gotten less complicated, believe it or not, even as the prices of these franchises have gone up,” says Corey Martin, Chair of Granderson Des Rochers, LLP’s Entertainment Finance Practice. He’s been involved with professional sports franchise sales for two decades and says the amount of money being thrown around is, in a way, making franchise sales easier. “As the prices of these franchises have increased into the multiple billions of dollars, it’s really narrowed the pool of prospective buyers that would have the financial wherewithal to purchase these franchises,” says Martin. San Diego’s MLB team will be dealt to either Dan Friedkin (owner of two European soccer clubs), Joe Lacob (Golden State Warriors owner), Jose E. Feliciano (majority owner of Chelsea Football Club), or Tom Gores (Pistons owner and 27% stakeholder of the Chargers). That group should make the Friar Faithful excited about the future. “It’s going to be folks who understand how to operate venues, how to liaise meaningfully and effectively with season ticket holders, dealing with complex issues such as media rights,” says Martin. “So, I think Padres fans can be reassured by the fact that whomever the winning bidder is, it’s going to be someone who’s sophisticated, understands sports, and is going to have the best interests of the Padres first and foremost in their mind when they buy the team.” The sales price is expected to flirt with $3.5 billion, which would top the previous record of $2.4 billion that Steve Cohen paid for the New York Mets in 2020. The Metropolitans are in the biggest media market in the country. San Diego has long been derided as a “small market club.” So, why would the Padres be so desirable that someone would pay a third more for them than a team in the Big Apple? “San Diego, in a lot of respects, is emblematic of what people around the world see as the California lifestyle,” says Martin. “San Diego is seen as a major market, a major brand with, if we’re being honest, some of the biggest stars in the entire sport.” We’re looking at you, Fernando Tatis Jr. and Manny Machado! The fact the new owners are also purchasing 30% of Petco Park and a chunk of its revenue generating power also bumps the value up. However, the biggest factor in why the Padres are almost inevitably going to set a new baseball team sales record is really based in Economics 101. “There’s a very finite resource and the reality is that, even as expensive as they are, there are more people with the multiple billions of dollars required to buy these sports franchises than there are sports franchises available to be purchased,” says Martin. “It’s purely supply and demand. The demand way outstrips the supply.” It is worth noting that, if the Dodgers or Yankees went up for sale tomorrow they would undoubtedly set yet another sales record. But, for now, San Diego is going to be the most valuable MLB team in history. So, what happens after the team is purchased? A lot. Once a winner is chosen and a sale price is agreed upon, Martin says it takes around two weeks to draw up the documents. Then, the real work begins. The sale must be approved by 75% of current MLB team owners, and they like to do their homework before accepting a new business partner. “The longest part of the approval process is vetting, like vetting these individuals, vetting everything that they’ve done on the public record, what their business practices are and what their reputation is. When you have high profile individuals like these, for the vetting process is going to go very quickly. It’s going to be a pretty streamlined, seamless process.” All four of them are owners of other professional franchises so they’re already well known in the sports space. Plus, the rest of the league understands the Padres are doing their due diligence in the vetting process before a vote is even necessary. “They know that the sellers are going to do their own vetting, and they’re going to kind of piggyback on that vetting process that the selling family is conducting,” says Martin. So, what kind of time frame are we talking about here? We can use the latest team sale as a decent blueprint. Last year, the Tampa Bay Rays had a deal in place to sell on July 15. The MLB ownership group voted unanimously to approve it on September 22, the proposal went through a quick review process from the U.S. Securities and Exchange Commission, and the new owners officially took over on September 30. That means the Padres could have new owners as early as the middle of July. With any sale there is a natural feeling of uncertainty among the fan base. Martin says the Friar Faithful can rest easily. “You’re going to end up with someone who’s, I think, going to want to continue to invest in the team. These guys are very, very competitive. They want to win. They understand it. It takes money to win. There’s always going be a learning curve when you’re dealing with a new organization, new stakeholders, interpersonal dynamics at play. But in terms of knowing how to run a sports franchise and knowing what it takes to maximize the product on the field, which is what’s most important, any of these four potential bidders, I think, are going to do a great job.” That opinion aligns perfectly with what John Seidler has said about making sure any new owners honor the work his late brother Peter did trying to bring a World Series title to San Diego. In February, Seidler told NBC 7 one of the top priorities in a sale is ensuring the long-term future of the club in San Diego. That’s something everyone selling a $3.5 billion asset says. But, for the most part in situations like this, the sentiment proves to be true. “A lot of these families that have owned these sports teams, it’s a big part of their legacy,” says Martin. “They want to make sure that if they’re passing that legacy on to someone else, it’s going to be in the right hands and that it’s going to be sold to a buyer who has the best interests of the city and the franchise in mind.” ...read more read less