THE BUSINESS AND POLITICS OF SPORTS
It's late March and means it is the start of the Major League Baseball season. It appears the "National Pastime" enters the 2011 season in pretty good shape. The owners and players are not even talking about the end of the industry's collective bargaining agreement in December unlike the more than two year lead up to the National Football League owners lockout or the potential National Basketball Association owners lockout that could happen on July 1.
The baseball part of the sports industry does have some significant problems. The Fred Wilpon-Saul Katz owned New York Mets may be suffering from some serious financial problems. Wilpon and Katz are caught up in the Bernard Madoff financial ponzi scheme and have been trading barbs with the lawyer in charge of getting back some of the funds that the victims lost in the Madoff episode. Wilpon and Katz are fighting with Irving Picard (no relation to the fictional Arthur Picard for was auditioning for the role of Adolph Hitler in Springtime for Hitler in Mel Brooks' The Producers, Picard was the lead tenor for the Albuquerque Opera Company for two seasons) with the dialogue between the three men seemingly coming out of The Producers in some ways.
Picard wants Wilpon and Katz's money and that could be causing some major problems for the Mets. Wilpon and Katz are offering a minority share of the Mets to any interested and well heeled investor or investors.
There won't be a “Springtime for Mets Fans" this season.
Eventually the Wilpon-Katz financial situation will be resolved although baseball people are greasing the skids for a Wilpon-Katz exit. People like Frank Robinson who asserted that the Mets situation is worse than the departed Montreal Expos when he managed the club which was owned by Major League Baseball and Tim McCarver.
While Bialystock-Bloom, rather Wilpon and Katz work out their financial problems off-Broadway in Queens, the messy McCourt divorce is still impacting the Los Angeles Dodgers. There is nothing Major League Baseball Commissioner Bud Selig can do until the McCourt divorce is finalized and once that happens there will be a direction to resolve the Dodgers ownership problem.
The Mets and Dodgers problems are temporary though. There are other areas that need to be addressed and some of the difficulties are beyond the control of Bud Selig and Major League Baseball.
Oakland A's owner Lew Wolff is still looking for a new ballpark after not being able to build a "baseball park village" on land near the Oakland Coliseum. Wolff also was not successful in getting a "baseball park-village" constructed down the I-880 south of Oakland in Fremont. Wolff has been asking Selig the same question that Burt Bacharach and Hal David through Dionne Warwick thought about in 1968 (coincidentally the year Charles Finley took his A's from Kansas City to Oakland).
"Do you know the way to San Jose?"
The answer from Selig seems to be I am not sure. Selig appointed a committee to study the issue more than a year ago because the San Francisco Giants ownership claims the San Jose territory as the team's own. There are some flaws in that thinking, Oakland is closer to San Francisco than San Jose. San Jose area residents twice rejected Giants ownership in stadium referendums.
The Giants reluctance to allow Wolff to move is buttressed in part by the 1922 Supreme Court ruling that gave the National League of Baseball an antitrust exemption because baseball was a game not an interstate business.
The 1922 SCOTUS decision has kept a third team out of the New York City area and has shut out New Jersey in the running to get a Major League Baseball team. There is no way the Steinbrenner family of Wilpon and Katz would ever allow a third team in the area and it is possible the Philadelphia Phillies franchise would also object to a New Jersey team.
California is broke and it may be difficult to get state aid as Governor Jerry Brown wants to get rid of redevelopment agencies funding. That could put a crimp in Wolff's plan to find a way to San Jose.
Another west coast problem, this time the Florida west coast, is the ongoing want for Tampa Bay Rays franchise owner Stuart Sternberg's want for a new stadium, preferably in Tampa not St. Petersburg. Major League Baseball Commissioner Peter Ueberroth in the late 1980s told St. Petersburg not to build a stadium. The stadium was built anyway and MLB eventually awarded the city a team in 1995. St. Petersburg signed a 30-year lease with then Devil Rays owner Vince Naimoli starting with the 1998 season and ending in 2027. Sternberg is stuck with the lease.
St. Petersburg elected officials will not let Sternberg out of the lease, at least not at the moment.
