Indians stock on the rise, BY ROLDO BARTIMOLE, Cleveland Free Times, 5-28-99
"A Smith College economist who wrote "an eye-opening account of greed [and] abuse of the public trust" about baseball owners told a Cleveland audience two months ago, "I happen to think [Cleveland baseball stock is] a great buy, and I bought a bunch of it."
Andrew Zimbalist wrote Baseball and Billions in 1992. His assessment of the business of baseball is reflected in the above quote pulled from the cover's flyer page.
Zimbalist recently visited Cleveland and spent time with Dick Jacobs and his management team. At the time, Zimbalist said that they talked about the state of baseball and shared information he said, "would improve the team" economically ...
The team bought by Dick and the late David Jacobs in 1986 for some $37 million could bring as much as $300 million, some analysts have said ...
The Class A common team stock had gone as low as $5 a share, so the spiked jump to $16, with a potential to hit $20 with a sale, certainly helped those who hold the stock.
Jacobs himself holds 133,200 shares, or 3.2 percent, of Class A stock and 2.2 million shares (99.9 percent) of Class B. The shares are held in trusts, with 25 percent in the David Jacobs trust. Class B is the voting stock, under total control of Jacobs.
McDonald Investments Inc., one of two firms that will try to find a buyer, also hit the jackpot. McDonald holds 574,517 shares, or 13.8 percent of the stock. William Summers Jr. of McDonald, and a board member of the team, has 25,000 shares. McDonald is a subsidiary of KeyBank, and both are in Jacobs' managed buildings in downtown Cleveland.
Another large stockholder and board member is Raymond Park of the Park Corp., of the IX Center, with 344,334 shares, or 8.3 percent. These figures are listed in the baseball company's June 2, 1999 annual meeting notice.
The company statement also lists 1998 salaries and bonuses for team executives: Chairman Jacobs, $467,424; General Manager John Hart, $600,000 and $195,692 bonus; Executive Vice President Dennis Lehman, $300,000 and $95,692 bonus; Marketing VP Jeffry Overton, $225,000 and $47,846 bonus; Finance VP Kenneth Stefanov, $138,333 and $23,923 bonus; former VP of Baseball Operations Dan O'Dowd, $300,000 for a partial year and $47,846 bonus.
Most of the executives also hold options to purchase team stock at $15 a share, so that any increase above that would mean profits for them.
For example, Hart and Lehman have options for 15,000 shares at $15. Should the stock go to $20, as some predict, both would realize a $75,000 profit.
There is a lot of money in the sports business for everyone, but it's the fans who pay the bills with ticket and merchandise purchases and again with taxes that provide the facilities for sports owners and players."
ARTICLE BY ROLDO BARTIMOLE, Cleveland Free Times, 6-10-99
"... When Dick Jacobs finally sells the Cleveland baseball team and the public realizes how much money he will personally walk away with, the realization of public welfare for developers may be advanced.
Jacobs, though with less disdain, continues the same systematic transfer of costs from himself to Gateway, thus the public, on numerous expenditures for Jacobs Field.
Both Jacobs and the Gunds continue to bill Gateway with questionable new charges ...
Jacobs wants to saddle Gateway with Year 2000 computer compliance costs at $52,000, rejecting questions of the validity of the expenditures. The Gunds haven't made a claim yet, but likewise insist that Gateway pay its Year 2000 costs.
Gateway also voted to increase its costs of providing parking for Jacobs' stadium workers. Under the leases, Gateway has to provide parking for both teams on game days. Because of a shortage of spaces at one site for Jacobs, Gateway added space at an extra cost of some $32,000 a year ... The lease between Gateway and Jacobs never called for Gateway to build an executive office at a cost of $7.2 million.
If leases are to be rigidly obeyed, then it's time the lawyers went back to all the legal words and see where there have been violations of strictly read documents.
It's time city and county officials got the Gunds and Jacobs off the public dole. Welfare reform, where are you?
Roldo Bartimole publishes the newsletter Point of View. He can be reached at email@example.com
Copyright © 1999, Cleveland Free Times (Hummingbird Press)