Tuesday, August 15, 2006

Jeffrey Loria – the Major League Baseball franchise killer!!

Florida Marlins owner Jeffrey Loria is the latest professional sports owner to demonstrate who he believes is “The Boss”. Loria last week went where Yankees owner George Steinbrenner and a former Atlanta Braves owner have been before, believing they knew more then the paid professionals they put in place to manage the multi-million dollar sports franchises.

In what has become a well reported incident, Marlins manger Joe Girardi and Loria had an ‘interesting’ exchange last Sunday when the Marlins ended a homestand losing a third consecutive game to the Los Angeles Dodgers.

Girardi, who had been ejected from the previous game, didn’t react after a key ball-strike call went against the Marlins. Loria seated behind his teams’ dugout did what a baseball fan would do, he yelled at the umpire. That was only the start of Loria’s heckling. He then shouted at his manager, yes, during the Marlins game with his team listening and Marlins fans within hearing range, the manager and owner of a Major League Baseball team became involved in a heated exchange of views – airing their dirty laundry in public. The Marlins have been steadfast in refusing to comment on the matter, which reportedly included orders from Loria to set up the teams’ conference room at Dolphins Stadium where Loria intended to fire Girardi ten days ago.

Thankfully cooler heads took control of the situation and Loria was saved from embarrassing himself, his team and Major League Baseball. It wouldn’t have been the first and sadly it wouldn’t have been the worst example of a Major League Baseball owner believing he was holier then God.

A year after buying the Atlanta Braves in 1976, Ted Turner decided to give his manger Dave Bristol the day off. He would manage the team that day.

"That was up in Pittsburgh he thought he could manage," longtime Atlanta Braves announcer Ernie Johnson Sr. told The Palm Beach Post. "We knew it wasn't going to last very long. He needed some help from the coaches, but he was in uniform and everything. After the game, the commissioner said you can't do that. He was just trying to snap us out of a losing streak, and we had a few in those days."

Turner gave new meaning to "hands-on" ownership. The Braves fired manager Bobby Cox in 1981 only to rehire him in 1990, with Turner saying, "Why did we ever get rid of this guy?" In time, the Braves came to dominate their division and claim a World Series title. For all his foibles, Turner "did a lot of good things for the Braves," Johnson said in the Palm Beach Post report.

The ownership antics of Yankees owner George Steinbrenner is the stuff legends are made of. In the first 23 years Steinbrenner owned the Yankees he changed managers 20 different times. Steinbrenner hired and fired Billy Martin five times between 1975 and 1988. Steinbrenner’s track record of not being able to deal with managers makes Joe Torre’s ten-plus seasons as Yankees manager that much more remarkable.

The linage between Steinbrenner and Loria runs much deeper then their inability to deal with people. Steinbrenner has become sports best owner because he grew up. He’s still as committed to winning as he ever was, he’s finally come to understand what an effective owner of a business does, hire the right people and let them manage your business. They’ll have good and bad days and you’d like to believe they’ll have more winning then losing days. Long before Jeffrey Loria won a World Series defeating Steinbrenner’s Yankees in the 2003 Series, Loria had a minority ownership stake in the Yankees.

As history will one day clearly demonstrate Jeffrey Loria may one day be considered the worst owner in the history of Major League Baseball, a man who will be dubbed – the Franchise Killer!!

Loria owned several minor league baseball teams along with his minority stake in the Yankees in the late 1990’s. In 1999, Loria purchased 24 percent of the Montreal Expos from the Expos ownership group and replaced Claude Brochu as the Expos managing partner. Loria cleverly structured his purchase agreement effectively giving him complete control of the team. His agreement allowed for Loria to make a series of ‘cash calls’ on the Expos ownership group. If the group failed to heed Loria’s cash calls, his percentage of the Expos ownership would increase. In what must have seemed to Montréalers to have taken place in the blink of an eye, Loria had control of 94 percent of the Expos by the end of the 2001 Expos season.

On February 14, 2002, after a 30–0 vote, Major League Baseball formed a Delaware partnership (Expos Baseball, LP) to buy the Expos from Loria for $120,000,000 with the intent of eliminating the franchise along with the Minnesota Twins. Loria then paid John Henry (Henry now owns the Boston Red Sox) $158 million for the Florida Marlins. MLB may have bought the Expos with the intent of contracting the franchise, however the Major League Baseball and the MLB Players Association agreed contraction would not be a part of the current MLB collective bargaining agreement. The current CBA expires in December.

