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Much about deal, and what it means, is a mystery

By TOM JONES
Published January 30, 2004

[Times photo, 2001: Michael Rondou]
Regardless of how much of the team Stuart Sternberg buys, Vince Naimoli, right, will remain the managing partner.
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Main story
Buyer: financial whiz who loves baseball

Q&A
Much about deal, and what it means, is a mystery

COMMUNITY REACTION
New investor? Great, as long as he won't move the team

COMMENTARY
Gary Shelton: New blood could be boon for Rays
Robert Trigaux: Rays give investor a chance for appreciation

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graphic

Q: What happened?

A: Stuart Sternberg, a 44-year-old Wall Street investor, and several other investors signed a letter of intent to buy out five of the six Devil Rays general partners: Chris Sullivan, Bob Basham, Mark Bostick, Dan Doyle and the Griffin Family Trust.

Q: What does it mean?

A: If the deal is finalized, and it's expected to be in the next month or two, Sternberg's group would own about 48 percent of the franchise.

Q: Who owns the rest of the team?

A: Vince Naimoli, who will remain as the managing general partner, owns about 15 percent of the team. The remaining 37 percent is owned by 18 "limited" partners (individuals and corporations) that own minor shares. The limited partners have no say in how the franchise is run.

Q: Since Sternberg's group owns the biggest single share of the team, does that mean Sternberg would be in charge?

A: No. The agreement between Naimoli and the other general partners gives him control over the franchise for as long as he cares to run it. By buying out the other general partners, Sternberg agrees to the same conditions and cannot force Naimoli out regardless of how much of the franchise he owns. Indications are Naimoli has no intention of giving up control of the team anytime soon.

Q: Why is the ownership structured like that?

A: Because Major League Baseball requires each team to have a sole owner or, if there are a team of investors, a managing general partner who represents and controls the franchise. When Naimoli and the other five original general partners put together their group, Naimoli was selected as the managing general partner.

Q: Could Sternberg end up as the team's managing general partner someday?

A: One theory is Sternberg wants to learn the business, and it's possible he might might take over when Naimoli chooses to retire.

Q: Does this deal have to be approved my Major League Baseball?

A: Normally a change in ownership requires approval by 22 of the 30 major-league owners, but because Sternberg is not buying the controlling interest of the team, MLB will monitor and approve the sale at the executive level. MLB is expected to approve the sale.

Q: How much did Sternberg's group agree to pay for their share of the team?

A: It isn't known. Forbes magazine listed the Rays as being worth $145-million last year, but the Rays and Major League Baseball dispute that figure. Both say the franchise is worth more, but won't say how much. If the Forbes number is accurate and Sternberg's group is buying 48 percent, that would come to at least $69-million.

Q: What do we know about Stuart Sternberg?

A: He is a former executive of the options-trading firm of Spear, Leeds and Kellogg. He sold his interest in that company two years ago and has been retired since. He grew up in New York as a Mets fan. He has a wife, Lisa, and four children.

Q: Who are his partners?

A: It isn't clear how many investors he has, or how much each is investing. But Sternberg is the leader.

Q: Why did the five general partners, all of them with ties to the Tampa Bay area, sell their interest?

A: None had an active involvement with the team and some or all were said to be unhappy at one time or another with how the team was run by Naimoli. Other factors - personal issues, other business ventures and a return on their investments - likely played a role.

Q: How will this affect the team?

A: As they say, it can't hurt. The Rays, last in their division in each of their six seasons, have the lowest payroll, so it is not likely they will spend less money. The departing investors have made no major contributions to the team in several years. So a new investor with a passion for baseball might mean good news for the Rays. But only time will tell.

[Last modified January 30, 2004, 05:27:58]

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