Former New York Yankee Derek Jeter, a man who could probably win an election for permanent American president if ballots were cast tomorrow, has decided to forever sully his good name by buying and running the Miami Marlins, a local improv comedy troupe that's been trapped in an out-of-control "Yes, and..." game since 1993. Yesterday news broke that team owner Jeffrey Loria will officially sell the team for $1.2 billion and return to living in the primordial bog that birthed him two millennia ago. Jeter will invest $25 million of his own cash into the team, but the major money is coming from investor Bruce Sherman, who lives in Naples and appears to be only a marginal improvement over Loria.
While Jeter is so ubiquitously popular his face might get printed on commemorative silver dollars after he dies, Sherman is more of a mystery to locals, especially because he doesn't live in Miami. As a primer, here's some key background of our new baseball overlord:
1. He's a Naples-based investor who made a huge bet on newspaper stocks back when those were worth something. Via the New York Times circa 2005:
At a time when Wall Street views newspapers as an ailing industry, Mr. Sherman has made a $4 billion bet that newspapers will survive the Internet onslaught. Mr. Sherman's clients own large chunks of nine newspaper companies, including 19 percent of Knight Ridder, 15 percent of The New York Times Company and 7 percent of Gannett, among others.
2. In fact, he was blamed the next year for cratering the newspaper industry, including the company that owned the Miami Herald. Via the American Journalism Review:
He needed a way to rescue his investment. Simply selling the Knight Ridder stock would likely depress its price, sinking him even deeper in the hole. However, he and his fellow mutineers believed that Knight Ridder in its entirety could be sold outright, just auctioned off, for more money – and maybe a lot more – than they could get by selling their shares on the stock market. So Sherman had decided to bully the company into putting itself up for sale.
This sale, if it happens, will constitute the first big-time hostile takeover of a U.S. newspaper company. But maybe not the last. Some on Wall Street are hoping it could trigger a broader wave of consolidation, with all of the investment banking deals, lawyers' and consultants' fees and stock windfalls that this implies. Many who work at newspapers – especially those belonging to Knight Ridder – worry now about their careers and the future of their profession. The assumption is that whoever buys Knight Ridder will make drastic cost cuts, to the detriment of good journalism and the company's long-term strength – a sad end for an organization whose 32 daily papers, including the Philadelphia Inquirer, Miami Herald and San Jose Mercury News, have won 60 Pulitzers over three decades. But for Sherman, the sale is an exit strategy. It could bail him out of a tough spot, maybe with a decent profit.
(He also blew $520,000 on a cruise at a charity auction — outbidding TV's Judge Judy — right as he was brokering the deal to crater the news industry, according to Editor and Publisher. Of course, in hindsight, it seems likely the industry would have tanked either way.)
3. His investment firm also got totally screwed in the 2008 financial crisis. Via the New York Times:
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It has been a rough stretch for those who have invested with Bruce S. Sherman, the co-founder of Private Capital Management.
After years of stellar performance, his asset management firm has stumbled. Based in Naples, Fla., it was one of the big losers in the near-collapse of Bear Stearns, with total losses estimated at several hundred million dollars.
That debacle followed huge losses in newspaper company stocks, which Mr. Sherman abandoned by the end of 2007, according to public filings. (One of those losses was in the stock of The New York Times Company.)
Today, much of Private Capital’s glitter is gone — and some investors wonder whether they should bail out or hope for better days.
4. He donated $500,000 to Jeb Bush's presidential campaign in 2016. Via the Naples Daily News:
Bush raised $5.9 million in Florida for his presidential campaign last year, while Rubio raised $4.2 million. In the ZIP codes for areas near and including Naples, Marco Island and Bonita Springs, Rubio raised $314,804 to Bush's $140,636 from individuals, according to FEC reports that show contributions through Dec. 31.
But in the battle of the independent expenditure committees, Right to Rise USA, the Super PAC supporting Bush, raised more than 90 times what conservative Solutions, the super political action committee supporting Rubio, collected in the Naples and south Lee County area — $1.06 million to just $11,500. Super PACs can raise money from companies and businesses.
The Right to Rise USA contributions in Collier County and south Lee County came in the first half of the year. The PAC didn't collect a nickel there after June 30, coinciding with a perceived "low energy" summer and fall for Bush. Retiree Bruce Sherman of Naples contributed $500,000 of the total.
5. He bought a $70 million, 210-foot yacht in 2010. As he putt-putts around the world in his yacht, the news industry is still in a shambles. Looks like owning the Marlins is a perfect punishment for that Knight Ridder deal!