Editor’s note: With the sale of the Red Sox late December 21, events have overtaken our editorial, which was published the same day the deal was announced. While we regret there is no local ownership of the Sox -- one of the main points made below --our observations about public financing of a new baseball stadium still hold true. For a quick take on current events, see "Today's Jolt."
AS WE GO to press, John Harrington is preparing to meet with the limited partners of the Red Sox on Thursday, December 20, to discuss bids made for purchase of the team. The limited partners control 47 percent of the team. Harrington needs to secure eight of their votes — in addition to the four he already controls — to gain a majority of ownership votes (there are 23 in all) to approve the team’s sale. Up for grabs are the controlling interest of the Yawkey Trust, the shares of the limited partners (most of whom have quietly signaled their willingness to sell), 80 percent of the New England Sports Network cable channel, and Fenway Park. As the stakes have risen (with the inclusion of many, if not all the limited partners’ shares), so has the price tag. In short, the sale of the Boston Red Sox and its collateral assets is going to be the most expensive transaction in Major League Baseball history. The sale may very well top $700 million.
If we were in a position to pick the new owners, irrespective of the details of the various bids, we’d choose the truly local group among the four still vying to become the new Sox owners: Joe O’Donnell and Steve Karp. Like most of the other bidders, they bring impressive business skills to the table; unlike the rest, however, they also bring a genuine commitment to Boston and baseball (especially O’Donnell, a former Harvard varsity player). Even more important, in our view, is that this is the only group with a passion for making the Sox into something they haven’t been in a long time: winners on the field. The "passion" factor, though, won’t be factored into the winning bid. And that’s because, despite what fans would like to believe, this transfer of ownership is not about anything other than money — and very big money indeed.
In the 14 months since John Harrington announced he was putting the team up for sale — after he was unable to secure traditional financing for the forced takeover of the Fenway neighborhood for a new ball park divined, blessed, and financially backed by Mayor Menino — the sale process has been cloaked in mystery. With the exception of a few hand-fed leaks to the media, the public has been kept in the dark about the details of the proceedings. (Indeed, the Boston Globe’s Meg Vaillancourt reported Tuesday that as the limited partners head into their Thursday meeting with Harrington, even they haven’t been given details about the bids.) Soon — perhaps sooner than we think — the new owners will be announced and the details of the deal will come to light.
Three things have always been clear, however. The first is that this transaction has little to do with baseball. Indeed, the opportunity to purchase 80 percent of the NESN media outlet is what brought several of the bidders to the table. It seems to be the motivating factor in Cablevision’s Chuck Dolan’s interest in the team. Adding NESN to Dolan’s New York–based MSG sports network will give him a television sports network that stretches from New England to the Mid Atlantic and put him in a much stronger position to sell national advertising. (Dolan also owns a share of Fox Sports Net, but doesn’t control the network.)
NESN is also what lured the New York Times Company into joining the Tom Werner–John Henry group. So tantalizing an economic prospect is NESN that the New York Times Company set aside concerns that its ownership of both the Boston Red Sox and the Boston Globe would create, at minimum, a chilling effect on the Globe’s coverage of the Sox and the business of baseball. At maximum, such dual ownership could give rise to an outright conflict of interest. (A conflict of interest evident on day one when the Times and the Globe were the only two papers to receive confirmation that the Times Company had joined the Werner-Henry bid. The Boston Herald was kept out of the loop.) Meanwhile, a private-investment fund known as Quadrangle, made up of extremely wealthy media investors, joined baseball-loving New York lawyer Miles Prentice’s bid for the team after failing to persuade Harrington to sell NESN separately. If this isn’t enough to convince the most rosy-eyed fan that the sale of the Sox is about big business, nothing will.
Regardless, the second clear thing about this deal is that it’s only the public who will come out on the wrong end of it. As Neil deMause, co-author of Field of Schemes: How the Great Stadium Swindle Turns Public Money into Private Profit (Common Courage Press, 1998), told the Phoenix last week: "Nobody buys a sports franchise for $700 million unless they’re going to try and make a whole lot of money from somewhere. When you see that kind of money being thrown around, it’s never good, because they’re going to have to get it back from somebody. That person is you, whether you’re a fan, a cable viewer, or a taxpayer."
Which brings us to the question of where the Red Sox will play. Only two of the bidding groups have addressed the explosive issue of building and siting a new park: the Werner-Henry group says it wants to renovate and expand Fenway Park on its existing footprint. And the Karp-O’Donnell group says it might like to build a new park on the waterfront near Pier 4 on land Karp already owns. In the Phoenix’s view, South Boston is the best place to build a new park, and political opposition to the notion has softened to the point where South Boston pols like City Councilors Jimmy Kelly and Michael Flaherty have given the prospect their blessings. (The current Menino-Harrington plan to build a new park in the Fenway neighborhood would displace the offices of the Phoenix; to read our past coverage on the issue, visit www.bostonphoenix.com/pages/fenway.htm). That said, they’re open specifically to the idea of building a park on land currently owned by Frank McCourt, who recently dropped out of the bidding process. It might be interesting to see McCourt team up with Karp and O’Donnell to beef up local connections and strengthen the prospects of eventually building a new park on the waterfront.
The last clear thing about the pending sale of the Sox is that the folks bidding for the team do not need corporate welfare. If you can afford $700 million for the privilege of paying Manny "I don’t like the clubhouse" Ramirez $100,000 a game, then you don’t need $300 million in public subsidies to build a new park. Whether or not Menino and House Speaker Tom Finneran see it that way, however, is another matter altogether.
By the time you read this, the new owners of the Boston Red Sox may have been announced. Then again, it could take much longer to settle the sale. We don’t need to know the identity of the new owners, however, to know that baseball in the year 2001 is about money rather than the game.
What do you think? Send an e-mail to letters[a]phx.com