When the Boston Red Sox, one of baseball's most storied franchises, went up for sale in 2001, a group of New England businessmen that sought to buy the team was considered the hometown favorite, the potential ownership group with just the right political, media and financial connections.
But when the bids were all in, Red Sox Nation was astonished to find that its beloved team had been awarded by Commissioner of Baseball Bud Selig to a triumvirate consisting of a Florida financier, a Hollywood producer and a longtime baseball insider whose last stop had been San Diego. None was a New Englander, but all had some prior connection to baseball -- and Selig.
If the controversial sale of the Red Sox is any guide, the auction of the Washington Nationals by its owners -- Major League Baseball's 29 other teams -- could result in an equally surprising outcome. Money, of course, will play a huge part in the decision -- some Nationals bidders have made oral commitments to paying as much as $450 million for the team, which would place the Nationals as one of the most expensive baseball properties ever sold. But there will be other, less predictable, factors.
"MLB has an institutional interest in the quality of the ownership and, irrespective of purchase price, whether they will be good, stable, long-term collegial owners. Baseball is a very small club," said Steve Greenberg, a managing director at Allen & Co. investment bank, which represented Selig's family last year when it sold the Milwaukee Brewers. "Only 30 owners. And you want to make sure the people in it are like-minded for the good of the game."
As with most major sports leagues, what's good for the game is often in the eye of the commissioner and his key advisers -- in this case Selig, Chicago White Sox owner Jerry Reinsdorf and MLB President Robert DuPuy. Their ideal owner: someone who has deep ties to the community, the long-term financial resources to support a competitive team, the prudence to treasure the franchise as a public trust and, not coincidentally, the savvy to toe the company line when it comes to MLB's operations.
Nationals President Tony Tavares put it another way. "Baseball is looking for a traditionalist," he said.
Selig has said he is committed to deciding on a new Nationals owner by late this month, and the process appears to be edging forward. DuPuy, MLB Executive Vice President John McHale and MLB general counsel Thomas Ostertag are expected to present Selig with an analysis of the eight groups that have already paid $100,000 each for the right to bid for the Nationals when team owners meet in Pasadena, Calif., on Wednesday.
Teams get sold to the people the commissioner likes. Selig helped assemble the ownership group in the Boston sale and approved the sale of the Oakland Athletics to an old friend, Lewis Wolff, who bought the ailing franchise for $180 million. Two other teams that were recently sold -- the Los Angeles Dodgers and the Los Angeles Angels -- went to buyers with ties to baseball. Boston real estate developer Frank McCourt bought the Dodgers after unsuccessfully bidding for the Red Sox and businessman Arte Moreno, who knew Selig from his days as a part-owner of the Arizona Diamondbacks, bought the Angels.
Washington presents a far different set of circumstances, and not just because the Nationals have 29 owners, who purchased the team, then known as the Montreal Expos, for $120 million in February 2002. Although baseball in general and Selig in particular were reluctant to move the Expos here, the team is now seen as a one-of-a-kind franchise in the nation's capital that will provide "a window into the national pastime," as one baseball insider described it.
Those factors and others, including the team's surprising performance on the field and its success at putting fans in the stands, have combined to make the Nationals one of the most hotly contested sports team auctioned in the last decade.
"There's no franchise that's more important to baseball than Washington," said Peter O'Malley, the former owner of the Dodgers, who helped select several owners as chairman of MLB's ownership committee. "So quality of ownership will be the most important thing. Quality of the people. Absence of controversy. And if I were there, it would be quality and stature in the community. No absentee ownership."
The desire for an owner with deep local roots could be magnified because the D.C. Council has remained split over a plan narrowly approved last year to fund a stadium with mostly public money. Many city leaders, including Mayor Anthony A. Williams and D.C. Council Chairman Linda W. Cropp, have called on baseball to pick a local group that will invest in the city.
If that criterion is the most important, it could favor the group led by Fred Malek and Jeffrey Zients, two prominent Washington businessmen. Their group probably has the strongest local political muscle as well as the stature that comes with having former secretary of state Colin Powell as a partner. However, the group may not want to spend the $450 million it could take to get the team.
The group led by Jonathan Ledecky, a former minority owner of the Washington Capitals, has a local connection and big money in the form of billionaire George Soros. The addition of Soros touched off a storm of criticism from Republicans on Capitol Hill because of his liberal politics. And Ledecky's failure to close on the Athletics in 2002 could hurt the bid.
