SBJ/January 12 - 18, 2004/SBJ In Depth

Political Hardball

Minnesota voters are split on many issues, but they agree in overwhelming numbers on this polarizing point: Major League Baseball acted as a monopoly run amok when it tried to fold their home team, the Twins, in December 2001.

That hostile act led to a bill that would have stripped MLB of its beloved antitrust exemption, as well as a hearing that featured the public flogging of baseball Commissioner Bud Selig.

NFL Commissioner Paul Tagliabue suffered a similar whipping in 1996, when his league allowed the Browns to leave Cleveland and the Oilers to leave Houston.

These are the sort of issues that can make sports a topic worth discussing in Washington, a unifying sort of political pork that is emotional, maybe even spiritual.

Voters — all voters — want better roads. They want more jobs. And they want their favorite team to stay in town, and win. That makes issues that involve the home team significant for elected officials.

Gen. Wesley Clark focused on sports fans in an ad in which he said “we’re all patriots.”
What makes those officials significant for sports leagues is the sweeping effect they can have on business, whether it be through a tax code change that bolsters franchise values, an FCC ruling that allows cable operators to charge more for sports channels, or an appropriations bill that keeps the skies over stadiums free of low-flying planes.

MLB, by far the most politically active of the leagues, was reminded of the role the federal government could play in its affairs during its labor stoppage of 1994-95.

In February 1995, representatives of ownership and the players union were summoned to meetings at the White House that the owners believed would yield either a settlement or the forced implementation of recommendations made by a mediator. They came away with neither, convinced that the union had outflanked them.

From that day forward, MLB has worked at Selig's urging to build relationships with legislators and regulators. Aside from a couple of nasty hearings, the government stayed out of MLB's last labor talks.

"I felt it was smart for us, as it is for most industries in America, to have a presence in Washington," Selig said. "There's a myriad of issues out there. We always need to be there to tell our story."

They haven't had to work as hard at the White House. The guy who lives there used to own the Texas Rangers.

Protecting interests

MLB, the NFL, NBA and NHL, and the MLB and NFL players unions, combined to spend about $1 million telling their stories through D.C. lobbyists in the first six months of 2003, according to disclosures filed with the U.S. Senate.

Baseball spent $555,000, by far the most of any league. The NFL spent $220,000, the NBA about $80,000 and the NHL about $20,000. The MLB Players Association spent $120,000 in the first half of the year. The NFLPA spent $20,000.

Though final reports for 2003 won't be available until later this month, the leagues and unions were spending at about the same pace they did in 2002, when they put about $2 million into lobbying. In comparison, United Parcel Service, which is one of the D.C. lobbying kingpins, spent about $3 million.

The sports leagues do it for the same reason that any large business hires lobbyists: to protect their interests and forward their agendas.

"The First Amendment gives every individual and organization in this country the right to petition the government," said Joe Browne, executive vice president of communications and public affairs for the NFL. "We're there to let them know where we stand on issues, just like every other entity and industry in the country."

Not all the leagues are comfortable with public discussion of their lobbying efforts. In fact, the NBA refused multiple interview requests on the subject. It is clear, though, that the league is an active political player — if only through the recognizable voice of one diminutive, but powerful, Democrat. NBA Commissioner David Stern contributed $334,050 to campaigns and fund-raising committees in 2001-02, far more than the commissioners of the other three leagues.

While that places Stern 90th on the Center for Responsive Politics' rankings of top contributors for the cycle, it leaves him well short of the levels of many franchise owners.

Indiana Pacers owner Melvin Simon ranked seventh at $2 million, according to the center. Baltimore Orioles owner Peter Angelos was eighth at $1.9 million. Cincinnati Reds owner Carl Lindner ranked 13th at $1.3 million. New NBA owner Robert Johnson was 17th at $1.1 million. Simon, Angelos and Johnson gave almost exclusively to Democrats; Lindner to Republicans (see Big spenders in politics chart).

President Bush seeks second term.
Don't feel badly for the GOP, though. Four of President Bush's "Rangers" — fund-raisers who have brought in more than $200,000 for the re-election campaign — own sports franchises: Lindner, St. Louis Cardinals owner Bill DeWitt, San Diego Chargers owner Alex Spanos and New York Jets owner Robert "Woody" Johnson. Because Bush is the incumbent, they won't have a rooting interest when the Iowa caucuses convene Jan. 19. But many of their sporting brethren will.

A review of federal election records compiled through June 2003 showed that owners of at least 46 franchises from the four major team sports leagues have contributed to a presidential candidate in the current cycle (see Contributions to presidential campaigns chart).

Baseball goes deep

Though there are active political players among ownership in all the leagues, MLB is the only one that has gone hip-deep into the campaign finance pool. Two years ago, the league created a political action committee that since then has contributed more than $315,000 to federal campaigns and fund-raising committees (see How the Major League Baseball Political Action Committee spreads its dollars chart).

MLB sees the PAC, which is funded through voluntary contributions from owners and team executives, as an extension of its lobbying efforts. Lobbyists from the D.C. law firm Baker & Hostetler manage the PAC with guidance from Selig and MLB President Bob DuPuy.

