Friday, November 7, 2008

Line in the Sand

As I outlined last May, baseball could find itself on the wrong end of a seriously righteous antitrust suit if (a) Mark Cuban wants to buy the Cubs; (b) Sam Zell wants to sell to Cuban; and (c) baseball tries to keep that from happening. Well, it seems like that's where we are now:

Throw out Sam Zell's idea of selling the Cubs by the end of the year because he still hasn't reached his goal of narrowing the field from five bidders to two. And sources close to commissioner Bud Selig sounded an alarm this week during the annual general managers meetings: Forget about Mark Cuban buying the Cubs.

Cuban, the Dallas Mavericks' owner, was the fan favorite, the guy who liked to drink beer, watch the game from the bleachers and spend money. He was the most appealing bidder to Zell's group, who knew Cuban could swing the quickest transaction for a team and ballpark that at one time figured to fetch $1 billion.

Global financial crisis or not, baseball's old guard plans to stand firm against letting Cuban into the club. ''There's no way Bud and the owners are going to let that happen,'' a Major League Baseball source said this week. ''Zero chance.''
I have no idea if Mark Cuban still even wants to buy the Cubs, but if he does, he is basically being told that he's going to have to sue to do it. Or, more to the point, he and Sam Zell are going to have to team up to do it. Given that the only court to ever consider the matter has ruled that the anti-trust exemption does not apply to the sale of teams, such a suit stands a good chance of success in my view.

Is it good business to launch a messy lawsuit that, even if successful, only gives you the right to pay a billion bucks for a low-liquidity asset in the middle of an economic downturn? Oh, hell no.

But it would be a load of fun for the rest of us, wouldn't it?

22 comments:

tadthebad said...

Oh hell yes. Please let this happen.

Anonymous said...

Would baseball's anti-trust exemption permit abused fans to sue Fox and ESPN for broadcast malpractice by the continued employment of Joe Morgan, Rick Sutcliffe, Eric Young, Fernando Vina and Tim McCarver? Just wondering.

Pete Toms said...

Wouldn't Zell be more pissed than Cuban at not being allowed to take the highest offer? As for Cuban, the link mentions there was/is hope amongst Cubs fans that Cuban would jack the payroll even higher. If I'm another owner, I don't know if I'm keen on that...we all know that with salary arb that has an inflationary impact on salaries.

Cuban's a rich guy with a blog, who wears jeans and throws temper tantrums courtside. He's not your typical blue suited, old, conservative rich guy. My point is, he's still a rich guy. Who cares about his persona?

I do give Cuban credit though for publishing some of the racist emails he received re. his player Howard ( is that his name? I'm not at all a basketball fan ). Many owners would have gone into damage control and turtled but he called out some of these a--holes.

mcb said...

Thanks for the Westlaw link, Craig. I don't read enough of THOSE everyday . . .

But, beyond the superficial, media-friendly reasons, what could be baseball's REAL reasons for keeping Cuban from buying the Cubs?

Jason @ IIATMS said...

Pete, I completely agree. But remember, Bud The Consensus Builder rules thru "partnership" with the 30 owners. He can't possibly cope with a maverick (get it, huh? OK, lame, sorry) like Cuban. Selig's already mainlining crushed Tums when dealing with Hankenstein and the last thing Selig needs is someone with Hank's obsession, but with the brains to execute on it.

Cuban would be the visionary that MLB needs to right some of the dumb stuff going on, like the stupid start times of playoff games, etc.

But again, with ConsensusMan's approach, that will never work.

Oil and water.

Pete Toms said...

@ mcb.

Craig & I have had this discussion before here but Selig might not want Cuban if in fact he is a renegade owner. I'd be surprised if Selig hasn't heard Stern's side of things. BS - before Selig - MLB's biggest problem was that the owners weren't unified. Read Lords of the Realm. AS - after Selig - they have been a unified group, thanks to Bud - read In the best interests of baseball?...Zimbalist - and presto magico! you have labor peace and record revenues!

The anti trust thing I'm not a fan of either but I do understand why Selig doesn't always accept the highest offer for a franchise. He did the same thing with the Red Sox and how did his choice of Henry & Werner turn out for everybody?

Pete Toms said...

I'm not done.

In a nutshell, the bloggers love Cuban because they perceive him as wanting to "stick it to the man".

The notion of any billionaire - even one with a blog and a goatee - "sticking it to the man" is absurd to me.

Craig Calcaterra said...

Pete -- I don't think it's about "sticking it to the man." If anything, I think people generally disapprove of many of Cuban's more over-the-top displays like running on the court like he used to do or blogging out of his rear or whatever.

I think what people like about him is that unlike just about every other owner out there, he talks about putting a winning team on the floor in the same terms as fans. There are no caveats about what is prudent in a given economic environment. There is no sense that he has any divided loyalties.

Does this actually matter? Well, probably not. As many have noted, there are plenty of ownership groups that have brought winners home, and fans appreciate that.

In many ways, however, it's a political/disposition thing more than anything else, and it is important to many fans that the owner seem to be "with them" as it were. Cubs fans are particularly in need of this after years of indifferent ownership by the Tribune, and the current status as a mere chit in Sam Zell's overall business strategy.

Mark Cuban may or may not be a good owner, but he is someone who would allow Cubs fans who live and die with their team to believe they are not doing it alone.

mooseinohio said...

Lots of ways to go with this discussion and I am certainly not a fan of the Anti-Trust exemption and while not a Selig basher certainly see why others are. However given the evidence we have regarding how Selig basically handpicks ownership groups under the watchful eye of a few key advisors (e.g. Reinsdorf) - would George Steinbrenner have passed muster with this method?

