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February 1, 2012
There are plenty of old bits in Cleveland sports. How could the NFL not force the financially strapped Art Modell to sell, or what if LeBron hadn’t been coddled the way he was, or why didn’t Sandy Alomar go out to the mound and yell at Jose Mesa when he was shaking him off in game seven of the ’97 World Series, or Joel Skinner’s stop sign starting the chain of events which began the unraveling of the ’07 ALCS. But perhaps the oldest of bits and one that was brought back to the forefront last week was a classic; say it with me:
“The Dolans need to sell the Indians.”
I have long been a defender of their ownership in our market, with the emphasis on the “in our market” portion of that sentence. Let’s get the facts out of the way:
• They were rooked by Dick Jacobs when they bought the team, purchasing the Indians at the absolute peak of their value. Larry Dolan and his son Paul, who is President of the team, had stars in their eyes. They were/are big Indians fans and allowed that to supercede fiscal responsibility.
• The Larry Dolan portion of the Cablevision family is a lawyer by trade. He is also not a BILLIONAIRE. He is a MILLIONAIRE. There is a huge distinction here when you are talking about baseball ownership.
• Even if they decide to sell the team at some point, they will never receive equal value for what they paid in 2000, a whopping $323 Million. In fact, they will be lucky to get back what they paid. Plus, as we know 2012 $323 isn’t 2000 $323 million. Think about this, Dick Jacobs paid $40 million for the Indians and sold for $323. In return for their investment, the Dolans have two playoff appearances while becoming city-wide whipping boys .
These facts have been there since the day they bought the team and weren’t ever going to go away. With that said, the 2007 version of the Tribe and recent versions of the Tampa Bay Rays and Arizona Diamondbacks showed that you indeed can compete for a playoff spot in a small market, but that you must rely on player development, scouting, and getting production out of your young, home grown talent. However, the margin for error in our market is so small.
Again, I’m not telling you anything you don’t already know.
With the Detroit Tigers owner and 83-year old pizza tycoon Mike Illitch spreading money around like it’s mozzarella cheese on a $5 Hot and Ready special, the Dolan’s once again have come under fire for being, well, themselves. While the Tigers replace injured DH Victor Martinez with Prince Fielder because their owner desperately wants to win a World Series before he dies, Indians fans all over the country are calling once again for the Dolans to get out of the game. They are bringing knives to a gun fight. Illitch is bringing several fully loaded bazookas.
The one thing the Indians and the Dolans in particular could always lean on, was the fact that they never had one of the free-spending teams, willing to throw money at any problem, in their division. Except they do, and they have. The White Sox and Tigers have been over the $100 million mark in recent years, and the Twins did as well when they opened their new stadium in 2009. The AL Central has always been winnable and one of the greatest moves Dick Jacobs ever made. While they can still win the division, the hill has gotten steeper, and the Dolans no longer have that crutch.
I’ve been in some recent Twitter arguments that the Randy Lerner ownership has actually been better
than the Dolan family ownership. As far as I’m concerned, this is like deciding who is the best looking Omega Moo. In a perfect world, we’d love to pull a franchise switch. Give me Mark Shapiro and the Dolan family, working under strict salary cap rules, owning and running the Browns, while Tony Grossi’s favorite “absentee billionaire” could use his considerable bankroll to spend money towards the Tribe. Obviously, the greatest move of them all would be to have Dan Gilbert owning the Indians.
Having an owner like Illitch of the Tigers, Mark Cuban of the Dallas Mavericks, or Gilbert for that matter, who have billions of dollars and use their franchise ownership as more of a “toy” rather than a prime source of revenue, is the way to fly in pro sports, especially in baseball where there is no salary cap. Unfortunately for the Dolans, they cannot afford to be taking a financial loss year in and year out. There are real budget constraints for them.
Here is the thing; I have no doubt that they want to win and they love this organization. They are Clevelanders. They get it. But the issue that will never go away is the fact that they will never have the jack that Mike Illitch has. The Detroit market is not exactly a bustling one either. But the old man wants a World Series title before he dies and has put his own money where his mouth is.
And he did it at the worst possible time for the Tribe owners.
(photo via chuck crow/PD)
66 Comments
Of course they got fleeced, of course he doesn’t have the money to compete, of course they’ve diminished the value of the franchise by running it into the ground. All of these are reasons why they need to get out now. I don’t see how fans clamoring for the Dolan’s to get out is in any way unjust. They clearly can’t afford it, and if things continue as they are, things will only get worse.
