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SBD/Issue 82/FranchisesPrint All
Eli Broad On Deck Should
McCourt Strike Out
L.A.-based developer and philanthropist Eli Broad "has offered to buy the Dodgers for $430[M], mostly in cash, if Boston developer Frank McCourt's highly leveraged bid falls through," according to Ross Newhan of the L.A. TIMES. The proposal would "require credits of $50[M]," and Broad also said that Fox "must agree to loan him $80[M], interest-free, for four years, or provide a credit of $16[M]." L.A. Mayor James Hahn confirmed Broad's proposal, saying that he had urged Broad to step forward "amid concerns from baseball officials and fans that McCourt might be stretched too thin financially to field a highly competitive ballclub." Newhan noted McCourt has until January 31 "to complete the transaction, or he will have to pay a significant penalty and lose his exclusive negotiating rights." A Fox Group official said that company execs "were not entertaining Broad's offer and were pressing ahead with McCourt." But an MLB official said that the league "is well aware of Broad and his resume," adding, "It stands to reason he could move through the approval process very quickly if it came to that." Sources indicated that former Dodgers Owner Peter O'Malley also "encouraged Broad to get involved." One source said that Broad "would work strictly in the background and hire a respected baseball person to run the Dodgers," and that Broad "has no interest in relocating Dodger Stadium" to downtown L.A. (L.A. TIMES, 1/17).
BROAD-SIDE: In L.A., Bill Plaschke reported O'Malley would be Chair of Broad's group, and Broad would be the principal owner with O'Malley as an investor. One local business exec said, "Somebody in baseball must have already told Eli that [McCourt's] deal is in trouble, or he never would have gotten involved" (L.A. TIMES, 1/18). The L.A. TIMES' Newhan cited a source who said that McCourt "tried to interest [Broad] in a partnership role" in his first efforts to find investors in his Dodgers bid. The source: "Eli concluded he couldn't invest in anything McCourt controlled" (L.A. TIMES, 1/18). In L.A., Steve Dilbeck wondered, "Why would News Corp. want to sell to McCourt, taking back a loan of more than $200[M], when it only would need to make a four-year, $80[M] loan to Broad?" Dilbeck, on Broad: "He's a local guy with impeccable credentials who has stepped up. It's what Dodgers fans have been wanting, what the franchise warrants" (L.A. DAILY NEWS, 1/18).
MCCOURT: Also in L.A., Rich Hammond cited a source as saying of McCourt, "I'd give him three years before he has to sell the team. He will either realize he can't do it, or he just won't be able to make payroll." Sports Business Group Principal David Carter, on McCourt: "It's like a high school kid who convinces his dad to buy him a car. He gets the car, but then he realizes he can't afford to buy the gas. I think Dodger fans should be concerned that, in this case, they're going to be the ones buying the gas." Hammond cited sources as saying that McCourt "has been rejected by several potential partners because of concerns about his finances and because investing in the Dodgers is considered risky business" (L.A. DAILY NEWS, 1/18).
RUMOR MILL: In Sacramento, Mark Kreidler reported that the "newest theory" involving the Maloofs and the NBA Kings is that the Maloofs will "sell the franchise at the absolute peak of its skyrocketing value, then use the whopper profit to take an expansion franchise or some other team to Vegas." Kreidler added, "I like the originality of this notion. ... [But] it does suffer slightly from having no basis in fact" (SACRAMENTO BEE, 1/17).
COLD CASH: Oilers President Patrick LaForge, on reports the team made a $2M profit on the November 22 outdoor game: "I haven't seen the final books, but we were planning to make about $700,000. That was our plan, though we had to move a lot of snow off the ice, so hopefully that didn't cut into it too much" (Minneapolis STAR TRIBUNE, 1/18).
YARDE SIGN: In Boston, Kevin Rothstein reported that Patriots season-ticket holer Craig Yarde planned to "protest the Patriots' yanking his tickets after one of his male customers was arrested using the ladies' room" at Gillette Stadium. Yarde was going to "load a giant sign saying 'Yarde Metals: 20 Years of Loyalty Down the Toilet,' onto a truck adorned with two brand-new Kohler toilets" (BOSTON HERALD, 1/17).
