Chuck Still Amuck

Cablevision Systems Corporation founder and chairman Charles

Dolan just keeps on bidding. Although the bidding for the Boston Red Sox closed

formally on Dec. 20, his latest $790 million bid (including $40 million in

assumed team debt) to buy the team, submitted late Monday night, keeps throwing

the talks into disarray. Negotiations among the competing parties are ongoing,

with the two other interested parties in the sale-corporate lawyer Miles

Prentice, supported by the Quadrangle Group and cable giant Comcast

Corporation; and the supposed declared winner, the John Henry–Tom Werner– New York Times group-also tweaking their

bids.

But this much is true: Red Sox chief executive John Harrington,

Commissioner Bud Selig and the clubby cabal of major-league baseball’s owners

will now face a scary realization when they vote on the sale this week: Chuck

Dolan seems determined not to walk away from this deal, so they’d better close

it quick.

Since the Red Sox current ownership signed off on Dec. 20 on the

$700 million, Bud Selig–approved offer fronted by Mr. Henry, the Florida

Marlins owner, and Mr. Werner, the ex–San Diego Padres owner, with $100 million

in cash added on from The New York Times ,

the fax machine at Mr. Dolan’s Boston lawyer’s office has been struggling and

cranking away.

$700 million, $740, now $790 million-all for a team that pays

Jose Offerman $6.5 million a year to play second base.

Unlike the competing bids, Mr. Dolan’s offer is a simple one:

there are no high-profile buddies of Bud Selig, no flashy Wall Street bankers,

no George Mitchells, no conditional financing agreements-just Chuck and his

Cablevision stock. Take it or leave it.

Which is what scares the heck out of Major League Baseball. Since

1980, Mr. Dolan, who through Cablevision’s ownership of Madison Square Garden

owns the Knicks and Rangers, has been in pursuit of a major-league baseball

team (he has also tried to buy the New York Jets and the Cleveland Browns). He

bid for the White Sox in 1980, the Yankees in 1998, the Mets in 1999-all to no

avail. For some reason that has yet to be made public, Major League Baseball

wants no part of Chuck Dolan and his Cablevision billions. Indeed, according to

one banker involved in the ongoing Red Sox sale talks, Chicago White Sox owner

Jerry Reinsdorf, one of Mr. Selig’s most ardent supporters, has reportedly said

that there is no way that Mr. Dolan will ever get approved by the owners-a

condition of any eventual sale of the club.

One wonders why. Yes, Mr. Dolan’s brother Larry owns the

Cleveland Indians, but so what? Mr. Henry has a 1 percent, limited-partner

stake in the Yankees, in addition to owning the Marlins. Mr. Werner still owns

a small piece of the Padres. Indeed, the most recent excuse put forward by Red

Sox president John Harrington-that Mr. Dolan’s ownership of the Knicks and

Rangers was also a potential conflict of interest-elicited chuckles from those

close to the negotiations. Didn’t Ted Turner own the Atlanta Hawks as well as

the Braves? For whatever reasons, Bud Selig and his gang are obviously ready to

pull out any stops available to keep Mr. Dolan with his nose pressed to the

owner’s-box window, looking in. “If Al Goldstein bid $2 billion for the Red

Sox, Baseball would say, ‘I’m sorry you are not qualified,'” said one banker

involved in the talks. “Baseball is a club of rich guys who can do whatever

they want. Chuck can say whatever he wants but the owners will never let him

into the fraternity.”

Mr. Dolan first came up against the forces of Mr. Selig and

company in 1980 in his bid for the Chicago White Sox. Cablevision was then a

mere sprite of a $250 million company and the Knicks and Rangers were still 14

years away. But Mr. Dolan, with his small cable-subscriber beachhead in the

Long Island suburbs, knew the importance of sports programming-in New York or

Chicago. He was nevertheless outbid by construction magnate Edward De Bartolo

Sr., but when Mr. Selig, then the owner of the Milwaukee Brewers, led the

owners in a campaign against Mr. De Bartolo, the club was sold to Mr. Reinsdorf

and his partner Eddie Einhorn instead, and Mr. Dolan turned his attentions to building

up his suburban cable empire.

Ever since then, Mr.

Reinsdorf and Mr. Selig, who was named acting commissioner in 1992 and took the

post officially in 1998, have been thick as thieves. Their club is an exclusive

one, led by Mr. Selig; Mr. Reinsdorf; Carl Pohlad of the Minnesota Twins;

George Steinbrenner of the New York Yankees; and Fred Wilpon of the New York

Mets. They are men who have gotten rich together and gone to the wall for each

other.

