If I had, though, the grade that might have surprised the most people was the grade I would have given to David Glass: an A. Glass (and particularly son Dan) had as much to do with the Royals’ stretch of 100-loss seasons as anyone, but things have changed dramatically in the Dayton Moore era.
There’s really three things you want from an owner: 1) open up the pocketbook when necessary; 2) hire the right people; and 3) stay the hell out of their way. In 2008, at least, Glass has done all that. The Royals have money to spend on free agency every year; Dayton Moore is highly-regarded in the industry, and just as importantly, has been allowed to hire a number of highly-regarded baseball men to assist him, most recently Mike Arbuckle.
And on the third point…when was the last time you saw David Glass’s name in the paper? Unlike five or even three years ago, you never see Glass weighing in on baseball matters. Occasionally he’ll talk about the finances of the club or the ongoing renovations, but that’s it.
Royals owner David Glass has an easy explanation for the anticipated increase of 20 percent or more in the club’s payroll for the 2009 season.
“You just put money in,” he said with a chuckle. “It’s simple.”
The increase figures to boost the Royals to about $70 million — nearly $12 million more than last season’s franchise-record $58.2 million — and comes at a time when several teams are trimming payrolls because of concerns over the economy.
Glass cites two reasons for the increase:
•The Royals are making measurable progress in their rebuilding plan after winning 75 games last season and escaping last place in the American League Central for the first time since 2003.
•A sign of good faith to the fan base upon completion of $250 million in public-funded renovations to Kauffman Stadium.
Those are both good reasons. Let me add a third reason, far more compelling than the first two.
I want you to compare these three stocks:
July 2 2007 December 4 2008Change
A 35.51 27.55 -22.4%
B 36.23 14.11 -61.1%
C 48.33 55.11 +14.0%
Stock A is Wells Fargo & Company, which represents the bulk of Carl Pohlad’s fortune. Last year the Twins’ owner ranked 114th on Forbes’ list of the 400 wealthiest Americans, with an estimated net worth of $3.1 billion, $1.3 billion of which was tied up in Wells Fargo stock.
Stock B is Cablevision Systems Corporation, which is the primary source of wealth for the Dolan family. Larry Dolan, who bought the Cleveland Indians in 2002, doesn’t appear to be involved with the company all that much – it was founded by his brother Charles. (If only idiot nephew James could have bought the Indians instead. Based on the way he’s run the New York Knicks into the ground, you’d figure that by now the Indians would have a permanent hold on last place.) But it does appear from this article that Dolan’s wealth is tied into the company. He’s a successful
And Stock C, of course, is Wal-Mart.
The stock market is in the midst of its worst decline since the Great Depression, but if your portfolio consisted mostly of Wal-Mart stock, you’d almost be forgiven for thinking otherwise. It’s a cliché to say that companies which service the bargain-basement sector of the economy are recession-proof, or even a hedge against the market, but in this case the cliché is absolutely true.
I can’t find a recent estimate of David Glass’s net worth; the best I can do is this KC Pitch article which (quoting a KC Star article that is behind the wall) estimates his net worth at $323 million in 1999 – before he bought the Royals. It’s instructive to note that from 1999 until mid-2007, Wal-Mart stock was essentially flat – the stock price was
But over the last 18 months, while Carl Pohlad has lost hundreds of millions of dollars, and the Dolan family has seen their net worth cut in half…Glass has done well for himself. His net worth is still a fraction of Pohlad’s, but Pohlad has never seemed interested in using his financial assets to the Twins’ advantage anyway. A team like the Indians, though, are feeling the pinch. Most teams in baseball are.
The Padres are having a fire sale (in addition to everything else, their owner is going through a costly divorce.) The White Sox have unloaded Nick Swisher and Javier Vazquez in the last month, though if anyone knows how to rebuild and compete at the same time, it’s Kenny Williams. Meanwhile, the Royals felt they could take a risk on offering Mark Grudzielanek arbitration, even as the Yankees didn’t feel they could take the same risk with Andy Pettitte and Bobby Abreu.
So why is Glass willing to raise payroll while other teams are looking to cut costs everywhere? Partly because he can afford to. With the White Sox retrenching, with the Tigers adrift, and with the Indians’ ownership watching their net worth crater – Cablevision stock is down almost 10% today as I write this – Glass may be thinking that a well-timed cash spend this winter might put the Royals into contention much sooner than anyone thinks.
If there’s a silver lining to the economic meltdown – at least if you’re a big fan of schadenfreude – is that some of the richest and most successful titans in