Thursday, June 2, 2011
A Fair Process to Becoming an Owner?
"Somebody's property being seized was un-American. There are core values in this country and fairness is one of them. I think everyone deserves a second chance." — Los Angeles Dodgers owner Frank McCourt (April 2011)
Is Major League Baseball still as American as apple pie? It largely depends upon its commissioner's preferences at the time, who serves at the behest of MLB's 30 team owners.
The question needs to be asked as to whether presiding Commissioner of MLB Bud Selig makes major decisions such as team ownership based upon sound business acumen or subjective reasoning influenced by his personal relationships, such as with specific MLB team owners or individuals who potentially could become owners.
Never have there been four MLB baseball franchises up for sale or takeover within one calendar year, with MLB taking over operations of two of the four so far.
The Texas Rangers, sold in August 2010 to Chuck Greenberg and Nolan Ryan — its minority owner and president — was taken over for a brief time by MLB prior to the Rangers' auction on August 4th. Selig took on former Rangers owner Tom Hicks via the U.S. Bankruptcy Court, took on his major creditors, and made it nearly impossible for any other bid to come to fruition except that of Greenberg's and Ryan's.
Then we have the New York Mets, which I discussed in an April 2011 piece titled, "Eyes Wide Shut," posing the question of whether or not Bud Selig was going out of his way to protect Mets' owners Fred Wilpon and Saul Katz from the same scrutiny he has bestowed upon Los Angeles Dodgers owner Frank McCourt.
Unfortunately, the Dodgers are about $500 million in debt, with the Mets debt topping $600 million and simultaneously being sued by the U.S. Bankruptcy Court for $1 billion.
Yet Selig went out of his way to have MLB takeover day-to-day operations of the Dodgers in April 2011, while he vehemently defends his friend Fred Wilpon. At the very least, both the Dodgers and the Mets have been mismanaged and personal allegiances should be taken off of the table at this juncture.
McCourt's problems center on his divorce from wife, Jamie McCourt, and a potential settlement. Otherwise, it will be up to a judge to make the determination of splitting ownership of the Dodgers down the middle between the McCourt's, resulting in an eventual sale of the team. Neither McCourt will have the working capital to continue ownership.
But Bud Selig would not let the process play itself out, nor allow Frank McCourt to transact a deal with Fox Broadcasting, which McCourt maintains would save the Dodgers for him and to help make the organization once again whole.
Working in Wilpon's favor is Selig's full support of his ownership in spite of the legal mess hovering over him by trustee Irving Picard. Picard is liquidating Madoff's firm on behalf of Madoff's clients, damaged by his thievery and fraud.
The Wilpon's now want the U.S. Bankruptcy Court and Picard off of their backs and have motioned to have the case moved to U.S. District Court. But the question remains as to whether Wilpon was complicit in his rotten investments with Madoff, his good friend of 30 years. But no matter for Selig, who remains true.
Lastly, we have the Houston Astros, who have sadly now turned into a veritable laughing stock of a team, six years removed from their last appearance in the 2005 World Series.
Enter one more billionaire, Jim Crane, founder and previous owner of Eagle Global Logistics (EGL) and now Chairman of Crane Global Logistics, in Houston, TX, both freight forwarding operations.
Astros' owner Drayton McClane has chosen Jim Crane to sell the Astros to, pending 30 MLB team owners' approval. For a cool $680 million, Crane will have succeeded on his third try to become a MLB team owner, having lost out on possible acquisitions of both the Chicago Cubs and the Texas Rangers. But this time, Selig will grant Crane his seal of approval.
Not only did Jim Crane have the initial highest bid for the purchase of the Texas Rangers in 2010, by some $15 million, but because his bid was denied by MLB, he then teamed up at the August 4, 2010 auction with Dallas Mavericks owner Mark Cuban to hopefully prevail over Greenberg and Ryan.
