ANALYSIS : The Ueberroth Era : Baseball Commissioner Makes Grade, Though Impact Isn’t All Positive
The recent signing of a national cable television contract is expected to be Peter Ueberroth’s last major involvement before he steps down as baseball commissioner on March 31.
What will his legacy be? What is there to say about his 5-year tenure?
There are no easy answers, but if a change in administrations always demands some form of report card, a plus and minus yardstick, then the Ueberroth regime may be best reduced to two subjects:
And the grades?
--Hired on the basis of his financial success as president of the Los Angeles Olympic Organizing Committee for the 1984 Games, Ueberroth has demonstrated a similar business acumen in opening new economic doors to the 26 clubs.
Even with the threat of financial penalties stemming from the collusion decisions and the possibility of a player strike or management lockout in 1990, the clubs have never been as solvent, the game never more popular.
If for no other reason than that he did the job for which he was hired, Ueberroth deserves an A for overall results.
--An executive on his Olympic staff once said of Ueberroth that he would “never be a prisoner of events,” and Ueberroth has again proved that to be true.
He may portray himself as a white knight riding to the rescue, he may be dictatorial, arrogant and self-serving, as he has often been characterized, but his active involvement in all areas has generally provided a positive and dramatic contrast to Bowie Kuhn, his stoic and stuffy predecessor.
Ueberroth deserves an A for activism.
Donald Fehr, executive director of the Major League Players Assn., claims that the owners were never as bad off as Ueberroth contended.
“They’ve lied,” he said recently. “They’ve been making money all along. What’s happened this winter only proves it.”
Fehr alluded to the free spending reminiscent of pre-collusion years.
He also said that the lie was first uncovered during the 1985 collective bargaining negotiations when Ueberroth ordered the owners to open their books in an attempt to show how much money was being lost.
The union responded by hiring a Stanford economist, who did his own study and insisted that many of the clubs were using creative accounting to hide income and profits and that most were making money.
It remains Ueberroth’s contention, however, that 21 of the 26 clubs were in the red when he became commissioner--some losing as much as $20 million a year--and that all are now breaking even or showing a profit.
According to Ueberroth’s figures, the industry had a net profit of $21.3 million in 1987, its first since 1973.
The figures can be deceiving, the ledgers disputed, but certain numbers speak well for the commissioner, confirming his contributions to the economic base:
--Major league attendance has risen from 44.7 million in 1984 to a record 52.9 million last year.
Ueberroth has probably had less to do with this than an improved economy, divisional parity and comparatively modest ticket prices. Still, he has consistently urged the clubs to hold the line on ticket prices--the average ticket in 1988 cost $7.16--and he has consistently stressed crowd control and improvements in stadium management.
Thirteen clubs now have no-alcohol seating sections, contrasted with 6 in 1985, 9 ban the sale of beer and 16 have a purchase limit on beer, contrasted with 6 in 1985.
--Showing the same corporate clout that he did with the Olympics, Ueberroth has increased corporate connections and resulting disbursements to the clubs from zero in 1985 to $13.7 million in 1988.
Likewise, he made the licensing of retail goods a function of the commissioner’s office and increased retail sales from $175 million in 1984 to $650 million in 1988, producing a $13.2-million disbursement to the clubs. By 1990, the per-club disbursement is expected to be $1 million a year, which should continue to grow.
--The recent signing of a 4-year, $1.08-billion national television contract with CBS assured each of the clubs about $10 million a year, contrasted with $7 million under the previous contract.
How much credit should Ueberroth receive? Minimal, perhaps. TV contracts in all sports are escalating significantly, and he seemed to be in the right place at the right time for troubled CBS, which is hoping that a commitment to sports will cure its poor ratings.
Nevertheless, Ueberroth was shrewd enough to base his negotiating concept on the growth of cable. The CBS contract is tied principally to postseason play. The contract with ESPN will bring each of the clubs another $3.8 million a year and, in Ueberroth’s view, change the way baseball is watched in that a regular-season game will be seen in most markets almost every night.
It has also been learned that the 12-year, $500-million contract that the New York Yankees recently signed with the Madison Square Garden cable network will benefit the other 25 clubs in that 25% of the Yankees’ annual income from that contract--about $10 million--is to be disbursed to the other clubs, which means that each will get about $400,000 a year.
The arrangement is a concession to the indemnity contract that Ueberroth previously negotiated with TBS, WWOR and WGN, the cable superstations that televise the Atlanta Braves, New York Mets and Chicago Cubs, respectively. That contract nets each of the clubs about $250,000 a year.
Thus, through the CBS, ESPN and indemnity deals, each of the clubs will be receiving almost $15 million a year, which does not include local TV and radio rights. Nor does it include the marketing and licensing disbursements.
