Dealing: The Cleveland Indians' New Ballgame: How a Small-Market Team Reinvented Itself as a Major League Contender

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9781598510492: Dealing: The Cleveland Indians' New Ballgame: How a Small-Market Team Reinvented Itself as a Major League Contender

For Indians fans who want to know what goes on inside the front office, this book tells all. It’s an in-depth look at how the team was taken apart and rebuilt as a contender again in spite of Major League Baseball’s competitive imbalance. Tribe fans grew accustomed to winning in the late 1990s. They had an owner with deep pockets, a brand-new ballpark, and a team of All-Stars who delivered a division championship nearly every year. Then, in 2002, the team’s new owners began a controversial plan to unload their popular but expensive stars and replace them with a steady stream of young prospects and veteran rehab projects. Critics scoffed, and fans stayed away. But by 2005 the plan showed promise with a 95-win season. And in 2007 it paid off, as the Indians beat the top-dollar Yankees in the playoffs and came within one game of the World Series—with a payroll less than half that of their competition. How did they do it? Veteran sportswriter Terry Pluto (who had unprecedented access to the Indians front office) carefully analyzes each big decision and tells which ones worked, which ones didn’t, and why. This rare behind-the-scenes look at a modern front office will intrigue any fan fascinated by baseball deal-making. A wealth of baseball detail that will intrigue serious fans and fantasy leaguers.

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About the Author:

Terry Pluto is a sports columnist for The Plain Dealer. He has twice been honored by the Associated Press Sports Editors as the nation’s top sports columnist for medium-sized newspapers. He is a nine-time winner of the Ohio Sports Writer of the Year award and has received more than 50 state and local writing awards. In 2005 he was inducted into the Cleveland Journalism Hall of Fame. He is the author of 23 books, including The Curse of Rocky Colavito (selected by the New York Times as one of the five notable sports books of 1989), and Loose Balls, which was ranked number 13 on Sports Illustrated’s list of the top 100 sports books of all time. He was called “Perhaps the best American writer of sports books,” by the Chicago Tribune in 1997.

Excerpt. Reprinted by permission. All rights reserved.:

“Is this team for sale?”

Dick Jacobs Buys Low, Sells High

He always wanted to get there first.

Remember that about Dick Jacobs.

He always believed in buying low, selling high.

Remember that about Dick Jacobs, too.

Those attributes explain why Jacobs bought the Indians after the 1986 season, and why he put them up for sale during the 1999 season, eventually cutting a deal with the Dolan family that led to a sale approved on January 19, 2000.

Jacobs bought very low, sold very high.

In between, he pulled off some very shrewd moves. He convinced the county to build Jacobs Field, which became one of the game’s new breed of cash-cow stadiums, gushing profits for Jacobs. Then he took the team to Wall Street, putting together a public stock offering that, over eighteen months, paid a 50 percent return to its investors, the biggest of whom was Dick Jacobs. No other Major League Baseball franchise had ever sold shares like this before.

In between, the Indians had their best run in franchise history.

Start with a story Jacobs told me before the 1995 season. I was asking him about business, how much money he’d make that year, how much he lost at the old stadium, the financial health of the franchise. He declined to talk recent profits, though he mentioned about $40 million in losses from 1987 to 1993. Instead, he talked about Swenson’s, an Akron hamburger joint, a drive-in with real carhops, still around, still a local legend.

Jacobs grew up in the Goodyear Heights section of Akron, where he said you could smell burning rubber from the plant where his father worked. By the time he was ten years old, Jacobs was mowing lawns for nickels and dimes. This was during the Depression. One of his customers was Wes Swenson, owner of the hamburger joint. It took two years, but Jacobs convinced Swenson to hire him. First, he peeled potatoes in the kitchen, but his eye was on the parking lot. That’s where the real action was, where carhops rushed to customers, took orders through the window, then ran back to the kitchen. When the food was ready, the carhops sprinted it back to the customer. It was all about looking sharp, serving quick, grabbing as many tips as possible.

“You wanted to get to the right cars first,” he told me. “After a year in the kitchen, I was a carhop. I could spot a Caddy coming two blocks away. I got my big foot out there first and told the other guys ‘That one is mine.’ I figured out which cars had the best tippers, and I made sure they were the ones that I waited on.”

Jacobs likes to talk about mowing lawns, peeling potatoes, serving burgers. He says little about the real estate deals that had made his company worth about $500 million by 1986, when he and his brother David made their move to buy the Indians. At the time, Jacobs owned forty-two malls and eighteen Wendy’s restaurants in the Columbus area. He also had some hotels in places such as Key West, where he was part of that Florida city’s real estate explosion. He had developed and sold countless shopping centers and malls over the previous decades. He was one of the first to figure out that America’s move from the city to the suburbs meant more than the need for housing. These people needed a place to shop, and they no longer wanted to drive or take the bus downtown. So he started with strip shopping centers in the suburbs, then switched to indoor malls. He realized malls had become the new gathering centers, much like the old town halls.

