By Les Carpenter
Washington Post Staff Writer
Thursday, November 3, 2005
Behind the doors to a private Ritz-Carlton dining room, Jeff Smulyan has come dressed for breakfast in a blue pinstriped suit and with the proper accessories -- a former chairman of the Federal Communications Commission and an ex-deputy U.S. attorney general.
If ever Smulyan needs to look both local and rich it is now, because his failure to do either might be the ruin of his bid to buy the Washington Nationals.
Smulyan, 58, runs Emmis Communications, an Indianapolis-based radio empire that generated $591 million in revenue last year, but his most important work now is in image management. The one realistic candidate to own the Nationals who brings an intimate knowledge of Major League Baseball also is the man whose record is his biggest detriment. His tenure as the out-of-town owner of the Seattle Mariners from 1989 to 1992 stand as "the one thing that I didn't walk away from and say, 'Wow, this is pretty good,' " he said over breakfast.
But this had a lot to do with the fact that baseball was becoming a big-money game and Smulyan turned out to not have a whole lot of money at the time. "It's a different time, we're different, our company is different," he said.
Smulyan says that his current investors are worth more than $2 billion even if his personal worth has only been put at $299 million. He talks about a partnership for his bid loaded with local names that include Richard E. Wiley, the ex-FCC head; former Washington Redskins Art Monk, Charles Mann and Calvin Hill; Alfred Liggins III, the chairman of TV One and chief executive of Radio One; and Eric H. Holder Jr., a former deputy attorney general in the Clinton administration. And he says the financial commitment from African Americans in his bid is the largest in baseball history -- a fact baseball does not deny.
The men who run the game, it seems, love Smulyan. He is close to Commissioner of Baseball Bud Selig and Chicago White Sox owner Jerry Reinsdorf, a top adviser to Selig on the Nationals' sale. When league officials told him this summer that he needed to buttress his bid with more money and bigger names, Smulyan jumped on the telephone and called total strangers, not only luring them onto his team but in the case of men such as Hill and Holder, persuading them to invest more than they ever dreamed they would.
But as baseball nears its decision on who will own the Nationals, Smulyan remains the outsider when compared to the other front-runners -- the group led by Frederic V. Malek and Jeffrey D. Zients and that of the Lerner family, both of which have longtime local credentials. District officials have kept their distance. Smulyan has traveled to Washington repeatedly, visiting the offices of Mayor Anthony A. Williams (D) and D.C. Council members, charming many in their face-to-face meetings only to be disappointed later when the support he believes he gets in those conversations changes in the public comments made later.
Williams said last month that he liked Smulyan, then added: "I am concerned he's not in the city. The last thing I want is some long-distance corporation to have a major stake and control over the organization."
Some, including D.C. Council Chairman Linda W. Cropp (D), have questioned the voice Smulyan's local investors will have in the Nationals' operation. Smulyan insists he will not take $100 million of people's money without letting them have a say.
"If you look at the people who are investors here there are no shrinking violets," Holder said. "And if the notion that these folks are at the table to get their picture taken and smile for the camera and be shuffled off so Jeff can make all these decisions, they don't know who we are."
Said Smulyan: "I think people have gotten to know us. I think we were portrayed as a group of outsiders who will come in and take the team away."
He said this is the last thing he wants. But in a city which has lost baseball teams twice before, the idea of an owner from the Midwest, whose previous foray into baseball included allegations he tried to move the team from Seattle to the Tampa Bay area, it is easy to understand the fight Smulyan is going to have against public opinion.'He's a Genius Marketer'
Smulyan had a vision for baseball when he purchased the Mariners in 1989: He was going to change the way it sold itself. He wouldn't simply sell $5 box seats and stock the concession stands with extra Cracker Jack. He wanted entertainment -- flashy scoreboards, booming music and team mascots that would be available for birthday parties, bar mitzvahs and school picnics.
In other words, Jeff Smulyan's baseball world in 1989 looked a lot like everyone else's in 2005.
"Baseball has a lot of different audiences and you have to put something together that makes each audience feel good and that overall the product on the field has to be great," he said. "But what you learn is that a baseball game is three hours long. It's got to be an entertaining experience."
In Seattle, he created a kids' section, played songs for each player as he came to the plate and claims his staff invented the concept of running movie snippets on the video board -- all now standard features in ballparks.
"He's a genius marketer," said Bob Watt, who as deputy mayor of Seattle in those days worked regularly with Smulyan on a number of issues including getting a new stadium, finding more investors -- and possibly moving the team out of town.
