Moorad No More

The sudden departure of Jeff Moorad has now had some time to sink in, and it's perhaps possible to come up with a more measured response than the initial response - which, going by our poll, generally appears to be happiness. It's difficult to tell how much actual difference Moorad's exit, and his replacement by Derrick Hall is going to make. It's not as if we're discussing the loss of, say, Hudson, whose production for the club can be measured in a number of objective ways. It's a lot harder to tell what Moorad contributed, beyond a large injection of cash, and consequently, what his departure will mean.

Nick Piecoro had a good piece on his blog, stating that Moorad "was instrumental, along with Kendrick, in maneuvering the club into a more-sound financial place than it was when he arrived." Actually, the comments on the piece are worth a read as well, with 'Hacks chipping in to defend Colangelo - and receiving some withering criticism from the infamously irascible Levski as a result. 'Hacks says of Colangelo, "He may be an overspending galoot, and his plan may not have worked had he stayed put...but he's not an idiot." However, elsewhere, Piecoro reports "In 2002 [the Diamondbacks] needed a $160 million cash infusion from ownership in order to avoid a potential bankruptcy." If true, it puts Jerry's fiscal planning into serious doubt.

I do have to say, it's startling to see our CEO leave the team to take over not just another franchise, but a divisional rival. Several people have mused over a conflict of interest, though since reports of the Padres' sale was being officially described by the club as "highly speculative," as recently as October 9, it doesn't seem there would have been much opportunity for anything like that. It certainly looks like the San Diego purchase will whizz through, in contrast to the Cubs, who have now been tagged with a 'For Sale' sign for approaching two years. At this rate, they'll probably win a World Series before the deal is finalized.

The obvious necessity is to find someone to take over Moorad's shares in the team, generally thought to be around $60 million in value, based on his ownership of 15-20% of the team, and Forbes'  valuation of the franchise last year at $379 million. Managing General Partner Ken Kendrick was optimistic that the shares could simply be absorbed by himself and the three other partners, saying: "Every unit since 2002, our general partnership has purchased. I think that is very likely to continue." However, that was before the recent financial meltdown: I don't know about you, but I certainly don't have a spare sixty million, and that's after checking down the back of the sofa.

It might be an appropriate place to give some background on those other partners: Mike Chipman, Dale Jensen and Jeff Royer. Chipman is probably the least well-known: he made his money as a founder of ChipSoft, the original creators of TurboTax, which allowed him to retire at the age of forty-five. Since then, he's been an investor in banks and Arizona real-estate - the latter suggests he might not be the best man to tap for cash right now. Seems he and his wife Evy did make the headlines a couple of years ago, after their executive jet had a mid-air collision with a glider near Carson City. [The line I like best in that story is from another passenger on the plane: "It was a normal landing, except with the wheels up." Landing gear: it's vastly over-rated...]

Dale Jensen is the biggest partner, and like Chipman, has his background in technology - here, selling software to banks. He sold his company, Information Technology, in 1996, and in addition to the D-backs, Jensen is currently a part owner of the Suns, Alice Cooper'stown and the Dodge Theater. As is kinda obvious, downtown is a focus of his energies, and he's also part of the Jackson Street Entertainment District plan, though that has been on shaky ground too, with one lender to the project filing for Chapter 11 bankruptcy. Just last month, Jensen was quoted as saying with regard to the scheme, "There's no credit to do anything." One imagines that probably applies equally to him taking up the equity slack caused by Moorad's departure.

Jeff Royer's family were one of the founding investors in the franchise, and he's a telecoms tycoon, with his companies including Galtronics Ltd., an antenna company, and Shaw Communications, a cable and satellite company - so might be a better bet to increase his holding. Royer was recently ranked the 18th most influential Canadian in baseball, just behind Larry Walker, and the Diamondbacks weren't his only interest in the sport - he was also the largest single investor in the Israeli Baseball League, a pro league which started there in 2007. Probably not a major conflict of interest there though, as the IBL was not a great success, shall we say. [That link has some great stories, including video of the incident where an IBL player argued an umpire’s call, got tossed, then refused to leave the batter’s box!]

The alternative to an internal sale would be finding an outside investor with the necessary cash and enthusiasm to come on board. Again, now would not seem like the ideal time to find such people, but the lure of owning a professional sports franchise should never be under-estimated. One thing I'm not clear about, is whose responsibility finding a buyer it is - does Moorad have to sell to someone, before he can take over the Padres, or is it up to the other owners? I'm leaning to the belief it'd be the former, with the existing partners having first refusal on the shares. While it's unlikely Jeff will end up taking a loss - the Forbes estimates have the team increasing in value by about $100m since the new owners came on board - he may not be in line for a massive payout, depending on what happens.

Derrick Hall now takes over as CEO in addition to his previous role as President, and if he brings the same talents there, I think we can expect a highly-visible CEO, with strong PR skills, continuing the emphasis on direct interaction with the fans. [I'm not aware of any other team - or indeed, many companies - that have a highly-placed executive who is so easily-accessible by Joe Public, which is hugely impressive] I notice that the team does not appear to be appointing or promoting anyone extra to fill the top tier of management, so the current incumbents are likely to be kept pretty busy. Given Moorad's apparently-spotty record in player assessment, leaving that aspect up to the baseball department as much as possible, is perhaps no bad thing!

One aspect which came out was the news that both Hall and GM Josh Byrnes were given equity in the organization, as part of the long-term deals which have them under contract through 2015.  No word in exactly how much was involved, but it's a rarity in baseball for it to happen at all: according to the story, only Oakland's GM and President (Billy Beane and Michael Crowley respectively) are known to have been similarly compensated. Like Byrnes, Beane is also signed long-term, through 2012. I like the idea in principal, giving them a direct stake in the success of the company - though I can't honestly say the share options I had when I used to work for HSBC made me work any harder.

Seems that we're checking out Chad Cordero as another possible bullpen arm, even though Cordero had a torn labrum in his throwing shoulder, an injury that required surgery last July. He's reportedly recovering well - currently throwing off flat ground at a facility near his Anaheim home - and could be ready in time for Opening Day. I couldn't help wincing when I read the words "closer for the Washington Nationals," since the last one of those we acquired turned out to be a heavily-tattooed disaster in 2008. [I blame Mike Rizzo...] Doesn't seem to be any shortage of interest, with the Anaheim, the Mets, St. Louis, Texas and Detroit also keeping an eye on Cordero's progress. Our colleagues at Beyond the Box Score take a look at him, and are impressed, concluding "Someone could be about to scoop him up for a big discount/small risk."

Finally, a quick plug for Thursday, and the online chat with Josh Byrnes. Last month's one with Jeff Moorad dropped the bombshell that we were looking for a fourth starter - though events since leave me uncertain whether Moorad had vagued out for a moment, and meant the Padres were looking for a fourth starter. Maybe we can get clarification from Byrnes. I think it's been a long while since the last time he did one of these - this one dates all the way back from March 2006, and I couldn't find anything more recent. Interesting to look at that transcript and see how things have changed [or not!] in the almost three years since. I still wish we had signed Jenny Finch!

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