CHANGE Coming to a Ballpark Near You
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Who will buy the Dodgers? What will happen to the franchise if Peter O’Malley does indeed sell it?
Twenty-two teams have changed owners since 1982, some more than once. Only the Atlanta Braves, Milwaukee Brewers, New York Yankees and Dodgers have remained under the same ownership in that time.
Now O’Malley, whose primary asset is the ballclub, has announced he is bowing out as the last true family owner.
What can be expected of new management?
Will it “Think Blue”--or only the black of the bottom line? The most recent sales fail to provide a clue. Consider the mixed bag that is the last five:
--The Pittsburgh Pirates seem to have gone from bad to worse.
--The San Diego Padres and St. Louis Cardinals have been dramatically revitalized.
--The Oakland Athletics have dug deeper into low-budget rebuilding that will demand fan patience.
--The Anaheim Angels are headed for a stadium and marketing renaissance, but will Disney apply that same glitz to the payroll?
There are no patterns or predictions to what has become musical chairs in baseball ownership.
“Every franchise is different and every sale is different,” San Diego Padre President Larry Lucchino said. “There’s a tendency to lose perspective on that.”
This much is clear: In the mysterious world of baseball economics, there is always a buyer for even the most--allegedly--troubled teams.
A closer look at the five teams most recently sold:
PIRATES
Kevin McClatchy disputes the perception that the Pirates have gone from bad to worse, saying they are doing the responsible thing in their small market.
They are rebuilding from within and reducing their financial commitment, he says, until a 35,000-seat baseball stadium becomes reality and the major leagues’ new revenue-sharing plan is fully vested. The Pirates could receive about $20 million from that plan in 2000.
The problem: Who needed another five-year plan? New ownership and new money should have allowed the Pirates to build a semi-respectable core.
Instead, within a year after McClatchy and partners officially took command, Manager Jim Leyland, the loyalist of loyalists, resigned; a core group of Jeff King, Jay Bell, Denny Neagle, Carlos Garcia and Orlando Merced was among players traded for unproven prospects; and a payroll expected to inch upward from $21 million in 1996 has been lowered to about $13 million.
General Manager Cam Bonifay acknowledged that it is not what he had anticipated.
“We were hoping the infusion of money would come sooner,” he said. “Now it’s obviously going to come later.
“Is it frustrating? It’s frustrating from the standpoint that we did have a good core of young players and believed that if we added four or five players to it we could be competitive in the next couple years. Every general manager wants the opportunity to win.
“Now it’s going to be another couple years before we can position ourselves in that mode.”
McClatchy, 34 and heir to the McClatchy newspaper chain, is baseball’s youngest owner. As managing general partner of a 28-member group, he reportedly invested $10 million of the $60.95-million purchase price, which included a $14.45-million carry-over from some of the investors in the previous ownership--the Pittsburgh Associates, who had bought the club from Warner Communications and the Galbreath family in 1985, primarily to keep it in Pittsburgh.
The McClatchy deal almost collapsed at the 11th hour when baseball, concerned about under-financing, insisted he beef it up, requiring new loans.
Two of five general partners, in a dispute over control, subsequently exercised their rights to be bought out of their $5-million investments. None of that has helped, but McClatchy is not deterred.
He said he studied the numbers and believes baseball can be successful in Pittsburgh with a new, intimate stadium, enhancing revenue streams in an area that does not allow the Pirates to compete with the big markets in income from radio and TV.
He cited the impact of new parks on struggling franchises in Cleveland and Baltimore and said:
“We can find a way to be competitive, but from a long-term standpoint, we need the new park.”
The city and state are working on it. If the finances are not in place by February of ‘98, McClatchy can trigger a process that would give the city 12 months to find a local buyer or he would have the option to sell to an out-of-town buyer, who would be free to move the team.
The Pirates have never drawn more than 2.065 million in a season, and club President Dick Freeman expressed caution about the stadium possibility.
