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Indians sell for $145M cash
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November 4, 1999: 2:04 p.m. ET
Owner of former laughingstock team now can laugh all the way to the bank
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NEW YORK (CNNfn) - The expected sale of the Cleveland Indians by Richard Jacobs, who turned the team from doormats to a powerhouse, was announced Thursday, bringing a large profit for him but a more modest gain for other shareholders.
The sale was for $320 million, but after deducting assumed debt and transaction expenses, the shareholders will receive about $145 million in cash. Jacobs and his late brother bought the club for an estimated $45 million in 1986.
The sale will bring between 22-1/4 and 22-3/4 a share to shareholders of The Cleveland Indians Baseball Co. (CLEV). The Indians are the only baseball team with its own publicly traded stock, rather than being privately held or a subsidiary of a media conglomerate. Its stock debuted in June 1998 at a $15 initial public offering price. It closed trading Wednesday at 20-5/8, and opened at 21-1/4 Thursday after the sales announcement, trading slightly below that level at midday.
The sale to Ohio attorney Lawrence Dolan and family trusts is expected to close by the end of the first quarter of 2000. It requires the approval of Major League Baseball.
After years of playing to empty seats and finishing last, the Indians have won five consecutive American League Central Division titles and twice lost the World Series this decade -- in 1995 to the Atlanta Braves and 1997 to the Florida Marlins. The team has not won a series since 1948, though, the fourth-longest drought of its kind in the league.
The team got a tremendous financial boost when it moved into publicly financed Jacobs Field in 1994, which helped set the standard for the modern baseball stadium. The team has sold out every seat the last three seasons even before opening day, an unprecedented attendance record for any baseball franchise. The team already has announced an average 12 percent increase in ticket prices for next year, hiking the cost of all 43,368 seats.
The purchase price pales compared to the estimated $320 million Rupert Murdoch's Fox Entertainment Group (FOX) paid for the Los Angeles Dodgers two years ago and the $491 million that Forbes magazine estimates the current World Series champion New York Yankees are worth.
Dolan's brother Charles is reportedly in negotiations to buy the New York Mets to make it part of his Cablevision Systems (CVC) entertainment and sports company. Under the deal to buy the Indians, Larry Dolan will acquire all outstanding stock in the company in a cash merger and also all the limited partnership interests in Cleveland Indians Baseball Co. Ltd., the limited partnership that owns the franchise.
The final purchase price is subject to certain adjustments that will not be finally determined until shortly before closing, the company said.
-- from staff and wire reports
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