Clubs with billionaire owners can lose just as easily as we can, but winning comes exponentially easier with the right FO people. That, you cannot say here. The MLB is an unfair system but such is the nature of the beast.
If Dolan was willing the sell the team, half the battle would be won.
Of course, the other half of that battle is finding a billionaire owner who actually wants to purchase the Cleveland Indians of all teams. Would a billionaire really want to buy a small-medium market baseball team in a town where football is king? He would have to be a HUGE baseball fan and most likely, an Indians fan. Buying the Cubs or Dodgers is one thing, those teams are profitable even when they lose. For the Indians it would have to be a guy like Ilitch who is willing and able to lose money in order to win. Easier said than done.
I do agree that Lerner would be a better owner of the Indians than the Browns. Lerner would stay out of the way, let Shapiro and Antonetti run things, and throw money around whenever the fans got upset. 200 million for Prince Fielder? Sure, whatever gets the fans off my back so I can get back to my soccer club.
And with all due respect, spare me the talk about Gilbert. He bought the Cavs because of LeBron James, because like the rest of us, he foolishly assumed that LeBron would stick around and we would have a dynasty on our hands. Attendance is already down at the Q, we’ll see how good of an owner Gilbert is if the team is mediocre and the arena is half empty like it was in the mid to late 90’s. He deficit spent trying to win and trying to appease the Chosen One, would he deficit spend if the team was mediocre and ranked near the bottom in attendance? Fat chance, I doubt Gilbert would run the Indians much differently if at all than the Dolans.
except that what would likely happen is just what happened in SD. new owners come in and fans get all excited that those cheapskate owners are gone, bring on the payroll and the wins. only to find the new owners operate in similar fashion.
My problem with people demanding the Dolans sell the team is the idea that anyone else would run it any differently.
There are very people smart enough to be a billionaire looking to buy a team that, to realistically compete, would have to lose money every year.
A baseball owner should not be in it to make money, they should be in it to win the games and championships. They are already at a point that they have enough money to throw some away, and if they have enough money to buy a team, they should not need the revenue from the team. That money should be used to improve team/ballpark, plus more times than not, money out of their pockets will also be needed to compete with the best.
I said this not a week ago and was told I was wrong that professional sports are indeed a business and should be run as one. I obviously disagree but if professional sports are being run like a business then maybe that’s the problem. It’s been said that sports are a business for awhile now.
I’m not sure that it is “likely”, but is a possibility obviously. Clearly the system isn’t fair to owners like the Dolan’s or anyone else who can’t afford a baseball team but that isn’t really a defense.
Is it at all possible for the Dolan’s to sell a portion of the team to a minority stakesholder? Could someone come in and buy say 40% of the team now, then invest that money into the team? Would they ever consider that? If that 40% investor was in fact a billionaire, this would be a great first step towards selling the team further down the road.
Well, for the guys to get what they have, obviously they have made some lucrative business decisions. Buying a baseball team (unless you can very low) is probably not the best investment. The revenue for the indians is probably around $170 +/- per year. You factor in payroll etc and you are not going to make more than you could elsewhere, plus you would have a good amount of assets tied up reducing flexability.
Amen on Gilbert. His main achievement during the Goldern Era of the Cavaliers was to run off Lebron. Why is he a good owner again? Oh yeah, the childish comic sans letter.
I’d say it’s more likely than a billionaire owner who is willing to run at a lost every year. Seriously, how many of those owners are out there in sports?
So you really think billionaires will willingly invest in companies in order to lose money?
Also, do you think Lerner loses money on the Browns? I sure don’t. So it doesn’t necessarily follow that he’d willing toss away money on the Indians if he owned them.
But didn’t Gilbert immediately turn around and eat Baron Davis’s fat contract in order to get the probable number 8 pick in the draft that just so happened to turn into Kyrie Irving? The man is a risk taker, and when those risks hit, they hit big. The team was abysmal last year and Gilbert still provided all the funds needed to turn this thing around. He also has the Monsters and the AFL team now, and he’s investing in casinos downtown. The Cavs will be fine.
I don’t think they would “lose” much money, but there are plenty of other things to invest in if your sole purpose is to make money. I do not think the ROI on MLB especially in CLE is very high. I would venture to say that some billionaires like to have nice, expensive things, and a MLB team is something not everyone can have (or buy).
Other than (apparently) Illitch, are there other owners out there willing to consistently lose tens of millions of dollars a year? In any sport? People talk like it is inevitable that someone wants pay 9 figures to own the Indians so they can throw away 8 figures every year. Even Cuban and Gilbert aren’t going to be willing to lose that much running the Mavs and Cavs.