I see some real parallels between the NBA Cuban and Steinbrenner and while as a lifelong Red Sox I have been conditioned to dislike all things Yankees (winking as I type) I have to admit that overall George was good for baseball. He was a maverick at times, a big pain in the behind at times but also did many things to lift not only the Yankees but all of baseball up, even if by just being the bad guy everyone wanted to defeat.

Could Cuban have a similar effect in MLB as he has in the NBA no one know? However I think he should be afforded a legitimate opportunity to show what he could do.

Jason @ IIATMS said...

@ Pete:

Agreed 100%; Lords Of The Realm should be mandatory reading.

To anyone who hasn't yet read this, go get a copy now. Book reports are due a week from next Friday. No shadowboxes, please.

tadthebad said...

Pete, when it was all said and done, didn't Henry/Werner have the largest bid anyways? I know they bought out the other minority partners, not just the trust. Not contradicting your statement that Selig directed the purchase, just wondering if there was any effect on the bottom line of the sale.

Pete Toms said...

@tadthebad; I've always thought that but no I'm not 100% certain. Anybody else? Is Maury out there? One of the reasons I think that is I recall reading that the Massachusetts Attorney General - or somethin like that - reviewed the sale and concluded it was scummy but the anti trust exemption made it allowable? If I root around I can find the quote.

tadthebad said...

Yes, I recall something about the MA AG reporting that because the money would be going into a trust or a charity or something, that only the top dollar bid could be accepted for sale under MGL? To the many, MANY attorneys who comment at Shyster, does this sound correct?

Craig Calcaterra said...

My fuzzy memory of all of that seems to recall that that was the issue, tad. I don't think it went anywhere.

More generally speaking, the antitrust stuff never came up there -- and has never come up anywhere else outside of the Giants sale in 1992 -- because the seller was always willing to follow MLB's direction on who would be and who wouldn't be acceptable. I mean, it's a free country, and if an owner wants to take less than top dollar he can.

The real test comes when Zell or someone in is place is being told that he can't sell to the person he wants to.

mkd said...

The reason I like Cuban is because he took an absolute joke of a franchise (Dallas Mavs) and turned them into perennial contenders. I think he should bag the Cubs deal and go buy the Royals or the Pirates or the Reds. If Mark Cuban is going to become and MLB owner, that's where we need him to be- not overseeing the already bloated Cubbies.

mooseinohio said...

To mkd - From my understanding of the 'No Cuban' stance is that it is not just his desire to own the Cubs specifically but to to be an owner in MLB. If my understanding is correct than it applies to the Royal, Pirates or any other team. Basically the other kids don't want him in their sandbox.

Pete Toms said...

Can't find the MAG quote ( if in fact that is what I read, admittedly I am a pothead - 2 words? ) but this is a quote from Zimbalist's "In the Best Interests of Baseball?, The Revolutionary reign of Bud Selig":

" Ultimately, the Sox, Fenway Park, and 80 percent ownership of the New England Sports Network (NESN) were sold to the Henry/Werner/Lucchino group for $700 million, plus $30 million of contributions to Yawkey Trust charities. A rival bid from Cablevision's Charles Dolan was at least as high as the Henry/Werner/Lucchino offer, but there were various questions about Dolan. One concern was a possible conflict of interest since Dolan's brother and a family trust owned the Cleveland Indians. Dolan had no experience in the baseball industry and the internal operation of Cablevision were also areas of concern.".....yada, yada.

So did the Red Sox sell to the highest bidder? Did this spare MLB the future embarrassment of James Dolan? If so, hooray for Bud!

Jason @ IIATMS said...

@ Pete,

I work for the Dolans....shhhhh. My little secret.

And for me, too bad JD didn't end up lord of beantown. 2004 never would have happened. or 2007. Or that movie with whatshisname and drew whatsherface. Or the ascent of Bill Simmons. or pink baseball hats.

Pete Toms said...

@ Jason - how's that MSG lawsuit against the NHL goin? If they / you? win ( which I read is unlikely ), that is gonna be a really, really big deal in pro sports.

Jason @ IIATMS said...

@ Pete:

Not to totally threadjack this board, but:

1) I don't discuss any issues relating to my employer or any of the business in which we operate. I do not discuss any teams that we own on my blog, either. Just a "church and state" thing with me. In fact, most of my colleagues don't even know that I have a blog.

Although, it's funny to see the teams, management, players, etc all on the company intranet/directory. Like I am going to email Isiah!

2) I have no idea, to answer your question, even in light of #1. That's a different division and my visibility is no greater than yours.

Pete Toms said...

@ Jason, ok fair enough. Uh, does that mean that if I'm ever in NYC again, no free concert tickets? Just kidding, there won't be any more MSG questions.

RoyceTheBaseballHack said...

I'm a DFW resident who's seen Cuban's efforts fist-hand for years. The guy is a lunatic. Smart, energetic, sincere and very rich, but still a lunatic. I'll add wildly ambitious.
I like MKD's observation best; forget the Cubs and go after The Pirates, Reds or even the Royals. The Royals, in particular, would be a fantastic match. While I think he would certainly contribute to The Cubs, I see that franchise in the same light as the Dodgers and Cardinals. The fan base is there and supportive. Anyone who owns them will likely do well in spite of themselves. If Cuban really wanted to leave an impression and a legacy of his ability, he would refocus his high-powered laser beam of Crazy Rich on a small/mid-sized market team, inject them with his cash and brand of character and see what happens. One of those teams vaulted into serious contention year after year would do more for baseball than having just another super rich dude owning just another major market team.
But I just realized I hate Cuban's guts. I'm laying here on a cool, sunny weekend morning, researching old investment articles and attendance stats, to leverage another opinion of the guy, when I should be out on my Harley.
Gotta go.