“It wouldn’t make sense to build a stadium if the [fan] support isn’t there,” he said. “We believe it is, but we’ll do a lot more exploring before anyone puts a shovel in the ground.”
In the meantime, the bad dream that started with the departure of Barry Bonds, Bobby Bonilla, Doug Drabek and others continues.
“We’ve obviously taken a different direction than the Florida Marlins and Chicago White Sox, but we’re doing the responsible thing in our situation,” McClatchy said.
“We didn’t exactly take over a well-oiled machine. It wasn’t as if there was a long line behind me waiting to buy the team and keep it in Pittsburgh. We took over an organization that was last in the league in attendance and had the worst record in the league and operating losses of $18 million.
“We’ve completely refurbished the minor league system, increased attendance by 40% [from a strike-shortened season] and are in a cash neutral position from an operating standpoint in 1997.
“If you take over a debt-laden franchise and improve the team’s future in a small market, you’re doing as good as you can do in a year. I mean, the expectations may have been a little too high.
“People were calling me a savior and expecting an almost instant, automatic turnaround. Unfortunately, it’s not an overnight proposition.”
PADRES
The new owners in San Diego and St. Louis started from better positions than McClatchy and recognized that the best marketing tool is a winning team.
As Padre President Lucchino said, there would be a need to “prime the pump” by bringing in quality players.
The previous Padre owners, headed by Tom Werner, had dumped players and payroll, turned off the community and devastated the organization. Software magnate John Moores bought the team for $83 million in December of 1994, with minority help from Lucchino and some of the Werner group.
A week later, the new owner approved a 12-player trade with the Houston Astros that landed Ken Caminiti and Steve Finley. A year later, the Padres signed free agents Rickey Henderson and Bob Tewksbury and traded for Wally Joyner.
The result: San Diego was the National League’s most improved team in 1995 and won the Western Division title in 1996, setting a club attendance record of 2.2 million and netting a five-year, $25-million cable television deal with Cox.
In the process, Lucchino said, the Padres lost $16 million in 1995 and $8 million in ’96. Nevertheless, he added, there had to be a beginning to a three-part mission: field a team worthy of fan support, create a warm and friendly atmosphere at Jack Murphy Stadium and be an active participant in the community.
“We felt we could capitalize on a depressed local situation and the downturn in baseball nationally,” said Lucchino, adding that the ugliness of the labor dispute ultimately had to yield to common sense and an upturn nationally.
“We came here knowing it was a robust opportunity,” he said. “The stone was at the bottom of the hill. There was a skeletal staff of 26 people [it’s three times that now], and no one spoke Spanish, which is suicide in this market.
“We had to restructure the entire organization, a very different kettle of fish from the Dodger situation.
“I expect that whoever buys the Dodgers will inevitably make some changes, but the new owner better be a student of history and familiar with the tradition and values of that organization.”
The revived Padres, who are raising some of baseball’s lowest ticket prices by a modest $1 and $2, are pursuing those same values and traditions.
In an era of disappearing family ownership, Moores’ wife, children and other relatives often watch games from a field box just behind the catcher and umpire. The new owner, who disdains ties and appears to have walked in off the street, has made himself visible and available on pregame strolls around the park, chatting with fans.
He holds regular focus-group meetings with Padre customers, listening to their complaints and recommendations. He has also created a scholarship fund for disadvantaged area students that players help subsidize. His philanthropy has helped produce a new and receptive environment for the team in its limited market, which may ultimately net public support for a downtown or waterfront ballpark, enabling the Padres to ditch Charger-friendly Jack Murphy.
The city recently appointed a task force to explore possibilities, but the cautious Padres have made no threats or set no deadlines.
CARDINALS
In St. Louis, said Fred Hanser, one of three general partners in the new 17-member ownership group, baseball was in a similar state of depression. The tradition-rich Cardinals hadn’t won since 1987, and interest “had deteriorated to a point where it was difficult to give tickets away.”