Thank you.
The only person who ever lost money as an owner of an NFL team was Art Modell. And he did it twice: once here in Cleveland and again in Baltimore.
I’m in for $100. Who else is with me?
This is going to be a whole lot of assuming, but…
According to leaked internal documents, the Pirates were pocketing about $15M a year. Lets assume that’s comparable to the Indians. Or heck, say it was $25M last year. That means an owner would have broken even with a $75M payroll.
So what does it cost to compete in MLB? A $100M payroll puts us about dead center in ’12 and means an owner loses $25M that year (that’s assuming no serious increase in attendance and the assumption that spending=increase in attendance is a WHOLE other debate).
Are there billionaires out there ready to lose $25M a year for a small market team with a payroll that is just average? I just don’t think it’s realistic to expect. As mentioned elsewhere, I don’t think Cuban, Lerner, etc. actually lose money with their teams.
What big risks has he taken with the Cavs that have hit big? We should give him time, sure. I just count the number of championship banners hanging in the Q and wonder what Gilbert has done to earn such love.
Some owners are savvy enough to take a team that might lose money and find other ways to make it work, by say, building a casino right next door to the arena. The New Jersey Nets previous ownership was pretty much 100% based on a real estate deal to move the team to Brooklyn. In these cases owning a pro team enables you to do so much more.
In the Dolans’ case they tried some things, but haven’t gotten a blockbuster yet. STO has been alright, although it is for sale apparently. Snow days is a good idea, although it hasn’t been successful yet. The country music festival is another good idea, but I’m not sure the constant berating of the fanbase was worth the extra money it put in the team’s coffers.
It isn’t up to me to come up with solutions until I own the team for myself. It is up to them. I know they aren’t going to lead the league in payroll. I know they aren’t going to sign $20 + million free agents. I can’t blame them as much as I blame Bud Selig and the game.
BUT, when we are in a window of contention and their sole need in the off-season is a righty who can play some first base and an outfield spot, I expect them to get it. Maybe they have with their recent trade with Tampa. Still, I refuse to blame the fanbase for being a little uneasy that the team didn’t do much in the offseason other than pay higher arbitration dollars.
I’m conditioned to some market realities of being a Cleveland baseball fan, but only to certain levels.
I’m not going to say anything is likely one way or another. I can’t pretend I know about a market or potential suitors. I think it IS a bit short sighted, however, to say that if the Dolan’s were to sell the team, that someone will deeper pockets wouldn’t be interested.
Not saying they are throwing away 8 figures a year. On a 300M investment they would probably want to make at least 5% per year (15M+). If they are only making 7 figures a year on the team, then they are probably losing money that they could have made elsewhere. You are going to have to put some more money down to get a better team on the field, which will increase attendence and revenue. The problems is in CLE, pumping extra money into the payroll may not mean more money in their pockets.
Good point, its easier to throw money around when you are making money. He wouldnt be making money with the Tribe, I stand corrected.
“They are already at a point that they have enough money to throw some away”
if they thought this way then they never would have become a billionaire in the first place. it is very rare you get into the Illitch situation where a guy is willing to blow through a few hundred million over the last few years of his life.
pro sports are a business for better or for worse that this point. should they be? I do not think that it matters because they obviously are at this point (even in college sports which are supposed to be less about the business side supposedly)
buying sport franchises has been a very lucrative business decision for most though. no, most sports do not make a ton of money year-to-year. but, franchise values have been skyrocketing since the 70s and owners have been reaping those profits. plus, it gives them an advantage in many of their other business ventures (perhaps bidding for casinos downtown?)
Who was available that they could afford? Beltran and Pena turned them down, and the Indians even offered Pena more money than the Rays did.
How many championship flags fly with our other organizations? The same amount right?
I’ll take Gilbert’s non PC attitude and straight talk any day over these other owners. He earned all that love by pledging to give the city a winning team after LeBron demolished the morale of the city. Larry Dolan and Randy Lerner demolish that morale yearly by selling off our favorite players or doing next to nothing with zero pledge to winning. Does that explain it?
I don’t mean to be snarky, but anything in the realm of the NYJ situation (arena complex in Brooklyn by a Russian oligarch billionaire) or the casino deal (which required a billionaire to pull off) don’t seem like realistic options.