But for Selig, who had been quoted as saying that Crane was "unapprovable" as a MLB owner, the game was won by Greenberg and Ryan, although a bankruptcy judge had not yet held the auction,. In the end, Crane and Cuban lost out when Greenberg raised his bid to $593 million at the auction and prevailed.
Many have asked why Bud Selig would less than a year later now approve of Jim Crane? Selig met with him earlier in May 2011 and sources have said it's a green light for the owners since Selig has changed his mind on Crane. Was Crane denied the Rangers because Selig was so pro Greenberg/Ryan or so anti-Crane/Cuban? Or did he simply not approve of Crane?
And again, what is the criterion that the Commissioner of MLB uses in discerning who gets to stay and who goes with all things being equal?
Important to note in this supposed vetting process that leads to MLB team ownership is that in the year 2000, Jim Crane's EGL had 2,073 of its employees file charges with the U.S. Equal Employment Opportunity Commission (EEOC) for:
"Asserting failure to and/or refusal to recruit, hire or promote African-Americans, Hispanics and female employees; demoting female employees from managerial positions; imposing disparate discipline to African-Americans, Hispanics and female employees; maintaining a hostile work environment ; failing to adequately investigate incidents of sexual and gender harassment; paying African-Americans, Hispanics and female employees less than Caucasian and/or male employees for performing similar or comparable work; discriminating against older female and older African-American employees and applicants for employment; failure to maintain proper records regarding applicants for employment."
All of the above Jim Crane denied, and entered into a voluntary settlement with the EEOC to the tune of $9,000,000 in 2001. In 2005, the U.S. District Court returned $6 million back to EGL, as out of the 2,073 claims, upon further review, it was determined that only 203 merited back-pay, which was largely the basis for the original $9 million assessed fine.
Since Jim Crane was not exonerated of wrong doing, but reached a settlement and was refunded part of that settlement, why choose him to run a MLB franchise, when Bud Selig is supposedly sensitive to maintaining good race relations? That is another million dollar question.
And given MLB's not so glowing record on promoting minorities and women both on and off the field of play, should not Selig stay away from another fire he might later have to put out?
Richard Lapchick's Center for Diversity and Ethics at the University of Central Florida, notes in his 2011 report card for MLB that there are only six major league managers of African-American or Latino heritage, no African-Americans are chief executives or presidents of any teams with one exception being Pam Gardner, president of business operations in the Astros organization under owner Drayton McClane. African-American and Latino general managers of MLB teams total four.
But Lapchick insists that "Bud Selig has helped make MLB's central and team front offices look more like America."
And since it was announced that Crane was selected as the purported next owner of the Houston Astros, it prompted the Houston Chapter of the NAACP to make the following statement prior to a meeting with him earlier in May 2011: "We are deeply concerned that someone that has a broad reach throughout the community and across the country regarding employment has such a dismal record in the area of discrimination. As such, this is someone that should be monitored very closely in the area of employment discrimination as it relates to minorities and women."
Since that statement, President-elect of the Houston Chapter, Dr. D.Z. Cofield, is pleased with Jim Crane's offering to disclose to the Chapter the contents and documents of his EEOC case.
So finally, does the selection process for ownership by the Commissioner of MLB and its owners necessarily need to be made more transparent to those outside the organization of MLB?
After all, MLB enjoys exemption from more U.S. anti-trust laws than any other professional sports leagues in the U.S., it gets subsidization from taxpayers throughout the country for its stadiums, infrastructure, and leases, MLB benefits from all cable TV subscribers' contracts whether or not they ever tune into a MLB game, gains billions of dollars in revenue from television and radio broadcasts through FCC-licensed airwaves, and remains exempt from opening their books to any other entity including the Major League Baseball Players Association.
We, as not only fans, but as taxpayers and consumers, deserve a bit more disclosure and should require further scrutiny from MLB and its office of Commissioner in ownership matters impacting municipalities throughout U.S. MLB is hardly a "private" corporation as many in the sports industry and news media foolishly suggest.
Bud Selig has a lot on his plate, right now, all right. And what he is serving up this time certainly does not include apple pie.