preview

Texas Rangers Power Or Collapse House?

Better Essays

Russel Jay Eserjose Finance 441 Research Paper Texas Rangers Power or Collapse House? In the Major League of Baseball, there is a blue and white team from Arlington, Texas, known as the Texas Rangers. In 2009, although the team had a substantial amount of talent on the field, they also had serious financial problems. The team has always been grossly undercapitalized. They depended on capital joint connections and loans to help pay for their bills. These problems lead to one of the biggest demonstrations of the economic crisis through the world of sports. At the time, the owner of their franchise was Tom hicks who owned Hicks Sports Group (HSG). Hicks was known for the founding of the private equity firm Hicks Muse Tate and Furst. He made his fortune on leveraged buyouts. Hicks also owned several other franchises such as the Dallas Stars, the Frisco Roughriders, a half of Liverpool F.C., and the Mesquite Championship Rodeo, but some were owned through different entities. In April of 2009, HSG headed toward the default on more than $500 million in loans. Later on that month, HSG was unable to make its interest payment on $525 million in syndicated bank loans. Once this was announced, lenders were bringing a forbearance to the conversation. Since 2005, the Rangers started seeing a downfall in cash flows and Hick’s hedge funds that were putting him into debt didn’t help. Later on in the month of April, Hicks publicized his will of selling only a minor part of the team.

Get Access