By the time he was negotiating for the Indians in 1986, Jacobs had seen a new opportunity. Now, downtown areas—and Cleveland in particular—were poised for a revival. He believed if a new ballpark could be built downtown, not only would it save the Indians for Cleveland, it could save Cleveland as a viable city, open for business. It could be a magnet for other businesses. It could inspire some confidence in other businessmen and investors. And, of course, it could make him a lot of money.

This could be his biggest deal yet, not because of the money, but because so many people would be watching.

What Jacobs was watching was a seemingly comatose baseball team owned by a dead man. For two years, the Indians had been in the estate of Steve O’Neill. His nephew, Pat O’Neill, had been put in charge of finding a buyer. The Indians were losers, on the field and at the bank. They needed a new stadium, but it appeared it would be years—maybe decades—before that would happen. There were legitimate fears the franchise would move to another city.

I developed a relationship with Pat O’Neill because we had both attended Cleveland Benedictine High School. Even though I was covering the Cleveland Cavaliers and NBA basketball at the time for the Akron Beacon Journal, he called me the night of the sale to give me the only interview about the deal he’d just made. He told me the new owners of the Indians were two brothers named David and Dick Jacobs, who developed shopping malls.

I’d never heard of them. No one even knew they were talking to O’Neill.

“These are great guys,” O’Neill told me. “Dick came in and his words were, ‘Is this team for sale?’ No messing around.”

Jacobs asked that question because Pat O’Neill had been unable to find a buyer for two years, and there was some thought that he might try to hold onto the team for a while. Jacobs explained why he and his brother wanted the Indians, how they planned to work with the politicians to lobby for the building of a new stadium. He stressed they were Cleveland guys, heavily invested in local real estate. It would be public relations suicide for them to move the team, a real possibility with many of the buyers approaching O’Neill. Then Jacobs explained that they had some cash and a viable way to make the sale work.

“The first time I talked to Dick, I knew that he and his brother were the guys,” Pat O’Neill told me that night. “They’re our kind of people, old school. Clevelanders. They’ll keep the team here.”

O’Neill believed Dick and Dave Jacobs could find a way to make a deal for a new stadium because they had built so many huge shopping malls and office buildings. Unlike some other bidders who talked so much but had so little of anything tangible to show, the Jacobs brothers kept their words to a whispered minimum. But their financial empire screamed that these were men of action. Dick Jacobs did most of the negotiating. David was more of a silent partner. (David Jacobs died in 1992, which is why few fans even remember he was part of the original sale.)

They cut a deal to buy the Indians that broke down like this:

· About $18 million in cash.

· About $3 million in a loan from the O’Neill estate.

· About $14 million in loans from different banks, which they inherited from the previous ownership.

“Part of the reason we bought it was I didn’t want the Indians to end up in St. Petersburg or somewhere else,” Jacobs once told me. “In the past, some of the owners didn’t have the money to run the team. Others had it, but didn’t feel comfortable making the investment.”

Jacobs was prepared to invest more in his new team, but he would do it on his own schedule. In his first year, the Indians lost 101 games. They drew slightly more than 1 million fans. The farm system was a mess, and so was scouting. This was clearly a long-term project, and he was in it for the long haul.

Jacobs knew that buying a property at the right time was only part of the deal. You also had to put the right people in charge of it. He brought in veteran baseball man Hank Peters to run the Indians in the late 1980s with the goal of building a team. Peters would create a productive farm system while slashing the major league payroll to pay for it. He also was ready to make tough trades, such as dealing Joe Carter, one of the team’s only stars, for minor league prospects Carlos Baerga and Sandy Alomar. Peters also was to train a new general manager to eventually take his place. Then when the Indians were ready to contend, Peters knew, he’d be retired. But he was a good-soldier executive, willing to dirty his hands digging the foundation even though he’d never get to live in the mansion.

Peters had done a stint with the Indians as minor league director before serving as the Baltimore Orioles’ general manager in the 1970s and early 1980s. Jacobs admired the Orioles, and when Peters had a problem with free-agent-obsessed owner Peter Angelos, Jacobs stepped in and hired Peters. That was important to Peters, who was discouraged in his final years with Baltimore: Jacobs made him feel wanted. And everyone said Jacobs could be trusted. So Peters went to work, and it was Peters who hired an obscure minor league manager named John Hart with the intention of making Hart the Tribe’s next general manager.

Jacobs didn’t know Hart, but he trusted Peters. It was Peters who trained John Hart to become general manager. It was Hart and his assistant, Dan O’Dowd, who convinced Jacobs to sign young players to long-term deals in the early 1990s, keeping them away from free agency longer. It was Jacobs who stayed patient.

