WisBiz In-Depth: Brewers' sale official; Attanasio group to spend money to win
By Gregg Hoffmann
MILWAUKEE A group headed by Los Angeles investor Mark Attanasio was officially approved as the new Milwaukee Brewers owner Thursday by Major League Baseball.
But, Attanasio already has been calling the shots on the Brewers' operations for a few months and has demonstrated his group will spend money to win and make money.
First, Attanasio spent a reported $220 million to buy the team, about $40 million more than most so-called "experts" were predicting the team was worth. Second, the group already has demonstrated that GM Doug Melvin will be allowed to make baseball decisions without as much concern about costs.
That's not to say that the Brewers could be in the running for high-priced free agents like Carlos Beltran, Pedro Martinez and others, but the franchise did shell out more than $8 million per year for White Sox outfielder Carlos Lee and about $2.8 million per year for free agent catcher Damian Miller, a La Crosse area native.
Those deals make Attanasio look like a big spender compared to the ownership group headed by the Selig family, who watched the pennies very carefully.
While big salaries do not always lead to winning, it is generally believed that the Brewers, who had one of the lowest payrolls in baseball last season, need to get into the $50 million to $75 million salary range to be able to sign new talent and keep some of their own as it matures and improves.
The equation should be: 1) Winning brings in more fans; 2) More fans mean more revenue; 3) More revenue means financial survival and continued improvement to the team.
By allowing Melvin to spend some more money initially, Attanasio is giving the club a better chance of starting the first phase of this equation. Now, Melvin must make wise baseball decisions.
Attendance, and other revenue streams such as luxury boxes, concessions, etc., are even more important to small market franchises like the Brewers, because they cannot negotiate as sweetheart of TV packages as franchises in large markets like New York, Chicago, Atlanta and others. A revenue sharing plan which kicks in from MLB should help even that playing field a bit.
Attanasio, 47, grew up in the Bronx, N.Y., and describes himself as a lifelong baseball fan. He is a graduate of Brown University and received his law degree from Columbia University before moving into investment banking. He has held positions at various investment firms since 1985 and is currently a partner in the Los Angeles-based Trust Company of the West.
Attanasio is not alone in this venture.John Canning Jr., Harris Turer and David Uihlein, who were part of the Selig group, will remain as partners in the franchise. Stephen Marcus also has been given an option to remain. Milwaukee area investor David Lubar also is expected to join the group. Attanasio will serve as controlling partner.
The financial transaction was schedule to be finalized at Foley & Lardner law offices in Milwaukee Friday. Attanasio will not attend the closing.
All indications are that Attanasio and his partners have the resources to compete in what has become the big-time money industry of baseball. The Selig ownership group ran a relative "Ma and Pa" operation in what had become a big corporate industry.
With the approval, the longest running ownership group in baseball ends. Bud Selig led a group that bought the bankrupt Seattle Pilots and moved the team to Milwaukee in 1970. Selig retained a group of family, friends and trusted associates throughout the franchise history.
When he became commissioner, Selig put his ownership shares -- reported to be between 25 and 30 percent -- in a trust. His daughter, Wendy Selig-Prieb, served as president of the franchise until two years ago and remained as chairman of the board until the sale. Her husband, Laurel Prieb, served as a front office executive.
As labor and other costs escalated in baseball, and County Stadium aged, the Selig ownership group struggled to keep up. At one time, the franchise was reported to have more than $100 million in debt. The building of Miller Park helped revenue streams, but the ownership group still did not have the funds of other, larger market teams.
Selig is reportedly enthusiastic about the transaction, calling Attanasio "very thoughtful, very smart, extremely smart."
"I think he's going to bring a lot of energy," Selig told the Associated Press at the MLB meetings in Scottsdale on Wednesday.
Selig said that bringing baseball back to Milwaukee was "my proudest accomplishment." The sale of the Brewers means baseball fans in Milwaukee don't have to worry about losing another team, the commissioner said.
"Now they don't have to go through what people went through in '64 and '65, when the Braves were leaving Milwaukee," Selig said. "There is no question about it. So whatever the controversy was about the ballpark or anything else, the Brewers are there. They're secure, and they're a marvelous asset."
Roof Settlement Helps
The Attanasio ownership group will not have to deal with legal controversies over the roof of Miller Park. The Brewers were never directly involved in the lawsuit between the stadium district and Mitsubishi Heavy Industries of America, but as the main users of the ballpark certainly were impacted by it.
Many members of the public also associated Miller Park with the Seligs, since Bud Selig led the fight for the controversial state financing of the stadium.
An out-of-court settlement was reached last week, just a few days before what would have been a costly and controversial trial had been scheduled to end. The stadium district will receive $33 million in the settlement and Mitsubishi $22 million.
The settlement was reached after Circuit Court Judge Kitty Brennan ruled that Travelers Indemnity Co. of Illinois held the obligation to cover the sides in the case. Travelers set a figure of $55 million, and the two sides divided the pot. IINA and the Royal insurance companies also paid some money in the case.
Don't expect everything to be fine with the roof in 2005. Repairs to the bogies, the mechanisms that open and close the roof, will be made after this coming season. So, the Brewers will limit the closing and opening of the roof during this year.
But, at least a legal hassle will not hang over the heads of the stadium, giving Attanasio and his partners a clean start in yet another way.
All indications are that Attanasio will play a relatively low-key, behind-the-scenes role as principal owner. Even the final MLB owners' approval on Thursday was overshadowed by the announcement of a new steroid policy in baseball.
Attanasio also has indicated that he will keep Melvin and the baseball staff in place. Rick Schlesinger will continue as vice-president of business operations. Much of the business and front office staff also will remain.
"Everything is on a great path, so I just want to continue with more of the same," Attanasio said at a press conference last fall.
But, make no mistake about it, Attanasio will make the big decisions in fact already has been and had indicated that he is willing to spend money in attempt to make the Brewers winners and eventually make money.
"Everything we do is going to be oriented to how we can start winning more games," Attanasio said. "I want to win."