Miscommunication Leads To Proposed
Ticket Prices Being Leaked
In what Orioles Dir of PR Bill Stetka called an "unfortunate case of internal miscommunication," team reps, who were supposed to hand out schedules at the Int'l Auto Show in Baltimore, "mistakenly distributed" a list showing that the team is "considering raising ticket prices" on premium seats by nearly 67%, according to Ed Waldman of the Baltimore SUN. The list showed single-game field box seats increasing from $45 to $75, and season-ticket box seats increasing from $40 to $55. While the Orioles "strongly denied that this season's prices are final," Stetka acknowledged, "It may end up that those are the prices." Gilco Sports Dir of Business Development David Cope, a former Orioles marketing exec, believes that $75 is "a lot for a baseball ticket, [but] it's not too much for this market." Cope: "If there's limited quantity, I have every confidence there is the demand for those seats, especially with the off-season moves that they've made." Waldman reported that for the first time, the Orioles may "price some prime sections by proximity to the field." Also, four sections of club-level seats "would drop from $40 to $30, and prices would remain the same for many lower reserved, upper reserved and lower box seats." Stetka said that team research showed the MLB "average for a field box in the first 10 rows was $75.70," and only "eight teams had lower average prices than the Orioles $45." According to Team Marketing Report, the Orioles' average ticket price in '03 was $18.23, 13th among the 30 MLB teams and "just below the sport's overall average of $18.81" (Baltimore SUN, 1/17).
Selig Hopeful That Conflict
Of Interest Talks Will Die
The Brewers late Friday afternoon announced that they have retained Allen & Co. to facilitate the sale of the team. In Milwaukee, Don Walker cited sources that placed the value of the franchise at $180-200M, including nearly $110M of debt. The Brewers, with MLB Commissioner Bud Selig owning a share of the team since '70, have the "longest tenured ownership" in MLB. Brewers Chair Wendy Selig-Prieb "went to great lengths to reassure the community that professional baseball was secure in Milwaukee." Selig-Prieb: "I believe that the legacy of the ownership group will in fact be its commitment to securing this franchise to our community." Brewers BOD member Michael Grebe said that until the team is sold, Selig-Prieb will remain chair, and "the management team in place would run the team" (MILWAUKEE JOURNAL SENTINEL, 1/17). BOD member John Canning said that the decision to sell the team is "not related to the recent problems" surrounding the cuts to the team's payroll and the departure of team President Ulice Payne in November. Canning: "If anything, the recent situation delayed this a little bit" (CHICAGO TRIBUNE, 1/17). Canning said that with the team for sale, a search for Payne's replacement has been put "totally on hold" (MILWAUKEE JOURNAL SENTINEL, 1/17). Selig, on selling the team: "I wanted to do this for a long time but the whole group had to come to this decision. ... It's just time" (MILWAUKEE JOURNAL SENTINEL, 1/18).
PERCEPTION OF CONFLICT: In Milwaukee, Tom Haudricourt wrote Selig was "unable to avoid conflict of interest accusations" since becoming acting commissioner in '92. Selig-Prieb: "He has been fastidious in separating himself from the operation of the club. Having said that, from time to time, have there been perceptions and is it an easy thing for somebody to make allegations when a commissioner has an interest in a team? Absolutely. To be able to eliminate that is obviously a relief and something he is very happy to be in a position to be able to do" (MILWAUKEE JOURNAL SENTINEL, 1/17). Canning added, "Bud has been aware of the apparent conflict of interest, although I can tell you he is religious about keeping the Chinese Wall between him and the Brewers. ... When Wendy started to pull out, when there was no Selig involved, he was ready. Now we're in position to make this transition" (CHICAGO TRIBUNE, 1/17).
Brewers Have Nowhere To Go But Up
VALUE PLAY? Sportscorp President Marc Ganis, on the value of the team: "The Brewers have a number of very strong factors in their favor. They have a new stadium, and the perception of the team in the marketplace is that there is nowhere to go but up. On the downside, there is a limited broadcasting market, they have a limited amount of talent, and the perception is of a losing team. There's no positive buzz." Metropolitan Milwaukee Association of Commerce President Tim Sheehy has "already received one call from a potential investor, whom he declined to identify" (MILWAUKEE JOURNAL SENTINEL, 1/18). Selig: "I think the game is so popular now, and we've changed the economic landscape with the new [CBA]. I feel good about where we are (as an industry). I hope we've increased the interest in buying teams. We'll find out in Milwaukee" (MILWAUKEE J-S, 1/18).
