Initial sale of Padres completed
Moorad to step in as VP/CEO in deal with majority owner Moores
Majority owner John Moores has completed the initial phase of ultimately leaving the Padres by selling about a one-third interest in the franchise to Jeff Moorad, a general partner of the Diamondbacks, and about a dozen partners, including former Dallas Cowboys quarterback Troy Aikman."This is a sea change for the San Diego Padres," Moores said in making the announcement at Thursday's news conference at PETCO Park. "It's the beginning of a process in which Jeff Moorad and his group will assume ownership of the Padres. This is a day that, frankly, I never thought would happen. But I feel pretty good about it. The process started [Wednesday] and will take a good number of years."
Moorad began that process nearly three months ago. He said the buy-in of $100 million gives him and his group an initial 35 percent of the franchise.The deal has the blessings of Major League Baseball Commissioner Bud Selig and Bob DuPuy, Major League Baseball's president and chief operating officer. The Commissioner's Office spent months scrutinizing the transaction and the group that Moorad has put together, which includes a number of friends and local partners, plus a guy "who many of you may remember has three fingers taken up on his hand by Super Bowl rings," Moorad said about Aikman. Under terms of the deal, Moorad and his partnership will have as long as five years to buy out Moores' controlling interest. Until then, Moores will remain the Padres' control person, representing the club at owners' meetings and sitting on numerous committees. At this juncture the transaction didn't have to be approved by the remainder of the owners because the control person at the head of the ballclub didn't change. In the future, though, when that change occurs it will have to come to a vote. "I'm comfortable with it and I like playing that role and it will continue," Moores said about his place in Major League Baseball. "Periodically, Jeff may need some of my baseball brilliance to help him. And I'm confident he'll pick up the phone and ask." Moorad immediately replaced Sandy Alderson as chief executive, adding the moniker of vice chairman to his title. Alderson announced on Feb. 3, the day Moorad signed a contract to complete the deal, that he would be stepping down at that time of its closing. Alderson joined the franchise in 2006 after a tour with the Commissioner's Office as executive vice president of baseball operations. Moorad is now the sixth club president or CEO since Moores bought the team in 1994. In contrast, he has had only two general managers -- Randy Smith and Kevin Towers -- and a pair of managers -- Bruce Bochy and Bud Black. "Two things are for sure: we're at Day 2 and it may take as many as five years to put it behind us," Moorad said. "And that's about all we know. Frankly, we built a transaction that has a great deal of flexibility by choice. One of the primary reasons that this deal made sense to me and my partners is the fella [Moores] sitting to my right. "The reality is that I consider him as a friend. To have a transaction that has flexibility is a function of people who trust each other." Moores said the sale value of the club, determined through a series of closings, will ultimately be about $530 million, including debt, which is about $200 million. Moorad wired $100 million to close this part of the deal on Wednesday night. Last year, Forbes Magazine valued the Padres at $385 million, 19th among the 30 Major League teams. Moorad owns about a 12 percent general partnership in the Diamondbacks, which is worth around $18 million based on the $379 million value of the franchise established by Forbes, minus the club's $235 million debt service. By contract, that stake could be absorbed by the remaining four Arizona general partners. The club's managing general partner, Ken Kendrick, said in January that that prospect was a distinct possibility when Moorad resigned as chief executive officer of the Diamondbacks to pursue his purchase of the Padres. Moorad immediately was replaced as chief executive by Derrick Hall, who was then president of the Diamondbacks. According to Major League rules, no one person can own more than five percent of two franchises. Moores said in a telephone interview on Thursday that the Commissioner's Office insisted that Moorad's partnership in the Diamondbacks be put into a trust until the time it is sold. "There were a lot of special issues that had to be dealt with because Jeff was moving from an ownership position to another with a division rival that lives right next door," Moores said. "Selig came up with an acceptable solution for Jeff and for baseball so the integrity of the game isn't questioned. "The trust will have a relatively short fuse on it. And baseball is going to make him sell it. These are obviously special economic times. Jeff won't have to sell it tomorrow morning on the courthouse steps, but he will have to sell it in a fairly expeditious manner." The status of the Padres franchise has gotten considerable media attention in part because of divorce proceedings involving John and Becky Moores. Before the current deal, they owned 80 percent of the team, with Becky sharing 50 percent of that asset. Their adult children, John Jr. and Jennifer, owned 15 percent, and the other five percent was owned by Glenn Doshay, a San Diego businessman. All three will remain part of the new ownership structure until the time when Moorad buys them out. Moorad, a former player agent, became part of the D-backs ownership group in August 2004, during the transition in which Jerry Colangelo sold his portion of the team. A year later, Moorad was approved as an owner by MLB with the stipulation that he was not positioned as the managing general partner. Kendrick, who owns in excess of a 12-percent share, assumed that role. That structure wasn't going to change in the immediate future, and Moorad, who spent most of his adult life working and living in Southern California, said he and his family had a strong conviction to return to their roots. Thus, buying into the Padres became a highly attractive option. It was Moorad's experience with the middle-market Diamondbacks that made him particularly attractive to Moores. "The challenge for us, much like it was in Arizona when I arrived, is to figure out the fix that not only fixes things here as soon as possible, but fixes it for the long term," Moorad said. "Our goal is to win consistently. To maintain a successful club that has a chance to win year in and year out. "It doesn't happen overnight. The change will take some time. But I can assure you we're going to invest in the future and invest in ways that we think make sense to build this organization so that it can win over time."
Barry M. Bloom is a national reporter for MLB.com. This story was not subject to the approval of Major League Baseball or its clubs.