His heart's in San Francisco

Sporting News, The, Oct 18, 1993 by William Randolph Hearst, III

Peter Magowan's first season as a managing general partner has been a giant success story

In one eventful month last year, Peter Magowan went from being the millionaire CEO of Safeway to the man who rescued the San Francisco Giants from the clutches of Tampa Bay. Even in those heady days, the managing general partner and new president of the Giants could not have foreseen the dream season. Magowan is quick to point out he is just one of 20 investors who put up the $100 million to buy the Giants from Bob Lurie. He says he never second-guesses General Manager Bob Quinn or Manager Dusty Baker. As a baseball owner, Magowan is the opposite of George Steinbrenner. So far, he has enjoyed the ride as much as any 12-year-old with a transistor radio.

Q How good a business is baseball?

A From a financial perspective, it's not a very good business. Most teams lose money. The Giants lost a lot of money last year. We're going to make a little bit of money this year, which is somewhat of a surprise. Next year the revenue from national TV contracts will be $8 million less for each team, but the current labor agreement will continue for another year. So, we'll have another year of escalating player salaries, which is our biggest expense.

Q Analysts put your team's revenue at roughly $65 million this year, giving you a profit of about $10 million.

A The revenue number is accurate, but the report that we made $10 million is way off base. We will probably have a small positive cash flow - less than $1 million. While that's a lot better than last year and better than we expected, it's still a pretty modest result. I get pretty tired of these so-called baseball economists who say that baseball teams earn a lot more money than they report.

Q The team has made a big success and changed people's attitudes about San Francisco Giants baseball. What were the ingredients in making that happen?

A Last year we sold 1.8 million tickets. This year we sold 2.6 million. First, there was a honeymoon period (because) baseball was still here; people were thankful and wanted to show their support. Second, there was a lot of excitement generated by the signing of Barry Bonds. Third, there was a lot of curiosity about the changes that we made to the marketing of Candlestick Park. Fourth was the conversion to day baseball: We draw much better in the day than we do at night. And fifth, and certainly very important, was the success we had on the field.

Q Whose idea was it to go for Barry Bonds?

A It was Larry Baer's and my idea, but I would want to emphasize how supportive our entire partnership group was.

Q You must get some amusement from hearing everybody say how you spent too much and now seeing the results.

A That's been one of the fun things all the way through. I remember when we signed Bonds and the next day in Louisville the previous ownership (Bob Lurie) did not want to sign him. We had to somehow find a way to promise Bonds that he would get the $43 million that we had agreed to pay him and promise Lurie that in the unlikely event that he ended up with the team back, he would not end up with that contract. It meant going back to all the partners and saying: "If Lurie ends up with the team, and the agent ends up with Bonds, the agent will try to peddle Bonds to one of the other 27 teams. Any monies short of $43 million over that six-year period, we will have to make up the difference - even though we have no ownership interests." That was the way it got done.

Q The other thing that people point to is marketing. You come from a background of dealing with the general public. What are the similarities?

A Making customers happy. It's very important to win, and our commitment to putting a winning team on the field should stand for itself. But what we're trying to create is what I like to call a shopping experience at Candlestick Park - that makes the customer feel at the end of the day, win or lose, that she had a good time or he had a good time, or their family had a good time.

Q Are you a hands-on manager?

A The baseball man is Bob Quinn, and he's a very highly respected general manager.

Q So this is not a George Steinbrenner kind of situation.

A No. Absolutely not. Dusty Baker runs the team on the field. He has done an absolutely outstanding job. Maybe one of the reasons why is we haven't interfered.

Q What's the hardest part about sitting in your chair?

A I'm a little frustrated with the baseball process. We were looking at the concept of expanded playoffs, and we eventually ended up with a vote on that subject of 26-1. You would think if it's 26-1, then let's do it. But, you should have seen how difficult it still was. Everyone said they liked expanded playoffs, but they didn't like the divisions they were placed in. It took a new owner, a guy from Florida, Wayne Huizenga, who said: "I'm the new kid on the block. If you want to put me in the Western Division even though I'm in Florida, I'll go because this is good for baseball." I wish more people would have that kind of attitude.