March 31, 1998
Elizabeth Farnsworth looks at the new kind of baseball owners and the effects they are having on baseball.
ELIZABETH FARNSWORTH: The new owners include media magnate Rupert Murdoch and his news corporation whose $311 million purchase of the Los Angeles Dodgers was approved earlier this month by Major League baseball. Other teams owned by corporate conglomerates include the Walt Disney Company's Anaheim Angels, Time-Warner's Atlanta Braves, and the Tribune Company's Chicago Cubs. For more on all this we turn now to Smith College Economics Professor Andrew Zimbalist--he's the author of the book "Baseball and Billions;" and to Leonard Koppett, who covered the Dodgers, Yankees, and Giants from 1943 to 1973 for the Herald Tribune, the New York Post, and the New York Times, and who's now a columnist with the Oakland Tribune. He's a member of the Baseball Hall of Fame. Andy Zimbalist, in the old days, families owned the teams, right? Are those days fading?
A RealAudio version of this segment is available.
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ANDREW ZIMBALIST, Smith College: They seem to be gone right now, yes.
ELIZABETH FARNSWORTH: What are the--can you give me any figures of how many teams are owned by families still?
ANDREW ZIMBALIST: Well, really there aren't any fully family-owned teams. There are remnants of family ownership. You have that, for instance, with Marge Schotz in Cincinnati, or George Steinbrenner in New York. But they don't fully own the team. They're part of corporate partnerships and they own in each of those cases between 40 and 60 percent of the team. O'Malley, with the Dodgers, was the last fully family-owned franchise.
ELIZABETH FARNSWORTH: Why is this happening? What's compelling these changes?
ANDREW ZIMBALIST: Well, I think the main thing that's happened is that all sports franchises have gone up terrifically in value, and they basically have priced themselves out of the family market. When you start looking at $200 and $300 million price tags, there are very few families who can afford to put that kind of money up. And what you have now in baseball is a sense that baseball has mismanaged itself for quite some time, and they've been on the down part of their economic cycle coming off still the strike, and people are seeing it as an attractive investment opportunity and particularly the media sees it as an attractive investment opportunity. The media sees the possibilities for synergy with the sports programming. They see the possibility to promote their other businesses. They see a possibility to gain more flexibility and control over the programming, and particularly in these days of the telecommunication revolution, where you don't really know who your competitors are going to be a few years down the road, it is much more advantageous to them to be able to lock up a franchise, especially at this point in time when the baseball industry is still at a bottom part of the cycle.
ELIZABETH FARNSWORTH: Mr. Koppett, do you have anything to add to the economic factors at play here?
LEONARD KOPPETT, Baseball Writer: Well, what has just been described really leads to the fact that you now have people owning ball clubs who are more interested in reselling clubs than in running clubs. And they are now a commodity that's of trading value because of the--because it's several hundred million dollars for a club, instead of $12 million. Walter O'Malley originally bought the Dodgers, and the price was $4 million when he acquired it. Now, they're being sold for $311 [million]. That's a different ballgame.
ELIZABETH FARNSWORTH: And what about the changes that have happened that have propelled all this, made this happen?
LEONARD KOPPETT: I don't think that baseball changes it. It changes in the world as a whole. You see things going to conglomerates and everywhere you look--in book publishing, and newspapers, and any business you look at, and especially in telecommunications. And, of course, that's true. If you own the ball club, you own that program. You don't have to negotiate with baseball to get the rights to that team at least. And then you have influence inside the organization for whatever deals are made for all baseball.
ELIZABETH FARNSWORTH: Mr. Zimbalist, what are some of the results of this so far? What are the effects on baseball of these big companies owning the teams?
ANDREW ZIMBALIST: Well, I think there's been an acceleration of the commercialization of the game and of the gentrification of the ballpark because of the corporate penetration. But I say only an acceleration because that really happens independent of whether you have corporate ownership or not, but corporate ownership tends to be a little bit more far-sighted. They tend to have deeper pockets. They tend to be able to lobby more effectively in public bodies, and they push the process that much faster and further. What is about to happen might be much more important, which is to say that you know have Mr. Murdoch and his news corporation controlling a good deal of baseball. He's in a position of much more power than anybody has ever had in that industry before. He not only controls the national media contract worth $565 million over a four-year period, but he controls twenty-two to twenty-four of the thirty local television contracts for the thirty baseball teams that are worth over $200 million a year. So these teams are now beholden to Rupert Murdoch and he has much more leverage and much more control than anybody has ever had before. And given the man's track record of doing whatever he wants to, to advance his own cause. I think it's potentially problematic.
