Thursday, September 15, 2011

Bad, Very Bad

Not to step on Mr. Parsons and his excellent post on the praiseworthy Tim Lincecum, but I fear the worst as a result of the news that Giant's ownership is forcing Bill Neukom out as CEO and as a partner. He will step down at the end of this year. Here is the simple equation: Without Neukom, no World Championships, with Neukom, World Championship. More to the point, however, is that I do not understand how a fractious ownership can continue to support the team that won the World Series. Is the split over money (Giants payroll up 25%) or, as the Chron claims, lack of communication? Or maybe a little of both. In any case, the ownership (apparently, no one owns a majority stake, apparently Mr. Neukom did not even own the largest stake) did not seem satisfied with the direction Mr. Neukom was taking the team and the manner in which he was doing it. Dissatisfied after winning a World Series! And with a streak of 2011 sell-outs at the park, merchandise flying off the shelves, split-gate revenue undoubtedly up, advertising revenue up (although probably not as much as in a better economy), all kinds of extra tv shows, with their accompanying revenue! Not to mention acquisition of development rights to the land just south of Mission Creek and McCovey Cove, worth zillions. (Have you seen UCSF Mission Bay and the other the development along the Third Street corridor?)

The Chronicle also reported that Mr. Neukom's stake would be sold to investors. We can only hope that the investors are Giants fans, but I am bothered by the plural. More investors, means more consensus building is necessary, meaning that the team is to be run increasingly by committee, rather than by leadership and vision. More investors means more time to make a decision. Will the Giants be able to bid for free agents when the asking price gets a little high, or will they have to convene the numerous members of the executive committee to talk about it? "Oops! someone else signed 'em while we dither." And maybe the investors will not be Giants fans, maybe they will be investors. Not as though that hasn't ever happened (see: LA). Should we dig a little deeper to keep our pitchers AND Buster Posey? "Wait, let me run the numbers to calculate ROE/ROI - gee, the margins seem to be dropping - so, No."

Maybe the owners will be content to let baseball people run the club. But I doubt it. Look at the recent history. There seemed to be a major shift in the club's direction when Mr. Neukom took over. We went from long term contracts for celebrities to shorter contracts (a good thing!). He generated "The Giants Way" which stressed athleticism, among other things. I have previously tried to make the case that we need to spend to keep our core pitchers together. We have a very good - no, excellent pitching staff going into next year with Wilson, Lincecum, Cain, Bumgarner and Vogelsong. Wilson, Cain and Lincecum are expensive, they are either expensive with us or with another team. We have some great relievers that are not too expensive, so even if we keep a couple of the more expensive guys, like Lopez, we still have an excellent group without too great a cost. We have Posey and Sandoval for not too much money, not to mention the up and coming youngsters like Belt and Crawford and Stewart. We need to supplement the hitters, whether with Beltran or with someone else, but it is not like we need a complete re-do of almost all the positions.

The Giants have the opportunity, with one World Series under their belts, to be great for at least most of a decade, in spite of the big, injury-aided stumble this year. It will cost money to do so. It sounds to me like the "lack of communication" explanation is a way of saying that the reasons are not to be divulged so as not to make the ownership look bad. Baseball is a business. Business owners get kicked out when investors lose money, or when they create some impression that investors will lose money in the future. It also sounds to me like the team, just past the height of their success, is anticipating a poorer future. I do not understand why unless they simply plan to go cheap. Welcome to Pittsburgh.


Ron said...

In European soccer these days, undisclosed investors usually means ultra-wealthy upstarts from either Asia, the Middle East, Russia, or the US. Could we be seeing something similar? Unless they are from Japan or Korea, they are definitely not baseball fans, let alone Giants' fans. However, they do like to spend a lot of money. Suspicious developments.

Max said...

We should probably reserve judgment until we see something tangibly good or bad from management. Not saying that a little anxiety isn't warranted, just that it's too early to presume that the Giants are going to go all Pittsburgh Pirates on us.

Brother Bob said...

There was no grand master plan that won us a WS beyond, "Let's get some good pitchers." It was a complete and utter fluke otherwise.

Zo said...

@Ron. Are you serious? MLB probably wouldn't approve of new investors from the Middle East or Russia, and "like to spend money" is another kiss of death. MLB does not want ultra-wealthy investors, they might raise the salary structure. There is no mention of new investors, only that Mr. Neukom's shares will be sold to investors.
@Max. Agreed, the proof is in the pudding.

M.C. O'Connor said...

We'll see. I'm not sure it is panic time. Baer has been part of the triumvirate for years. If anything, the Giants are better suited than most clubs to make this transition. All I care about is whether they will spend the big bucks to keep Tim and Matt and Co together. I started to get the feeling that Nuke was going to spend like he'll and get any free agent we could dream of. Now I get the opposite feeling--that they will go hella cheap on us. The reality is most likely neither extreme. The suits with the real money keep a low profile in this outfit so I don't expect we'll learn anything substantive for a few weeks at least.