"We ought to be able to have the ability to support the candidates that we want to support," Selig said. "We want to do it legally and above board. We felt the PAC was the best way to achieve that."

Most of MLB's donations follow the logical strategic patterns of many business PACs, with spending decisions made based on issues and spheres of influence rather than political or social ideology.

MLB gives to leadership in both houses of Congress. Speaker of the House Dennis Hastert, R-Ill., received $10,000 from the PAC in the last two years, as did powerful Sen. Arlen Specter, R-Pa., a heavyweight on the Judiciary Committee, valued above all others by MLB because the committee presides over antitrust matters. Dick Gephardt, presidential candidate and former House Democratic leader, received $7,000, all but $1,000 of which came before he gave up his leadership slot. James Sensenbrenner, chairman of the House Judiciary Committee, received $6,000.

MLB also donated to whips from both sides of the aisle in both houses, along with leading members of key caucuses, including the Black Caucus, Hispanic Caucus and Internet Caucus.

The league gives to those whom it considers to be influential allies, such as Sens. Byron Dorgan, D-N.D., and Chris Dodd, D-Conn., each of whom received $6,000 from baseball's PAC in the last two years. Dorgan's former chief of staff, Lucy Calautti, is MLB's chief lobbyist. Selig counts Dodd as a friend.

MLB cultivates favor from party leadership by contributing to incumbents who are running in key races. In 2002 the PAC made three contributions totaling $4,500 to Sen. Mary Landrieu, a Louisiana Democrat who retained her seat despite a Republican spending onslaught. It spent $3,000 to help re-elect Sen. Tim Johnson, D-S.D., in a race that attracted attention from Democratic leaders and the president.

MLB gives heavily to the joint fund-raising arms of both major parties, contributing $91,500 in the last two years (see MLB's political action committee contributions chart).

Most important, it contributes to those legislators who serve on the committees that have jurisdiction over its pet issues. Over the years, the House and Senate Judiciary committees have used MLB's antitrust exemption as an excuse to prod the sport's leaders on issues that rarely yield legislative action, but almost always generate headlines and sound bites. MLB's PAC has donated to 27 of the 37 members of the House Judiciary Committee and 11 of 18 members on the Senate Judiciary Committee in the last two years, giving to both proponents and opponents on key issues.

House Judiciary member Mel Watt, D-N.C., would take away baseball's antitrust exemption tomorrow if he could. He is not likely to change his mind. But he sits on that influential committee and he is a three-time MVP of the annual congressional charity baseball game, so MLB gave him $1,000.

"He's the starting pitcher and he loves the game," said Calautti, who grew up in the shadows of Shea Stadium and found the Mets long before she found politics. "So, you know what? He gets our support."

So does a somewhat more accomplished pitcher, Sen. Jim Bunning, R-Ky., who received $5,000 from the MLB PAC last year. Bunning's committee assignments are far afield of MLB's standing interests, but he won 224 games and made the Hall of Fame, so it's good to help him stay in Washington.

If these don't seem like large sums for baseball owners who paid players a minimum salary of $300,000 last year, keep in mind that campaign finance laws passed in 2002 and affirmed by the Supreme Court in December tightly regulate contributions to candidates for federal office.

An individual may give only $2,000 to a candidate during a campaign and only $37,500 to all candidates during any two-year period. A PAC may not give more than $5,000 to a candidate during a campaign. Primaries, runoffs and general elections each count as separate campaigns. PAC contributions to national parties and other PACs also are limited.

When MLB doesn't donate to a key legislator, it's sometimes because that person won't accept money from PACs out of fear that it will be construed as influencing him or her. That's the case with Sen. Patrick Leahy, the ranking Democrat on Senate Judiciary.

While MLB lobbyists respect that position, they don't agree with it.

"You don't buy somebody's vote with $1,000 or $5,000," said Bill Schweitzer, managing partner of Baker & Hostetler's Washington office, which handles legislative affairs for MLB. "What you do get is better access. They'll return your phone call if you want to get in and see them. If you don't give them money, they may not return your phone call. That's about all you get."

Landing an audience

As campaign finance laws have gotten tougher, PAC contributions have become an increasingly popular way for industries to curry legislative attention, making contributions an effective lobbying tool.

In fact, it was the trend toward campaign reform that spurred baseball toward forming the PAC, which allows for larger contributions and helps MLB's lobbyists monitor the giving.

Many owners were major contributors long before MLB formed the PAC. With so much money flying around and reformers doing more to regulate it, Schweitzer and his firm's election law expert, Mark Braden, began to worry that baseball owners might be accused of operating as a PAC without registering as one.

At an owners meeting in 2001, they made the recommendation that MLB form a PAC that would attempt to raise about $250,000 per year, or about $10,000 per club. Last year, owners and executives from 21 clubs participated, contributing $162,270 through Nov. 30.

Among the more illustrative of MLB's contributions are the ones it has made to Rep. John Conyers, the ranking Democrat on the House Judiciary Committee. Conyers took a large and nasty bite out of Selig during the hearings in 2001. And yet MLB contributed $3,000 to Conyers in 2002 and another $1,000 to him last year.

