Edskin's bi-monthly column: Edition #1
Time is Now for Lindner, Reds
Normally, I find "how they made their millions" stories a tad boring. It's usually through inheritance or some complex business dealings-yawn. However, the story of Cincinnati Reds owner Carl Lindner is quite interesting--- bananas. Yep, he sold a whole bunch of bananas and he turned them into millions of clams. We look at a banana split and say "mmmmmmmm," Lindner looks at a banana split and says, "cha-ching!"
Lindner sold so many bananas that he decided to buy himself a major league baseball team-that's a whole lotta bananas. Unfortunately, that's where my admiration for the man ceases.
Upon being named majority owner of the Reds, Lindner made it quite clear that he was not in it to make money, but he also made it quite clear that he wasn't about to lose money either. It's as if he just wanted a big playground for his grandkids that wasn't going to cost him anything. His reluctance to lose a few bananas off the back of the truck, have kept the mid-market Reds drifting in a sea of mediocrity-so close, yet so far.
Some say that it's his money, his team, he should be able to do as he sees fit. But is that accurate? Does the team really belong to him, or is he just a high-profile caretaker for the city and the fans? I tend to lean towards the latter. I believe that owners have an obligation to their fans to do all they can to produce a winner. If Linder knew from the get-go that he wasn't willing to make the necessary concessions to compete at a high level, then why buy in the first place?
And perhaps he is being a tad shortsighted when it comes to the bottom line. Linder has three HUGE factors in his favor:
--The city of Cincinnati loves the Reds. Right now, the fans are battling the negativity, complacency, and frustration that comes with seasons of disappointment and questionable moves from the front office. Nothing gnaws at a fan more than unloading a good player for next to nothing in return, just so the books balance. But the city has always been baseball crazy-give them hope and the turnstiles will explode.
--The Reds open a new stadium this season, which virtually ensures good attendance. Add a winner to a new stadium and Linder could be swimming in green with the increased concessions and merchandising sales that would be sure to follow.
--The number one note of comparison in Cincinnati is Bengals owner Mike Brown. Conduct a popularity poll between Brown and Saddam Hussein and Brown would probably win-by a hair. Lindner doesn't have to do much to make his team the only show in town.
Am I telling another man how he should spend his bananas? You bet. Lindner has a responsibility as a sports owner that owners of other corporations and businesses don't. Right now, the message he seems to send is, "we're probably not going to be all that great, but please, we still want you to come out to the park."
It's hard to say, but given his position, I truly believe I'd take a different approach. Lindner is a very old man, even if the Reds lost millions this year, it still wouldn't make much of a dent in his wallet. I think it would be worth the financial hit to compete for a World Series--to have your team playing in those magical October games. And as stated before, success on the field translates directly to financial success off the field through a variety of different means. He could very well make his money back-or more.
The Reds are not in need of an overhaul. Their general manager, Jim Bowden, who at times is his own worst enemy and at other times is the Reds only hope, has done a solid job of building a core of young players that is ready to bust out. Bowden is also a master at annually finding diamonds in the rough who come cheap (see Jimmy Haynes last year). So, the Reds don't need quantity, but they are desperate for quality in one key department--starting pitching. Add two good starting pitchers, or one great one, and the Reds go from a middling team to a true contender. Problem? It's going to cost some bananas. The Reds have the ammo (trade bait) to get a deal done to acquire any number of high quality pitchers (The Expos Bartolo Colon being the golden nugget at this point), but there doesn't seem to be any way to accomplish this without adding payroll.
Bowden can wheel and deal and find treasures in the trash heap until the cows come home, but the ball is ultimately in Lindner's court. He can keep the status quo and hope that the Reds have a magical season as they did in 1999. Or he can sign off on a bit of a risk venture--- a dare to be great opportunity. In the end, sports is a business, but you can't shake the natural instinct to want to be the best. Mr. Lindner, we know you're a good businessman, now show us that you can be a winner too.
Imagine what a hero Lindner would be if he signed off on the deal(s) that restored the Reds as a champion and gem to the Queen City. He would be the ultimate hero. The fans might just, dare I say………go bananas.
Thanks Boss :) Oh, and check your PM's!
Good article Ed.
I have agreements and disagreements with this position.
I can fully understand someone (such as us "average joe's) making the contention that it wouldn't hurt a billionaire like Lindner to lose several million investing in this team, if it could possibly bring a winner.
