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
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
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
$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
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
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
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
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