Do new owners have any cash left to win?

KEN ROSENTHAL

August 03, 1993|By KEN ROSENTHAL

NEW YORK -- Now that the pinstriped egomaniacs are finished with their macho staredown, only one question remains: Can the Orioles afford a new accountant, much less a free-agent slugger?

After 14 years, the club finally is returning to local ownership, but after yesterday's frantic auction in federal bankruptcy court, it might not be worth the price.

The good news is, the new ownership resulted from the merger of two high-powered groups, each of which was willing to spend nearly $150 million to buy the club.

The bad news is, the final price of $173 million was nearly $50 million more than the previous record for a major-league team.

Let's say Jim McKay was in for 1 percent.

Now he's down for $1.73 million.

The electrifying bidding war took place in a sweltering sixth-floor courtroom in lower Manhattan -- the island Peter Minuit bought from native Americans for $24 in trinkets almost four centuries ago.

Let's see, $24 -- that might be the price of a hot dog next season. Compete with Toronto? Heck, the Orioles might be forced to lease Camden Yards to the Blue Jays for special events.

"Will you be able to go out and buy a Barry Bonds? No, and it wouldn't put more people in the stands anyway -- they're already full," said Joel Mael, the financial adviser to New York art dealer Jeffrey Loria, the "loser" who backed out rather than bid $175 million.

The new owners say they're committed to winning. Then again, so did Eli Jacobs the day he bought the team for a paltry $70 million five years ago.

In truth, the Orioles won't level the playing field with Toronto unless Peter Angelos, Bill DeWitt and Co. accept a minimal return on their investment, and perhaps none at all.

Jacobs, of course, is to thank for this mess. He originally struck a deal with DeWitt for about $140 million, subject to the approval of his creditors. But then he went into bankruptcy, leading to yesterday's auction.

The thing went more rounds (16) than a heavyweight championship fight. The price jumped nearly $18 million in the first 10 minutes. It was the go-go 80s revisited. The suits reveled in their bloodless version of Russian roulette.

Lawyers and accountants, accountants and lawyers -- with the heat and the SRO crowd, you could have swore you were in Camden Yards, the place where batting averages meet billable hours.

The scene was like none other in major-league history, but in the end, the difference between DeWitt's original offer and the final price was nearly $35 million -- the going rate for a top free agent.

Yet, Angelos and DeWitt insisted they can operate the Orioles in a manner that reflects the club's vast revenues.

"I say yes to that, but I don't suggest that Eli Jacobs' stewardship was one where necessary expenditures weren't made," said Angelos, the Baltimore attorney who will be managing partner.

"There's a difference of opinion on that. We certainly hope to put in as much as Mr. Jacobs, possibly more, hopefully more."

Hopefully?

"I hope they have the wherewithal to go out and get the players they need," Loria said. "They have to make adjustments on the field -- serious adjustments."

Even Judge Cornelius Blackshear agreed. At one point, a lawyer for Angelos started rambling about the "fair value" of the team. Blackshear replied, "They're in third place, are they not?"

Fourth, actually, but everyone laughed at the joke. For $173 million, you'd think these guys were getting the Blue Jays. Instead, they're buying a team that hasn't been to the World Series in 10 years.

Let's say the banks lend the group $90 million -- a reasonable guess based on the Orioles' profits. The owners would be left to invest more than $80 million, an amount they surely have, but an imposing figure nonetheless.

Angelos said the reduction of national television money alone will account for an $8 million loss in revenue next season. That figure could grow higher with a prolonged work stoppage and if salaries continue to soar.

Will the Orioles make like the financially strapped San Diego Padres or the filthy rich Blue Jays?

"Obviously the best way to build a team is through player development," said DeWitt, who will oversee the baseball operation. "But that's not to say you can't plug in holes in the free-agent market."

Lots of luck, Bill.

Just don't go into bankruptcy.

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