Is Money the Only Matter in Expansion?

In less than two weeks, major-league baseball owners will meet in Santa Monica, Calif., to decide where two National League expansion franchises should be planted for the 1993 season. Six cities remain in the running. Each has a unique appeal and sales pitch.

Denver would be the first major-league baseball city in the Rocky Mountain time zone. Orlando, Fla., is the home of Disney World and Arnold Palmer. The Jackie Gleason Show originated from Miami Beach. On and on.

These are selling points, all right. But there is a more reliable gauge with which to measure the expansion hopefuls. It is wealth, pure and green. Look for the single investor whose pockets are so deep he can spend $95 million to buy the team and an additional $25 million to buy managers, players and a farm system, and then still have a checking account balance above $100 million. When you find him, it’s likely you also have found a city where baseball is coming in 1993.

With the owners meeting less than two weeks away, the expansion grapevine is touting Denver and Miami -- cities with strong financial backing -- as clear front-runners with Tampa-St. Petersburg a close third. The same fiscal considerations seemingly have Washington’s cash-starved effort running nearly last.

In the end, the 26 owners will decide. In California, on June 13, they will hear a report of the NL Expansion Committee, whose members are three NL owners and league president Bill White. Then they will take the long-awaited vote. To be approved, an expansion city must receive votes from nine of the 12 NL owners and a majority of the 14 American League teams.

Baseball Commissioner Fay Vincent does not rank the cities seeking teams or publicly comment on their prospects. He does talk about credentials. He says money “tends to get overlooked.

“There’s a tendency to look at this as city against city or demographics against demographics,” Vincent said in his New York office recently. “Those are important, but the element that is overlooked is the quality and financial strength of ownership.”

Vincent cited the case of a large city whose population is growing rapidly and where baseball seemingly would thrive. Yet, it isn’t among the finalists for baseball expansion. The city is Phoenix.

“People say to me, ‘Gee, it’s a great city. Why isn’t it considered?’ ” Vincent said. “The answer is that there is no (investor) there of substance. I can’t arrange that.”

There are other ownership criteria, of course. In 1985, an expansion planning committee established six. The first two were “significant” ties to the community and a “long-term commitment” to keeping the team there. In one shape or another, the last four emphasized the importance of finding one, or a few, well-heeled investors.

Look closely at the cities apparently in the lead. Look at the money. See a connection? An unmistakable one?

In Miami, the riches belong to H. Wayne Huizenga. Unlike investors in the other five competing cities, Huizenga neither has a partner in his baseball venture nor apparently does he want one.

Why should he? Huizenga has the local ties -- he already is a 15 percent owner of the Miami Dolphins of the National Football League and owns half of Joe Robbie Stadium, the 4-year-old stadium where a Miami baseball team would play. He has the business acumen -- he owns Blockbuster Entertainment, the home-video chain that operates 1,800 stores.

Most important, and most evident, Huizenga has money. Only Richard DeVos, who leads Orlando’s bid and is a co-founder of Amway, is in the same fiscal bracket among private investors seeking teams. And DeVos has a problem Huizenga doesn’t. Huizenga has Florida roots. DeVos is from Michigan.

Of the 26 major-league teams, a few are owned by large numbers of smaller investors, and, at times, managed by committee. The New York Yankees, Milwaukee Brewers and Chicago White Sox are examples of teams for which ownership is spread among tens of investors. (The Yankees’ group, for instance, is composed of a principal owner, who, at the moment, is banned from baseball, a managing general partner and 17 limited partners.)

In such cases, a spokes-owner is appointed to oversee the team’s operations. Still, baseball prefers simpler arrangements, those in which a team representative can take a stand without a roll call vote of the minority owners back home.

“It’s just an awful lot easier to get decisions made,” said Douglas Danforth, chairman of the National League expansion committee. Danforth knows the pratfalls of spreading ownership authority better than most. As chairman of the Pittsburgh Pirates, who only remain in Pittsburgh because the city’s largest corporations bought the troubled team before out-of-town investors could, he has lived them.

Danforth said a simple ownership structure would give an advantage to an individual or small group seeking an expansion team. Then he qualified. “The question is how large,” Danforth said. “It is only one measure we are considering.”

Denver and Washington are going in different directions. Six months ago, Denver’s chances appeared grim. John Dikeou, owner of the city’s Class AAA baseball team, had seen his real-estate empire crumble, and suddenly was out of the picture. It was not clear how the city’s bid could be infused with new money.

In March, Denver’s hopes soared when a corporate hero entered the picture. Adolph Coors Company agreed to plow $30 million into the baseball project. As much as $15 million apparently will go to financing Denver’s new baseball-only ballpark to be named -- here is a shocker -- Coors Field. Seemingly overnight, Denver was a favorite again. It is that simple.

Washington has no Huizenga or Coors and, apparently, virtually no discernible chance. John Akridge III, a real-estate developer who is leading the city’s efforts, continues to seek investors.

Expansion hasn’t only pitted city against city. As the June meeting approaches, increasingly, the battle has become owner against owner. The prize is $190 million that the owners will be collecting in expansion franchise fees. The dispute is over how it will be divided.

Last week, Danforth, representing the NL, and Milwaukee Brewers president Bud Selig, representing the American League, met with Vincent in New York. They informed him that, after months of negotiation, they were deadlocked over how -- if at all -- to divide the expansion fees. In past expansions, only owners in the expanding league shared the money and only teams in that league provided players for an expansion draft.

Then again, an expansion team went for $7 million when the American League grew by two to 14 teams in 1977. Its owners say times have changed and with it, so should the rules about distributing wealth.

National League owners apparently were not made to feel guilty about the rate of inflation. Said Danforth of the negotiation, “Today is today, yesterday was yesterday.”

All sorts of compromises are in the air. Among them: The NL agrees to a nominal sharing of fees, but demands AL support to expand big into Florida cities -- with both teams. The AL receives a healthy cut of expansion money but lends players to the expansion pool.

The final judge will be Vincent. He met with representatives of the leagues Thursday, and has promised a decision next week. Still, he has made it clear that the owners could -- and perhaps should -- have settled this one.

“My view is simple -- the owners are best able to decide that subject,” Vincent said. “It is a matter almost purely of economics. For 26 business people not to be able to resolve a straight-forward economic issue seems to me to be too bad.”