In what could be a defining moment for the franchise, Nationals owner Mark Lerner says Barry Svrluga of the Washington Post that the team brought in New York investment bank Allen & Company to explore the possibility of selling the franchise or adding new investors/partners to the current ownership group. Lerner stressed that the process is “exploratory” in nature and added that there is “no set timeline or expectation of a specific outcome.”
The Lerner family purchased the Nationals, formerly the Expos, from Major League Baseball for $450 million in 2006 after the former Montreal franchise was closed and moved to Washington, DC. Forbes recently estimated that the franchise is worth $2 billion — a 4% increase over last year and the 12th-largest MLB franchise. Sportico placed that same $2 billion estimate on the value of the franchise back in March 2021. Longtime controller Ted Lerner, who is now 96, handed over control of the franchise to his son, Mark, in 2018. At the time, as Svrluga points out, the young Lerner was adamant that that the family would never consider selling the team. Obviously, this mentality has changed.
The Nationals’ open willingness to explore a sale of the club comes at a time when the on-field product has been largely demolished following last summer’s sell-out, which saw Max Scherzer, Trea Turner, Kyle Schwarber, Daniel Hudson, Yan Gomes, Josh Harrison, Brad’s hand and Jon Lester all traded for younger, more controllable players (and, in some cases, a pay break). Of that group, Turner was the only one checked past the 2021 season. He now earns $21 million with the Dodgers. The rest of that group signed elsewhere in free agency (or, in Lester’s case, retired).
The Nats have reinvested some of those resources into the 2022 squad, but their overall payroll is nearly $40 million lower than its 2021 level. Nelson Cruz joined the club on a one-year contract worth a guaranteed $15 million. Cesar Hernandez ($4 million), Anibal Sanchez ($2 million), Steve Cishek ($1.75M), Eire Adrianza ($1.5 million), Sean Doolittle ($1.5 million) and Alcide Escobar ($1 million) all signed in the offseason as well, as are unsigned veterans Dee Strange Gordon and Maikel Franco, who have both been part of the club. None of these players are signed beyond 2022, although Cruz’s deal contains a mutual option for the 2023 season. This is largely an accounting metric, as mutual options are very rarely exercised by both parties.
When considering the potential sale of the franchise, there are various complicated factors to consider – even beyond the standard complexities associated with any multi-billion dollar sale of a team. First, the Nationals have been mired in an ongoing dispute with the Orioles over their television rights for the better part of a decade. The Mid-Atlantic Sports Network (MASN) broadcasts Nationals games, but is owned and operated by the Angelos family – which also owns the Baltimore Orioles. At stake, hundreds of millions of dollars in revenue.
Of course, the team’s long-term payroll prospects also impact the sale price. It’s one of the reasons last summer’s high-profile sale was notable, but it also highlights the Nationals’ failed efforts so far to expand the superstar Juan Sotowhich reportedly rejected a 13-year, $350 million extension this winter.
More concerning to potential buyers than the money that perhaps should be allocated to expanding a cornerstone of the franchise is the money that is still owed to a host of players who don’t even play for the Nationals anymore. . The Lerner family customarily included deferred money in deals for their free agent signings to reduce current value. However, this overwhelming list of postponements is starting to pile up.
For example, the Nationals owe Max Scherzer $15 million in deferred pay every season from 2022-28 — even though he’s now pitching for the division-rival Mets. They pay Stephane Strasbourg a third installment of $10 million in deferred salary from his before contract this year, even before considering the salary he will earn under the new $245 million deal he signed on the heels of his World Series exploits. This new deal for Strasbourg calls for him to receive three equal payments of $26,666,667 each July from 2027 to 2029 – the contract itself ends in 2026 – plus a final installment of $3,999,974 on December 31, 2029 (hats off to the Cot contracts for specific numbers).
These are far from the only postponements to consider. Patrick CorbinThe $140 million contract contains $10 million in deferrals payable from 2024 to 2026. The Nationals will pay Brad Hand a combined $6.5 million from 2022 to 2024 as part of the deal. $10.5 million year that he signed to kick off the 2021 season. They are, somewhat incredibly, still on the hook for $2 million a year for Raphael Soriano until 2025. Soriano retired after the 2015 season.
Despite the huge list of deferrals and the messy dispute over television rights, the value of the Nationals franchise has undeniably skyrocketed since the time the Lerner family purchased the team. And given the relative scarcity with which Major League franchises come up for sale, there should be considerable interest, whether from an entirely new ownership group or from some wealthy investors seeking to get a foot in the door as minority players with an eye on increasing that share over the years.