News Briefs: Fall 1998

Attendance: 29,376 per game, up 3.8% in 1998.

Average salary: $1,378,506, up 4.88%.

Median salary: $428,500, up 7.1% but still below 1994's $450,000 median.

Home run chase sparks renewed interest in MLB. A New York Times/CBS News poll conducted in mid-September found 22% of adults "very interested" in MLB, up from 15% in 1997. 41% were "somewhat interested," up from 27%, while the number expressing no interest fell from 58% to 38%. The 62% expressing interest is the highest since the poll began in 1985.

An AP survey in August was less positive. 15% of respondents said they followed MLB "closely," 23% "not closely," and 62% "didn't pay much attention." 24% reported less interest in baseball since the 1994-95 labor dispute. When asked to select among three choices for the biggest problem facing MLB, 44% said the players were overpaid, 25% said tickets cost too much and 20% said games lasted too long. MLB was the favorite sport of only 11% of respondents, to 38% for the NFL, 20% for the NBA and figure skating, and 6% for the NHL.

Luxury tax threshold over $60 million. Based on salary figures reported in the November 23 USA Today, the tax threshold - the midpoint between the fifth and sixth highest-salaried clubs - will be $60,031,380. The five clubs over this threshold must pay a 35% tax on the excess: $170.875 for Texas, $586,817 for Atlanta, $971,350 for Los Angeles, $1,971,311 for the Yankees, and a whopping $4,140,339 for the sub-.500 Orioles.

Regular season TV ratings jump. Fox's Saturday afternoon ratings rose 15%, from 2.7 to 3.1; Fox Sports Network's Thursday-night ratings climbed from 0.7 to 0.9, and fX's weekly game, which moved from Monday to Saturday nights, saw an increase from 0.4 to 0.6. ESPN earned a 1.8 rating for its Sunday and Wednesday games, while TBS's Braves games averaged a 1.6 rating. LCS ratings rose, but the short, uncompetitive World Series posted its lowest ratings ever: a 14.1 average/24 share, below the previous low of 16.4/27 share set by the quake-interrupted 1989 Series.

MLB News

Alderson, Gibson hired by MLB. After 17 years in the Oakland Athletics' front office, Sandy Alderson has joined MLB as executive vice president of baseball operations. Alderson will be in charge of rules and administrative policies. Hall of Famer Bob Gibson has also been hired to consult with AL president Gene Budig on disciplinary matters. MLB also named Robert DuPuy executive vice president/ administration and chief legal officer, and Robert Manfred executive vice president of labor and human resources.

Antitrust exemption repealed for labor matters. The complete text of the "Curt Flood Act of 1998" is reprinted on pp. 3-4 of this issue. Don't drive or operate heavy machinery after reading it.

Team News

Cincinnati. Frisch's Restaurants has sold its 1/15 share of the Reds for $7 million to a group of four other limited partners - Louise Nippert, Carl Lindner, George Strike and William Reik - for $7 million. General partner Marge Schott, who is still under suspension, is reported likely to sell her general partner's shares, and most of her stake, in the near future. Hustler publisher Larry Flynt was interested, but dropped out after Ted Turner told him he'd never win approval. (No, I am not making this up: it was reported in the November 25 issue of Baseball Weekly.)

By a 65-35 margin, voters rejected a proposal which would have relocated the Reds' previously-approved new stadium from the riverfront to the Broadway Commons area. The new 45,000-seat park is scheduled for completion in 2003.

Florida. In the October 18 New York Times Magazine, Andrew Zimbalist concluded that despite a reported operating loss of $28.7 million in 1997, the Marlins actually earned $13.8 million last year. Analyzing documents used by Marlins president Don Smiley to attract prospective investors, Zimbalist estimates that Marlins' owner Wayne Huizenga attributed $38 million from luxury boxes, concessions, signage, parking, merchandise sales and naming rights to his stadium rather than his team; sold the Marlins' cable rights to another Huizenga enterprise for $2.1 million less than their market value; and paid $3 million too much for general and administrative expenses.

After months of negotiations, commodities trader John Henry agreed to buy the Marlins from Huizenga for roughly $150 million. Henry immediately began lobbying for a new $300 million, publicly-financed stadium.

Kansas City. A group headed by New York lawyer Miles Prentice, but with 75% local money, has bought the Royals for $75 million from a foundation set up by late owner Ewing Kauffmann. Prentice's group is said to include between 25 and 75 investors, including golfer Tom Watson and baseball legend Buck O'Neil.

Los Angeles. Fox's control of the club becomes complete at the end of the year, when Peter O'Malley steps down as chairman of the board.

Minnesota. Clark Griffith, whose family owned the Twins and Senators for more than 60 years, has offered $110 million for the club, but the offer was rejected by current owner Carl Pohlad. Pohlad, who bought the Twins for $38 million in 1984, is reportedly asking $140 million for the club.

Montreal. After failing to sell enough personal seat licenses to help finance a proposed baseball-only park, Claude Brochu has agreed to step down as president and general partner of the Expos, and the franchise has been put up for sale to local interests. The provincial government of Quebec, which was burned badly by the cost overruns on Olympic Stadium, refuses to contribute public funds to construction of a proposed $250 million park.

New York Yankees. George Steinbrenner is negotiating with Cablevision over the sale of a significant interest in the Yankees. Cablevision, which already owns the New York Knicks and Rangers and holds the Yankees' TV rights through the year 2000, believes that buying most of the club outright will be cheaper than the cost of renewing the TV deal. However, at press time negotiations had stalled over how much control George Steinbrenner would retain. The proposed deal values the Yankees at $500 million or more.

Oakland. As part of a move to break the club's lease at the Oakland Coliseum, Athletics owners Steve Schott and Ken Hofmann have put the team up for sale to local bidders for $135 million. City officials say that they've deliberately overpriced the team as a first step towards possibly moving it to San Jose.

San Diego. By a 60-40 margin, San Diego voters approved construction of a new baseball-only stadium for the Padres. The deal calls for the City of San Diego to contribute $275 million ($225 million from a new hotel tax and $50 million from a redevelopment agency), with San Diego Port District contributing $21 million for infrastructure improvements. The Padres will pay $115 million, including $40 million from naming rights, and have agreed to recruit at least $400 million in additional development around the park.

Toronto. In a lease dispute with SkyDome, the Blue Jays have threatened to move back to Exhibition Stadium - even though demolition of their old home had already begun. The club seeks a greater share of concession, parking and luxury box revenues. SkyDome responded by announcing its intention to file for bankruptcy.

Copyright © 1998 Doug Pappas. All rights reserved.
Originally published in the Fall 1998 issue of Outside the Lines, the SABR Business of Baseball Committee newsletter.

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