Selig Plays Hardball on Stadium Deals
Without baseball's antitrust exemption, a major league team could move into Washington or Northern Virginia without baseball intervening. With it, the Baltimore Orioles, who have sought to block such a move, enjoy a monopoly over a region encompassing 7.6 million people, the fourth-largest consolidated metropolitan area in the United States after New York, Los Angeles and Chicago.
Without the antitrust exemption, "they'd all be in jail -- it's real simple," said Spencer W. Waller, director of the Institute for Consumer Antitrust Studies at Loyola University in Chicago. "I'm not saying that people in baseball are evil or immoral, but because of antitrust laws they act like any rational monopolist would act in raising price, restricting output and limiting innovation. It's more of what a rational cartel would do than a monopolist."
Selig's role as judge and jury in Washington is freighted with irony. Although he has long fretted about a Washington area team's potential impact on the Orioles, and vice versa, in 1970 he relocated his own franchise from Seattle into what is now baseball's smallest market, 90 miles from two Chicago teams, four years after the Milwaukee Braves moved to Atlanta.
Throughout the 1990s, Selig promoted a new ballpark as the only way to make his team competitive enough to stay in the city -- a message that he and his supporters conveyed via implied threats, the cooptation of Wisconsin's most powerful media and one of the most expensive lobbying campaigns in state history.
Interviews and recent audits of the Brewers' finances suggest that Miller Park was built on a foundation of economic sand. Much of the revenue the new stadium generated went to support a previously hidden spiral of private debt -- $171.3 million in 2001, the year the park opened, according to a report last month by the non-partisan Wisconsin Legislative Audit Bureau.
Among other things, that review of the Brewers' finances showed that annual $3.85 million stadium maintenance payments the team received from taxpayers was used until 2002 to service $50 million in Brewers loans. The loans represented part of the team's contribution to stadium construction.
The debt, along with plunging attendance, forced the Brewers to slash player payroll to a major league-low $27.5 million just three years after Miller Park opened. The Brewers opened this season paying their entire team $10.4 million less than the Boston Red Sox pay outfielder Manny Ramirez and pitcher Pedro Martinez.
On Jan. 16, faced with a public outcry over the reduced payroll and growing questions over how he used the Miller Park money, Selig put the Brewers up for sale.
Selig-Prieb, the Brewers' chairman, said the club's finances were undermined by changes in baseball while the stadium was being built. "The economics of the game changed dramatically during this period," she said. She echoed her father's view that without the new ballpark the Brewers would have been forced to leave Milwaukee.
Change in the Rules
Selig broke his first stadium promise more than a decade before Miller Park was built.
He drove out to Madison, the state capital, to have breakfast with Thompson. "I'm building a new stadium, and I wanted you to know," Selig told the governor, according to Thompson. "Don't worry about it. I'm going to build it myself."
Selig was a local hero, the man who had almost single-handedly saved baseball in Milwaukee. In 1965, at 31, he had fought unsuccessfully to stop the Braves from moving to Atlanta. Selig spent the next five years trying to get another team. In 1970, he led a group of investors who bought the Seattle Pilots out of bankruptcy; Selig's stake was $300,000. The team was diverted to Milwaukee with such haste that Brewers patches had to be sewn over the Pilots' uniforms.
Selig told friends that he wanted to be the first owner to finance his own ballpark since Walter O'Malley built Dodger Stadium for $18 million in 1962. But his promise failed to take into account the momentous economic shifts inside his sport. As baseball gravitated from broadcast to cable television in the late 1980s, teams in large markets began to receive torrents of new revenue that they spent on free agents, driving up player salaries.
The trend buried cities such as Milwaukee, the 27th largest metropolitan area in the nation. Selig in effect was trapped in a perfectly circumscribed market: Chicago was 90 minutes to the south; Minneapolis six hours to the west; and Lake Michigan directly east.
"Life changed," said Selig. "The same rules I was playing by no longer existed."
In comparison to other owners, Selig was not enormously wealthy; the team and his car dealership, which he took over from his father Ben, a Romanian immigrant, were his primary sources of income. So, in what became a nearly continuous search for cash to support his franchise, Selig reversed the equation: Instead of Selig building the stadium for Wisconsin, the state would build it for him.
"The bottom line is the Seligs really couldn't afford to own the team," said John O. Norquist (D), Milwaukee's former mayor. "They were looking for other revenue streams."
Selig had only to look at other owners to see what was possible. In Chicago, Reinsdorf, now chairman of baseball's relocation committee, had threatened to move the White Sox to St. Petersburg, Fla., in 1987. The Illinois legislature approved a $150 million ballpark in 1988 as the clock struck midnight to end the legislative session.
In 1989, George W. Bush invested $606,000 as part of an investment group that purchased the Texas Rangers. Largely because of the construction of a publicly financed stadium -- the Ballpark at Arlington, now known as Ameriquest Field -- the group sold the team to Hicks nine years later for $250 million. Bush's reported share was $14.9 million; the 2,358 percent return on his investment made him financially secure enough to enter politics.
Selig was known in Milwaukee as a kind of everyman, a rumpled creature of habit who regularly ate his lunch at a local custard stand. He was careful never to explicitly threaten to leave. He made the rounds in Milwaukee, impressing upon local politicians, reporters and members of the business community his predicament.
"What he would say is, 'Unless we build a facility we can't economically survive here,' " said James R. Klauser, who served as secretary of administration under Thompson. "He never said, 'If we don't get a stadium we'll leave.'
© 2004 The Washington Post Company