Ties that bind crucial to putting deal together
By Cliff Peale
Enquirer staff writer
Friendships and investments shared over three decades paved the path for Bob Castellini to take over the Cincinnati Reds.
The deal closed Friday, and now Castellini and partners Tom and Joe Williams can look forward. Pitchers and catchers report to spring training in less than a month, and Opening Day is 10 weeks away. Until the honeymoon ends, they're the good guys.
But a look back on the deal is a look back at the way business gets done, in Cincinnati and in many cities. It turned not on price or passion for the Reds but on those connections between the new group and former chief executive officer Carl Lindner.
Some of the connections are social or civic. Lindner and Castellini are among the biggest fund-raisers for George W. Bush's presidential campaigns. Some ties are generational. Tom and Joe Williams are the sons of former Reds owner Bill Williams, a contemporary of Lindner's. When Williams the elder owned the team, Castellini was a minority owner.
Some links will impact the region's future. Castellini is chairman of the Cincinnati Equity Fund, which loans money from big corporations to development projects, and like Lindner is a board member of the Cincinnati Center City Development Corp., which coordinates downtown projects for the city of Cincinnati.
That means the new Reds owners will have a heavy impact on development of the Banks - the hole in the ground between Paul Brown Stadium and Great American Ball Park. Hamilton County officials already have made the pilgrimage to Castellini's 26th-floor office that overlooks the site and undoubtedly will make more.
Some of the connections have been straight business. For years, Lindner controlled nearly all of the stock in Castellini's Midwest produce operations. Lindner's investment in the Castellini operation provided valuable cash for Castellini to expand nationally, and into other businesses including trucking and refrigeration. The Lindner investment came through Chiquita Brands International Inc., when Lindner was Chiquita's chairman and chief executive. Castellini continued to run the produce company.
In 2002, that part of the relationship closed. Chiquita emerged from Chapter 11 and Lindner left the company. Late that year, Chiquita sold its interest in Castellini's operations back to the Castellini family for about $45 million, including about $21 million in cash.
Then there's the $36 million that Hamilton County paid his family in 1997 to buy 24 acres of prime riverfront land for Paul Brown Stadium.
The bidding to buy a controlling interest in the Reds came to a head in September, when Castellini and the Williams brothers decided to get in the game.
Several groups already had submitted bids several months before, including one local group of Broadway investors. But Castellini called Lindner, who made clear they would be the first choice if they could match the best offer. A few weeks later, Castellini's group had the requisite financing, and less than two months later, in early November, they signed a preliminary deal.
In short, there's little doubt that Castellini is the Reds' CEO today in part because he had those kinds of connections.
"It wasn't exactly at 11:59, but it was probably 11:30," says Steve Greenberg, the investment banker hired to market the team, of the Castellini bid. "They asked us what price they needed to hit, and they hit it. This came down to who did they (the selling shareholders and Lindner) want as their partner?"
Lindner could match any offer, so he could pretty much pick the buyer. And along with the other selling shareholders, he picked Castellini.
"If it hadn't been for Carl's help and advice," Castellini told a battery of guests and television cameras during his formal introduction Friday afternoon, "we wouldn't be here today as new owners."
The other local group may never have had a chance. That's probably because they lacked the same connections.
They were lifetime Reds fans, including Rick Steiner, the local Broadway producer, and Rocco Landesman, the New York theater owner who would have been the CEO.
That group met with Lindner. But from the beginning they were a bit flamboyant for Lindner. One member, Dan Staton, has been an investor in Penthouse magazine. Steiner is an avid poker player. In the world of professional sports, that's not even unusual, much less improper. But at the very least, it's not Lindner's style.
In late October, as it became clear that Lindner would choose the next controlling group, Castellini was getting all the attention. And that was that.
"It's a very tough fraternity to get into," Steiner says. "I thought we were gonna get it. But once they emerged, the writing was on the wall."
Don't get me wrong. Castellini obviously is qualified to run the team. He's owned part of one baseball team or another for nearly three decades. He's made plenty of money here and has earned the right to spend it.
"We will bring championship baseball to Cincinnati," he told the crowd Friday.
Steiner says he'll sleep easy at night knowing his Reds are in good hands.
It's a little hard to feel sorry for Steiner. He's one of the producers of "Jersey Boys," the story of Frankie Valli and the Four Seasons that has been a Broadway sensation since it opened last October. Another show, "The Wedding Singer," will open in April. So he's doing fine.
But put yourself in Steiner's shoes, Reds fan. What if you could afford the once-in-a-lifetime shot to own your beloved hometown baseball team? Steiner thinks about it every day. How much money is that worth?
"I will be reminded daily," Steiner says, "that this is the one that got away."
So now Castellini is running the Reds. He'll determine the future of general manager Dan O'Brien and chief operating officer John Allen. When Reds fans call local talk radio to vent about Adam Dunn's strikeouts or Brandon Claussen's curveball, they'll throw those verbal darts at Castellini, not at Lindner.
Castellini showcased himself Friday with his first press conference at Great American Ball Park. He brings a reputation as a bulldog - competitive and knowledgeable and passionate about baseball. We all know it's a difficult battle for a small-market team like the Reds to compete with teams from bigger cities. This group appears ready to try.