I get your point – the Dolans need to find other avenues for revenue. They’ve tried – OSN was a failure, they were VICIOUSLY ridiculed by the fans for snow days and concerts (ex. “what? give more money to cheapskate Dolan?”), the hockey game sounded pretty successful… but none of those (outside of successfully exploiting local TV rights) are going to be serious game changers.
A realistic, creative move to add value to the franchise might be physically moving the team. Which will, I’m sure, spark local cries of outrage.
As for the “won’t get a RH bat/big name FA”, see EyesAbove’s comment.
True.
The other thing people forget with MLB ownership is that the league exerts a MASSIVE amount of influence when teams are bought and sold. Not sure how legit it was, but I remember reading in multiple places that the league had no interest in Cuban being an owner of the Cubs.
In addition, they regularly make demands that the new owners have to agree to (Astros to the AL West, anyone?). If another market becomes actively interested in getting a MLB franchise (or maybe a team for Brooklyn), I don’t think people will be hoping for the Indians to be on the market.
Be careful what you wish for. A Dolan sale could have all kinds of unintended consequences.
Legalize prostitution and let Dolan own the brothels? Every owner gets a vice!
So his (unrealistic) pledge that he will win a championship before Lebron does earns him the title of Straight-Talker over Dolan? Sounds like the exact opposite to me.
Dolan is (to a fault) the straightest talking owner this city has: “Every four or five years, if we can have a shot at the World Series and compete for the playoffs like we did in ’05, that’s as good as it gets.”
If his answers scare you, stop asking questions.
What about spending when we are in a position to contend? I see zero money being pushed around right now except for that being tossed at a broken down Grady Sizemore and some really really low level FA’s….I don’t think it is a stretch to say he bent the truth on that.
payroll is up $20mil over last year. spending for your own players counts too. he also spent part of the farm system to go and get Ubaldo.
put these in “Progressive Field” and they have to buy a ticket to get in. Double bonus!
that is what scares me about a sale. if sold in around 2015, then the new owners can give Cleveland a 3 year trial before the lease ends and they can ship the team out.
I hope that the Indians can have back-2-back successful competitive years to win back the fanbase (and get rid of some of the constant negativity) as much as I do to compete for a championship right now. And remember, that it was not too long ago (early 90s) when MLB was exploring new markets that Montreal and Cleveland were the two franchises that got mentioned as possible targets for relocation.
“spending for your own players counts too.”
This is expected. Not filling needs is NOT. Also, the Ubaldo deal, IMO, will cripple this team. Too many assets given up on a guy with far too many flaws. If we’re lucky, it ends up as a push, but I doubt that.
That’s not money? Increases in salary due to arbitration isn’t spending? You can complain about the moves all you want, but don’t say they aren’t spending. They’re looking at about $22M more this season (about a 42% increase). From ’07 to ’08, they spent $17M more.
Again, your unhappiness with the answers does not change their validity.
Also, I will point out yet again: they tried everything to bring Beltran and Pena here. Even more money would not land one. The other rejected being here twice.
I expect to pay my rent. And I expect it to increase next lease.
That doesn’t magically change my bottom line somehow.
Works the same way for millionaire owners too.
should there be a thread on this one? if not, I suppose it fits in best here:
http://www.clevescene.com/gyrobase/the-custodian/Content?oid=2805785&storyPage=1
Exactly. Paying your rent is expected, it is common place, it is doing the minimum. Now, if you have your rent paid but no one comes over because you don’t have a couch then what? If you are Larry Dolan you keep cutting the rent checks and sitting on the floor till someone dumps a mystery couch by the dumpster that smells like old eggs.
Ok maybe that analogy was a little harsh but you get the point.
I understand they are spending more in salaries. I can read numbers. But where is the spending to fill NEEDS.
You can speak all day about how they’re spending on guys they already have…but when the contracts are up they’re gone. And until then we cant buy to fill around them because, oh well, we’re paying the guys we already have….
If Cleveland loses their baseball team, I am not rooting for them any more, unless they get a new one.
“I see zero money being pushed around right now except for that being tossed at a broken down Grady Sizemore and some really really low level FA’s”
that’s where I came back noting how payroll is indeed increasing by $20mil.
and it’s not doing the minimum. Florida (until now), Pitt, and other teams would have shipped out those expensive parts by now (heck, we would have if we didn’t feel we could compete).
I wish we could do more too. Sadly, that’s not our reality right now.
Again, Beltran and Pena. They tried and were rejected.
We’re going to kill this metaphor, but whatever…
You can’t buy a coach when all your money is going to rent.
Giggles all around… nice puff piece of the man asking taxpayers for $6M in renovations.