It is the last part that troubles many in Washington. While Smulyan might have made the Mariners a marketing success, he also dumped the franchise and left town three years after he bought it, hounded by banks, frustrated by his own lack of financial capital and Seattle's unwillingness to build him a stadium.
Looking back it is clear Smulyan did not know what he was walking into when he bought the Mariners for $76 million in August 1989. He bought a team without much of a fan base in a city where football was the sport of choice. And it was a community that had little municipal support for professional sports. Seattle had been burned by baseball before when the expansion Pilots went bankrupt after one year and were snatched away by Selig, then a used car dealer who moved the franchise to his home town of Milwaukee.
The only reason Seattle got another shot at baseball was because the city sued the American League in the early 1970s and was promised an expansion franchise in exchange for dropping the suit. The resulting team, the Mariners, had gone through two owners -- a group headed by the actor Danny Kaye followed by California businessman George Argyros -- before Smulyan bought them.
Smulyan, coming from Indianapolis, said he understood little of this history until after he bought the team. All he knew was he had purchased a club that never had a winning season and was playing in the Kingdome, perhaps the dreariest stadium in the major leagues.'He Outsmarted Himself'
Right from the start there were problems. The Mariners had one of the lowest payrolls in the American League, at about $10 million. Smulyan tried to increase it to $22 million by 1992, yet even then it wound up being at the bottom. Smulyan was also taking a hit in his own business, as the radio industry went through a crushing downturn.
He began to push for the things he needed to make the team profitable -- a new ballpark and a big television deal. And here is where Seattle opinion splits on Smulyan. Some say he was a man desperate to make baseball happen in the Northwest. Others think he used his financial problems as a ploy to run to a new domed stadium in St. Petersburg, Fla.
"I think he was struggling to get an outcome that I think he wanted, which was to keep the team in Seattle," Watt said. "His financial circumstances at the time kept him from doing this."
In the summer of 1991 the Seattle Times obtained internal bank memos from Security Pacific Bank in which the bank demanded the repayment of a $39.5 million loan. The memo said Smulyan would trigger an escape clause in the Kingdome lease, look for a local buyer and then move the team in 1993.
Smulyan says he believes the newspaper read too much into the memo. "I always felt that was more manufactured by the Times, let's be blunt," Smulyan said. "Because of what we said? The infamous bank memo? The bank met with [Smulyan's team president and current Emmis executive] Gary Kaseff and the bank said, 'Look, we think Jeff is on a mission from God that no matter what happens he is going to kill himself to make this work.' They said, 'We want to know Jeff's not crazy because we don't think it works here. And we'll be your bank anywhere you go but we don't want to go down the drain here.' "
Others have a different view. Former Sen. Slade Gorton (R-Wash.), who is credited with saving baseball in the Northwest, calls Smulyan "a highly unsuccessful owner who complained from the day he took over the franchise."
The catch to relocating to the Tampa Bay area was the Kingdome lease the bank memo said Smulyan was trying to break. It contained a clause that said an owner could break the lease and move, but only after offering the team to a local buyer first. Considering that two owners had already given up on the team in its first 10 years, Smulyan agreed.
"We said the first day, 'If we can't make it work let someone else try,' " he said. "Did I talk to people in Tampa? Of course, I did. Did I talk to people in Major League Baseball [about a move]? Because the assumption was that no one would buy it."
Smulyan added that he had one discussion with officials in the Tampa Bay area and was told he would be welcome to come. But regardless of what interest he had in moving, the Kingdome lease trapped him in Seattle, at least until he was unable to sell.
"He outsmarted himself," said Gorton, who now works for the Seattle law firm of Preston Gates and Ellis. "If the community there has any voice in the subject they would be wiser to look for a local owner."
Gorton persuaded Nintendo, which had its U.S. headquarters in the Seattle area, to front a group that included a handful of Microsoft executives. They bought the team from Smulyan in 1992 for $106 million and proceeded to have many of the same fights as Smulyan with city and county politicians for the next four years, lost a referendum on a new stadium, threatened to sell the team and eventually convinced the governor to convene a special session of the state legislature. They got the new stadium that Smulyan cherished in 1999.
"Jeff was either being duplicitous and wanted to move to Tampa all along or he was trying to work with Seattle and was using Tampa as leverage with Seattle. I prefer to believe the latter," Watt said before acknowledging that Smulyan struggled with Seattle's culture, which warms slowly to outsiders. "I hadn't been in Seattle long enough to have a lot of friends and supporters. So when he needed help there wasn't a lot of that." As Smulyan's name emerged as a candidate for the Nationals, Watt said he began looking at Emmis's numbers, curious to see if Smulyan's capital was different now. "His financial circumstances are much better," he said. "I understand the concerns for D.C., but there's reason for hope."