"Yes, he opposes us," Schweitzer said. "And, yes, we had a tough hearing. But we've got to stay at it.

"Washington is a place where you can't get mad. Getting mad doesn't do you any good. If you get mad, whatever made you mad just gets worse. So you have to figure out a way to have a relationship with people with whom you may not be in agreement. Even if you can't get them to change their minds, you may at least get them to stop pounding on you."

NFL executives said the league has considered forming a PAC several times but always rejected it, in large part because some owners were uncomfortable with the attention that it would attract. That's also a concern for the NBA.

"In the NBA, when we have had a necessity to be heard, to have a presence or an audience, that has been worked out on a more personal basis and on a quiet basis," said Jerry Colangelo, who owns both the Phoenix Suns and the Arizona Diamondbacks. "In baseball, it's more important to have a visible presence, because there are more issues that have to be monitored — and, because the union established a beachhead there."

Several lobbyists who represent sports properties said they were intrigued by MLB's bold step, but did not see it as a viable option for the other leagues.

"Good for baseball if it works for them, but the rest of the leagues have never really seen the need for it," said Philip Hochberg, a longtime lobbyist who has represented the NBA, NHL and NFL, as well as the Division I-A college athletic directors. "Sports has never had the problem of getting its story told because of who we are. Sports leagues generally can open doors, as opposed to the manufacturers of staplers or coffee mugs, who might have a harder time getting an audience."

Star power

As an example, Hochberg points to the strategy that he used when lobbying on behalf of big-college athletic directors in the 1980s.

In 1986, the IRS revised the tax code to take away tax breaks for some college football season-ticket holders while maintaining them for others. Making matters worse, the IRS wanted schools to determine sellouts on a game-by-game, and section-by-section, basis — an accounting nightmare.

Division I-A athletic directors proposed that all schools be treated the same, suggesting an 80 percent deduction that would produce about the same tax revenue as the IRS' convoluted plan.

Reasoned as their proposal seemed, the ADs still needed an effective means of carrying it forward. Hochberg, who understood the allure of big-time college football, came up with one, parading a procession of prominent football coaches and athletic directors through the offices of members of Congress who could make tax law. In came Joe Paterno, Frank Broyles and others to shake hands, pose for pictures and make their pitch for a better tax rule.

To get in to see Sen. Phil Gramm, who taught at Texas A&M before he won a seat in Congress, Hochberg showed up with A&M athletic director John David Crow, the only Aggie to win the Heisman Trophy.

When Crow got in front of Gramm, the senator politely asked why he had come to the Hill, then listened patiently as Crow explained the problem the schools had with the IRS ruling.

"OK, I understand," Gramm said. "Now, let's talk Aggie football."

Not long after the meeting, the ADs' proposal sailed through Congress, saving many of the schools millions that they stood to lose if their season-ticket holders had lost their write-offs.

Frequently, the bulk of the time that a sports league's lobbyist gets with a congressman or senator will be spent talking sports. At the end, they'll segue into the issue that they've come to talk about.

Most bills "would not get us in the door," Calautti said. "But the ability to have them vent, or be happy, about baseball is definitely an opportunity for us to go in. And we love to talk baseball, so that's OK."

Two years ago, Calautti spearheaded the formation of the Sports Coalition, a union of lobbyists who work on behalf of the sports properties. She chairs a monthly meeting during which they try to find common ground on issues, hoping that a united front will give more weight to their pitches.

Calautti credits the coalition for the success the leagues had in taking control of the skies over stadiums in the wake of Sept. 11. The leagues' strategy on that issue was an example of working savvily within the political system.

MLB, the NFL and the college football programs sought legislation that would enforce the White House's call for no-fly zones over stadiums during sporting events. They made their pitch to the Federal Aviation Administration and the Department of Transportation, but they were drowned out by a powerful lobby of airline owners and operators that dealt with those agencies all the time.

So the leagues' lobbyists went where they stood a better chance of being heard: the House and Senate Appropriations committees, which control the purse strings for federal agencies, and by default can control agency policy.

Buried within the omnibus appropriations package that the House passed last month is legislation that gives sports properties control of their air space during games. Senate Appropriations will consider the package this month.

Win some, lose some

Each summer for the last 43 years, members of the House and Senate have gathered for a fund-raiser in which Democrats play baseball against the Republicans. For the last 17 years, the Democratic team has been managed by Martin Olav Sabo, a congressman from Minneapolis.

Click through Sabo's Web site and you'll soon find a photo of him smiling, his fist popping the pocket of a weathered mitt, a Minnesota Twins banner balanced on a bookshelf behind him.

"You go to Marty Sabo's office and he will take out of his drawer a book with all the statistics of every player in the Minnesota Twins' minor league system," said Schweitzer, an avid Indians fan who used to be chief counsel to the American League. "Now think about when we were talking about contracting the Twins.

"How friendly do you think Marty Sabo was to us?"

Some issues burn holes that even the most skilled lobbyists can't repair.

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