Red Sox Willing To Go Over Luxury Tax Threshold Hurricanes Seeing Smaller Crowds So Far Orlando City's Rawlins Still A Fan First Franchise Notes Reds Upgrading GABP Ahead Of All-Star Game Red Sox Spend Big With Ramirez, Sandoval Bills Say Stadium Will Be Ready For Sunday 2014 Reader Survey: MLB AHL Checkers Likely To Leave Hornets' Arena NFL Franchise Notes
NEW ROYALS OWNER: GREATER KANSAS CITY COMMUNITY FOUNDATION
Published May 3, 1995
The IRS approved a complicated plan established by the late Royals Owner Ewing Kauffman that would allow for the team to be owned by local Kansas City charities, according to this morning's K.C. STAR. The team will have six years to find a buyer that promises to keep the team in K.C., before opening up bidding to an outside entity. The charitable group that will own the team is the Greater Kansas City Community Foundation and Affiliated Trusts -- a collection of smaller groups managing 400 charitable funds and 11 affiliated trusts with combined assets of $170.6M. Although the foundation is to own the team, the Royals will be directed by a five-member group led by current Royals Chair/ Wal Mart CEO David Glass. Royals President Michael Herman also will be on that board. The Kauffman plan still needs to be approved by MLB owners (Charles Crumpley, K.C. STAR, 5/3). HOW IT WORKS: The Foundation must raise $50M in donations from the community at large, with the interest (perhaps as much as $3M/year) directed towards some of the losses the team regularly incurs. Any additional losses would be paid from a different reserve fund of $37.5M that Kauffman donated before he died. The six-year search for a new owner could begin as soon as June, when the team is expected to be officially turned over to the Foundation. When a buyer emerges, the $50M would "flow back to the community foundation." A large share of any funds beyond the $50M purchase price also would flow into "special donor accounts at the community foundation, and that money also would be given to various charities." Among the donors to the $50M fund: $5M each from Kauffman and his late wife, Muriel; $1m from the Kansas City Star Co. and a foundation tied to its parent, Cap Cities/ABC (KANSAS CITY STAR, 5/3). THE FINANCIAL SHAPE: Kauffman came up with the plan to buy time for the city in the hope that MLB's new economics would help the small markets. Last year the team lost a reported $25M, but Herman said with cost-cutting measures they hope to break even in a couple of years. Kauffman had said "several times that no one would want to buy a baseball team that consistently loses millions of dollars and had little prospect of making money because it was in a small city." Glass has expressed interest in buying the team but was unavailable for comment (KANSAS CITY STAR, 5/3).