“I had been a general manager for less than a year, and I was asking my owner to commit millions of dollars to a plan that had never been done before,” Hart told me in 1995.

It was 1992. Hart was coming off an arbitration case involving Indians starting pitcher Greg Swindell, who was 12–9 with a 4.40 ERA in 1991. Swindell won a $2 million salary, putting him among the most highly paid 10 percent of all pitchers in baseball. Hart was disappointed with the results and told O’Dowd, “The arbitrator is not even a baseball guy. We are never going to go through this again.”

O’Dowd, a man who loves ideas and is willing to take chances, in many ways reflected Hart. While the two of them were twenty-five thousand feet above the ground, sitting next to each other in an airplane, they decided to put their heads in the clouds and adopt a new approach.

“We were trying to save a doomed franchise,” Hart recalled. “Big-market teams were going to just blow us out of the water. We’d continue to lose our best and brightest young players—either to free agency, or be forced to trade them before they became free agents.”

That’s when O’Dowd and Hart concocted a plan to sign their best young players, such as second baseman Carlos Baerga, catcher Sandy Alomar, pitcher Charles Nagy, and others, to long-term deals after their first season or two in the big leagues. Early in their careers, it seemed these players would be overpaid. They also would have financial security that they had yet to earn. But these multiyear contracts would help the team project its future for the next three years.

“I’ve never been afraid to take risks,” Jacobs told me in 1995. “John had his honor on the line, I had my checkbook.”

“If it hadn’t worked, I’d never be a general manager again,” Hart said. “I had other general managers calling me, asking me what was I doing. What if these guys got hurt? What if they couldn’t play?”

They signed eleven players. Not all became stars. Long forgotten are the multiyear deals given to Mark Whiten, Jack Armstrong, Scott Scudder, Dave Otto, and Glenallen Hill. But there were more hits than misses, from Baerga to Alomar to Nagy to Albert Belle. Then, just when all this young talent began to mature, Jacobs put out $14 million to sign veterans Dennis Martinez and Eddie Murray for the 1994 season. They played a key role in the 1995 pennant-winning team, as did another veteran free agent, Orel Hershiser, signed before the 1995 season.

“That was expensive,” Jacobs said of signing the free agents. “But I wanted the success and character from those guys to rub off on our young players. We also were moving into Jacobs Field, and I could make some projections on our revenue. That made it easier to move forward.”

Jacobs field was the key piece.

No ballpark, no contender.

Maybe no Cleveland Indians.

Jacobs worked with the Cleveland and Cuyahoga County political powers to get the new Gateway development project moving, with a baseball park at its center. He had no interest in Cleveland Browns owner Art Modell’s plans to renovate the old Cleveland Stadium.

Modell wanted to hang on to the Stadium. He had been renting it from the city for years for a token amount. He had poured millions into the sagging structure and wanted to recoup some of that investment.

The last thing Jacobs wanted was Modell as a landlord.

“It’s hard for two guys to share the same lunch box,” Jacobs told me years later.

Especially if one of the guys was Art Modell. Jacobs would never have said so, but it was obvious that he, like most other members of Cleveland’s millionaire business community, knew Modell had financial problems.

Jacobs wanted to control his own facility. He realized that a new ballpark in the heart of the city, not on the lakefront, was needed to wipe away some of the blight and begin the healing of downtown Cleveland.

Modell didn’t jump immediately into the Gateway project. He was still trying to save his own stadium, and was not thrilled that Jacobs had no interest in his banged-up lunch box on Lake Erie.

Jacobs kept moving forward, and Modell was left behind on the stadium issue.

The Gateway project delivered Jacobs Field and Gund Arena, the new home of the Cleveland Cavaliers. Owner Gordon Gund had been recruited to bring the Cavaliers from the suburban Richfield Coliseum to downtown in order to help convince Cuyahoga County voters to approve a countywide tax on tobacco and alcohol. The levy passed. Jacobs Field was built. The Indians moved in for the 1994 season and became immediate contenders.

From 1994 to 1999, the Indians were exactly what Jacobs said he wanted them to be during interviews in the early 1990s: “I want a contender with a positive cash flow and a fair return on our investment.”

“With Dick Jacobs, when he was set on something, that usually was it. End of discussion,” said Ken Stefanov, the Tribe’s senior vice president of finance and chief financial officer. “Mr. Jacobs loved going to games. He was proud of what the team did and of being owner of the Indians. He’d often say, ‘This was fun.’ But he also wanted us to run at a profit.”

The rise of the team and the new ballpark created a gold mine for Jacobs. But you also have to give the owner credit for staying with Hank Peters and John Hart in the long, losing years before the Jacobs Field era. And give Jacobs credit for not trying to tell his baseball people how to do their business. He set a budget, but Jacobs didn’t demand that the general manager trade for a certain third baseman because he had happened to see the guy have a good game on TV. He was not influenced by public opinion, either from the fans or media.

