SBJ/February 27 - March 5, 2006/This Weeks News
Sternberg: ‘Whole level of optimism is very encouraging’
Published February 27, 2006
Stuart Sternberg made a fortune on Wall Street, collecting a reported $300 million to $400 million as an executive at the options trading firm Spear, Leeds and Kellogg when it was acquired by Goldman Sachs for $6.5 billion in 2000.
By purchasing 48 percent and controlling interest in the Tampa Bay Devil Rays, he’s invested in baseball’s most downtrodden stock. The Brooklyn native views the purchase as part long-term investment, part labor of love. At 46, he’s young enough to wait for the Rays to rebound from a miserable eight-year history and ambitious enough to believe it’s possible in a provincial market with low per capita income and no plans to build a new ballpark.
Sternberg spoke recently with SportsBusiness Journal correspondent Pete Williams.
|“People aren’t looking to hold grudges
when it comes to a baseball team. It’s
not like we’re a corporation that was
dumping pollution into Tampa Bay.”
Sternberg: There’s no question that if this were a sausage factory, I wouldn’t be here. Some people buy artwork, some buy boats. As I look at where I can make investments, this is something that over a three-, five- or even eight-year period, there’s no way to get any reasonable return on it, nor do I expect to. But if we run this business correctly, then over a long period of time the investment will take hold and we will get some return on it. But I have a 10-year-plus time horizon. I’m fortunate to be in a position where I can wait for a long period of time.
How do you feel the first 100 days of your tenure have gone?
Sternberg: I’m very pleased. It’s like when you have plans for a home. Everything looks great on paper, but when you open the walls, you have all these other challenges that start to come about. We haven’t been shocked at what we’ve seen. The way people have taken to the opportunities and the challenge that presents itself now and the whole level of optimism is very encouraging.
How much of this has been mending fences with the community?
Sternberg: Very little. We recognize the issues, the mistakes that have been made on all sides. We’re not looking to tell a story that’s not there. People aren’t looking to hold grudges when it comes to a baseball team. It’s not like we’re a corporation that was dumping pollution into Tampa Bay. We didn’t need to go way out of our way to fix what went on in the past. The (free) parking is an olive branch. Things like the food policy … we heard a lot of complaints and it seemed to be something that irked people. So we decided to give it a shot and show people things can be different.
The previous Rays regime had almost a sense of entitlement for what it expected from the community. On the other hand, you made a JFK reference in your introductory press conference: Ask not what you can do for the Devil Rays …
Sternberg: That wasn’t to put fault at anyone’s feet or lay blame. But certainly it is all about what we can do for everybody. There is no expectation on anybody to do anything for us, and I think that line, while a little corny, is the way I feel. Given the energy level here and what went on in the early ’60s, it just sort of works. As the leader of this whole thing, I’ve got a set of ideals that have to resonate down and the main one really is that we just have to have a connection to the entire area. We’d like to be something that becomes a binding fabric of the community.
You’re spending $10 million this year alone on sprucing up Tropicana Field. Some would say that’s a lost cause. Can you ever recoup that investment?
Sternberg: You might say it’s not a prudent way to spend money because of what the return has been and where attendance has been. But (fans) want to see something clean with some sparkle to it. The (premium) Platinum Club will produce some return; the other 80 percent is tougher to quantify. But we thought we had to improve the experience, such as the sound system and visuals. When you’re talking about clean restrooms and better signage, lighting, clean seats and floors that aren’t sticky, that goes a long way. We had things that we could have continued to sweep under the rug, but we thought it was worth it to pay the price, regardless of what attendance will be.
You’ve talked about raising the team’s (MLB-low) payroll by just 10 to 20 percent annually for the next five years. Won’t that be a tough sell to fans?
Sternberg: In the entertainment business, they know if they put Tom Cruise in a movie, they’ll almost certainly get back $100 million. It’s virtually guaranteed. You don’t have that in baseball. If we had added, say, (recent Toronto free agent signee) A.J. Burnett to our existing team, we’d have a much higher payroll, but where are we then? We’re not one player away, but we might be sometime soon. If we get a read and sense that we are, then we will do what we can.
What’s your long-term view of the stadium situation?
Sternberg: Because of when it was built and the age and the style of the stadium, it just can’t last as a feasible structure for more than X number of years. I don’t know if that number is 10 or 12 or 14 or eight. It will last us five to seven years, but there’s no way it makes 20. You buy a car and expect it to last 100,000 miles. Right now, we’ve got a car with 50,000 miles and even if I’m expecting it to last 100,000, we might have to do something at 80,000, or at 140,000. But I’ve got to get 80,000 out of it.
What would make the 2006 season a success?
Sternberg: If we have a significant increase in the level of interest, whether that’s measured by attendance, TV ratings, callers to radio shows, Internet hits or some combination. If we can get people to come back a second time whereas in the past maybe they didn’t. That’s what we want, for people to keep an open mind to us.