Lerners to explore the possibility of selling nationals

In what could be a franchise-changing moment, Nationals owner Mark Lerner tells Barry Svrluga of the Washington Post that the team has hired New York-based investment bank Allen & Company to investigate the possibility of selling the franchise or adding new investors / partners to the current ownership group. Lerner stressed that the process is “exploratory” in nature, adding that there is no “set schedule or expectation of a specific outcome.”

The Lerner family bought Nationals, formerly Expos, from Major League Baseball for a sum of $ 450MM back in 2006, after the former Montreal franchise was folded and moved to Washington, DC. Forbes recently estimated that the franchise is worth $ 2 billion – a four percent increase from last year and the 12th most of any MLB franchise. Sportico placed the same estimate of $ 2 billion on the value of the franchise back in March 2021. The longtime controller Ted Lerner, now 96, handed over control of the franchise to his son, Mark, back in 2018. At the time, as Svrluga points out, the younger Lerner was adamant that the family would never consider selling the team. It is clear that the mentality has changed.

The Nationals’ open willingness to explore a sale of the club comes at a time when the on-field product has largely been torn down after last summer’s fire sale, where Max Scherzer, Trea Turner, Kyle Schwarber, Daniel Hudson, Yan Gomes, Josh Harrison, Brad hand and Jon Lester all traded for younger, more controllable players (and in some cases pay cuts). Of that bunch, Turner was the only one who had been controlled beyond the 2021 season. He now earns $ 21MM with the Dodgers. The rest of that group signed elsewhere in free agency (or, in Lester’s case, retired).

Nats reinvested some of these resources in the 2022 team, but their total payroll is nearly $ 40 million. lower than the 2021 level. Especially, Nelson Cruz joined the club on a one-year deal worth a guaranteed $ 15 million. Cesar Hernandez ($ 4MM), Hannibal Sanchez ($ 2MM), Steve Cishek ($ 1.75 million), Ehire Adrianza ($ 1.5 million), Sean Doolittle ($ 1.5 MM) and alcides escobar ($ 1 MM) everyone also signed out of season, just like veterans without a roster Dee Strange-Gordon and Maikel Francowho both made the club. None of these players have been signed after 2022, although Cruz’s deal includes a mutual option for the 2023 season. It is largely an accounting measure, as mutual options are very rarely exercised by both parties.

When looking at the potential sales of the franchise, there are various complicated factors to consider – even beyond the standard complexities associated with any multi-billion dollar sale by a team. First, the Nationals have been embroiled in ongoing lawsuits with the Orioles over their television rights fees for most of a decade. The Mid-Atlantic Sports Network (MASN) broadcasts Nationals games, but is owned and operated by the Angelos family – who also own the Baltimore Orioles. At stake are hundreds of millions of dollars in revenue.

Of course, the team’s long-term salary outlook also affects the selling price. That’s one of the reasons why last summer’s far-reaching sales were of a certain note, but it also sheds a special light on the nation’s hitherto unsuccessful efforts to expand the superstar. John Sotowho reportedly rejected a 13-year extension of $ 350 MM this winter.

Of greater concern to potential buyers than money that should perhaps be earmarked to expand a franchise cornerstone is the money that still owes a host of players who no longer play for the Nationals. The Lerner family has usually included deferred money in agreements for their free agent signatures as a means of lowering today’s value. However, the overwhelming list of postponements is starting to rise.

For example, Nationals Max Scherzer owes $ 15MM in deferred pay each season from 2022-28 – even though he is now up against division rival Mets. They pay Stephen Strasburg a third $ 10MM installment in deferred pay from his earlier contract this year before he even considered the salary he would earn under the new $ 245MM deal he signed on the heels of his World Series heroism. The new agreement for Strasburg requires him to receive three equal payments of $ 26,666,667 each July from 2027-29 – the contract itself expires in 2026 – plus a final installment of $ 3,999,974 on December 31, 2029 (tip to Cot’s Contracts for the specific contracts) figures).

It is far from the only postponements to consider. Patrick Corbin‘s $ 140MM contract includes $ 10MM in deferrals to be paid from 2024 to 2026. Nationals will pay Brad Hand a combined $ 6.5MM from 2022-24 as part of the one-year, $ 10.5MM agreement he signed to pitch the 2021 season . They are, somewhat unbelievably, still even on the hook for $ 2MM annually Raphael Soriano through 2025. Soriano retired after the 2015 season.

Despite the huge array of postponements and messy TV rights conflict, the Nationals’ franchise value has undeniably risen since the time the Lerner family bought the team. And given the relative rarity with which Major League franchises are put up for sale, there should be considerable interest, whether it is from a brand new ownership group or from some wealthy investors who want to get a foot in the door as minority stakeholders with an eye towards this share grows over the years.

Leave a Comment