Insider baseball: why a major league team is headed to Washington

Washington Monthly, Dec, 2001 by Dayn Perry

Malek now heads Washington Baseball Club LLC, the organization supplying the campaign's muscle. As he puts it: "We've got the money, the people behind the effort, the site [for a new stadium], the backing of the City. We've got the resources to get this done."

Of course, every city in America that wants a baseball team has a similar committee of heavyweights angling for a franchise. What Malek has that others don't is the ultimate political connection: As co-owner of the Texas Rangers, his partner was George W. Bush.

Bush's $606,000 investment in the Rangers in 1989 netted him $14 million when he sold his share in 1994 to run for governor of Texas. Such good fortune is not easily forgotten. Bush himself has spoken publicly of his desire to see Major League Baseball return to Washington (Clinton, by contrast, did not). His opinion will no doubt weigh heavily on any decision to relocate a team, thanks to his position and his personal connections to baseball's owners and commissioner (himself the silent owner of the Milwaukee Brewers). The question is, which side of the Potomac will Bush recommend?

Politically, Bush may be tempted to back the heavily Republican Virginia delegation in Congress, and some say he's already put in a word to that effect. But as a former owner, he also understands the economics of relocation. Typically, whichever party allows baseball to drink most deeply from the public trough gets its way. The preferred methods of corporate entitlement are the publicly funded stadium, taxpayer coverage of cost overruns, charitable rent prices, and team retention of most stadium revenues. When taxpayers fund stadiums, directly or indirectly, a team's revenue can increase by 50 percent. This in turn causes franchise values to soar, as Calvin Griffith, and many owners since him, have discovered. Bush himself convinced the city of Arlington, Texas, to cough up $135 million toward the price of a stadium, which exponentially increased the value of his investment.

A Third Term for the Senators

Whether Virginia or the District gets the ultimate nod from Bush and his owner buddies may come down to which jurisdiction can offer up big subsidies. Here, the District has the advantage. Ron Utt of the Heritage Foundation points out that District law does not subject bond offerings, a likely vehicle for stadium financing, to referendum, only to city council approval. But in Northern Virginia, a countywide vote would be required. As a result, Utt argues, Major League Baseball will probably conclude that D.C. is "most likely to support and finance a stadium with the least amount of resistance."

Bush and the owners can also read a balance sheet. The fact that Bill Collins, managing partner of the Virginia Baseball Club, Inc., and likely the lead investor in a Northern Virginia team, appears to be in dire financial straits favors the District's. chances. In April, his company, Metrocall, narrowly avoided having to file for Chapter 11 bankruptcy, and its financial situation remains grim.