Is it any wonder that the price of franchises has soared? The Baltimore Orioles, for instance, sold for $12 million in 1979. In November, coming off their 2 worst seasons, the Orioles sold again for $70 million. If a baseball franchise represents a sound buy at that price, the commissioner’s impact on baseball’s bottom line can’t be overlooked.
Then, of course, there’s collusion, a concept devised to slow the growth of salaries and the foolish spending on free agents. Did it come from Ueberroth?
“Who are the other candidates?” responded one American League general manager.
“I mean, mandating good sense is a lot different than appealing to good sense. I don’t think you’d have seen the financial restraint of the last 2 years without his presence. He’s been a pretty central figure.”
Arbitrators Tom Roberts and George Nicolau have ruled that it went far beyond that, finding the owners guilty of violating the collective bargaining agreement in the off-seasons of 1985 and ’86. A decision on the union’s third grievance is pending, as are the financial penalties, which may range from $15 million to $100 million, according to most sources. Are the clubs concerned?
“It’s one thing for everyone to be in the black when Ueberroth makes his final speech (which he did at the December baseball convention),” the American League general manager said. “It’s another thing if we’re all still in the black after the arbitrators make their decisions.
“I think we’re concerned, but not to the point of constantly talking and worrying about it.”
After all, how much would even $4 million a club hurt when weighed against the free-agent savings of the collusion era and the current financial base?
In fact, the wild spending of the current winter isn’t seen as a rebuff of Ueberroth or a reaction to the arbitrators as much as a statement on the game’s solvency. The money is there now. Why not spend it?
Reflecting on the environment when Ueberroth was hired, the general manager said:
“I think there was some division within ownership, some question as to where the game was going financially. There wasn’t a lot of consensus on any issue.
“I wouldn’t say Peter is dictatorial, but he is very strong-willed. He brought a lot of bright people together and eliminated much of the divisiveness. I think he’s done it as well as anyone could. He was able to rise above individual interests. The teams are more financially stable now, more creative, more willing to take risks. There’s a good-time feeling, the grievances notwithstanding.”
Peter Ueberroth likes to tell the story about his first day in the commissioner’s office when he said to his secretary, Mary Sotis: “Good morning, I’d like a cup of coffee.”
And she replied: “Good morning, you don’t have any umpires.”
With their contract expired and negotiations stalled, the umpires had walked out on the eve of the 1984 league playoffs.
It was the start of a tumultuous 5 years during which labor, drug and minority issues shared the spotlight with the game’s economics and Ueberroth, despite union and owner constraints, took his office to new levels of activism.
In what are generally regarded as positive steps:
--Ueberroth responded to appeals and arbitrated that 1984 umpires’ strike, getting them back to work before the playoffs ended.
--His opposition to the owners’ plan for a salary cap and persistent, behind-the-scenes maneuvering during the 1985 collective bargaining negotiations is generally credited for limiting the work stoppage to 1 day, making Kuhn’s handling of the 50-day strike in 1981 look absurd.
--He brought Willie Mays and Mickey Mantle back into baseball’s fold, ending the ban Kuhn had imposed when both took jobs as greeters at Atlantic City casinos.
--Though frustrated by the union’s refusal to accept random testing at the major league level, Ueberroth’s drug program--built on education, minor league testing and rehabilitation as opposed to punishment--has generally been viewed as successful.
Of the 275 minor league tests in 1985, the first year of the program, 10% were positive. Of the 1,400 taken in 1988, only 1.5% were positive, according to the commissioner’s figures.
His prompt handling of the players involved in the Pittsburgh drug trial, suspensions of repeat violators and $500,000 fine of the Texas Rangers for calling up Steve Howe against his orders filled some of the random testing void at the major league level, which for the last 4 years has been free of widespread violations.
--Although it took Al Campanis’ renowned appearance on “Nightline” to prompt a serious commitment to minority hiring, there has since been progress everywhere except in the key positions of general manager and field manager. In the last 19 months, minorities have filled 36% of the available baseball jobs, according to the commissioner’s figures, and the total minority employment has risen from 3% to 10%.
Ueberroth responded to the “Nightline” show by hiring UC Berkeley sociology professor Harry Edwards and the Washington (D.C.) consulting firm of Clifford Alexander and Janet Hill to serve as advisers on minority hiring.
There are still no minority general managers and only two minority field managers--Frank Robinson of the Baltimore Orioles and Nick Levya, a Mexican-American, of the Philadelphia Phillies. Ueberroth was strong enough to mandate collusion, but individual interests on some issues have remained pervasive.
So, a report card of straight A’s?
The Ueberroth legacy isn’t all positive. There are aspects of duplicity, strong-arming, conflicts of interest. Owners have been angered and remain angry. Some negatives:
--The mandated collusion has revived labor passions among many of the young players and contributed to what one longtime National League owner calls the worst relationship between players and management heading into negotiations on a new bargaining agreement.
