Whole New Ballgame: With Dan Doyle Jr. no longer interested in the Rays and with a new stadium deal looming, the team must find new investors.
Mike Ehrmann/Getty Image)As the team tries to finalize plans for a new stadium, Tampa businessman Dan Doyle Jr. has taken himself out of equation. Dan Doyle Jr. is no longer part of the group led by Trip Miller that is seeking to buy the Tampa Bay Rays for $1.85 billion. A spokesperson at DEX Imaging, the Tampa-based printer and copier company started by Dan Doyle Jr. and his father, told Forbes via an email, “Mr. Doyle Jr is not involved with the group out of Memphis.”
In June, I reported that Trip Miller, founder of the Memphis hedge fund Gullane Capital Partners, was tying to put together a group of investors to buy the MLB team. One reason Miller is having trouble raising money to buy the Rays is that he is looking to be the control baseball operations while with an investment of only $200 million. Back then, Miller was hoping that the biggest investment would come from the Doyle family.
Two other balls in play complicate matters for prospective buyers.
The first is that Stuart Sternberg, principal owner of the Rays, is being sued by five of the team’s limited partners who claim Sternberg “has been secretly paying himself and several 501SG investors salaries from the partnership, leaving minority partners with large tax obligations while he ‘strategically’ withheld distributions, devalued membership interests and purchased shares from estates under manufactured pressure scenarios.” Sternberg denies the allegations and the Rays issued a statement calling the lawsuit baseless.
The second factor is that the team announced a deal for a new $1.3 billion stadium this week that would be built near the current Tropicana Field site as part of the redevelopment of the 86-acre Historic Gas Plant District and open for the 2028 season. But to get the financing across home plate there is still a public approval process that requires votes from the St. Petersburg City Council and Pinellas County Commission.
Earlier this year Forbes valued the Rays at $1.25 billion, 26th out of the league’s 30 teams. The team’s low valuation is the result of the Rays generating just $248 million in revenue last season, 28th in MLB. Tropicana Field, which is owned by the city of St. Petersberg, has been in operation since 1990 and has been home to the team since their arrival for the 1998 season. The stadium was constructed for just $200 million and is widely considered the worst in baseball. The Rays pulled in under $9 million from premium seating in 2022—in the bottom quartile in MLB. This season the Rays are averaging just 17,700 per home game (27th in MLB) despite a 93-60 record.
Without knowing the economics of the new stadium, it is hard to see how a new investor could appraise the value of the Rays. That appraisal is vital because the Rays are only profitable ($9.5 million in earnings before interest, taxes, depreciation and amortization in 2022) due to a paltry $79 million payroll and $60 million in MLB revenue sharing they get from high-revenue teams like the New York Yankees, Boston Red Sox and Los Angeles Dodgers. An increase in payroll or slippage in revenue-sharing proceeds would mean investors could be on the hook for capital calls.
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