Angels May Be in for a Change

The Angels could play under new ownership next spring, perhaps with an entirely new roster, as the result of a series of complex transactions that would include the elimination of two major-league franchises.

At a financial crossroads and with its labor contract about to run out, baseball is considering the unprecedented move of contraction--buying out and dissolving teams--to rid itself of struggling franchises and lessen the need for rich clubs to share revenue.

For the Walt Disney Co., that would make for a prime opportunity to meet two top objectives--selling its money-losing baseball club while ensuring the team remains in Anaheim.

Tony Tavares, president of Disney’s Anaheim Sports division, said the company is not interested in folding the franchise. Instead, it would like to sell “to the right buyer, at the right price.”

Asked if that might mean selling to the owner of a contracted team who wanted to stay in baseball, Tavares said, “The answer is yes.”

The Montreal Expos, who drew 8,817 fans for a three-game series in September, are considered the prime candidate for contraction, with the Florida Marlins and Tampa Bay Devil Rays also widely mentioned.

Commissioner Bud Selig did not return phone calls this week but had said contraction was “unquestionably a viable option” in a weekend interview at the National League championship series.

Said one National League executive, “I don’t think we’ll know until early November whether it could be considered for next year, or for the year after. That’s a tight time period. But things can happen rapidly.”

Baseball’s labor agreement ends with the final out of the World Series and negotiations on a new deal are dragging, which could result in a players’ strike or owners’ lockout. Baseball owners will meet in Chicago on Nov. 6.

With Selig repeatedly trumpeting contraction but offering no details, teams must decide whether to prepare for such a radical change.

“If a couple of clubs disappear, we’ve got to be ready,” Angel General Manager Bill Stoneman said.

A club source said the Angels have quietly begun preparing for a dispersal draft should teams be folded and players sent elsewhere. Along with the Expos, Marlins and Devil Rays, the Kansas City Royals, Minnesota Twins and Oakland Athletics are possible targets for contraction.

It’s possible that Angel players might be included in such a draft, even if the franchise stays in Anaheim, a highly placed major league source said. If, for example, the Marlins folded and Disney sold the Angels to Florida owner John Henry, he might be allowed to keep such players as A.J. Burnett, Josh Beckett and Cliff Floyd, with Angel players going into the dispersal draft instead.

Henry told his staff this month that the Marlins would return to Miami next season, and the 2002 National League schedule shows the Expos playing host to the Marlins on opening day. But with no plans for a new ballpark, the Marlins’ long-term uncertainty is so pervasive that General Manager Dave Dombrowski told the South Florida Sun-Sentinel he would consider general manager vacancies with the Texas Rangers and Toronto Blue Jays. “Our situation is such that it’s reached the point where I’m going to at least listen to what people have to say,” he said.

Still, contraction remains a highly problematic issue, even if Selig can persuade two owners to fold. Selig’s own commission on baseball economics reported last year that “there should be no immediate need for contraction” should owners increase revenue sharing and, if necessary, allow franchises to move.

Gaping revenue disparities remain, however. And the cost of buying out teams--and perhaps their minor league affiliates--would be compounded if baseball were to lose its federal antitrust exemption.

“I don’t think [contraction is] going to happen for a number of reasons, the most important being the legal encumbrances and challenges,” said Smith College economist Andrew Zimbalist, author of “Baseball and Billions.”

“It’s bad business strategy, from the standpoint of generation of revenues. It’s bad legal strategy. It’s expensive and enormously complicated.”

But if it were a way out of baseball, Disney would be happy to take it. In the report to Selig’s commission, the Angels claimed operating losses of $83 million from 1995-99, a figure exceeded in those years only by the Blue Jays and San Francisco Giants.

The Angels have claimed double-digit losses in each of their first five seasons under Disney management, even in 2000, when they received a reported $8 million from an industry pool in which teams with higher revenues pay to help teams with lower revenues.

Tavares said the Angels would come “closer to breaking even” this year--but only with more help from that pool.

The Angels shaved their opening-day player payroll from $50 million in 2000 to $43 million this year after dumping several high-priced veterans. But with several players due for big raises next year, the losses are expected to return to double digits.

Even so, major league officials believe that Orange County, as part of the nation’s second-largest television market and with population growing, will respond to a winning team.

The Angels set a franchise attendance record by attracting 2.8 million in 1982, a year in which they won a division championship, and drew at least 2.3 million each year from 1982-91. Even this season, while finishing 41 games out of first place, they drew 2 million fans--more than competitive teams in Philadelphia and Minnesota.

Larry Lucchino, outgoing president of the San Diego Padres, reportedly is interested in joining a new ownership group to buy the Angels. Selig has asked Lucchino to assist Henry in evaluating prospects for a new ballpark for the Marlins.

In San Diego, and in Baltimore before that, Lucchino has a track record for selling baseball that Disney cannot match. The fabled Disney marketing magic has failed to cast its spell over baseball.

Disney long ago accomplished its primary objective in owning the Angels. As Disney planned its second Anaheim theme park--California Adventure, which opened this year next to Disneyland--the company believed pro sports would enhance the city’s reputation among visitors and the company’s reputation in town.

So, with former co-owner Jackie Autry threatening that the Angels might follow the Rams out of town, Disney bought the team.

But, with the Angels and the Mighty Ducks of the NHL anchored in Anaheim in modern venues--and still losing money--and with the collapse of Disney’s proposed ESPN West cable channel, which would have carried Angel and Duck telecasts, Disney apparently no longer needs to own the teams.

Disney spent $140 million to buy the Angels and another $98 million to renovate the stadium. In 1999, when Disney negotiated to sell the Angels and Ducks to a group led by Broadcom Corp. co-founder Henry T. Nicholas III, the asking price of $450 million for the teams reflected an approximate price tag of $300 million on the Angels. At the time, that would have allowed Disney to recover its investment and make a small profit.

Since then, Disney has been unable to find another suitor--for the Angels or Ducks, another money-loser. And given the uncertain economic climate of the nation in general and of baseball in particular, the Angels aren’t likely to sell any time soon.

Whatever the ownership, Tavares stressed that the Angels--a name with 40 years of history in the American League, and seasons before that as the Los Angeles entry in the old Pacific Coast League--would remain a local fixture.

“To my knowledge, there would be a team here and it would be the Angels,” he said.