January 11, 2002

6-4-3

Who Are You, and What Have You Done With Gary?

by Gary Huckabay

For those of you who may have missed the Associated Press article, Representative John Conyers (D-Mich.) has called for the resignation of Allan H. "Bud" Selig as the commissioner of baseball.

Conyers is apparently upset about a bridge loan for $3 million received by the Milwaukee Brewers in 1995. The loan was made to the Brewers by Tempus Investment Corporation. Current Twins owner Carl Pohlad had an extensive ownership stake in Tempus at the time of the loan. The loan was secured by money-market funds worth about 25% of its value, and the interest rate was 10.5%, or prime plus a point and a half. The controversy over the loan is the result of a clause in the bylaws of Major League Baseball that requires disclosure of related-party loans between owners. Selig and Pohlad were supposed to tell all the other owners about the arrangement. There is no prohibition of loans between teams.

Conyers appears to be pretty upset about the entire arrangement; either that, or he sees this as an opportunity to make a point in the court of public opinion, and a chance to go after Selig where he's vulnerable, and something can be proven. Kind of like going after Al Capone for tax evasion, or O.J. Simpson for littering: if you can't prove what you really want to prove, find something else to prosecute.

Rep. Conyers sent a letter to Selig in which he wrote, "In light of this disclosure and your apparent unwillingness to reveal other financial information that you assert supports your decision to eliminate two baseball teams, I regret that I must call on you to resign as commissioner of major league baseball." In other words, he didn't believe Selig in front of Rep. Sensenbrenner's House committee a few weeks ago.

What Conyers doesn't understand is that Bud Selig is not your father's commissioner. "Your job as commissioner is to do what is in the best interest of baseball," wrote Conyers, illustrating his antiquated notion of what the Office of the Commissioner is supposed to be. The commissioner's office is no longer an overarching pedestal from which one governs baseball with some high-minded ideal of what the game should be. Selig is effectively a hybrid between a Chief Executive Officer and a Chief Marketing Officer. He serves at the behest of the owners, and he needs to keep them happy in order to keep his job. He spends a great deal of time trying to manage relationships, build consensus, and put the best public face on the game he possibly can, so that people keep watching and buying tickets.

Selig's constituency is not baseball as a whole, or the fans, or the pundits, or the gamblers, or the bankers. His constituency is the owners, and the owners alone. I'm sure he'd prefer that what's best for the owners is what's best for baseball, and he might even believe it when it's not necessarily the case.

Selig's three-year contract extension gives Conyers even more reason to doubt the owners' claims that they're losing money. If they were, why would they rush to give a contract extension to The Chief? The appearance of solidarity for negotiations with the MLBPA is one thing, but money makes the world go 'round. CEOs lose their jobs easily enough when their company is profitable but not growing. Boards of directors and shareholders tend to get pretty cranky when their company is bleeding cash, and executives suddenly start to leave "in order to pursue other opportunities." (Read: "You're canned. Clean out your desk.")

It's easy to understand Rep. Conyers's frustration, but it's hard to support his action. Major League Baseball is a privately-held business, one which should be free to run itself in any legal fashion whatsoever. Conyers has the power to attempt to constrict the legal framework within which baseball has to operate. I get really nervous whenever a government official starts writing letters suggesting that a particular executive step down. Conyers has already started to back away from his letter, and he would be well advised to continue doing so at full speed.

Bud Selig isn't a perfect commissioner. Some of his actions deserve careful scrutiny under as much light as possible. The same is always true of the actions of government.

Gary Huckabay is an author of Baseball Prospectus. You can contact him by clicking here.

Gary Huckabay is an author of Baseball Prospectus. 
Click here to see Gary's other articles. You can contact Gary by clicking here