NET WORTH

By BILL SHAIKIN

July 16, 2001 12 AM PT

TIMES STAFF WRITER

Summer in New York, and the kid was homesick--not for a burger from Tommy’s or a chili dog from Pink’s, but for Vin Scully and the Dodgers.

Wall Street puts its rookies through a boot camp of its own, the hours dragging through the muggy days and late into the evenings. Slackers go home at midnight.

But midnight in New York is 9 p.m. in Los Angeles, so Jeff Shell called one of his friends back home and asked him to tune in to Scully and put the telephone down, next to the radio. Night after night, Shell phoned a friend.

Through the magic of technology--this was the 1980s, so we’re talking toll-free networks and speaker phones, not the Internet and cell phones--the fledgling financial analyst worked through the night and into the early hours of the morning, listening to the voice he loved call the games of the team he loved.

Today, Shell brings the Dodgers to you, on Fox Sports Net. He brings every other team in town to you too.

As president of Fox Cable Networks, Shell brings almost every NBA, NHL and major league baseball team to cable viewers in the market of the home team. As escalating ticket prices and widespread cable availability converge, enabling television to define the sports experience for increasing numbers of fans, a USC study recently selected Shell as the most influential sports business figure in Southern California.

“Because sport has been driven by money so much, and because the media play such a large role in that, many people that work for media companies are thought to be the most influential in sports,” said Tony Tavares, who oversees the Angels and Mighty Ducks as president of Disney’s Anaheim Sports division. “They’re controlling so many purse strings.”

Peter O’Malley ran the Dodgers as a family business, which it was--then. On any day the Dodgers moved into first place, or added to their lead, O’Malley served ice cream to the employees.

If O’Malley is well thought of by Dodger fans, Shell is virtually invisible to them. He attends dozens of Dodger games each season but sits among the crowd, not in the Fox box. Shell is a big guy, but not the biggest guy, at a company in which the Dodgers are a speck on the corporate windshield.

Rupert Murdoch’s NewsCorp., a global media conglomerate with interests from newspapers in Fiji to television stations in Bulgaria, has two divisions headed by Shell:

* Fox Sports Enterprises encompasses majority ownership of the Dodgers, minority ownership in Staples Center, Madison Square Garden, the New York Knicks and the New York Rangers, and options to buy minority ownership in the Lakers and Kings.

* Fox Cable Networks includes 20 local sports channels with contracts for cable rights to 73 of the 79 U.S. teams in the NBA, NHL and major league baseball. (The NFL sells its cable rights nationally, not team by team.)

Even mighty Disney bowed to Shell’s cable empire. In 1998, Shell and Tavares negotiated a landmark agreement in local sports television history, unplugging a Disney dream in the process.

Disney had slapped a billboard across the scoreboard at Edison Field--”ESPN West: Coming Fall 1998”--that heralded a rival to Fox Sports Net. ESPN West was to be a local cable channel that would be anchored by Angel and Duck broadcasts. Disney intended to use the power of the ESPN name to launch local cable channels across the country.

Too late. Fox already had secured cable rights for every other team in town and just about every other team in the country. Disney surrendered, but only after Fox had agreed to pay a premium price--about $140 million over 10 years--to keep the Angels and Ducks on Shell’s Fox Sports Net.

“He’s very bright,” Tavares said. “There are a lot of people that are very bright, but you can’t make a deal with them. They’re too complex about it, or they’re trying to get too much of an edge.

“Jeff knows how to make a deal that benefits both parties. He understands the dynamics of a deal. He’s likable to do business with.”

Shell’s local sports channels are expected to generate more than $750 million in revenue and more than $150 million in profit this year. For every fan attending a Laker game at Staples Center, nine households watch on Fox Sports Net.

“I think television is becoming more important in the economics of sports and, increasingly, it’s the way many fans experience the teams,” Shell said. “But there’s still nothing to replace walking through the tunnel and seeing the basketball court or the green of the baseball field. To me, that’s one of the best feelings you can get.”

Shell, 36, grew up near UCLA, hopping the bus to Dodger Stadium and buying $1 tickets to sit in the left-field bleachers, behind Dusty Baker. He played varsity basketball at University High in West Los Angeles but confessed, “My great heroic performance was making the team.”