To be honest. If I was a billionaire, I'd probably have no problem doing it. But then I'm a baseball-addict (and Carl is not) ;)
But my question is... is it simply "his" money to be able to do this?
Yes, he's the CEO; but does that give him the right to lose money on a yearly basis (and that's what the trend would be), and then have to justify it to his LTD partners and shareholders of his various investments/company's? Would they stand for that?
I, and most of us, don't know what the situation is when it comes to his "readily available" or liquid assets.
Put yourself in the position of being one of those partners/investors.
Let's say you are an investor/shareholder in UDF, Chiquita, or one of Lindner's other holdings, and he's telling you each quarter/year that your dividends/profits will be alot smaller because he's taking that millions and putting it towards the Reds (and organization that you, as a shareholder, have no part with)?
And again I ask the question (which has been asked many times before; but no one seems to know the answer ;) )... How much is enough? Does it ever end? Or is Lindner and his partners suppose to be content with that situation year in and year out? Because looking at the economic environment in baseball, it's not a pleasant scenario.
Should we take the risk of say the D'backs owners, who have their team in a very precarious financial situation?
Some say they wish Lindner would sell the team to an owner who would pour millions into this franchise to bring the fans a winner. But teams like the Angels, A's, and Twins have shown that it's not simply about pouring money in, in order to be competitive and win; but having the right personnel, player development, etc.
Look at the payrolls of teams like LA, Boston, Baltimore, etc. When was their last WS? Organizations like the Angels, Twins, and A's embarass these guys IMHO.
And with the exception of owners like King George and the Red Sox, who else is following that philosophy of spend, spend, spend?
Some have held up Dolan as an example. Jacob sold the Indians at just the right time. Look what Dolan is now having to do. Economic losses within his personal investments/holdings, along with the fact that the revenue from the new stadium have finally reached a "saturation point", have forced him to cut payroll, loose key players, and begin to rebuild, after only owning the team a few short years.
My whole point is... regardless if Lindner sold this team. I don't think we'd see anyone come in here and just start pouring money into this franchise. Whether it's this team's geographic location, market size, or the limitations on generating large amounts of revenue... I just don't see that happening.
And if we start the 2003 season with a payroll near 60 Mil, then what is wrong with that? Most, at one point months ago, were saying they'd be ecstatic to see that kind of increase. Now it's not enough?
Be patient on the Colon thing. The Yanks are already out of the picture. The price to acquire him (the # and quality of prospects) will keep coming down as we get closer to spring training, and the Reds are one of the few teams that still have payroll room to work with. That's why I think the Walker and Dessens trades were necessary and well-timed - no way Bowden gets approval from Lindner on the Colon thing unless he's already freed up the payroll. If the Expos agree to take on Sullivan in return (or if the Reds can move Sullivan in another deal), I'd say you might be closer to a deal with the Expos than most realize.
I'm telling you, there's plenty of room for improvement, but I think the above pitching staff at least gives us a chance.
But if we can't sign Colon long term, then it was all wasted IMHO. he is due to make 8.25 Mil in 2003, before entering FA. If he has another solid year, is it preposterous to assume he will be demanding somewhere in the area of 12-14 Mil/year in a multi-year deal?
And if this organization was willing to pay that, could you see him being the highest paid player on this team? Not trying to assume or start anything; but could that lead to a "sticky" situation? ;)
I'm so tired of all this Lindner talk. It's so easy to say to you have to spend money to make money. BUT, spending $70 or $75m in 2003 doesn't guarantee the Reds will be playing in October. It improves your chances and raises expectations, but doesn't guarantee anything. Let's say things don't go as planned in 2003, even after you spend $75m. The disappointment is greater than ever, there go a bunch of season ticket holders, so the Reds then cut payroll to $60m for 2004. Oh my God, can you imagine the *****ing from the fans when they have to CUT payroll? I mean, look at the *****ing now that they're INCREASING payroll by $15m.
When the Pirates and Brewers were in the first year of their new stadiums (2001 I believe), what were their payroll levels? Why do Reds fans believe our payroll in 2003 should be higher than that?
