Business of Baseball Report

MLB Reaches Tentative Lease Deal With D.C.

MLB and the D.C. Sports and Entertainment Commission reached a tentative deal on a lease that should keep things on track for the Washington Nationals to play in a new ballpark on the Anacostia Waterfront. MLB agreed to two major concessions that were holding up the negotiations. They agreed to extend a letter of credit for $24 million to ensure that the Nationals’ rent payments would be guaranteed in the event of a terrorist attack or a players’ strike. They also agreed to contribute $20 million to cover contingencies in the event that there are cost overruns on the new stadium; however it appears that the $20 million will go towards a 1,225 VIP parking lot, and in exchange, MLB will get a piece of the parking revenue.

The lease now has to be approved by both Wall Street and the city council, and in the process, other problems have started to crop up. D.C Chief Financial Officer Natwar Gandhi is conducting a new estimate of the potential cost of the ballpark, and the city was on the defensive when a local television stated that the cost would now be $701 million, which is $166 million more then what the city council agreed upon. The city acknowledged that the $701 million figure was a worst case scenario, so as with anything, we’ll have to see how this all plays out.

In the meantime, MLB Commissioner Bud Selig continues to meet with the eight bidders for the Nationals. With the lease looking like it is near completion, the final hurdle that’s prevented the team should be out of the way.

GM by Committee

The Boston Red Sox went into winter meetings this year without a general manager. With Theo Epstein leaving the team in October, Bill Lajoie, former general manager of the Detroit Tigers and the Red Sox special adviser for baseball operations, heads a group that’s already engineered a seven-player trade with the Florida Marlins. Assisting Lajoie are the team’s chief executive Larry Lucchino, Jed Hoyer the assistant general manager, the special assistant to the general manager Craig Shipley, player development director Ben Cherington and Zach Scott, the manager of major league administration.

Yankees Bleed Green

Success, depending on how you define it, can be costly. The Yankees haven’t won a World Series since 2000, and while that’s hardly a drought, owner George Steinbrenner has consistently had the highest payroll since that time, yet he has no World Series Championships for his troubles. In 2005, it looks like the Yankees lost somewhere to the tune of $50 million to as much as $85 million, and the number could get even higher if they’re forced by the league to true up the amount they received from the YES network.

Part of the problem is that the payments aren’t necessarily going to payroll and player development that could improve the team; they’re going to the league. The team is going to end up paying $75 million in revenue sharing and another $33 million in luxury tax, and the end result of this is that the Yankees are going to end up shaving their payroll from a record $200 million and change to somewhere around $180-185 million, which would still be tops in the league.

Reds in the Radio Business

If you remember, the St. Louis Cardinals switched radio stations and in the process purchased a 50% stake in the radio station that will begin broadcasting Cardinals games beginning next year. Robert Lawrence, a former Taft Broadcasting executive, assisted the Cardinals in the purchase, and it turns out that he’s pals with new Cincinnati Reds owner Robert Castellini. It looks like Castellini is trying to persuade Lawrence to become part of the ownership group. Once on the team, his primary task will be negotiating a similar deal for the Reds.

The team’s current deal with WLW expires in 2007, and while they’ve had a mutual relationship since 1969, there has been some strife between the two. WLW wasn’t happy when MLB signed a national distribution deal with XM radio and then the Reds stole one of WLW’s top sales executives by hiring him.

Red Sox File Suit Over World Series Ball

If you remember, Doug Mientkiewicz, the former Red Sox first baseman who made the final out in the 2004 World Series, kept the ball, claiming it was his. In January, the Red Sox and Mientkiewicz agreed that the Red Sox would temporarily hold the ball and would be allowed to display is along with World Series trophy. The agreement also said that Mientkiewicz would get the ball back at the end of the year.

Now the Red Sox have filed suit seeking permanent possession of the ball and they’re also asking that the court place the ball in a secure location until ownership has been decided. The Red Sox are alleging that ball remained the teams property because Mientkiewicz was an employee of the Red Sox.

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