Nationals' Transition Extends Off Field
Friday, May 11, 2007
Last July, when Major League Baseball was officially turning over the Washington Nationals to the family of Bethesda real estate giant Theodore N. Lerner, the incoming president of the club, Stan Kasten, was going over the plan he thought would best serve the building of the team. It involved slashing payroll in the upcoming offseason, stripping the roster before it was completely restructured. He wanted his new owners to understand the public's most likely reaction.
"They're going to call you cheap," Kasten said he told his bosses. "They'll probably call you cheap bastards."
As the Lerners approach the 10-month anniversary of their official takeover, the adjustments are ongoing both on and off the field. The Lerners have gone from owning businesses whose operations were essentially out of the public spotlight to taking on a franchise that Ted Lerner's son Mark -- one of the Nationals' four principal owners -- called "a public trust."
The first harsh criticism of the Lerners came last week in a four-part series on FoxSports.com that detailed tremendous turnover in the baseball operations department as well as some employees' frustration with the business practices the new owners have put in place.
The Nationals' play on the field, and the improvement needed there, is apparent. Heading into a 10-game homestand that begins tonight, the team has lost eight straight and owns the worst record in baseball. But just as important are the changes club officials -- from the Lerner family to Kasten to General Manager Jim Bowden -- felt they had to make not only to improve the team, but to make sure the business side of the operation runs smoothly.
Those changes, current and former employees say, have been jarring for some who consider the new owners to be overly scrutinizing, questioning expenses from baseballs to the use of overnight delivery services. But the upper echelon of management -- from the Lerners on down -- considers the changes part of the necessary evolution of the franchise. The Lerners' goal: run the Nationals as efficiently as they run their real estate empire, Lerner Enterprises. The family, Kasten said, is learning how those practices apply to a baseball franchise.
"There's no question it's different from other businesses," Kasten said in an interview yesterday. "Everyone on our team, our product, are all people with a high media presence, a high customer identification. That's a very different kind of thing. So there are adjustments. What I will say about our owners is they have been extraordinarily engaged at every step."
Ted Lerner has rarely spoken in public since his family took over the club. Mark Lerner -- who, with brothers-in-law Robert K. Tanenbaum and Edward L. Cohen, serves as a principal in the ownership structure -- declined to be interviewed for this story, referring questions to Kasten. But in an interview just before the season started in April, Mark Lerner said the family is still familiarizing itself with the business of baseball, a process he said "could take two or three years."
"We bought a business, a business that really wasn't run very well," Lerner said. "It was given to us in a very poor state. Our first goal was to get our arms around the business, whether it was baseball, football or selling meat."
Team officials and employees say that process has come with some bumps as everyone becomes accustomed to the way the Lerners want things done.
"Take purchasing," Mark Lerner said. "There was no rhyme or reason to how purchasing was done. That's a big deal. You spend hundreds of thousands of dollars, if not millions. We had to make sure that employees were not just bidding things on their own, or buying things on their own, down to a FedEx package. Everybody didn't know what the rules are."
Though the Lerners have pledged to invest every dollar of profit they make from the team back into the franchise for the first decade of their stewardship, the changes in such practices have had an impact on every department. For instance, some employees, primarily scouts, said they initially had trouble receiving expense checks in a timely manner. Two former club officials said one scout was owed "several thousand dollars" in expenses when his credit card statement came due and told his bosses he would come off the road until he was paid.
Kasten said yesterday those problems are being fixed and acknowledged, "That learning curve took time, but that's okay."
Kasten took issue with some complaints. "You do have to almost laugh and be a little embarrassed for people who are questioning the fact that they're being asked to justify their expenses," Kasten said.
There has, too, been a tremendous amount of turnover in the front office. During spring training, the farm director, Andy Dunn, resigned, and several of his underlings were either dismissed or left voluntarily. Some former employees said the working conditions in the baseball side of the organization were untenable. "Some people were glad to go," one said yesterday.
Kasten said he believes such a high level of turnover has helped.
"I'd say it's above average," he said, "because we were understaffed and undermanned in every area. And by the way, we got the best and the brightest from throughout baseball as a staff by paying them really well and treating them really well."
Kasten, Bowden and the Lerners know that such transitional issues would be more easily dismissed if the club was winning. But this year, the first full season in which the family owns the team, was long ago allocated for building. Player payroll went from roughly $63 million to roughly $37 million to $38 million.
Kasten and Bowden have said time and again that some money saved in payroll is being put in scouting and development, though they won't specify how much. The Lerners will contribute at least $30 million more to alterations to the new ballpark, set to open for the 2008 season. That number, Kasten said yesterday, "keeps climbing."
And while Kasten is loath to give specific payroll projections for next season, he did offer a scenario. "Say we had $30 million to improve in the offseason," he said. "Who goes out there in November with $30 million burning a hole in your pocket? I can say to anyone, 'Come talk to me.' " He stressed that such a number was an example, not a hard figure.
For the most part, the players seem to have faith in new ownership. Third baseman Ryan Zimmerman, the one player who seems certain to be part of the future, said he understands the turnover, the payroll cutting, everything that goes into rebuilding.
"Why spend money this year?" Zimmerman said. "Let's let the young guys get some work and see who can really perform and then build around six or seven guys who can perform. Then next year, when you want to spend money, when you want to spend $40 [million] or $50 million, you can bring in two good starters, a power bat and a leadoff guy. Then we're right there."
Such a wish list is shared by fans. Kasten, though, reiterated that he must be patient, to not make rash decisions swayed by the public or the media. He said the Lerners won't be swayed. And he said the staff is ready to "take on the challenge of building a championship operation," one led by the Lerners.
"The only question that matters is: Is the staff which is now here very good and working well together and productively?" Kasten said. "The answer to that is, 'Yes.' Shouldn't that be the only thing that matters? It is to me."