April 1999 Boston Baseball: part 1 of John Harrington series

The Emperor Has No Clothes, part 1

Throughout the 1999 season, Boston Baseball will examine the career of controversial Red Sox CEO John Harrington.

How did an accountant who has never invested a dime of his own money in the Sox become the absolute boss of New England’s most storied sports franchise? And what are the implications of Harrington’s unaccountable authority for the Sox, their fans, Fenway Park, and Major League Baseball?

John Harrington’s involvement with Major League Baseball began almost thirty years ago. In 1970 AL president Joe Cronin hired Harrington, then a 33-year-old accounting professor at Boston College, as controller of the American League. From the AL offices at 520 Boylston Street, Harrington came into regular contact with league vice president Tom Yawkey.

Cronin retired after the 1973 season. When his successor, Lee MacPhail, moved the AL offices to New York, Yawkey hired Harrington as treasurer of the Red Sox.

But Yawkey, sole owner of the Red Sox since 1933, had less than three years to live. Yawkey died of cancer on July 9, 1976, survived by his 67-year-old widow Jean. With no children to inherit the club, Yawkey left the Red Sox to the Yawkey Trust, a charity controlled by Jean Yawkey and two other trustees. New England braced for the inevitable sale of the Sox.

The Yawkey Trust put the Sox up for bids in 1977, only to reject the high bidder in favor of a suspiciously one-sided inside deal. Although A-T-O, Inc., the parent company of Rawlings Sporting Goods, offered $18,750,000 for the Sox, the trust instead sold the club at a 20% discount to a syndicate headed by Haywood Sullivan, and Edward (Buddy) LeRoux.

Sullivan, a former major league catcher, had spent the past 12 years in the Sox front office. LeRoux, who had served as Red Sox trainer from 1966-74, was a businessman with Florida real estate holdings. Neither had the wealth normally associated with ownership of a major league club, and their bid was far below A-T-O’s. A-T-O sued the Yawkey Trust to invalidate the proposed sale, arguing that the trust had an obligation to generate as much money as possible for itself from the sale of the Sox.

While the suit was pending, Sullivan and LeRoux quickly consolidated their authority. On October 24, 1977, Sullivan became Sox GM and LeRoux became Vice President for Administration. Former GM Dick O’Connell, who had worked for the Sox since 1946, was abruptly discharged. Although O’Connell had long been close to Tom Yawkey, Jean Yawkey said that her husband had decided to fire O’Connell when, less than a month before Yawkey’s death, O’Connell had tried to purchase Joe Rudi and Rollie Fingers from the Oakland Athletics for $1 million each.

The prospective new owners would face no such temptation, because they were woefully undercapitalized. Sullivan and LeRoux, the managing general partners, controlled the club despite investing only $200,000 each. Jean Yawkey contributed another $3 million, while the others in the syndicate borrowed $8 million from State Street Bank & Trust to finance most of their purchase. In return, the bank demanded and received security for the loan: a clause in the loan agreement which limited how much the Sox could spend on player salaries, player development, and free agents.

If the sale had gone through, the State Street security clause would have crippled the Sox during an era when free agency sent salaries soaring. (The Red Sox payroll rose from $1.9 million in 1977 to $14.7 million in 1986.) But the American League rejected the deal. Bud Selig, then chairman of the AL’s finance committee, explained: “This isn’t Cleveland, it’s Boston, the flagship of the American League. This is the most important franchise in the American League, and we can’t afford to let it be underfinanced or second-rate.”

Sullivan and LeRoux finally won American League approval to buy the Sox in May, 1978, after restructuring their ownership group to eliminate the State Street loan. The new group consisted of three general partners – Jean Yawkey, Haywood Sullivan and Buddy LeRoux – and thirty limited partnership shares.

Jean Yawkey was the key to the deal. Through her J.R.Y. Corporation, the Red Sox matriarch bought one of the three general partnership shares for $1 million. She also bought a limited partnership share for $500,000; gave the partnership the land under Fenway Park, valued at $5.5 million; and loaned Haywood Sullivan $1 million to buy his share. Buddy LeRoux bought the third general partnership share, as well as four limited partnership shares. Kentucky coal magnate Rogers Badgett invested $5 million in ten limited partnership shares, with the remaining 15 divided among six purchasers. The new deal was valued at $18 million, with nearly half the total -- and all of the increase – coming from Jean Yawkey’s pocket.

Amid the chaos, Harrington left the Red Sox to work for an insurance company. When Edward F. King was elected Governor, Harrington joined the state Office of Administration and Finance, while continuing to consult for the Sox. Having saved the Sox for her “baseball people,” Jean Yawkey returned to the background, content to allow Sullivan to handle baseball operations while LeRoux controlled the club’s business affairs.

Sullivan and LeRoux muddled through until late 1980, when an administrative gaffe cost the Sox the heart of their team. Under the major league rules, clubs were required to mail 1981 contracts to all players they wished to retain by December 20, 1980. The Sox failed to send contracts to Fred Lynn and Carlton Fisk until December 22, two days after the deadline.

Lynn and Fisk filed grievances. They demanded immediate free agency, arguing that by failing to follow the rules, Boston had waived its right to reserve them for 1981. Sullivan lamely responded that the delay had been tactical: the Sox wanted to sign both players to long-term deals, but since they were one year from free agency, he feared that tendering them one-year contracts might induce them to accept salary arbitration, then leave after 1981.

Instead they left at once. While his grievance was pending, Boston traded Lynn and Steve Renko, to California for the aging Joe Rudi, who hit .182 as a DH for the Sox in 1981; Frank Tanana, who posted a 4-10 record; and Jim Dorsey, who wouldn’t return to the majors until 1984. Lynn signed a four-year contract with the Angels for more than $1 million per year. Fisk won his grievance on February 12, rejected a four-year, $1.7 million offer from Boston, then signed with the White Sox for five years and $2.9 million.

After this fiasco, Jean Yawkey sent an S.O.S. to Harrington. In January 1981 Harrington resigned from his state job to return to the Red Sox front office – and to become executor of Tom Yawkey’s estate, with all the power and prestige that job entailed. Mrs. Yawkey also promised to will Harrington her limited partnership interest in the Sox, which is now worth at least $5 million.

Peter Gammons proclaimed in the January 18, 1981 Boston Globe: “Bringing back one of the finest minds in the game back into the organization is news that should cause Red Sox fans to rejoice a lot more than signing some free agent.”

What would Gammons have said had he known that in 1999, seven years after Jean Yawkey’s death, Harrington would still control the Sox through her estate?

Coming next issue: How Jean Yawkey regained control of the Sox – and Harrington inherited it upon her death.

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