After studying at Cal and Harvard and working on Wall Street, Shell returned to Southern California, joining Disney as a financial analyst. His small world of cruise lines and theme parks was interrupted one Friday afternoon when he was asked to spend the weekend analyzing the economics of professional sports.

Former King owner Bruce McNall had approached Disney about investing in the team and in a new arena to replace the Forum. Disney opted to buy its own team, the Mighty Ducks, and hired away McNall’s consultant--Tavares--to run it.

Fox recruited Shell in 1994 to head a new division that would plan the company’s television strategy--deciding how much to bid for programming, for instance, and expanding cable and satellite operations into Latin America. Shell stumbled into sports in 1996, when Fox bought half of Liberty Media, which owned a string of local cable sports channels, one of them Prime Sports in Southern California.

“I thought the whole idea of creating a national sports network based on local sports networks was the best business idea I had ever heard of,” Shell said. “So I raised my hand and said, ‘I want to be in this business full time.’ ”

And so he was, as the first employee and chief financial officer of the Fox-Liberty partnership and, after Fox bought out Liberty in 1999, as president of Fox Sports Networks. But the concept Shell regarded as “the best business idea I had ever heard of” has so far failed to fulfill its promise.

“We know of the power of the home team,” he said. “We know that, if you’re a Dodger fan and the Dodgers are on tonight, you’re going to go home and watch it. You may be a huge baseball fan, but there’s nothing that’s going to get you to watch the Pirates against the Mets when the Dodger game is on.

“So we know we’ve got you. The problem is, we pay a lot of money for the rights to those games. The challenge is, can we get somebody to tune in to Fox Sports Net even when there’s not a game on?”

That, literally, is the billion-dollar question, even without counting fees paid by Fox for NBA and NHL games. Fox has committed about $2.3 billion in long-term agreements for local cable rights to 23 major league baseball teams, and paid about $225 million this season alone, according to Broadcasting and Cable magazine.

If you flip to another channel as soon as Vin Scully says good night, that’s a poor investment for Fox. Would you stay tuned after the game for a national sports report, akin to “SportsCenter” on ESPN? For the heavily promoted but critically panned regional sports reports, focusing on coverage of the local teams? For a talk show, or for something completely different?

Shell has yet to find the winning answer, but he has not lost faith in the concept. Sports fans largely ignored “SportsCenter,” he argues, until ESPN secured broadcast rights to early-round NCAA tournament games.

“Because people like me were drawn to ESPN to watch college basketball, we started watching ‘SportsCenter’--Keith Olbermann and Dan Patrick and Boomer [Chris Berman] and the whole gang,” Shell said. “And over time, when ESPN could no longer afford to buy the rights to the tournament, by then they had created this huge platform called ‘SportsCenter,’ which is like a religion to men in the United States.

“We’re trying to use this incredible platform we have--the local games, versus the tournament that ESPN had--to try to create something else that becomes a religion for fans. We’re trying to find the right formula, whether it’s local sports news or Jim Rome or entertainment.”

It wasn’t so long ago that teams were regarded as an incredible platform for corporations, especially media companies.

Corporate ownership was the wave of the future, or so the theory went. Corporations such as Fox and Disney could afford to pay the spiraling player salaries that family owners such as O’Malley could not, and could justify the spending because of the opportunity to pitch merchandise, movies, shows and other company products to loyal fans attending games, watching on television and listening on radio.

But those corporations apparently forgot, or were rudely reminded, that owning a team requires running it, with daily public scrutiny almost unheard of elsewhere in the business world. The fans were loyal to the team, not to the corporation, and they perceived management explanations of fiscal responsibility as a whining strategy, not a winning strategy.

Fans cared little whether the Angels lost $83 million from 1995-99, or that the Dodgers lost $77 million, as the teams claimed in a major league report. O’Malley could not subsidize losses from his other businesses, because he had none. But individual owners with personal fortunes from other ventures now are touted as preferable to faceless corporate owners.

“There’s no question it hasn’t worked the way people thought it was going to work,” Henry T. Nicholas III, co-founder of Broadcom Co., said. Two years ago, he considered buying the Angels and Ducks from Disney.

