Tom Hicks
Thomas Ollis Hicks Sr. was an American private equity investor and sports team owner who was based in Dallas, Texas. Forbes magazine estimated Hicks's wealth at $1 billion in 2009, but it dropped to $700 million in 2010.
Hicks co-founded the investment firm, Hicks, Muse, Tate & Furst, previously owned 50% of the English football club Liverpool F.C., and was chairman of Hicks Holdings LLC, which owns and operates Hicks Sports Group, the company that formerly owned the Texas Rangers of Major League Baseball, the Dallas Stars of the National Hockey League, and the Mesquite Championship Rodeo. In 2010, Hicks sold the Rangers and Liverpool to satisfy his creditors, and the Stars went into bankruptcy the following year.
Early life and career
The son of a Texas radio station owner, Hicks was born on February 7, 1946, in Port Arthur, Texas, and had graduated from Thomas Jefferson High School, in 1964. Hicks earned a bachelor's degree in finance from the University of Texas in 1968, and his Master of Business Administration from the University of Southern California in 1970. He was a member of the Sigma Phi Epsilon social fraternity.Hicks became interested in leveraged buyouts as a member of First National Bank of Dallas's venture capital group. Hicks and Robert Haas formed Hicks & Haas in 1984. The next year that firm bought Hicks Communications, a radio outfit run by Hicks's brother Steven – the first of several media companies bought or created by the buyout firm that involved Steven.
In the mid-1980s, Hicks & Haas bought several soft drink makers, including Dr Pepper and 7 Up. The firm took Dr Pepper/7 Up public just 18 months after merging the two companies. In all, Hicks & Haas turned $88 million of investor funding into $1.3 billion. The pair went their separate ways in May 1989. He wanted to raise large pools to invest, while Haas preferred to work with investors deal by deal.
In 1989, Hicks co-founded the investment firm, Hicks, Muse, Tate & Furst with former Prudential Securities banker John Muse. The firm raised $250 million, with early investments including a life insurance company, Life Partners Group. In 1991, Morgan Stanley's Charles Tate and First Boston's Jack Furst became partners. Hicks was chairman from 1989 to 2004, Hicks Muse raised $12 billion of private equity funds, consummated over $50 billion of leveraged acquisitions, and grew to become one of the largest private investment firms in the country.
But Hicks Muse hit a rough patch by the early 2000s, when investors in Equity Fund IV were burned by a $1.2 billion plunge into telecom investments in 1999. Hicks announced that he would leave the Hicks Muse on March 8, 2004, to spend more time with his family and his sports teams. He has remained active in his own ventures. He created Hicks Holdings, a vehicle for his sports and real estate empire, and then started buying companies again in the $10 to $250 million level, including: a Chinese electronics firm, a venture with DirecTV selling bundled TV-telecom services to condos, a landscaping materials company in the Midwest, a pet food firm in Argentina, and Gammaloy – an oil field rental outfit he bought from his wife's family, paying approximately $20 million in the 1990s.
Additionally, Hicks formed Hicks Acquisition Company I, Inc.. In September 2009, HACI merged into Resolute Energy Corporation, an oil and gas firm. Hicks did not sit on REN's board of directors, but his son, Thomas O. Hicks, Jr., represents HACI on the board.
Politics
Hicks was a member of the political action committee for the 2008 presidential election campaign for former Republican Mayor of New York City Rudy Giuliani. Hicks was previously neighbors with former U.S. President George W. Bush and First Lady Laura Bush. Each neighbor's property shared a boundary between Daria Place and Holloway Road, within a gated community of Preston Hollow, Dallas, Texas respectively.Hicks, with the help of then-Gov. George W. Bush, helped create the University of Texas Investment Management Company to manage the Permanent University Fund. Almost a third of the $1.7 billion private equities portfolio UTIMCO invested between 1995 and 1998 was with firms personally or politically connected to then-UT Regent Tom Hicks or then-Gov. George W. Bush.
Sports
Dallas Stars
In December 1995, Hicks bought the Dallas Stars of the National Hockey League for $82 million. During his tenure as owner of the club, Hicks was the Stars' Chairman of the Board and the club's representative on the NHL Board of Governors. Hicks played an instrumental role in the development and planning of American Airlines Center. Under his ownership, the Stars won seven division titles, two Western Conference crowns, two Presidents' Trophies, two consecutive trips to the Stanley Cup Finals and the 1999 Stanley Cup championship. In April 2010, Hicks's company defaulted on $525 million in bank loans backed by the Stars and a 50% interest in the American Airlines Center.On September 13, 2011, lenders voted to agree to have the Stars file for bankruptcy and sold at auction. On November 22, a bankruptcy court judge approved a bid by Vancouver businessman and Kamloops Blazers owner Tom Gaglardi to buy the team for $240 million.
