Bears Back in Business

From the Newark Star Ledger, January 8, 2009:

Owner Is Bullish on Future of Bears
By Philip Read

The team may be $1 million in debt in a declining economy, but the new owner of the minor league Newark Bears said he thinks the time is right for his ballclub, despite a recession perhaps not seen since the team captured the President's Cup for winning the highest percentage of games in 1933, during the Great Depression.

"I think especially in this economy ... this is the place to come," said James Wankmiller, who as president and CEO of Bases Loaded Group acquired the Newark franchise for $100,000 and the assumption of some $1 million in debt during a bankruptcy court hearing just two months ago. "They'll come because young baseball players come chasing their dreams." (Click here for the full article.)

I'm certainly a bit late in posting about the Newark Bears emerging from bankruptcy, but I guess this article gives me a bit of a reprieve. The terms of the Bears' reorganization plan called for a sale of the franchise to new ownership for $100,000 and the assumption of about $1 million in debt by the new ownership group. Before the Bears filed for bankruptcy, they owed creditors about $6.4 million. It appears that the Bears' debt load is now substantially smaller, which isn't surprising considering that the goal of a chapter 11 reorganization is typically a reorganization of the company's balance sheet. The Bears' reorganization is largely similar to that of the professional sport organization bankruptcies that I have studied in that the team was sold to a new ownership group. To wit, the Los Angeles Kings were sold to Majestic Anschultz Ventures, the Pittsburgh Penguins to Mario Lemieux's consortium, and the Buffalo Sabres to billionaire Tom Golisano. Now the Bears have been sold to Bases Loaded Group. One reason this may be the case is that if the existing ownership had the financial capability to operate the team, bankruptcy wouldn't be needed. But perhaps there are underlying reasons. Maybe the existing ownership just wants out and is taking advantage of sections of the Bankruptcy Code (such as the ability to terminate executory contracts, eliminating some debt, etc.) to make a sale easier. Or maybe the existing ownership made a bad investment and just wants out. Of course, it is pretty difficult to gauge what existing ownership is truly thinking, but this is just food for thought.