Ledecky has campaigned more openly for the team than other groups, holding a news conference last month touting the backing of key city officials, such as council members and former mayor Marion Barry, and announcing a $100,000 donation to renovate city recreation facilities.
Another prominent Washington businessman, Ted Lerner, the patriarch of a local real estate empire, has the money and a quiet diligence that is designed to inspire confidence from Selig. But like Malek and Zients, Lerner's group, which includes his son, Mark, may not be willing to pay what baseball wants.
Chicago businessman Yusef Jackson, who has partnered with billionaire grocer Ronald Burkle to bid on the team, has lived in Washington and has local ties to prominent politicians such as Barry. But neither Jackson, who is the son of Jesse L. Jackson, nor Burkle lives here.
The same issue applies to another bidder, Franklin Haney Sr., a businessman with one foot in Tennessee and one in Washington.
Longtime Atlanta sports executive Stan Kasten has Selig's confidence and is believed to have found a financial backer with deep pockets, which could make him a force in the bidding process.
A local group based in Northern Virginia, which communications executive William Collins led for years, got a financial and public relations windfall when it enlisted Sallie Mae Chairman Albert Lord to be its new chief in June. However, Collins -- who still is a member of the group -- did not deliver on promises of a publicly financed stadium in Virginia, which was baseball's preferred location for the Expos. His failure may hurt the group's chances.
The eighth bidder, former Seattle Mariners owner Jeffrey Smulyan, who runs a radio and television empire from Indianapolis, is friendly, well-spoken and very close to Selig and Reinsdorf. But a lack of Washington connections could hurt Smulyan, although several baseball insiders consider him a formidable bidder willing to spend a lot of money.
Baseball officials have yet to decide how the final stages of the selection process will proceed, according to officials involved in the bidding. Selig could call for a second round of bidding, with each group putting in a written bid accompanied by more detailed information about its financial structure.
One option being mulled would be to set a price, presumably over $400 million. If more than one group agrees to the price, the decision would then be based on other factors, including local ownership, the financial soundness of the bid and which bidder is the most comfortable fit.
Initial bids have ranged from about $350 million to around $400 million, and some groups have orally committed to going much higher, according to people familiar with the bidding process. Those believed to be at the high end of the bidding include Haney, Jackson and Burkle, and Ledecky and Soros, according to various sources.
Kasten, Smulyan and Lord and Collins are in play as well. The league informally indicated to some groups, among them Malek and Zients, and Lerner, that their bids were at the lower end of the scale, according to sources. Those two groups, at least, would be willing to spend more, but it's not clear how much more, according to those sources.
Baseball observers have broken the eight bidders into subsets, with some groups belonging to more than one subset. One insider referred to the "baseball insiders" group, which includes Smulyan, Kasten, Lerner and Haney. Smulyan and Kasten are former team owners or operators. Lerner and Haney aren't "insiders," but they have hired people who once worked on the administrative sides of teams to help guide their bids.
Another subset consists of the two groups -- Lerner's and Haney's -- that are betting that baseball will look favorably on a family-owned team in which the decision-making process would be conducted by one or two individuals. That would be a contrast with the Malek-Zients and Lord-Collins groups, each of which include a smattering of semi-equal partners that cut across the Washington business, legal and political communities.
After money, local connections may be the most important factor. When Selig sold the Brewers, a team he had owned since 1970, the buyers included Mark Attanasio, a Los Angeles financier, but also the Lubar family of Milwaukee, and four of Selig's former partners in the team who rolled over their holdings.
In the case of the Red Sox, all three of the new owners had extensive backgrounds in baseball -- Tom Werner with the Padres, John Henry as the former owner of the Florida Marlins and Larry Lucchino as former president of the Padres and Baltimore Orioles. The group bought the franchise and its profitable New England Sports Network for $700 million in January 2002.
It won the team despite a purportedly higher bid offered at the last minute by cable television billionaire Charles F. Dolan. But the sale, which was conducted by the team's longtime owner, a trust established by the late Tom Yawkey, was investigated by the Massachusetts attorney general's office, which suggested Selig had "called the shots" to steer the team toward Henry. In the end, Henry, Werner and Lucchino recruited other investors, including former Sen. George Mitchell (D-Maine), by the time they took over the team.
"We've been around long enough to know that baseball's preference for local perspective and local coloration is sort of well established," Lucchino said. "It doesn't mean it's qualifying or disqualifying. It means that historically, there has been a preference for that structure."
Staff researchers Julie Tate and Alice Crites contributed to this report.