And, even if the Reds are winning, to say the turnstiles will explode might be an exaggeration. What we saw here in '95 and '99 was well short of turnstiles exploding. Granted, the new stadium will help tremendously. But, any explosion of turnstiles is a short-term thing. Not to mention that clubs that spend big money do so from TV revenues, not turnstile explosions. I suspect that if the Reds spent $70m on player payroll this coming year, there are still those that would complain and say that they should spend $80m. Personally, mark me down as being ok with the $60m, as long as we maintain that over the next 2-3 years. With the development of Dunn and Kearns, with the Larkin contract expiring in '03, and with everybody but the Yanks and Red Sox watching their dollars a little closer these days, we can compete in the NL Central with $60m. I think we're a couple moves away, but moves that can be made by the start of spring training.
Baseball's a screwed up game right now. I don't blame Steinbrunner for wanting to win, but I also don't expect Lindner to spend like Steinbrunner. Steinbrunner has the market to do it - Uncle Carl doesn't. The game is a mess - thanks Bud.
I agree with ya TT.
The vast majority of MLB owners/organizations are in the same boat as the Reds are. Even teams with payrolls in the 70-80 Mil range (some, not all) were mediocre teams with won-loss records that were nothing to brag about.
It tells me there is more to it, and may have alot to do with your organization's infra-structure, and having the right personnel in the right places to scout, develop, make those "key" baseball related and on-field decisions, and yes, at the right times, make acquisitions.
And I will agree that this may very well be the area where this organization has huge weaknesses.
First of all, well written article Edskin, I enjoyed reading it. :thumbup:
I think 60 million is fine. The only things I would ask more of form Lindner would be:
1)Market the team better
This one pays him, and thus he could put that money back into the team. I really have to believe the Reds have got to be one of the worst advertised teams in the country.
2)Make the 60 million slightly flexible
Decide how flexible before the season, but tell Bowden that if he truly gets a deal that he can't pass up the payroll could jump 3 - 5 million. No more, but give him that much flexibility to make a deal in July. Not being able to trade for a Chuck Finley due to being short a few hundred thousand is ridiculous.
I'm a huge Bengals fan, so quite honestly the Reds organization and even Carl Lindner get huge thumbs up to me. It really could be worse than having an owner that just wants to break even. Ask Kansas City Royals fans, their owner is just in it to make a buck. Ask me and other Bengals fans who have to put up with a numbskull lining his pockets. Reds fans have it okay, maybe not ideal, but okay.
I have no problem with a $60 million payroll if indeed we do see that. I have a problem with a supposed business genius investing his money in a venture that "continually loses money" if you listen to over half the owners, and not expecting to do the same to remain competitive. Not that they do lose money, I really dont think most of us are naive enough to believe this. But a baseball team is NOT like other businesses. A truly savy businessman would have done the homework and realized that if he wanted a break even business from operating revenues perhapse he should have invested in something else. With the new mostly public financed stadium I guarantee you he has doubled his equity in the team. I compare owning a baseball team to owning real estate. You dont necessarily make a living from the rent, but you are building equity...paying off the mortgages etc.
Again I am satisfied with $60 million for payroll, however if its obvious come the trading deadline that we could compete with the acquisition of a Findley or Colon and he doesnt approve such a purchase, than I question his motives and intentions for buying our team. Why buy a baseball team to just compete? If as I have heard countless times baseball is a business, then why not treat it as such. Who invests in a business to just break even? I am a business owner as well and when I decided to start my own business, I didnt do it with the intention of "not losing money".
And if your not a baseball fan, I respectfully submit that perhaps your money would be better spent elsewhere.
Sorry if this has gone on or I didnt make sense, its still early for me and Ive only had one cup of coffee.
I had three main points in this article:
1. Lindner does NOT need to spend like the large market teams. But as it stands now, this team WILL NOT compete for anything special with the current rotation-- it would take a 99-like miracle for that to happen-- don't want to hold our breath for that. What we need is one or two pitchers-- and I'd be willing to part with salary from position players to make it work. I'm not asking for him to go crazy-- just raise it enough to get the one or two guys we need.
Does it guarantee anything? Of course not, but you've got to give yourself the best chance possible. I don't like the idea of keeping expectations low, so that fans will be pleasantly surprised if we win.
2. The fact that GAB is opening, pretty much guarantees that a good team would fill the seats just about every night. It's an added bonus that should be taken advantage of.
3. If Lindner simply wanted a business in which he could break even, then why choose Major League Baseball? If he pretty much knew that he wasn't willing to lose any money/investers, then why not pick something else?