Serving as the club’s gatekeeper has been Commissioner Selig, the

used-car dealer from Milwaukee who, nine years after replacing former

Commissioner Fay Vincent, spends 99 percent of his time on the 30th floor of

the Firstar building in Milwaukee as

opposed to the grander Park Avenue suite that Major League Baseball makes

available to the commissioner. Make no mistake-the gates of baseball will open

for a certain breed of owner.

Take Mr. Henry and Mr. Werner, both in their early 50’s, and

Montreal Expos owner Jeffrey Loria, who is in his early 60’s. These are guys

who have made enough money in their careers-commodities trading, TV sitcoms and

art dealing, respectively-to take a seat at the table, but who lack the

billions to allow them to do it on their own. Plus they are fans: baby boomers

who get dewy-eyed talking of their love for the game.

They are also very adept at swearing fealty to Mr. Reinsdorf, Mr.

Steinbrenner and the other owners. Chuck Dolan is not a fan, nor is he anyone’s

vassal. He rarely attends Knicks and Rangers games and at 74 years old, he is a

seasoned Fox Sports Net partner of Los Angeles Dodgers owner Rupert Murdoch and

came within inches of buying the Boss’ beloved Yanks in 1998. Unlike Tom

Werner, he will commission no sappy documentary about Fenway Park, nor will you

see him move his family to Boston if he gets his team as Mr. Henry has promised

to do.

There is a midlife-crisis quality to this new breed of owner-Mr.

Werner is romancing Katie Couric; Mr. Henry is an amateur musician with an

interest in Eastern philosophy-that contrasts with Mr. Dolan’s harder,

Eisenhower-era sensibility. For Mr. Dolan, this is all about business; the Red

Sox and their NESN cable network are just another soft asset to add to his

collection.

To be sure, he has made it clear that his bid is a personal one,

linked in no way to Cablevision. That may well be, but separating Cablevision,

the company, from the Dolan family will never be an easy task.

Which is what scares the lords of baseball. They all know Chuck

Dolan and they know that they can’t control him, plus they have no idea what

his intentions are. Where is the money coming from? Is he borrowing off his

stock, or will he sell to raise cash? Bankers close to the deal say that the

primary objection of Major League Baseball remains Mr. Dolan’s brother’s

interest in the Cleveland Indians. While a Chuck Dolan link to the Indians has

never been made public, those who have talked to baseball officials suggest

that if need be, a money trail could be established. Larry Dolan is a Cleveland

lawyer, they say. Where did he get $320 million to buy the Indians?

Owners are also worried that Mr. Dolan, with his ready billions,

would be the new Steinbrenner on the block, bidding up contracts in search of a

winner-as he has with the Knicks and the Rangers. There is another reason that

Mr. Selig does not want the Dolans to win. Mr. Selig’s plan for contraction had

always hinged on the fact that Mr. Henry would sell his Marlins to Mr. Loria

after getting the Red Sox. The plug would then be pulled on the Expos, leaving

either the Minnesota Twins or the Tampa Bay Devil Rays as the other team to go.

But now the back room, Bud Selig way of doing business is under

attack. Massachusetts Attorney General Thomas Reilly has suggested that the

Henry group was favored by the commissioner’s office despite its lower bid. And

the revelations that Mr. Selig accepted a $3 million loan from a company owned

by Mr. Pohlad have not helped his image either.

All of which Chuck Dolan knows, and hopes will work in his favor.

By allocating the extra $50 million in his latest offer to the Yawkey Trust

(which owns 53 percent of the Sox), Mr. Dolan is addressing the root cause of

the Massachusetts attorney general’s complaint: that the Red Sox, in taking the

lower $700 million offer from the Henry group, are selling short the interests

of the charitable foundations that are to receive the trust’s share of the

funds. Strange as it may seem, Mr. Dolan, whose visits to Boston have been

cloaked in secrecy, now sees himself as a savior of sorts. While Mr. Henry and

Mr. Werner did undertake a P.R. offensive in Boston last week, they suffer in

the smarting eyes of Red Sox fans due to their association with the current

team president, the much-reviled Mr. Harrington.

So it has come to this: Mr. Dolan, that old monopolist whose

cable service charges some of the richest fees in the country, might suddenly

have become a man of the Red Sox people. But time is running out. Baseball

owners have the Red Sox sale to the Henry group on their agenda at their

meetings in Phoenix on Jan. 16. The sooner they approve the sale, the sooner

they will be able to once more slam the door on Chuck Dolan’s

baseball-ownership dream.