Bud Selig on community ownership: 'I don't think it works'

Give Los Angeles City Councilwoman Janice Hahn credit for this: She got a lot of mileage out of a nonstarter of an idea. As she told The Times in this story, she would like to see fans get together to bid on the Dodgers should the team be put up for sale. Hahn got some more publicity here, here and here.

No chance.

Hahn apparently neglected to check with Bud Selig. But in the month before the McCourt divorce trial started, here is what the commissioner told The Times about community ownership: "I don't think it works."

The stories linked above generally come to that conclusion, but they include misconceptions as to why.

There is a theory that Congress must get involved. This is false. Major League Baseball can approve whatever ownership it likes.

There is a theory that MLB would not want a team to be publicly owned because of the financial disclosures that would be required. This is partially true -- MLB likes to keep its financial data confidential where possible -- but not decisive. The Seattle Mariners have to disclose financial data that would otherwise be private, a deal the Mariners made -- and MLB approved -- in order to secure a publicly funded ballpark in Seattle.

The primary reason MLB would not approve community ownership involves capitalization. In other words, it's all well and good to say 10 million fans each would contribute $100 and, voila, there's $1 billion to buy the Dodgers.

But then the fans would have to operate the team, and therein lies the problem. Let's be whimsical and say the Dodgers want to buy Cliff Lee away from the New York Yankees -- and every other team -- in free agency, for $200 million. If the Dodgers do not substantially increase their revenue -- and even the splashiest free agents seldom drive attendance -- is every one of those fan-owners willing to pay more money to guarantee Lee's contract?

Finally, let's be practical. What MLB wants to know from potential owners is not just how they would pay to acquire the team but how they would pay to run it. When the team loses tens of millions of dollars in any given year, who covers the losses? And what if those losses continue?

You're not talking about a one-time payment of $100 any more. You're talking about  what could be one of the most impractical series of cash calls in sports history.

The Green Bay Packers make community ownership work because the NFL shares so much of its revenue equally among teams, but even the NFL would not approve community ownership today. And the division of revenue is far more unequal in MLB.

Selig's complete comments on community ownership:

I don't think it works. No. 1, if you lose money, who is going to pay?

The Packers' story is unique. You notice no one else has done it in sports, including in football. It's a great story. I give the NFL credit. Their economic system saved the Packers and let the Packers grow into what they are today, which is a remarkable institution. But does it really work in today's economics, if you're just starting now?  No.

-- Bill Shaikin

Comments

[OMG]

Janice Hahn?
.
Really?
.
How slow a news day is it?

[Labeldude]

But evidently highly leveraged buyers are OK as long as they have a plan which includes first and foremost, kissing Bud's ass.

[Blue Boy]

Steve, it's worse than "who pays?" Based on the entries on this blog, can you even remotely imagine gatting a voting block majority of fans to agree on anything? Ten million individually-minded owners/voters! No publicly-owned team CEO could deal with that. Ownership by the uber-wealthy has its seamy side but at least with McCourt we know at whom to point.

[crystalheuvo]

The community on Bud Selig: 'We don't think he works'

[crystalheuvo]

The community on Magic Johnson: "Buy the Dodgers"

[Jaime]

I was wondering who would win the largest ego contest if Magic Johnson bought the Dodgers as some Blue fans are suggesting...
.
Magic or Frank?

[KoufaxFan]

Bud the Dud should be saying "McCrap hasn't worked; get him out of there."

[Dodger Fan]

I hate to agree with anything Bud Selig says but I think he is right about community ownership. You need someone at the helm of the ship and in a LA scenario who would that be, Major Villaraigosa? If you think that is a good idea just look at the city's financial situation.

I think the key is in Steve's ninth paragraph where he writes that "MLB wants to know from potential owners is not just how they would pay to acquire the team but how they would pay to run it. When the team loses tens of millions of dollars in any given year, who covers the losses? And what if those losses continue?" Now why didn't Mr. Selig and MLB think of this before they approved the sale to the McCourts in the first place?

I would guess that because they were not only not thinking practically the weren't thinking at all. Thanks Bud!