Good points from all though, and thanks for reading :)
Thanks for the article, Edskin. Very well said. And Redsfaithful, I agree with you that the Reds need to be marketed better. I also agree that the $60 million payroll would be fine. I'm not sure the average fan cares much about the numbers. It's the flexibility or lack thereof that matters most. Not signing off on the Findley trade this past July when the team was competing. It's the loss of Walker and Dessens with very little in return. FeLo may turn out to be a great player, but who in Cincinnati had heard of him before the trade? All of that leaves the fans with a bad feeling about the Reds, IMHO.
Edskin - I see your points. But in all fairness, let's wait until March before we begin to criticize Lindner, Bowden, or the personnel moves that have been made thus far. Payroll room has been opened up - now let's see what Jimbo can do with it between now and March. Be patient.
Hey, I'm putting a season ticket purchase on hold until I see what develops over the next few months. So I recognize what everybody is saying, but I'm at least willing to give the FO time.
I'm not making any determination/evaluations until i se who takes that field on Opening Day. There's still plenty of time for certain "key" moves to be made.
And I agree on our most important need right now being pitching. And I also think this FO realizes that too. It's the one ingredient that we need to add to a healthy squad.
I have always wondered why a "new stadium" guarantees good attendance in the opinion of some. I do not feel this way. Especially in a city like Cincinnati. While the town has always shown great support for their beloved REDS, I do not think a new stadium will guarantee geat attendance. With a few exceptions (Cubs, Red Sox, Cards, Dodgers), I think winning is what sells tickets.
The GAB will definitely cause increased ticket sales. But for how long? When will the excitement of the GAB wear off? I think this will be directly correlated to the performance of the REDS. I do not believe that REDS fans are the types that find it to be the "trendy thing" to be seen at the new park. After 1 or 2 games at the new park, the average RED fan will buy more tickets to see a playoff contender (like Pitt & Milwaukee). Not an also-ran. I guess I am claiming that most REDS fans, God love us, are fair-weathered (like most sports fans).
I do not want to blame Uncle Carl either. The man did not become a billionaire by making "bad business decisions". We'd all love to have a George Steinbrenner or Mark Cuban type owner, without the personality disorders. I blame the dysfunctional "MLB setup". We, as REDS fans, find ourselves in the "MLB small market catch-22"... does Uncle Carl spend big bucks to attempt a return on the investment (winning and the $$$ that it generates) and risk losing serious cash in the process? I guess it depends on your opinion of being a MLB team owner... is it a business or a hobby?
Excellent column Edskin.
The "small market" excuse for mediocre seasons no longer works for me. Four of the seven teams that had lower payrolls than us in 2002 (Oakland, Minnesota, Montreal, Florida), all had better records than us. Each of these markets is equal to or in some cases signficantly worse than Cincinnati. It has been proven quite a few times through the nineties that you can win if you spend your money wisely, even if you have a low budget. Carl threw a fork in all those plans by giving Larkin a $27 M extension despite the fact that his baseball people told him that everything that is happening now would eventually happen. Not only is that bad spending, it is indicative of an owner who is not at all in tune with the salary structure of the team, or where the deficiencies in the team lie (read: starting pitching). I was reading about Mark Cuban this morning, who personally I think is an immature nut, and he had a really good quote: "If you are not an involved owner, you are an idiot".
I am not trying to pretend that I have any clue about the responsibilities of being a CEO, but one thing I know to be true is that you have to care. Your name is being stamped on everything. Every time a player doesn't try, or every time Bowden plays managerial musical chairs, or every time Allen blames the fans, it is a reflection on you and your business practices. Every time you hand out a big contract, you have to believe that not only is this person good at their respective field, but they are solid in character and will represent you well. That has not happened at all the last five or so years. The Oester incident, random opinions of Oester notwithstanding, was an incredibly embarrassing episode for the team, and it was barely addressed. It made us come off as crass and manipulative. That is just one example of the charades that go on down there. Why are all of our good FO people gone? Doc Rodgers, Gary Hughes, Kasey McKeon?
Redsfaithful summed up just what I was thinking extremely well. I don't need a Yankee level or even a Cardinals level payroll. All I want to see is sound baseball decisions and a little flexibility. We were not allowed to add a cent of payroll last year in July despite being in the thick of it. Finley was a really good move, as proven by his stint with the Cardinals. If we have the opportunity to get a bona fide, proven, stud commodity, I don't think it is too much to ask for a little leeway and flexibility. There were several deals on the table that would have SIGNIFICANTLY improved our team, yet we passed them up because of small financial considerations. As a fan, that is very, very tough to swallow.
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