Tom Hicks did not buy the Texas Rangers for $250 million because he loves baseball. He bought the Texas Rangers and the 270 acres of land around the Ballpark in Arlington because he loves making money.
"I didn't buy a baseball team for $250 million," he says, sitting behind a conference table in his 16th-floor office in the Crescent. He wears a starched white shirt, a red silk tie, and a broad, thin smile.
He bought the team because he envisions one day owning and operating a regional sports network that will broadcast his Rangers and his Dallas Stars and, possibly, Ross Perot Jr.'s Dallas Mavericks across Texas, Louisiana, Oklahoma, New Mexico, and Arkansas. He bought the team because he envisions a day when the Ballpark in Arlington will be his very own money machine, spitting out gold coins into his pockets. (The naming rights alone will be worth a small fortune--farewell, Ballpark in Arlington.) He bought the team because he wants to develop the land around the Ballpark and fill the flat, dull Arlington horizon with office towers, hotels, restaurants, and shops.
Little in Hicks' office reveals his association with sports. There are a couple of bound Dallas Stars annual reports on his bookshelf, a small University of Texas Longhorns football helmet on his desk, an autographed hockey stick resting on the wall, but not much else. Indeed, his office--with its glorious view of Dallas spread below--looks more like a tony hotel suite, a marble-and-oak living room with each book, chair, and sofa in its perfect, proper place. Only his desk is unkempt, stacked high with documents and faxes.
Buried beneath that stack of papers is a paperback copy of John Helyar's 1994 Lords of the Realm, a behind-the-scenes chronicle of the ongoing rancor between baseball players and team owners.
"I may get around to reading it," he says as he holds the book and glances at it, perhaps for the first time. He chucks it back on his desk, seemingly uninterested.
No matter that Tom Hicks is about to become an owner of his own baseball team. He has no time for history books, no time for looking back on yesterday when tomorrow's decisions are far more important: Who to sign? Who to cut? How much to spend? How much to save? Lord, where to begin?
Tom Hicks announced on January 7 he intends to buy the Texas Rangers, but he does not yet own the team. He'll have to wait until he receives approval from the other owners in the league, and that could take six months to a year.
But that hasn't stopped Hicks from being involved in the team's day-to-day dealings: Rangers president Tom Schieffer, whom Hicks says he intends to keep in place until Schieffer proves him wrong, keeps him informed of the hirings and firings, the raises and demotions to the minors. Hicks was notified well in advance of the $3.25 million offered to pitcher Bobby Witt two weeks ago--the 12-12 Bobby Witt, the very average Bobby Witt--just as he knew of the $1.2 million Lee Stevens would be given for one more year of his services. Hicks demands to be informed. He doesn't want any surprises.
"I'm not officially involved at all," Hicks stresses. "But as a courtesy, Tom Schieffer, who is representing the prior ownership and knows he'll represent me once I'm the new owner, is walking a very appropriate middle ground, keeping me informed as a courtesy. He's bouncing ideas off of me and giving me the courtesy of knowing what's going on."
Tom Hicks would love nothing more than for the Texas Rangers to win a World Series. It would, of course, be good for business. Hicks--a man whose personal worth is estimated at $150 million and whose investment firm Hicks, Muse, Tate & Furst owns more than 140 companies worth in excess of $20 billion--is no fool.
But a World Series would further his reputation as a man willing to do whatever it takes to win in the world of professional sports. He's already ponied up the dough to turn the once-struggling Dallas Stars into the best team in the National Hockey League; the signing of goalie Ed Belfour in the off-season was the exclamation point at the end of that promise. And as a University of Texas regent, he was instrumental in ousting football coach John Mackovic and replacing him with Mack Brown. Bringing a World Series to Arlington would make him rich, yes, and it would make him proud, of course.
And it would do him justice: So far, he has proved himself a good guy in a world of evildoers, a far more dignified owner than Jerry Jones and a far more virtuous owner than Ross Perot Jr. He would prefer to stay off the sidelines and out of the spotlight; he lets others run his teams, approving only the most serious decisions. He makes a deal, then sticks to it--guaranteeing only what he can deliver.
Tom Hicks wanted a new downtown arena because his Dallas Stars were losing money, not because he wanted to get richer using someone else's money. He offered to pay for the arena himself, using city money only as a loan. He didn't threaten to move to the suburbs until his alleged partner, Junior Perot, almost screwed up the deal with helicopter rides and other nonsense. Hicks appears to be a stand-up guy willing to go far in order to win--but never too far.
