Fred Wilpon was a happy man. The tall, reserved 62-year-old had grown up in lower-middle-class Brooklyn, the son of a funeral-home manager, and here he was, a multimillionaire guest at City Hall accompanied by his own son. Wilpon had amassed a fortune building and buying Manhattan office and residential towers, along the way becoming enough of a political power to merit an invitation to tonight’s “State of the City” speech. He was even optimistic about the baseball team he co-owned, the Mets, which had a new, dazzlingly upbeat manager, Bobby Valentine.
Then Rudy Giuliani reached the part of his speech where he began handing out goodies. The mayor announced that the city would build a minor-league ballpark on Staten Island – for the Yankees. Wilpon applauded politely. Afterward, he reminded Giuliani that “it would have to be a quid pro quo thing.” The mayor knew what Wilpon meant: Under baseball’s bylaws, the Mets have the right to veto a Yankees farm team in New York. “I don’t threaten the mayor,” Wilpon says serenely. “I like him, and that’s not my style.”
Two days later, Giuliani made another announcement: Wouldn’t it be wonderful if pro baseball came back to Brooklyn, with a minor-league stadium on Coney Island – for the Mets?
That was nearly two years ago. In September, the Staten Island Yankees completed their first season, playing at the College of Staten Island. But your tax dollars have been at work, and in the spring of 2001, the team will christen its $29 million city-built stadium (Rudy Field?). On Coney Island this summer, the only sign of the Mets was the phlegmy voice of Bob Murphy issuing from radios. (The Mets will have a farm team in Brooklyn next summer, Wilpon says, “in an interim stadium site, but we don’t know where yet.”)
On the big-league fields, the Mets look like losers, too, imploding in September while the Yankees tune up for a run at their third World Series in four years. But what’s gone unnoticed is the number of business clashes between the Yankees and the Mets as they jockey for long-term muscle. Even though bricks, mortar, and wooden bats will always be necessary to field a major-league team, the key to post-millennial success in pro sports is going to be media and money. On those fronts, the perpetually second-fiddle Mets may emerge as the big winners. Wilpon is a baseball romantic, but as with the city’s best ballplayer, Derek Jeter, there’s a steel will behind his smile. And it’s Wilpon’s cool deal-maker side that’s talking about selling the Mets to a broadcasting giant.
For 38 years, this town has been plenty big enough for two teams. Wilpon claims that all remains well. “Both teams have substantial radio and TV contracts and advertising support,” he says. “You’re talking about New York, not the Bay Area. There’s no shortage of fans.”
But three forces are pushing the teams into closer competition for entertainment dollars: Baseball payrolls keep rising (this year, the Yankees set a major-league record of $85 million and the Mets spent $70 million); New York fans no longer have any patience for mediocre teams, let alone losing teams; and teams need vast TV and licensing revenue.
The Mets and Yankees bosses have skirmished before (Nelson Doubleday owns 50 percent of the Mets, but Wilpon runs the show; Steinbrenner has 22 tombstone-silent partners). In 1992, Steinbrenner favored firing baseball commissioner Fay Vincent, while Wilpon led the losing campaign to save his friend. In 1994, Steinbrenner vehemently opposed rich teams’ sharing revenues with weaker franchises, while Wilpon was a moderate.
But their deepest divide was settled only last year. Major-league owners had agreed to present a united front in negotiations with major sportswear companies in an attempt to create a single, lucrative sponsorship program. Steinbrenner knew he possessed the most valuable logo, however, and he sold it to Adidas for $95 million.
When baseball blocked the deal, the Yankees sued. But the real maneuvering took place in baseball’s executive council. The group of ten team owners is baseball’s board of directors; Steinbrenner was kicked out. Wilpon argued that the Yankees-Adidas deal hurt baseball as a whole. As Steinbrenner’s suit was headed to federal court, a compromise was struck: Adidas would pay a national licensing fee to Major League Baseball and broaden its promotional efforts beyond the Yankees. Steinbrenner kept the bulk of the original deal’s money and reclaimed his seat on the ruling council.
“Don’t get me involved in that one,” Wilpon says. “We have a very nice relationship, George and I.”
Certainly the two men have bonded over their hunger for new stadia. While Steinbrenner blustered about the Bronx, the Mets and Wilpon played the good little brother, quietly putting together a nifty scale model of a retractable-dome stadium. Wilpon says he understands the mayor’s fealty to the Yankees – “I like the fact that he’s a baseball fan; we’ve had mayors who weren’t” – and is willing to wait until the future of Yankee Stadium is decided. One reason Wilpon can keep cool: Buried in the Mets’$2 241-page lease agreement with the city to rent Shea Stadium is a clause guaranteeing the Mets the right to occupy any new baseball stadium built with city funds. “We have never used that clause, and we don’t intend to,” Wilpon says. That doesn’t mean he expects nothing in return for waiving his rights.
The other gushing “revenue stream” in sports is broadcasting money. The Yankees and Mets are old-school, profitably funneling their games through middlemen at the MSG Network, Fox Sports New York, WPIX, and WWOR. But other franchises – such as the Braves, Cubs, and Rangers – are part of broadcasting empires, and here’s where the Mets are poised to surge in front. And they can thank Steinbrenner.
One reason the admirably cunning Steinbrenner was so eager to make the Adidas deal was the looming end of his previous windfall. In 1988, the Yankees sold their TV rights to Cablevision Systems for a whopping $486 million. That money has underwritten the Yankees’ great late-nineties victory streak. But the contract ends in 2000.
The Adidas cash, though, won’t even cover Derek Jeter’s next contract. So last year, Steinbrenner nearly sold the team to Cablevision. The deal fell apart, but Steinbrenner came up with an imaginative alternative: merging the business side of the Yankees with the New Jersey Nets. All sorts of rosy projections show the merger leading to an IPO bonanza for Steinbrenner, but previous stock sales by sports teams have been duds. And the Yankees still need a new TV contract. Steinbrenner has the most valuable content – 162 Yankees games each year – but hasn’t explained how he’ll distribute it. There’s talk that the YankeeNets conglomerate will launch its own cable channel, but that would suck up those phantom IPO bucks in a hurry.
Meanwhile, the Mets are close to getting their hands on actual money – and directly linking their content with the most powerful distributor in the Northeast. Cablevision, which already owns the Rangers and Knicks, plus TV rights to the Devils and Islanders, the Wiz, and all those channel-changer boxes, is voraciously consolidating its control of the supply of New York sports programming. So instead of paying $12 million a year for the right to televise Mets games, Cablevision is offering $400 million to buy the spikes, the jocks, and Mike Piazza’s annuities. Complicating the transaction is the fact that Rupert Murdoch owns the Los Angeles Dodgers and a large chunk of Cablevision. Major League Baseball has rules against owning more than one team, but it’s hard to imagine the rules won’t be bent to strengthen baseball’s television presence.
The deal would set up an interesting challenge to Steinbrenner. If he doesn’t start his own cable channel, two of the primary TV outlets he’ll be negotiating with will be owned by Cablevision and Murdoch. “The Yankees are content that people want, and that’s not going to change,” says John Moag, a sports-industry analyst at Legg Mason. “But these deals would really reduce his options and his leverage.”
Last November, Cablevision’s chairman, Charles Dolan, nearly signed up Steinbrenner as an employee. This fall, Dolan, if he buys the Mets, will take on the Yankees as the enemy. For Fred Wilpon, the deal would mean a sweet return on the $40 million he paid for his half of the team – and his beloved Mets would get a new owner who matches Steinbrenner’s ruthlessness.