That left MLB owning and managing a rudderless Montreal franchise. The team had died several years earlier, Loria responsible killing what was left of the Expos soon after he arrived in Montreal in 1999. The Expos moved to Washington after the 2004 season, renamed the Washington Nationals. On May 3, 2006, Ted Lerner agreed to pay Major League Baseball $450 million for the franchise, an amazing return on the $120 million they had paid Loria four years earlier for the Expos.

Ownership issues have been a hallmark of the two Major League Baseball franchises Jeffrey Loria’s owned. The problems may not have initially been his direct responsibly, however at the end of the day Jeffrey Loria effectively may lead to the death of two Major League Baseball markets. Is it the man (Loria) or the circumstances (failure to get new stadiums built)?

When Jeffrey Loria arrived in Montreal in 1999 he brought with him Steinbrenner’s ownership attitude. His first major decision was to take the Expos off radio and television. Loria was right in believing media rights counted for a significant component of a Major League Baseball franchise’s revenue streams. His lack of understanding of the Quebec market (Loria overvalued the Expos media rights, both French and English in Quebec), led to the Expos games being taken off both radio and television at the start of the 1999 season.

The die was cast; the final nail had been hammered into the Expos coffin with Loria’s decision. Any chance the Expos had to survive ended with the perception Loria had left among corporate Quebec. A few months later the Expos returned to French language radio. The Expos became the first MLB team to broadcast their games on exclusively on the Internet in 1999, when Dave Van Horne was banished to the Internet with the Expos English radio broadcasts. Any attempts the Expos made to correct the error in judgment Loria had made where next to impossible. No one wanted anything to do with Major League Baseball. The problem that began many years earlier found its ultimate solution with Loria as Expos managing partner – the death of the baseball in Montreal.

When Loria arrived in Montreal he knew the Olympic Stadium wasn’t working as the teams’ home. Loria knew that Claude Brochu had failed in his attempts to secure public funding for a proposed downtown baseball stadium. It shouldn’t have surprised anyone when Loria failed. Canadians have never had much of an appetite when it comes to building sports facilities – welfare for billionaire sports owners.

In a classic example of déjà vu Loria again knew from John Henry’s failed attempts with the Marlins -- South Florida taxpayers have no intention of offering any assistance in paying to build a new baseball stadium. Just like the Montreal Expos played their games in a terrible and unfriendly stadium, Major League Baseball is never going to work in Dolphins Stadium.

Since early January Loria has dispatched Marlins president David Samson (his son-in-law) to San Antonio, Las Vegas, Portland and Charlotte in hopes of finding a city ready to build and then give him the keys to a new $250 million taxpayer built baseball stadium. The only seriously interested city has been Las Vegas and Major League Baseball made it clear several months ago they have no intention of allowing Loria to move the Marlins to Sin City.

Loria’s next move could indeed be to offer to sell Major League Baseball the Marlins or to legally challenge MLB’s attempt to prevent him from moving the Marlins to Las Vegas.

Hialeah has shown some interest in getting involved in a building a new stadium in South Florida, with the clock ticking towards the end of the Marlins current lease at Dolphins Stadium there isn’t enough time to get a deal done. The Marlins current lease expires at the end of the 2010 season. The team can end their lease after the 2007 season. Samson has gone on the record, suggesting in no uncertain terms either the Marlins get what they want (a new stadium) or they’ll pack their balls and bats and move elsewhere.

"There's no more fake deadlines or real deadlines," Samson said in a November 2005 interview. "This is about the Marlins trying to save its franchise. We need a place to play after 2010 and we don't have one."

In the last seven years Jeffrey Loria has purchased controlling interest in two Major League Baseball franchises. One team (the Expos) are history and unless there is a stunning reversal of fortune Jeffrey Loria will again be at the center of Major League Baseball dying in another market. Before Major League Baseball moved the Expos to Washington, it had been 33 years since the last MLB team moved, the then Washington Senators to Dallas/Fort Worth where they became the Texas Rangers at the start of the 1972 season.

Is it the man, is it the problem, is it the sport, is it the market – irregardless of which answer you choose the man at the center of two of the biggest disasters in Major League Baseball ownership history is Jeffrey Loria.

For Sports Business News this is Howard Bloom. Sources cited in this Insider Report: The Miami Herald and the Palm Beach Post