Friday, April 02, 1999

Reds deal gets new player

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Steve Schott has agreement to buy club, sources say

BY GEOFF HOBSON
The Cincinnati Enquirer

Steve Schott

        The proposed sale of the Reds was thrown into chaos Thursday with word that Marge Schott has reached a deal to sell the team to a group that includes her cousin, former Reds executive Steve Schott, several sources told The Enquirer Thursday night.

        Marge Schott already has a letter-of-intent on the table with Cleveland attorney Larry Dolan to sell her 5.5 shares and controlling interest of the club for $65 million.

        Neither Marge nor Steve Schott would comment Thursday night.

        Sources said Steve Schott's group is composed mostly of southern Ohio businessmen. The group, looking to underscore its commitment to Cincinnati, had considered approaching the city of Cincinnati Retirement System to participate as a minority shareholder, but that part of the plan is on hold.

        Steve Schott, 37, a lifelong Cincinnatian, was executive vice president of the Reds from 1988-91 and is an investment banker based in Cincinnati and Michigan.

        “Steve brings a lot of experience and he truly believes there's a legacy with the family and that's important to him,” said one of Schott's partners, who requested anonymity.

        “It's very important to Steve and Marge that the team stay in Cincinnati and that it has very strong ties to the area. The idea of family is big for them, too.”

        The Steve Schott deal blurs an ownership picture that was already fuzzy at best.

        On March 8, Marge Schott unveiled her letter of intent with Dolan, giving her limited partners 30 days to match the offer and take control of a partnership that is due to expire Dec. 31, 2000.

        But since the deal contained a contingency that said Dolan must reach a deal with the partners, the limiteds refused to accept the offer as real and have told Marge Schott they don't believe the 30-day clock has started. The 30-day window shuts Apri 6.

        There is no legal consensus on what makes the Dolan deal real, but her agreement with Steve Schott indicates Marge Schott no longer believes the Dolan deal is viable.

        Sources familiar with Marge Schott's deal with Dolan said that agreement includes a “no-shop” provision, which prevents her from entering into another deal until the Dolan deal is resolved.

        But other sources have suggested if certain contingenies in the letter-of-intent aren't met, it becomes null and void.

        Still, it appears the Dolan deal, which has not been withdrawn, has precedence. If there is no deal with Dolan, Marge Schott must present the Steve Schott deal to the limited partners at a meeting and give them 30 days to match.

        Major League Baseball sources said Thursday they weren't aware of her deal with Steve Schott.

       

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