Why John Henry and Tom Werner Won the Sox
Two days after the end of the most exciting World Series in
years, Commissioner Bud Selig destroyed all the goodwill the
Series had produced by announcing that two of MLB's thirty
teams wouldn't live to see the 2002 season. Contraction
didn't happen, but the new owners of the Red Sox owe their
purchase to Selig's scheme.
When contraction was first proposed, a major obstacle was the
shortage of owners willing to get out of baseball. Disney would
sell the Angels, but only to someone who would keep the club in
Anaheim. Montreal was the most obvious target, but owner Jeffrey
Loria was determined to operate a baseball team. So was John
Henry in Florida. No one would miss the Tampa Bay Devil Rays, but
they were locked into a long-term lease and played in a state
whose courts were already hostile to MLB's antitrust
Then Carl Pohlad came to Selig's rescue. Pohlad, MLB's
wealthiest non-corporate owner, was frustrated that the taxpayers
of Minnesota wouldn't build him a new stadium. If Selig
needed another team to contract, he could have the Twins –
for a sizable premium over their market value, of course.
But three problems remained. The Twins had to break their stadium
lease, Jeffrey Loria needed another team, and the Players'
Association had to be steamrollered into allowing MLB to
eliminate teams. Only one of those three problems could be
solved...and that solution involved rigging the sale of the Red
The group which ultimately won the Sox was originally headed by
Les Otten and TV producer Tom Werner. Werner used to own the San
Diego Padres...like Harry Frazee used to own the Red Sox. In the
four years after Werner bought the club, Padres' attendance
fell 30%. The last straw came in 1993, when Werner slashed the
club's payroll more than 50% in midseason by trading Gary
Sheffield, Fred McGriff and almost every other veteran not named
By late November Werner's bid had been joined by The New
York Times Company, which wanted NESN more than the Sox, and by
former Senator George Mitchell. Mitchell, a prominent candidate
for Commissioner before Selig staked his lifetime claim to the
job, had served on the "Blue Ribbon Economic Panel"
which lamented how the dominance of large-market teams was
ruining competitive balance. Red Sox fans can be forgiven a
bitter chuckle at that thought.
But Mitchell didn't bring enough money to the table. With
other bidders including Charles Dolan of Cablevision and
syndicates headed by Miles Prentice and Joseph O'Donnell, and
John Harrington obligated to sell control of the Sox to the
highest bidder, Werner and Otten needed more support.
It was time for Commissioner Selig's game of musical
franchises. Enter Florida Marlins owner John Henry.
When Henry bought the Marlins in 1998, he inherited the terrible
stadium lease former owner Wayne Huizenga had
"negotiated" with himself for the Marlins. Henry vowed
to build a new park with his own money if necessary...but within
a year or two he was saying, "Well, I'll use my own
funds if I must, but if I do there won't be any money left to
sign players, so can't the taxpayers spare a few hundred
million?" Keep listening for the first notes of that tune
drifting over the Common.
Behind the scenes, Selig arranged a three-way franchise swap.
Henry would swap the Marlins for the Red Sox; Jeffrey Loria would
swap the Expos for the Marlins; and MLB itself would buy and
operate the Expos until the club could be contracted or re-sold
at a huge profit to Washington, D.C. interests. The scheme still
hinged on Henry's group winning the auction for the Red
Sox...but with Selig's buddy John Harrington handling the
sale, that was easily arranged.
Attorney General Thomas Reilly minced no words in describing
what happened. "Major League Baseball was calling the shots
here." he declared after a meeting with Harrington.
"This was a bag job," he proclaimed after another week
of meetings. "It's very clear from this process there
were no rules. The rules were changed hour by hour, bidder by
Harrington held the auction open until the Henry/Werner group
had matched the best offer then on the table, then declared it
over, refusing to consider bids of $90 million more from Dolan
and the Prentice group. Harrington, who by law was required to
obtain the best price for the Yawkey Trust, justified his
decision by explaining that the Henry/Werner group had the best
chance of winning approval from the other owners.
It was a simple but effective scheme. Just decide in advance who
was to win the auction, then rush the Designated Winners through
MLB's approval process and use their head start as an excuse
to reject clearly superior bids. To placate Attorney General
Reilly, Harrington and the Henry/Werner group agreed to give the
Yawkey Trust another $30 million -- a small price to pay for
subverting the auction process and keeping the Sox in hands
friendly to Selig.
But what's good for Selig is by no means good for the Sox or
their followers. If the revenue sharing formula and luxury tax
contained in the owners' current labor proposal had been in
effect last year, they would have cost the Sox more than $35
million. That's the difference between having the money for a
new stadium and being unable to afford more than a new paint job
for Fenway. Is this what New England has to look forward to in
the Henry/Werner era?
The battle for the Red Sox raises another issue: why anyone
would pay $700 million for a franchise which, according to MLB,
lost $13,675,000 last year. Next month I'll discuss MLB's
Copyright © 2002 Doug Pappas. All rights
Originally published in the April 2002 issue of Boston
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