Orioles could sell for over $120 million


The Baltimore Orioles, the last-place team in perhaps the worst division in the majors, could bring from $90 million to more than $120 million, according to various executives working in the sports industry.

If those estimates are correct, and Eli S. Jacobs does sell his 87 percent stake in the team, his profit would be substantial.

Jacobs, after spending years amassing a fortune once estimated at more than $600 million, paid $70 million for the Orioles in December 1988. At the time, it was the second-largest amount spent on a major-league baseball team, and more than five times the $12 million the previous owner, Edward Bennett Williams, paid in 1979.

Jacobs has said he was approached by interested buyers and that the prices were such that they could not be ignored. He has retained New York financial advisers at J.P. Morgan to study the offers.

"It takes someone with a lot of guts, bundles of money and an ego the size of Nevada," said Larry Greenberg,a financial consultant to sporting facilities.

Thinning the field of prospective and acceptable buyers further is that other teams, including the Houston Astros and the Montreal Expos, also appear headed for sale.

Greenberg said he adheres to the commonly held belief that the "greater fool theory" is as operative in baseball as it was in Texas real estate. Buy it now and find a "greater fool" to pay more later, or so the theory goes.

But baseball teams are rarely used as short-term investments. If purchased for tax benefits, it typically takes from five to seven years to capture the potential write-offs ' and recent legislation put an end to much of that appeal. If purchased for sheer operating profits, a certificate of deposit usually pays more. While cash flow from a baseball team can be attractive, net income rarely is. And if purchased out of love for the game, the desire to sell presumably never comes. To spend $100 million on a baseball team, even if half the money is borrowed, is risky business.

"The outlook at the present time is not very positive, especially for the small- to medium-sized markets," said Robert Ezrilov, head of the professional sports practice for the accounting firm of Arthur Andersen & Co. in Minneapolis.

Ezrilov said that, despite the $1.5 billion, four-year television contract Major League Baseball has with CBS and ESPN, baseball is quickly about to lose its appeal for owners. This year is the second year of that four-year contract, he said, and players' contracts quickly are catching up to the large bottom line.

So whether the Orioles can break the $100 million mark remains to be seen. A new stadium, a tradition of die-hard fans and recently strong operating profits could lift the attractiveness of the team.

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