REAX: MLB President & COO Bob DuPuy released a statement that read in part, "We of course respect the decision of Commissioner Selig and the other owners to take this step, and we will do everything we can to facilitate the sale" (MLB). A JOURNAL SENTINEL editorial stated, "New ownership presumably would mean an infusion of money to beef up the team's payroll and give it a realistic chance to compete with baseball's have rather than fight with other have-nots" (MILWAUKEE JOURNAL SENTINEL, 1/17). In Milwaukee, Michael Hunt wrote, "The belated good news for everyone now Selig most definitely included, because his job as commissioner will become somewhat easier once the title changes hands is that the door is finally ajar for new ownership" (MILWAUKEE JOURNAL SENTINEL, 1/18).
AUDIT WILL CONTINUE: Wisconsin legislators will "continue to push for state review" of the Brewers' finances, despite the plans to put the team up for sale. Assembly Speaker John Gard: "One way or the other, we've got to get this thing done" (MILWAUKEE JOURNAL SENTINEL, 1/19).
Davidson Guessing Hurricanes Or Predators
A U.S.-based NHL franchise contacted Winnipeg Deputy Mayor Dan Vandal "to inquire about possibly relocating" to the city, according to Ross Romaniuk of the WINNIPEG SUN, who noted the call "did not come from" the Penguins, which Vandal "had courted during the past few weeks." Vandal said of the call, "They're asking, `How serious is Winnipeg? Because we're in trouble.'" Former Winnipeg Jets GM John Ferguson said of an NHL team returning to the city, "It would be an ideal situation to come back to Winnipeg. There's a new arena being built and the fan base is there" (WINNIPEG SUN, 1/17). Vandal indicated that the club is "southern-based." ESPN/ABC hockey analyst John Davidson: "If I had to guess I'd say Carolina or Nashville. I just can't see it being the Panthers right now." Hurricanes and Predators officials "denied suggestions [Friday] night either team was getting set to move" (WINNIPEG SUN, 1/17).
JET SET? In Winnipeg, Ted Wyman noted during the Jets' entire NHL existence that included 669 regular-season home games, the team "attracted more than 15,000 fans just 106 times. That's a little less than 16% of the time." Wyman: "We can assure you, the vast majority of those near-sellouts were against Montreal, Toronto or the Gretzky-led Oilers and Kings. Without a visiting-team attraction, the attendance was incredibly underwhelming" (WINNIPEG SUN, 1/17). In Toronto, Al Strachan wrote, "It's simply the latest salvo in the ongoing public-relations battle that is the precursor to negotiations for the new [CBA]. ... The NHL has been propping up Canadian franchises through the Canadian Assistance Plan. Can anyone seriously think that the NHL governors are now going to add another team to that welfare list?" (TORONTO SUN, 1/18).
Texans Push Season-Ticket
Prices Up At 6.3% Average
The Texans have "quietly increased season-ticket prices" for '04, the first price hike in team history, according to David Barron of the HOUSTON CHRONICLE. The team estimates the average increase at 6.3%, or about $3.64 per ticket. The average cost of Texans tickets in '03 was $50.67, which ranked 19th in the NFL. Prices will increase "in each category except for terrace seats, which remain at $30 per game. The most expensive lower-bowl seats will increase from $74.50 to $78 per game." The highest average increase "is for lower bowl end-zone seats, which go from $44.50 to $50 per game," up 12.4%. Texans Senior VP/Sales & Marketing Jamey Rootes noted that while season-ticket prices for club seats also increased, "ticket holders who signed long-term contracts will not pay more for those seats." Parking prices in some lots will rise to $20 from $15. Rootes: "We want to make sure that we are in line with pricing for NFL games and with other entertainment options, and we are laser focused on delivering superior value for our fans and clients" (HOUSTON CHRONICLE, 1/18).