ELIZABETH FARNSWORTH: What do you think about how this is going to affect baseball?
LEONARD KOPPETT: I think it all depends on the individuals that are chosen by these conglomerates to run the baseball part of the business. If they choose people who have themselves long backgrounds in baseball, understand the process, understand promotion, understand this very peculiar kind of business that it is, then it won't have any large effect for the public as a whole. Whatever goes behind the scenes is their business. But if they now staff at club president levels people who pay--who have had success in their other businesses and don't understand baseball, the results of baseball can be very bad.
ELIZABETH FARNSWORTH: Andy Zimbalist, do you agree with that?
ANDREW ZIMBALIST: I do agree with it. I think we have to be careful, though. I mean, on the one hand baseball has been a poorly managed sport, and it's been a sport with very weak leadership. And I think that corporate ownership can bring baseball something in both of those regards. But if corporate baseball pushes their strategy too far, then I think there's a danger of losing the mass space for this sport that has been for over a hundred years our national pastime. The gentrification of the ballpark is a serious issue. You have tickets--
ELIZABETH FARNSWORTH: What do you mean by that?
ANDREW ZIMBALIST: Well, I mean that you have the introduction of luxury boxes, eighty to a hundred and twenty luxury boxes, in a modern ballpark. You have 10,000 club seats. You have seats being built now at the Diamond Back Ballpark in Arizona, where they have computer terminals next to the seats that sell for $195 a seat per game, and that the bottom end seats, instead of selling for 75 cents or $2.50, like they used to sell for, are selling for $10 and up. It becomes almost impossible for a middle income or a low income family to go to the ballpark. And I think as baseball proceeds with catering to the higher income group, if it doesn't pay attention to the mass fan base, it's going to be in trouble in the long run.
ELIZABETH FARNSWORTH: It sounds like you're saying, though, that these companies won't necessarily go that way; it depends on who they put in charge of things.
ANDREW ZIMBALIST: I agree fully with that, yes.
ELIZABETH FARNSWORTH: I'm sorry. I'm just asking Mr. Koppett.
LEONARD KOPPETT: Yes. What--we may be living in a time when it is happening on all levels on television--for its entertainment and for access, and that's the shift that's going on. The people who will actually go to these luxury ballparks will be a smaller number and very affluent and produce more dollars. The people who want to just follow baseball are going to have to do the bulk of it, not by reading newspapers or going to sit in the bleachers 15 times a year, but to watch it on television 100 times a year. And if you're a media conglomerate that is both in the television business and in the baseball business, you don't mind that at all. You don't mind if you're increasing your television audience while you're decreasing your live audience.
ELIZABETH FARNSWORTH: Go ahead.
ANDREW ZIMBALIST: I think we have to be careful here too because if you look at what Fox has done with broadcasting baseball, because they own these local contracts, they've put together a package on Direct TV where you can get out of market games, so that if you happen to be say a Los Angeles Dodgers' fan living in New York, you can buy this package. But Fox has required anybody who wants to see the Dodgers to buy a package of all major league teams and they charge $140 for it for the year. That's an antitrust violation, and it stems from the kind of control that Fox has garnered over the industry. So I think that Mr. Koppett is correct, that there is a tendency and maybe someday it will be the case that this sport is appreciated on television. I'm not sure still that lower income people will be able to appreciate it, and I'm very concerned that on a cultural level that sports really provide almost the only outlet in the United States today for a community for form and to exist and root and scream together as a community. If people are reduced to watching baseball games in their living rooms, that community aspect is gone, and the society is robbed of one of its few true community expressions.
ELIZABETH FARNSWORTH: We have just a few seconds left.
LEONARD KOPPETT: I agree with that completely.
ELIZABETH FARNSWORTH: Okay.
LEONARD KOPPETT: But the question is: If that's where we're going, how do we stop the train and get off?
ELIZABETH FARNSWORTH: Okay. Thank you both very much.