Attendance had fallen from a club-record 3.08 million in 1989 to 1.7 million in strike-delayed 1995, and the perception, Hanser said, was that Anheuser-Busch, the brewery that owned the club, had stopped caring. August Busch III was seldom seen after opening day at the stadium that carries the family name.
Another robust opportunity.
Hanser and partners, including Managing General Partner Bill DeWitt Jr., who had previously held minority interests in the Cincinnati Reds, Texas Rangers and Baltimore Orioles and whose father had once owned the St. Louis Browns, bought the club, stadium and four parking garages for $150 million in the winter of ’95.
The brewery had spent $8 million on stadium renovations, including a grass field, and the new owners immediately undertook a team renovation.
“St. Louis had always been a great baseball city,” Hanser said. “The fans understand baseball and understand when the owner attempts to put a good product on the field.
“We felt they were dying to come back to the park and that we had to hit the pavement running, that we had to go ahead and spend some money. We felt we would recoup it in improved attendance and did.
“I mean, we definitely enjoyed a successful resurgence. Our slogan was ‘Baseball As It Ought to Be,’ and that’s the way it played out.”
The Cardinals’ payroll went from $27 million to $37 million as the new owners approved the free-agent signings or trade acquisitions of Ron Gant, Gary Gaetti, Andy Benes, Royce Clayton, Todd Stottlemyre and Dennis Eckersley, among others. Tony La Russa was hired as manager for two years at $3 million.
Regular-season attendance soared to 2.6 million as the Cardinals, 62-81 in ‘95, won the National League Central title and then sold out Busch Stadium while winning the division series with San Diego and ultimately losing the National League title to Atlanta in Game 7 of the championship series.
Interest in the Cardinals is so high now that officials carried a computer on their five-state winter caravan, making it easier to sell tickets. Despite a per-game increase of $2-$4 for prime locations, season-ticket sales are up 10%.
The payroll might reach $40 million, with former Dodger Delino DeShields having been signed to play second base. A manually operated, inning by inning, throwback scoreboard for games out of town will be among the additions at Busch.
The new owners, unlike Busch, remain visible--whether it’s general partners Hanser, DeWitt and Andrew Baur strolling through the stands; or publisher Michael Pulitzer signing autographs at a pep rally; or David Pratt hitting ground balls during practice. They’re still on the pavement and running.
“They say you can’t win every year, but we’re going to try,” Hanser said.
A’S
The re-acquisition of Jose Canseco and his $4.5-million salary seems at odds with the low-budget internal rebuilding the A’s began in earnest under new owners Steve Schott and Ken Hoffman last year, but the Boston Red Sox are picking up $500,000 of that and the remaining $4 million is less than the A’s would have had to pay Terry Steinbach and Mike Bordick, who recently left as free agents.
In addition, the A’s needed an attraction and now have it, the reunited “Bash Brothers,” Canseco and Mark McGwire.
Along with Scott Brosius, they are the only survivors from the 1992 team, the last of the four to win a division title in a five-year span that produced two American League pennants and a 1989 World Series victory.
Walter Haas and family, heirs to the Levi Strauss empire, ended 15 years of popular and successful ownership by selling to Hoffman and Schott, Bay Area real estate developers, for $68 million, a potential bargain, on Nov. 1, 1995.
Many of the factors involved in O’Malley’s decision to sell the Dodgers contributed to the decision by Haas, club President Sandy Alderson said.
He cited rising costs amid the ongoing labor unrest and estate planning at a time when failing health left Haas concerned that the team could become a burden for his family.
“There was a recognition that at some point we would have to rebuild, but I don’t know if Walter and Wally [Haas] would have pursued it with the earnestness that [the new owners] did,” Alderson said, adding that Hoffman and Schott are committed to keeping the team in Oakland, but only if the process doesn’t include “a considerable loss of money.”
“You’ll never see a $60-million payroll in Oakland,” he said of the small-market realities. “We’re giving our young players a chance to play and succeed. We trying to do more with less.”