The current agreement will expire at the end of the 1989 season. The owners, according to sources who attended a meeting chaired by Ueberroth Dec. 7, are preparing for a lockout at the start of the 1990 season. The union is expected to make hard-line demands regarding a larger slice of the TV income. Moderates on both sides hopefully believe there is so much money at stake now that a work stoppage may be avoided.
--Ueberroth’s threat to move the playoffs out of Chicago unless the Cubs installed lights at Wrigley Field showed blatant disregard for one of the game’s few remaining landmarks and is another measure of his total sellout to TV, which is seen in the commitment to a prime-time playoff and World Series schedule no matter what havoc it creates for young viewers and the print media.
--Though he apparently had the owners’ approval to serve on the board of directors of other companies, he is said to have troubled some in 1987 when, as a member of the board of the E.F. Hutton Group, he borrowed time from his responsibilities as commissioner to negotiate Hutton’s purchase by Shearson Lehman Brothers.
He reportedly received a $500,000 bonus for his service to Hutton as a board member and another $420,000 bonus--comparable to his $450,000 annual salary as commissioner--for his role as merger negotiator.
--Many owners were said to be similarly troubled with Ueberroth’s clandestine role as architect of George Argyros’ futile attempt to buy the San Diego Padres and troubled again by Ueberroth’s continued support of the Seattle Mariners’ owner in his running feud with the city of Seattle over provisions of a lease that Argyros has repeatedly broken.
Ueberroth, who on one hand has consistently urged franchise loyalty, similarly painted the city of Chicago into a corner with threats that he would not stand in the way of a White Sox move if they did not get a new stadium.
--There have been instances when Ueberroth’s corporate connections have been at the expense of longtime friends of baseball.
He forged an alliance with USA Today as a sponsor of the All-Star game, for instance, after severing baseball’s long relationship with Gillette.
And a contract with the Equitable Financial Companies to sponsor old-timer games in each of the 26 parks also produces contributions to the Baseball Alumni Team to aid former players in financial need, a task long undertaken by the Assn. of Professional Baseball Players of America, which does not benefit from the Equitable contract.
--Though the situation improved some in the last half of his tenure, Ueberroth’s availability to reporters has been inconsistent at best. Columnist Dan Shaughnessy of the Boston Globe has repeatedly referred to him as the Omissioner.
--Despite the lucrative nature of the new television contracts, more than a half dozen owners told The Times that they are disturbed by Ueberroth’s role on several counts:
1--They said that NBC, which has been broadcasting baseball since 1947 and sharing the sport with ABC since 1976, should have been given a last opportunity to match or beat CBS’ bid.
2--They said that because NBC’s contract does not expire until the end of the 1989 season, there was no need to complete the negotiations until sometime in the spring, that by finalizing and announcing the agreements at a time when players are negotiating contracts, Ueberroth has contributed to the current spending wave by convincing both owners and players that prosperity reigns.
3--They said that Ueberroth was intent on making the announcements now to enhance his own departure and that he is guilty of some duplicity, because much of the groundwork on the new contracts was done by the owners’ own television committee before Ueberroth consummated the deals on his own and took the credit.
Would Ueberroth have been reelected if he had chosen to remain?
Almost certainly. The record attendance and acknowledged solvency would have enabled him to overcome the concerns of what seems to be a minority group of owners. This way, however, he goes out much the way he came in--on his own terms, his credentials as a business wizard intact, his reputation generally unblemished.
He will be succeeded by National League President Bart Giammati, an authority on Renaissance literature, a former president of Yale University and a grass-roots baseball fan.
Some think the timing is perfect.
“Now that the business elements have been re-established, we need a person who will be more of a spokesman for the game itself,” the American League general manager said.
“We need someone who may not be as strident, who may be able to bring labor and management together. There ought to be some time when labor and management can sit back and enjoy each others’ company.”
Ueberroth? His future is uncertain. It has been rumored that he will end up running an entertainment conglomerate.
He is on the board of directors of the Coca-Cola Co., which owns Columbia Pictures. He is a longtime friend of Kirk Kirkorian, who is controlling shareholder of MGM/UA. He is also on the board of directors of Transamerica and the Irvine Co., and has former business ties to Wall Street and the airline and travel industries.
Political rumors have also resurfaced in the wake of George Deukmejian’s decision not to run for a third term as governor of California.
Ueberroth has said that he is not interested in popularity contests, that he is best suited running things, maybe even mending things.
Whatever the role, his grades are again likely to be high because he will approach it with a confidence bordering on . . . well, as he said of baseball in a recent interview: “This wasn’t a very healthy institution when I came on, but it’s extremely healthy in most every direction now. It’s well positioned to continue growth in every area.”
On The Rise
During Peter Ueberroth’s 5 years as commissioner of baseball, the sport has prospered. Baseball has gone from 21 of 26 teams losing money to the current state, where all the teams make money. In addition, attendance has gone up each year.
Source: Major League Baseball