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Rays give investor a chance for appreciation

Okay, sports fans. Try to look at the purchase of a major stake in the Tampa Bay Devil Rays from a stock market point of view.

It could be one sweet deal, or the equivalent of tossing money down a sinkhole.

A group headed by Wall Streeter Stuart Sternberg, whose roots lie in the complex world of options trading, reportedly just bought a large share of the Tampa Bay Devil Rays franchise at a time when the "stock" of the team is low. If we rely on Forbes magazine's estimates of the value of the Devils Rays, the team's worth has dropped 35 percent to $145-million in less than five years.

Not a bad time to buy. If you have the guts. Sternberg obviously hopes he's getting a cheap price for the team and a shot at some strong appreciation ahead, while also indulging his passion for baseball.

Sternberg, 44, bought 48 percent of the Devil Rays _ more than any other investor _ along with one curve ball. Control of the Rays, as dictated by the original terms of the franchise's ownership, will remain in the hands of 66-year-old managing partner Vince Naimoli.

Sternberg purchased the pieces of the team owned by five of the original franchise investors, many of whom have long been unhappy with the team's performance under Naimoli. Exiting are Outback Steakhouse co-founders Chris Sullivan and Bob Basham, Florida trucking executive Mark Bostick, Danka Business Systems co-founder and former CEO Dan Doyle and a trust fund set up by Sarasota businessman Bill Griffin.

In the world of Major League Baseball, Sternberg's buying into a briskly traded market. Of the 30 American and National League teams, at least four _ the Atlanta Braves, Los Angeles Dodgers, Milwaukee Brewers and Montreal Expos _ have been on the selling block. Several more teams, the Minnesota Twins among them, are financially stretched and their owners probably could be easily convinced to sell for a decent offer.

And at least six additional major league teams have changed hands within the past five years.

For awhile, Major League Baseball and other pro sports franchises were hot items, so hot that Corporate America _ especially media companies _ decided it made great sense to buy a franchise and use the team for marketing and public relations purposes.

No more. Public corporations faced with spiraling team costs are bailing out of Major League Baseball and other pro franchises. In fact, the sale of the Dodgers was announced Thursday by media baron Rupert Murdoch and his Fox Entertainment Group in a $430-million deal to Boston real estate developer Frank McCourt. Among the early shoppers looking at the Dodgers was Tampa Bay Bucs owner Malcolm Glazer.

The Dodgers deal follows Walt Disney Co. selling the Anaheim Angels to Arte Moreno last May for $183.5-million. And Time Warner, which inherited the Atlanta Braves and other pro sports teams when it bought Ted Turner's CNN empire, has already sold some teams and has indicated the Braves may be next _ at the right price.

Still other teams have new owners in recent years. The Boston Red Sox were bought in 2002 for $700-million, which included a ball park and sports network. The Cleveland Indians and Toronto Blue Jays changed ownership in 2000, the same year that former Wal-Mart CEO David Glass took control of the Kansas City Royals. A deal soon followed for the Florida Marlins in 2002.

That's a lot of ownership churn. Thursday's announced $430-million deal for the Dodgers probably gave some comfort to the Rays-buying Sternberg. There's a clear upside to his investment _ if the Rays can crawl out of last place and field a competitive team.

There was a time when Major League Baseball was very fussy that team franchises should be owned largely by local investors. Those days are fading fast. Distant money talks. Thursday's sale of a Los Angeles franchise to a Boston buyer proves that.

Which brings us to the $64,000 question.

Will Sternberg bring more financial clout and the willingness to put more money into the Rays' paltry payroll than the quintet of departing and disconsolate team investors? Sternberg apparently made a bundle in his Wall Street dealings. But is it even enough to compete with such mid-tier teams as the Orioles and Blue Jays _ if not the frenzied pockets of Yankees owner George Steinbrenner?

It's too early to say. Sternberg is quiet, nearly invisible to Tampa Bay so far. The size of his bank account and conviction to spend in the expensive arena of Major League Baseball will emerge later.

One thing is already clear. This Wall Streeter likes risk-taking. And he's well versed at it.

_ Robert Trigaux can be reached at trigauxsptimes.com or (727) 893-8405.

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