“Mr. Jacobs was a great owner to work for,” said Mike Hargrove, the Tribe’s manager from 1991 to 1999. “We’d meet with him. He was interested in what we wanted to do and wanted to hear the reasons. But I’m telling you, he was supportive. He respected John [Hart] and I. He let us do our jobs. We knew he was behind us. He liked stability. I have the utmost respect for him.”

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Book Description Gray Company Publishers, United States, 2008. Paperback. Book Condition: New. Updated ed.. Language: English . Brand New Book. Fair, honest and insightful throughout . . . The book is a compelling look at the Indians organizational thought process in what has become a challenging baseball market. -- MLB.comFor Indians fans who want to know what goes on inside the front office, this book tells all. It s an in-depth look at how the team was taken apart and rebuilt as a contender again in spite of Major League Baseball s competitive imbalance. Tribe fans grew accustomed to winning in the late 1990s. They had an owner with deep pockets, a brand-new ballpark, and a team of All-Stars who delivered a division championship nearly every year. Then, in 2002, the team s new owners began a controversial plan to unload their popular but expensive stars and replace them with a steady stream of young prospects and veteran rehab projects. Critics scoffed, and fans stayed away. But by 2005 the plan showed promise with a 95-win season. And in 2007 it paid off, as the Indians beat the top-dollar Yankees in the playoffs and came within one game of the World Series--with a payroll less than half that of their competition.How did they do it? Veteran sportswriter Terry Pluto (who had unprecedented access to the Indians front office) carefully analyzes each big decision and tells which ones worked, which ones didn t, and why. This rare behind-the-scenes look at a modern front office will intrigue any fan fascinated by baseball deal-making. A wealth of baseball detail that will intrigue serious fans and fantasy leaguers. Bookseller Inventory # AAC9781598510492

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Book Description Gray Company Publishers, United States, 2008. Paperback. Book Condition: New. Updated ed.. Language: English . Brand New Book. Fair, honest and insightful throughout . . . The book is a compelling look at the Indians organizational thought process in what has become a challenging baseball market. -- MLB.comFor Indians fans who want to know what goes on inside the front office, this book tells all. It s an in-depth look at how the team was taken apart and rebuilt as a contender again in spite of Major League Baseball s competitive imbalance. Tribe fans grew accustomed to winning in the late 1990s. They had an owner with deep pockets, a brand-new ballpark, and a team of All-Stars who delivered a division championship nearly every year. Then, in 2002, the team s new owners began a controversial plan to unload their popular but expensive stars and replace them with a steady stream of young prospects and veteran rehab projects. Critics scoffed, and fans stayed away. But by 2005 the plan showed promise with a 95-win season. And in 2007 it paid off, as the Indians beat the top-dollar Yankees in the playoffs and came within one game of the World Series--with a payroll less than half that of their competition.How did they do it? Veteran sportswriter Terry Pluto (who had unprecedented access to the Indians front office) carefully analyzes each big decision and tells which ones worked, which ones didn t, and why. This rare behind-the-scenes look at a modern front office will intrigue any fan fascinated by baseball deal-making. A wealth of baseball detail that will intrigue serious fans and fantasy leaguers. Bookseller Inventory # AAC9781598510492

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Book Description Gray & Company, Publishers. Paperback. Book Condition: New. 222 pages. Dimensions: 8.5in. x 5.6in. x 0.6in.Fair, honest and insightful throughout . . . The book is a compelling look at the Indians organizational thought process in what has become a challenging baseball market. MLB. comFor Indians fans who want to know what goes on inside the front office, this book tells all. Its an in-depth look at how the team was taken apart and rebuilt as a contender again in spite of Major League Baseballs competitive imbalance. Tribe fans grew accustomed to winning in the late 1990s. They had an owner with deep pockets, a brand-new ballpark, and a team of All-Stars who delivered a division championship nearly every year. Then, in 2002, the teams new owners began a controversial plan to unload their popular but expensive stars and replace them with a steady stream of young prospects and veteran rehab projects. Critics scoffed, and fans stayed away. But by 2005 the plan showed promise with a 95-win season. And in 2007 it paid off, as the Indians beat the top-dollar Yankees in the playoffs and came within one game of the World Serieswith a payroll less than half that of their competition. How did they do it Veteran sportswriter Terry Pluto (who had unprecedented access to the Indians front office) carefully analyzes each big decision and tells which ones worked, which ones didnt, and why. This rare behind-the-scenes look at a modern front office will intrigue any fan fascinated by baseball deal-making. A wealth of baseball detail that will intrigue serious fans and fantasy leaguers. This item ships from multiple locations. Your book may arrive from Roseburg,OR, La Vergne,TN. Paperback. Bookseller Inventory # 9781598510492

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