Publicly, Hicks promises to spend whatever necessary--within reason--to turn the Rangers into a true contender. He talks of letting team president Schieffer, general manager Doug Melvin, and manager Johnny Oates go after a marquee player--to prove Hicks' dedication to the fans.
"I asked management half-jokingly what's the Eddie Belfour equivalent person they needed to take the Rangers to the championship level," Hicks recounts. "Of course, they said [Seattle Mariners pitching ace] Randy Johnson. I could have figured that one out."
He speaks of his willingness to lose a few bucks in order to win a few fans.
"I've told management the team doesn't have to be as profitable as they had projected when I bought the team," he says, "and if they work out something that's better, then that's fine."
He says all the right things and makes all the right moves. Which is exactly what he needs to do, especially after the debacle that was the 1997 season: Rangers fans have proven a most giving and forgiving lot, forking over tens of millions last year to watch the 1996 American League West champs stumble to a third-place finish.
According to Financial World, the Rangers made $87.7 million in 1996 in total revenues--including gate receipts and media and venue revenues--which was seventh in the major leagues. (The totals for 1997 aren't available yet.) The Ballpark in Arlington was also the most profitable ballpark in America, raking in $25.5 million.
After 26 embarrassing years, the Texas Rangers are only a few more losing seasons away from alienating even the most staunch supporters--especially with ticket prices increasing for the second time in two years. Hicks has given Schieffer, Melvin, and Oates permission to go outside their working purchase agreement, which should be finalized and signed early next month, if they can prove that a big-money player would make the team a contender.
He's asked what he'd do if Schieffer called him tomorrow and said he could deliver pitching ace Randy Johnson for $10 million a year. Hicks doesn't hesitate.
"I think that's what I'm hinting at--some gesture to the fans that we really want to take the next step," he says. "I've given them the OK to do that. If it works out. Now, they've got to work it out. They're the baseball guys."
Of course, Schieffer says he isn't going to spend Hicks' money till he's approved by Major League Baseball, no doubt fearing the reaction of small-market owners already worried about skyrocketing payrolls. It won't help Hicks' cause if he goes after a multimillion-dollar player: Already, several owners are threatening to quash Fox magnate Rupert Murdoch's purchase of the Los Angeles Dodgers, which was scheduled to go before a vote this month until acting commissioner Bud Selig canceled the meeting, fearing he wouldn't get the approval.
Privately, Hicks worries that fans think his purchase of the Rangers is a World Series guarantee. Just look at what he did for the Stars--who went from near worst to first only a year after he became owner.
Shortly after Hicks bought the Dallas Stars for $84 million in December 1995--indeed, before the purchase actually went through, while he was still in the letter-of-intent phase--Stars president Jim Lites and then-coach and general manager Bob Gainey approached him about trading Corey Millen to Calgary for center Joe Nieuwendyk. Hicks agreed to the deal, even though it meant boosting the payroll before he'd even signed the final purchase agreement. He also OK'd the signings of right wing Pat Verbeek, defenseman Darryl Sydor, left wing Dave Reid, and a host of other free agents.
After the Edmonton Oilers humiliated the Stars in the first round of the playoffs last season--goaltender Curtis Joseph shut out the hapless Dallas team twice in seven games--Hicks told Gainey and Lites he wanted them to sign someone to replace Andy Moog; Hicks and team management also felt Roman Turek was at least a year away from becoming a dominant player. So in July 1997, they brought in free agent Ed Belfour and signed him to a four-year, $10-million contract; defenseman Shawn Chambers also signed at the same time to a four-year, $8-million deal.
In the fall, management also upped the salary of team captain Derian Hatcher and agreed to a $3.5-million, one-year deal with Mike Modano, who will certainly ask for millions more at the end of the season.
When Hicks bought the Stars, the team's payroll ranked among the lowest in the league at $18 million; as a result, the Stars were among the NHL's bottom-feeders, owning the 22nd best record in a league of 26 teams. Two years later, the Stars' payroll sits at a lofty $31.7 million, which is fifth in the league, and the Stars are the winningest team in the NHL, boasting a coach and a roster one misstep away from winning the Stanley Cup.
"I joke that the main contributions I made were saying yes when they asked for more money," Hicks says about his Stars, flashing what's either a smile or a grimace. "But it was a critical decision when we were still in the letter-of-intent stage to let them sign Joe Nieuwendyk, because I could have prevented that from happening. We knew what that was going to do to the payroll.
"But those were tough decisions. Each time we said yes, that increased the losses of the team, which I had to fund out of my own pocket."