A payroll that had exceeded $40 million in 1992-93 has been pared to $20-22 million for 1997 and will no longer be permitted to exceed performance, Alderson said.
The comparatively no-name A’s of ’96 displayed a surprisingly robust offense and chased a wild-card berth into September before fading. Average attendance increased as the season progressed, but the A’s drew only 1.15 million--they set a club record of 2.9 million in 1990--after having to play the first home stand in Las Vegas while remodeling of the Oakland-Alameda Coliseum continued for the Raiders.
Alderson said the Raiders’ return was an unforeseen complication for the new owners, affecting the Coliseum and siphoning dollars that East Bay fans might have spent on the A’s, who are lowering parking and some ticket prices for 1997.
Alderson said he would be surprised if attendance didn’t increase more than 20%, but he acknowledged that the Raiders could represent a long-term problem in the small-market competition to enhance revenue streams.
The new owners voted against the labor agreement, believing it did not do enough for small-market survival, but Alderson said there is no deadline or clandestine plan to move, despite speculation.
The A’s, he said, are concentrating resources on scouting and development. But even those costs are rising so rapidly that the small markets might soon be priced out, “a very scary possibility,” he added.
In the meantime, Alderson said, the A’s goal “is to get a little better every year as we build from within. It’s not farfetched to think we can be competitive in the next two or three years, but it would be foolish for any owner to think he could buy his way out of [an overdue rebuilding process].”
ANGELS
Tony Taveras, president of Disney Sports Enterprises, insists that Disney has its priorities in order, that its plans go much beyond a remodeled stadium, a name change or new uniforms, colors and logo.
“Do you think I can stand up and market this team if it finishes in last place?” Taveras asked. “We recognize that we have to put a product on the field and build on it. Do it consistently, year to year.”
Disney paid Gene and Jackie Autry $30 million for 25% and controlling interest in the Angels. It became official in May only after Disney and Anaheim agreed on how much each would pay for the remodeling of Anaheim Stadium.
But how to renovate 36 years of bad history?
Taveras said Disney understands it can’t sit back and expect fans to show the same patience and modest expectations they have generally shown the Mighty Ducks, an expansion team.
“We have to be aggressive and I think we have been,” he said. “We’ve at least made an attempt to change the chemistry.”
He referred to the hiring of an intense Terry Collins as manager and the addition of such face-in-the-dirt players as Dave Hollins and Jim Leyritz.
The payroll will go from about $27 million to $32 million. No big-buck quick fixes for Disney. A recognition of responsibility includes fiscal responsibility, Taveras said. It also means an end to the “vicious cycle” of trading prospects and then finding the cupboard bare when an emergency requires “internal solution.”
“It’s going to take three or four years to build [the farm system] up again,” he said.
Time will tell if a change of chemistry can help the Angels close the gap on Texas and Seattle in the American League West.
In the meantime, Anaheim’s traditional fans have “let us know” that they want to concentrate on the field and not be distracted by Dixieland jazz or cheerleaders on the dugout, director of communications Bill Robertson said. The bands and pompons will be confined to other areas, and there will be fun and entertainment zones when the stadium is completely finished in 1998.
“We’re learning as we go,” Robertson said of the fans’ reaction.
Some of the reaction to the relocation of season-ticket holders during the stadium construction and Disney’s 1998 plan to charge as much as $34 in a Diamond Club of prime seats hasn’t been positive, but Taveras said that economic realities make a club losing money look for ways to recoup.
After 36 years of inconsistent Angel continuity and direction, Disney’s history of magic and success bodes well for the future. Taveras reflected on the long term and said the Angels represented a perfect partner for Disney’s other operations--the Ducks and Disneyland.
And “with something inherently as good as baseball,” a down cycle was the best time to buy in. He referred to the labor dispute that has since been settled.
Now, he added, the election of a commissioner is critical and owners and players must recognize the need to form a true partnership. Will it happen? Every question is different, as are every franchise and sale.
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