“I think professional sports team ownership is a really bad business. Ultimately, player payroll ends up eclipsing whatever profits you have. You have to keep scrounging for that additional revenue stream just to stay above water.

“It’s a perfect business for a guy like [Dallas Maverick owner and Internet billionaire] Mark Cuban, who can put his heart and soul into reviving the team and not worry about the year-to-year swings in profitability. Or a guy like [Clipper owner and real estate magnate] Donald Sterling, who doesn’t necessarily need the year-to-year profits from the business.”

To business students, a team is a “brand,” a commodity to be marketed, no different from Coke, MTV or Tiger Woods. As the promised synergies vanished into a haze of financial losses--”You’re not going to find $20 million or $30 million a year in synergy benefits,” Tavares has said--the justification for corporate ownership grew increasingly hazy too.

“The only way it helps the company long-term is if you can make the brand into something bigger than it is,” Shell said. “If you can find a way to include the Dodgers, for example, or the Angels, for Disney, into your overall stable of brands and develop TV shows about them and sell T-shirts and do all sorts of stuff to exploit and develop the brand, no differently than you would exploit the brand of Mickey Mouse and ‘The Jungle Book.’ ”

The Atlanta Braves built TBS for Turner Broadcasting, and Mighty Duck merchandise sold almost at Disney’s will in the early years of the franchise. Success is possible, if elusive, and Fox hasn’t abandoned hope for the Dodgers.

“We spend hundreds of millions of dollars building brands like FX and Fox Sports Net,” Shell said. “Where is there a better brand than the Dodgers?

“Here’s a brand that has been built for over 100 years. It’s pure. It evokes emotion in a great number of people. Theoretically, in the hands of a media company, a brand like the Dodgers should be extremely valuable.

“I think that there has been so much day-to-day difficulty with the everyday business of running the team that it’s been hard to get our hands around how to further develop the brand.”

Chase Carey, the Fox executive who usurped the authority of then-General Manager Fred Claire and traded popular superstar Mike Piazza, now leaves the Dodgers in the hands of chairman and minority owner Bob Daly. (Shell does too.) Kevin Malone, Fox’s hand-picked replacement for Claire, is gone after alienating fans and opposing general managers with contracts and comments often regarded as outlandish.

Fox paid $311 million to buy the Dodgers in 1998, then handed day-to-day management to Daly a year and a half later. With Daly addressing the headaches and headlines, Shell discounted reports that Fox plans to sell the team.

“If somebody comes and offers us a billion dollars for the Dodgers, my guess is that Mr. Murdoch would consider selling,” Shell said. “But when the asset is appreciating every year, and when there are things that the current management team is doing to fix the product--and doing pretty well this year, in my opinion--there’s no reason to sell. That’s why, despite all the rumors, the team is not for sale.”

That would allow the kid who grew up watching his team from the left-field bleachers to keep watching his team from prime company seats--behind home plate, not upstairs in a lavish suite.

“He eats Dodger Dogs with ketchup,” said Shell’s brother, Dan, a newly hired assistant basketball coach at St. Mary’s College in Moraga. “He might like to go with the onions, but he might run into somebody he needs to talk to. But he won’t sit up in the box and eat roast beef. He doesn’t like sitting in the box.”

Shell describes himself as “a television executive that happens to have lucked into a set of businesses that are related to sports.” These, after all, are his hometown teams.

“I grew up, like everybody else, listening to Chick Hearn and Vin Scully,” he said. “Now I just happen to watch Chick Hearn and Vin Scully.”

And here Shell pauses briefly and lowers his head, almost in thanks, and lowers his voice, almost to a mumble.

“And employ them,” he said.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Southland’s Power Elite

The 20 most influential sports business figures in Southern California as ranked by USC study

1. Jeff Shell, president, Fox Cable Networks.

2. Tony Tavares, president, Anaheim Sports.

3. Tim Leiweke, president, Kings, Galaxy, Staples Center.

4. Ellen Oppenheim, general manager, Los Angeles Department of Recreation and Parks.

5. Peter Dalis, athletic director, UCLA.

6. Michael Ovitz, president, Artists Management Group.