What the Potential Sale of the Washington Nationals Might Look Like

Photo via Washington Business Journal

            Sixteen years ago, the Lerner family purchased the Washington Nationals from Major League Baseball (MLB), and eventually built the team into World Series champions in 2019. Now, it is rumored the Lerner family is exploring options for changing ownership structure and potentially selling the team. Mark Lerner, the son of owner Ted Lerner, made a statement explaining their family has hired Allen & Company (a New York based investment bank) to research potential suitors to become the next owners of the Washington Nationals.

            The Lerners left the door open to possibilities including a sale of the team or bringing in additional partners. The Washington Post quoted Mark saying, “this is an exploratory process, so there is no set timetable or expectation of a specific outcome.”[1] The Lerners acquired the team in 2006 for $450 million and relocated it from Montreal to Washington. According to Statista, the team’s current valuation is roughly $2 billion. The valuation is based on the current stadium deal without deduction for debt (other than stadium debt).[2] With Ted Lerner turning 97 this October and the impact Covid-19 had on MLB revenues, it is a sensible time for the Lerners to make a potential exit.

            The most recent acquisition of an MLB team was Steve Cohen’s $2.4 billion purchase of the New York Mets in 2020. Another recent MLB team acquisition was in 2017 when Bruce Sherman acquired the Miami Marlins for $1.2 billion. The current valuation of the Nationals is seemingly accurate given the size of their market and the popularity of baseball in comparison to the other recent acquisitions. Washington is a premium market and the Nationals are a team that very recently have won a World Series, so it is safe to value the franchise closer to the New York Mets ($2.4 billion) rather than the Miami Marlins ($1.2 billion, a bottom feeder of the MLB in recent years).

            The Lerners are looking to the right place to do their due diligence in this process. Allen & Company managed the sale of the Mets, the NFL’s Carolina Panthers (the most recent acquisition of an NFL franchise), and were enlisted by the Denver Broncos for the potential sale of their franchise.[3]  The investment bank is clearly trusted in the sports industry to get its client everything it is looking for in the sale of the team.

            Potential buyers need to be approved by MLB as well as Washington. In order to be approved by the MLB, the potential owner must get 23 other owners to vote in favor of the candidate. The Nationals partnered with Events D.C. during construction of their stadium.[4] Events D.C. serves as the district’s sports authority and given the fact the stadium is owned by the city, any potential owner would likely need to go through approval from the city as well.

            There is no guarantee a change of ownership will take place with the Washington Nationals franchise. The Lerners are simply doing their due diligence and exploring all options for their family and the franchise moving forward. However, if they decide to pursue this avenue, the deal will look something similar to Steve Cohen’s acquisition of the New York Mets in 2020.

[1] https://www.washingtonpost.com/sports/2022/04/11/washington-nationals-lerners-potential-sale/

[2] https://www.statista.com/statistics/194644/mlb-franchise-value-of-the-washington-nationals-since-2006/#professional

[3] https://www.washingtonpost.com/sports/2022/04/11/washington-nationals-lerners-potential-sale/

[4] https://www.bizjournals.com/washington/news/2019/09/06/here-s-a-look-at-the-new-huge-entertainment-venue.html?ana=twt

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Former college baseball player, focusing my legal studies on the intersection of sport, law, and business.

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