There are some business that should be recession proof and that could even thrive in a tough economic environment. Usually those businesses include anybody associated with liquor sales, from the big multinational companies like Anheuser Busch to the small local watering hole, usually when people are down and times are tough liquor sales go up. Another industry considered to be recession proof is the motion picture industry, the thinking goes that when people are down they want to go out and forget about their troubles and be entertained with a big screen spectacle. The other industry that was supposed to be recession proof was sports, and in particular baseball, but that may be changing. As ticket prices continue to climb and the competition for the publics entertainment dollar is at an all time high, the Texas Rangers are suffering in a major way and could be forced into bankruptcy.
The group that currently owns the Texas Rangers has recently defaulted on $525 million of debt and the creditors that have been left hanging are not so happy about the current situation. There is a tentative agreement to sell the club to a group that includes Nolan Ryan, but the creditors are not pleased with this potential buyer because they feel that there are other buyers who would pay them more.
This situation could turn messy as the current owners look to sell the team as quickly as possible to avoid a situation in which the creditors may file an involuntary bankruptcy petition against the team. If the creditors were to do so, then it would force the Rangers into Chapter 11 protection and shift power to the creditors and away from the current owners.
If the creditors move in this direction then they would try to convince a bankruptcy judge to place more emphasis on repaying the debt than the desires of the current owners to sell to the perspective buyer.
The situation is so tense that there is speculation that Major League Baseball could step in and seize the Rangers to prevent the creditors from pushing the club into bankruptcy.
It is a shame that a popular club could be in such trouble when the baseball operation side of the business seems relatively sound, but the investment side of the ownership group has bungled its operations and placed the clubs future in jeopardy.