The Stars will continue to lose money until they move into their new arena, which is scheduled to open in the fall of 2000. Jim Lites refuses to say just how much the team loses annually. He will only admit it's a "significant" amount, blaming the deficit on a dearth of TV revenues, the size of Reunion Arena and its lack of top-dollar luxury boxes, and the high payroll.
"We have the best team in the NHL and the fifth-highest payroll in the NHL," Lites says. "Tom wants the team to win and has allowed us the opportunity and luxury to have a winning team's payroll without the same level of revenue streams."
The new city-supported arena will, of course, change all that: From the additional revenue brought in by the sale and rental of luxury boxes to the additional money brought in by expanded concession and merchandising sales, the Stars will become a profitable team not long after the arena is completed. Then there's also the not-so-small matter of the regional sports network Hicks will get on the air after the Stars and Rangers (and, most likely, the Mavericks) are out of their TV deals in the next three years.
Yet spending does not guarantee winning, a fact the Rangers should know better than anyone. Of the teams with the seven largest payrolls going into the 1997 season, only the Rangers and the Chicago White Sox--who began in April with a $54.5 million payroll--didn't make the playoffs. The failure of the Sox to make post-season play could be blamed on team chairman Jerry Reinsdorf, who sold off the franchise in pieces when he decided it wasn't worth chasing Cleveland for the AL Central pennant.
The Rangers' disasters were blamed on bad decisions by management--the very same management Hicks is keeping in place, for now--and injuries. Rather than sign shortstop Kevin Elster after his remarkable performance during the 1996 season--he drove in 99 runs and was a sure-handed infielder--they left their fortunes in the holes-for-hands of Benji Gil, a project who never developed. Gil has since been traded to the White Sox, and Elster is back for one more go-round--after an injury-plagued season in Pittsburgh. The team also never found a suitable leadoff hitter, and Tom Goodwin, who came from Kansas City in the Dean Palmer trade, is no great find: He's a speedy outfielder and a great base stealer...when he actually gets on base.
Will Clark collected much of his $5.6 million last year from the bench, where he sat with torn tissue in his right heel, an injury that still bothers him. Second baseman Mark McLemore hasn't played since August and is still recovering from arthroscopic surgery on both knees. Pitchers Xavier Hernandez and Danny Patterson also underwent surgery in the off-season.
The decision to sign the up-and-down Witt for $3.25 million is a disturbing development, but hardly a shocking one in a business where expansion teams and free agency are draining the talent pool. Hicks will have to pay a hell of a lot of money this year to mediocre talent and injured veterans--never mind the one star pitcher this team so desperately needs.
"The current management and ownership adopted a philosophy a few years ago that they really want to go with quality people who first want to play for the Texas Rangers," Hicks says. "They decided they didn't want people who didn't want to be here, which I agree with. I support that. We're gonna run the team as a business. They're going to be under a long-term contract, and it's gotta be someone they think will help the club. And probably when you bring one in, you've got to get one out, too, so it's a matter of how you change the team to make that payroll work."
Of course, in the long run, the payroll and the win-loss record are perhaps the least of Hicks' concerns. After all, he likes to explain that a sports franchise rarely loses its value over the long haul--just look at the Rangers, perennial losers worth a quarter of a billion dollars.
Rather, Hicks is blunt about the real reason he bought the Rangers: to flesh out his dream of the regional sports network he hopes to get off the ground by 2000. He has the money to do it, the broadcasting resources, and now he's got the teams.
On August 12, 1997, Hicks, Muse, Tate & Furst bought LIN Television, the nation's 22nd-largest television group, from AT&T for $1.9 billion. Earlier this month, the LIN ownership approved the deal. Locally, LIN owns eight channels, including KXAS-Channel 5 and KXTX-Channel 39, the latter of which currently broadcasts Rangers games--and a hell of a lot more down the road, if Hicks' plan comes to fruition.
Hicks--who will rank as the country's second-largest radio station operator when his firm acquires SFX Broadcasting for $2.1 billion on May 31--envisions a regional sports network that would feature the Stars, the Rangers, and even the Mavericks surrounded by men's and women's college sports, coaches' shows, and sports-news programming. It will compete directly against Rupert Murdoch's Fox Sports Net, which the media mogul formed a few years ago as an alternative to ESPN.