Texas Rangers
In June 1998, Hicks bought the Texas Rangers of Major League Baseball's American League from an investment group managed by George W. Bush. Under Hicks's ownership, the Rangers won the American League West Division crown in 1998 and 1999, but failed to deliver a World Series. Hicks made headlines across all MLB when he personally negotiated and signed shortstop Alex Rodriguez to the biggest contract in MLB history at that time; a ten-year, $252 million deal at the December 2000 winter meetings. That contract, however, severely limited the Rangers' ability to sign other players, and they would have only two more winning seasons during Hicks's ownership. Years later, Hicks pointed to the blockbuster contract as "one of his biggest regrets".The Rangers also spent a large amount of money on Chan Ho Park, who signed a $65 million contract with the Rangers following the 2001 season. The Park signing would be a disaster for the Rangers as the new "staff ace" was unable to adjust to the move from pitcher-friendly Dodger Stadium to the hitter-friendly American League. After finishing in last place for the division three consecutive seasons with Rodriguez, Hicks agreed to trade to the New York Yankees before the 2004 season. As part of the agreement, the Rangers would supplement a portion of his remaining contract. This agreement would continue until Rodriguez opted out of his contract in 2007. On January 23, 2010, it was announced Hicks had agreed to sell the Rangers to a group led by Chuck Greenberg and Nolan Ryan. Hicks would have been a minority share holder in the new ownership group.
Prior to bids being placed by potential buyers, Hicks told the media the Rangers were operating under normal business with no interference from MLB. Regarding the Rangers' inability to sign 2009 first round pick Matt Purke, he said, "We were disappointed that the family insisted on $6 million. The Texas Rangers were not willing to do that. It had nothing to do with MLB restrictions. There is a clear misimpression we didn't sign Matt Purke because MLB wouldn't let us. That's not true. We didn't because of Tom Hicks, Nolan Ryan and Jon Daniels. We were not willing to go to $6 million." After his group had completed the purchase agreement, Ryan told the media the Rangers were unable to offer the first round pick the $6 million signing bonus both parties had verbally agreed upon after the draft because MLB, who were strictly overseeing the Rangers budget by this time, would not approve the amount needed to sign Purke. After the announcement of the pending sale by Hicks Sports Group, several additional hurdles occurred which had to be remedied before the sale of the team could be finalized. Several of the lenders, who were owed over $500 million, vocally objected to the deal accusing Hicks of rejecting a higher offer by Jim Crane and stated they would not sign off on the deal. Hicks has been sued by three different parties over the land adjacent to the stadium that was sold in a separate transaction as a part of the purchase by Greenberg and Ryan.
On May 24, 2010, HSG filed for Chapter 11 bankruptcy protection/separation of the Texas Rangers from HSG and asked the courts to approve of the sale of the Rangers to the group headed by Greenberg and Ryan. The move was made to expedite the sale and resolve the sale prior to the MLB trade deadline and draft signing deadline. Ironically, Alex Rodriguez was the largest unsecured creditor, owed nearly $25 million in deferred payments despite being traded six years earlier.
Emails presented in court show that after Hicks agreed to an exclusive negotiation period with Greenberg attorneys for HSG were still in discussion with another bidder, Dennis Crane, about a sale price for the team and emailed the creditors on December 31, 2009, saying, "Basically, the response from the MLB was to prohibit us from negotiating with anyone other than Greenberg. Their intent seems to be to lock us into Greenberg even though Crane now has a clearly superior economic deal – and may always have had based on Greenberg's current position. We need help here. Unless the lenders weigh in, we are going to be stuck negotiating a deal that is clearly worse than Crane's."
The bankruptcy court ordered a public auction to be held on August 4, 2010, and the winning bid was submitted by Greenberg/Ryan. Co-lead investors Ray Davis and Bob R. Simpson were named co-chairmen.
In March 2011, Greenberg resigned as chief executive, sold his interest, and Nolan Ryan was named president and chief executive officer. Ryan was subsequently designated the controlling owner of the club by a unanimous vote of the 30 owners of Major League Baseball on May 12, 2011.