It’s been reported recently that buyout vet Tom Hicks’ sports empire is crumbling with rumors that his Texas Rangers had to borrow from Major League Baseball just to meet payroll.  This is on top of news several months ago that Hicks Sports Group (HSG), the parent vehicle that owns the Rangers, as well as the NHL’s Dallas Stars amongst other assets had defaulted on $500+ million worth of loans, including a chunk of money lent from Mr. Hicks himself.

Hicks has suggested HSG is just another victim of the global credit crunch (i.e. inability to borrow to the hilt) and economic turmoil, but the bigger problem seems to be poor management, somehow thinking servicing $500 million worth of loans was sustainable.  While sports teams can be great investments, generally inching up over time, they’ve never proven to be tremendous cash-flow generators (even in good times) which makes me wonder how HSG was ever able to convince the 40th lender that $500 million was perfectly sustainable with plenty of margin (a couple autographed bobbleheads perhaps).  Have to give credit to HSG for sustaining at least 1 year into the slowdown.

It’ll be interesting to see where Hicks and HSG goes from here.