Murdoch figured someone in Dallas was more likely to watch the Stars play the Colorado Avalanche than a Stanford-Arizona college football game. He could also sell substantially more local and regional advertising by narrowing down the viewing audience. Currently, Fox Sports Net owns the regional broadcast rights to 49 pro teams and reaches about 55 million homes nationwide, according to Forbes. That includes the Dallas Mavericks, Dallas Stars (locked into a deal with FSN until the end of next season), and Texas Rangers (who will share broadcasts with Channel 39 till 2000).
Hicks expects the network would most likely be broadcast over Channel 39 and another cable channel; Hicks, Muse already owns a piece of Marcus Cable as well. And he will likely have to bring in either FSN or ESPN to provide the wrap content. His current plan would essentially kill Fox Sports Southwest.
"We're in active negotiations with [Fox and ESPN] now," Hicks says. "You wanna have as many of the wrap sports as you can. I mean, the consumers want to listen to all the other sports those two people provide too. Our games don't fill up but a small portion of the time. They're the must-see local sports that bring the audience to the network, then you have all sorts of other programming alternatives they want to see as well."
There is a precedent for a network such as the one Hicks is proposing: In July 1997, Comcast-Spectacor announced the creation of Comcast SportsNet in the Philadelphia area, which would offer baseball (Phillies), hockey (Flyers), and basketball (76ers) games. Not coincidentally, Comcast also owns a majority stake in the 76ers, the Flyers, and two arenas in the Philadelphia area, the CoreStates Spectrum and the just-completed CoreStates Center.
When a similar setup occurred in Detroit with the Tigers and Red Wings, the value of the baseball and hockey teams skyrocketed after ESPN and Fox got in a bidding war to provide that wrap content.
Hicks bought the Rangers, a team worth $89 million nine years ago, for $250 million--thanks in large part to the new ballpark. Imagine the value of the franchise when it's the anchor of a regional sports network.
Hicks insists he doesn't want to create a superstation, like Ted Turner's WTBS, home of the Atlanta Braves, or WGN, which broadcasts Chicago Cubs and White Sox games across the country. He explains they are dinosaurs, relics of cable's early days, the pre-ESPN era when companies were desperate for content of any kind. More likely, Hicks doesn't even want to think about a superstation because of all the furor surrounding Rupert Murdoch. Not only are owners concerned about his bottomless pockets ruining the small-market teams' payrolls, they're also hesitant about giving ownership of a team to the man whose network owns the rights to broadcast major-league baseball till 2000. San Diego Padres owner John Moores is particularly outspoken against the Murdoch purchase.
But owners and acting MLB commissioner Bud Selig believe Hicks' purchase will be accepted by the league with little question. He will be good for the sport, willing to pump more money into a team that, just a decade ago, was a laughingstock--a losing major-league team wasting away in a minor-league park. If nothing else, the current ownership has turned a once-shabby organization into a respectable organization--one that signed Nolan Ryan, built a baseball cathedral in the middle of a strip-mall prairie, and proved its loyalty to fans and Ivan Rodriguez by giving him a five-year, $42-million deal last season.
Hicks should prove a good steward of this franchise; he is, after all, no Brad Corbett or Eddie Chiles, two former owners who nearly buried the Rangers beneath horrible trades, bad business deals, and a distaste for the sport that would linger long past their doomed associations with the club.
After an hourlong discussion about the business of baseball and broadcasting, Hicks is asked whether he feels any responsibility owning a baseball team; he has, after all, bought a piece of a sport that's 150 years old, a sport romanticized more than any other in the history of America. He thinks for a moment, then utters a phrase not often associated with Tom Hicks: "It's kinda neat."
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"I don't think anyone can buy a sports team who doesn't love sports," he says after a few more seconds. "There are much better investments. They may not lose their money, but they can be stale investments. I think I really looked at it from a business point of view."
He then laughs a little and recounts the days when, as a boy, he tuned the radio by his bed to broadcasts of the Dallas Eagles games at Burnett Field in Oak Cliff, where Willie McCovey and Eddie Knoblauch blossomed into major-league heroes. A native Texan, Hicks didn't grow up with hockey. He was a child of baseball.
"Buying the Rangers was a business deal," he says. "But I noticed when I was walking to the press conference at the Ballpark that I got real..." For a second, he stumbles over his words. "I looked out on that stadium, and I got real...kind of...a touch of emotion that I wasn't expecting to have. It was kind of like realizing you were going to own something that was historic, a slice of Americana. I didn't have that feeling when I went out to the Stars Center the first time. An ice rink is a completely different thing."
Tom Hicks owns the Ballpark in Arlington now. Incidentally, he mentions with a grin, he also owns the land where Burnett Field used to sit.