There was a rumor around that Major League Baseball would simply contract the Tampa Bay and Oakland franchises with Sternberg taking over the Mets from Wilpon and Katz and Wolff would end up with the Dodgers franchise. The lease in St. Petersburg runs through 2027 and Wolff is committed to Oakland through 2013. The Major League Baseball Players Association will not let 50 jobs go without a fight and then there is Congress. It is unlikely Congress would leave what is left of the 1922 SCOUS ruling if MLB decides to knock off two teams.
New Jersey has a cable TV contract that is available that would blow out Tampa or the San Francisco Bay Area. Cities like Las Vegas and Portland might go after a team and San Jose is in the mix.
But the Mets, Dodgers, A's and Rays may be minor problems for Selig, the former owner of the Milwaukee Brewers, and the Barons of Baseball. Newly elected Republican governors in Wisconsin, Ohio and Florida could have a devastating impact on the bottom line with draconian cuts to public workers and ill-advised policy decisions that have chased business away from those states.
Elections have consequences and in Milwaukee, Brewers owner Mark Attanasio and NBA Bucks owner (Wisconsin Senator) Herb Kohl must be thinking about how much of a hit their businesses will take because the Republican candidate and now Wisconsin Governor elect Scott Walker didn't like a federal funded high speed train project that would have connected Madison with Milwaukee. This decision took place before Walker was Governor and before the February 14th changes in the working conditions for public employees and the explosion and backlash against Walker and Wisconsin Republicans over the ending of collective bargaining for public sector employees.
Why did Walker kill the high speed rail? It was a waste of money.
Funny Republican President Dwight D. Eisenhower during his two terms between 1953 and 1961 understood the value of infrastructure and built the highway system in the country. The Eisenhower built infrastructure is crumbling from neglect and politicians are killing infrastructure projects that are badly needed because the projects are too costly.
At least that is the reason given -- a waste of money.
Draw your own conclusions depending on what side of the aisle or if you are a member of the red or blue team.
Walker apparently isn't a big fan of mass transit based on his eight-year record as Milwaukee County Executive and called the $810 million project a waste of money. Outgoing Democratic Governor Jim Doyle ordered a stop to the project prior to leaving office which Walker approved. But here is the problem that Walker faces and here is where the Milwaukee business community should be up in arms along with voters. The end of the project will eventually cost Milwaukee construction jobs and ended the Spanish company Talgo's deal with the city to build a Wisconsin headquarters in the city in a shuttered warehouse in a depressed section of town where the trains would be assembled.
The Madison to Milwaukee or Milwaukee to Madison high speed trains would have started operating in 2013. Walker had run on a platform that would create jobs. His decision could ultimately cost Wisconsin 4,000 or so jobs and for sports teams, that means a loss of potential customers in a small market. Walker wants the money for road improvements but the feds want the rail line and the feds were willing to pick up most of the maintenance costs on the rail line.
That is not good for Attanasio's business nor is it good for Kohl's fiscally ailing franchise. Selig has said nothing.
Walker also lost another major business because of the political climate in Wisconsin.
Invenergy, a Chicago company, plan to build a large wind power project south of Green Bay went by the boards in the middle of March. Walker proposed a bill that would clamp down on wind power and that was the deal breaker. Again, Walker has chased jobs away. That is not good news for MLB or the NBA. Walker apparently has taken down the "Open for Business" sign not only in Wisconsin but globally. In Spain, one company knows Walker's state is not welcoming their business and all the publicity surrounding Walker and the state Republicans has not made a favorable impression.
In Sternberg's backyard, Governor Rick Scott nixed a high speed rail between Tampa and Orlando. Scott gave up $2.4 billion in federal funding and cost the region 30,000 jobs. The western part of the high speed rail region, near Orlando, was profiled on the CBS show "60 Minutes" and CBS reported that the child poverty level is reaching near 25 percent in that area. In this climate Scott nixed job creation and seems to be at war with teachers. He, like a lot of other political leaders, is on a crusade to cut education and reduce teaching jobs along with other public sector jobs. But there seems to be a major, major flaw in the theory. The more you lay off people, the less tax revenue you raise and you still have to take care of these people in some manner. Scott is a highly unpopular governor and has people in his party, the Republicans, irate with his high speed rail decision.
It cost Florida jobs.
These people spend money in their community, use local stores and those local stores will have less revenues coming in and there will be less taxes available to government to pay for needed services.
It's economy 101.