SBJ/July 10 - 16, 2006/This Weeks News

Flurry of team sales changes the face of MLB ownership

Houston Astros owner Drayton McLane couldn’t help but be amazed when recently surveying the group of Major League Baseball team owners to which he belongs.

McLane (left), who bought the Astros in 1992,
is part of the old guard, thanks to
newcomers like Attanasio.
“I’m very quickly getting to be a senior guy now,” McLane said. “I never thought that sort of thing would happen this fast.”

McLane indeed has gone from baseball’s newest owner in the fall of 1992 to the ninth-longest tenured. Considering that many of those ahead of him on the list — including the Chicago Cubs’ Tribune Co. and the Seattle Mariners’ Nintendo of America — maintain little to no public profiles with regard to baseball or are not active in MLB’s business activities, McLane’s status as an elder statesman of the game is well fortified.

And that status is growing almost by the month as MLB undergoes one of its most frenetic periods of franchise turnover in modern history.

Thirteen franchise ownership changes have occurred since early 2002, with a 14th set to happen later this summer as Time Warner seeks to complete a proposed sale of the Atlanta Braves to Liberty Media. If that Braves deal is done in time to make the agenda for baseball’s quarterly owners meeting next month in Toronto, it will be the fourth consecutive such session with a vote to approve a franchise transfer.

The ongoing flurry is rivaled by a six-year stretch between 1992-98 in which 14 teams changed hands and four expansion clubs started, as well as a 1978-81 period in which a dozen teams were sold. But instead of a situation where many of those prior deals were derived out of economic distress, the current crop is largely borne out of baseball’s growing financial strength. In rather short order, the latest batch of deals also has altered MLB’s group of owners from a disparate mix of family groups, baseball lifers and corporate titans to a more homogenous mix of successful, self-made businessmen.

“We now have a real preponderance of aggressive, entrepreneurial business people who have a real love of the game,” said MLB President Bob DuPuy. “The business credentials of our people coming in now are very, very strong. Before, you could still sort of be a hobbyist or run a team more as simply a community trust.”

Said Pittsburgh Pirates owner Kevin McClatchy, who bought the club in 1996, “It’s a completely different group now. When I came in, we still had people like the O’Malleys in Los Angeles, Marge [Schott] was still around. It’s amazing how much it’s changed. It’s certainly a better working, more functional group now.”

View the most recent MLB sales and the longest tenured owners below.

The rapid change in baseball’s ownership mix promises to have significant ramifications on baseball’s current labor talks with the MLB Players Association. Ideological differences still exist among the owners, particularly with regard to the proper level of revenue sharing to aid small-market clubs. The current group of owners is not sharply divided into hawks and doves, though, as has been the case in many prior rounds of talks.

Perhaps more telling, the current round of negotiations has so far been conducted in a very private, low-key manner, as management is loath to upset to the sport’s fiscal gravy train in which revenue has grown by more than a third since 2003 to a projected $5.1 billion this season.

The current labor deal expires Dec. 19.

“It’s only been the last, maybe, eight years where baseball’s really begun to hit it from a revenue development standpoint,” said Steve Greenberg, managing director of investment bank Allen & Co., which is helping broker the sale of the Braves, and former MLB deputy commissioner. “So when an owner comes in now, what MLB gets is a more businesslike approach. There’s no longer just that clubby attitude.”

To a certain degree, an enhanced professionalism and seriousness in the MLB ownership ranks parallels that of the other major U.S. leagues and is an inevitable outgrowth of franchise sale prices that have exceeded $300 million in three of the last six deals and most recently hit $450 million in Washington. But changes are evident throughout MLB’s business operations that reflect the new reality. Owners meetings are now conducted in a more streamlined fashion and no longer contain separate sessions for American League and National League owners that often duplicated the main general meeting.

In addition, MLB in 2004 began operating a two-day, new-owner orientation program that gives each new franchise boss a formal overview of baseball’s central office and its day-to-day functions.

“There’s a definite learning curve we want to get our guys over as soon as possible, so that effort has been quite helpful, getting people to know who to contact when questions come up,” DuPuy said. “I think we might have had one session with three or four guys in at the same time.”

The program, not surprisingly, includes a detailed presentation on labor and the nuances of MLB’s relationship with the players’ union. Baseball insiders say those presentations have been beneficial as some owners in prior generations unsuccessfully sought to use their outside experience with major labor and trade unions as a best-practices tool for negotiations with the players.

The other hallmark of the current wave of ownership turnover is a greater sense of allegiance to Commissioner Bud Selig.

While Selig as a noted consensus builder holds vast influence over any transaction, several deals in the recent spurt of activity have included an even greater level of involvement by him. It was Selig’s family that sold the Milwaukee Brewers in 2004 to Mark Attanasio. MLB is about to close on its sale of the Montreal Expos-turned-Washington Nationals to Ted Lerner. And it was Selig who helped construct the historic 2002 franchise swap in which Florida Marlins owner John Henry purchased the Boston Red Sox, Expos owner Jeffrey Loria purchased the Marlins and MLB bought the Expos.

“We’re all still competing like the dickens on the field, off the field for players, for every advantage in scheduling, and so forth,” said Stan Kasten, who ran the Atlanta Braves for 17 years and is set to become president of the Nationals when that sale closes later this month. “But there’s a definite sense of collegiality there. It’s always been there, I think, but given there’s now a real sense of optimism with where baseball is going, it makes that collegiality stand out a bit more.”


At the MLB owners table

THE MOST RECENT DEALS
Team (year of sale) Buyer(s)
Washington Nationals (2006) Ted Lerner
Cincinnati Reds (2006) Robert Castellini, Thomas L. Williams and W. Joseph Williams Jr.
Oakland A's (2005) Group led by Lewis Wolff that includes his son, Keith, and billionaire John Fisher
Milwaukee Brewers (2005) Mark Attanasio
Colorado Rockies (2005) Charlie and Dick Monfort
Arizona Diamondbacks (2004) Existing club partners Ken Kendrick, Dale Jensen, Mike Chipman and Jeffrey Royer
Tampa Bay Devil Rays (2004) Group led by Stuart Sternberg
Los Angeles Dodgers (2004) Frank McCourt
Los Angeles Angels of Anaheim (2003) Arte Moreno
Boston Red Sox (2002) John Henry, Tom Werner, Larry Lucchino
Florida Marlins (2002) Jeffrey Loria
Montreal Expos (2002) Major League Baseball
New York Mets (2002) Fred Wilpon, Sterling Equities partners*

THE LONGEST TENURED
Rank Principal ownership Team (year purchased)
1 George M. Steinbrenner New York Yankees (1973)
2 Fred Wilpon New York Mets (1980)*
3 Tribune Co. Chicago Cubs (1981)
4 David Montgomery Philadelphia Phillies (1981)
5 Jerry Reinsdorf Chicago White Sox (1981)
6 Carl Pohlad Minnesota Twins (1984)
7 Baseball Club of Seattle^ Seattle Mariners (1992)
8 Michael Ilitch Detroit Tigers (1992)
9 Drayton McLane Houston Astros (1992)
10 Peter Angelos Baltimore Orioles (1993)

* Fred Wilpon and Nelson Doubleday purchased the club in 1980. Control and representation of the club varied over the term of their partnership before Wilpon acquired Doubleday's share in 2002.
^ Group in which Nintendo of America holds the majority stake.
Research by David Broughton
Source: SportsBusiness Journal archives

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