Business of Baseball Reportby Brian Borawski
August 31, 2005
Partial Sale of Cincinnati Reds Heating Up
A Lexington-based group and a New York attorney have put their names into the hat as prospective majority owners of the Cincinnati Reds. Three current owners, one of whom owns The Cincinnati Enquirer, are selling their 51.5% stake in the team. A group of local investors got into the mix in early July and had received permission from Major League Baseball to examine the Reds' books and records. Now it appears they have two competitors for majority ownership in the team.
The Lexington-based group includes Ron Switzer, a Lexington money manager, and Doug Flynn, a backup infielder who played for the Reds when they won two World Series titles in the 1970s. The New York attorney is Miles Prentice, who has put bids on several major league teams in the past. He lost out on bids for the Kansas City Royals and the Boston Red Sox; he does, however, own several minor league teams.
The 51.5% stake in the team does not include operating control of the team. The current ownership agreement gives part-owner Carl Lidner control over the team until he either relinquishes it or passes away. It’s expected that the sale will net $80 million, but the final amount will depend on whether or not the winner can negotiate operating control of the company.
Nationals Fan Protest or Telecom Conspiracy?
Five hundred fans attended last Saturday’s Washington Nationals game as part of a protest to demand that cable giant Comcast begin carrying Nationals games. Comcast and Baltimore Orioles owner Peter Angelos are currently embroiled in a legal battle over the Orioles' move from Comcast to the Mid-Atlantic Sports Network (MASN) beginning in 2007. Until the lawsuit is resolved, Comcast has refused to carry Nationals games, whose broadcast is also the property of MASN.
Comcast has fired back and says that the organized protest is simply an anti-cable, and more specifically anti-Comcast, smear campaign. David Cohen, Comcast’s executive vice president, points to the fact that the seven bars that supposedly organized the protest all have DirecTV, which carries Nationals games. Also suspicious is the involvement of Jeff Mazzella, the executive director of the Center for Individual Freedom, whose website shows support for Comcast rivals SBC Communications and AT&T.
Baseball Owners Delay Vote on Minor League and Draft Changes
Last week, baseball’s 30 general managers approved a series of changes to the short-season minor leagues, along with a change of the draft date and how draftees are signed. Owners have decided to postpone putting the recommendations to a vote until the respective teams have more time to examine the potential changes.
Baseball America broke the story two weeks ago on the prospective changes, which included eliminating the rookie level Arizona and Gulf Coast Leagues, moving the entry draft to the end of June, and requiring draftees to sign at a newly specified date in August. Chicago Cubs president Andy McPhail favored the delay so a determination could be made as to whether the changes would create efficiencies and actually result in cost reductions.
Minor League Merry Go Round
Baltimore Orioles owner Peter Angelos provided the sole opposition to the relocation of the Montreal Expos to Washington, D.C last winter. While he was compensated by the league and then some to account for any loss of revenue that the move might have caused his team, the Nationals are once again providing some stress for Angelos. It appears that the Orioles had permission from both the Class AA Eastern League and the Class AAA International League to move their AAA affiliate to Harrisburg, Va. Unfortunately, Harrisburg is already home to the Nationals' AA affiliate, the Harrisburg Senators. Part of the Orioles’ deal was to find a new owner and home for the Senators, but the fact that they haven’t has delayed matters.
Angelos asked MLB to intervene in the matter, but they’ve refused to get involved. The Orioles have been looking for a new and better home for their AAA affiliate, the Ottawa Lynx, ever since they were evicted from their former home in Rochester and subsequently forced to move to Ottawa. Ottawa owner Ray Pecor is adding fuel to the fire by shopping his team to the Philadelphia Phillies, and it’s expected the Lynx will be moving to Allentown, Penn. to become the new AAA affiliate of the Phillies.
If that happens, the current home of the Phillies' AAA club, which is located in Scranton/Wilkes-Barre, Penn., would open up as a prospective home for the Orioles. The problem is that the Scranton area is a location that both the New York Mets and New York Yankees desire because both teams have a strong fan base there.
For now, nothing is final. The only thing that’s certain is the whole situation probably has Angelos’s blood pressure up.
Fenway Park, National Monument?
The Boston Red Sox have announced that they’ve applied for landmark status for 93-year-old Fenway Park. By having Fenway placed on the National Historic Register, the Red Sox will be eligible for a 20 percent rehabilitation tax credit on the amount spent to renovate the ball park.
Janet Marie Smith, the Red Sox vice president for planning and development, told The Boston Globe that the club wasn’t certain how long the process would take, nor could she ascertain how much the credits would be worth to the team. The downside to getting landmark status is that once a building has been declared a landmark, the owner loses some flexibility as to what he or she can and can’t do to the site.
Brian Borawski is a member of SABR's Business of Baseball Committee and writes about the Detroit Tigers at his own website, TigerBlog. He welcomes comments, questions and suggestions via e-mail.
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