SPORTS Triple Play

IT WOULD MAKE AN EXCELLENT ESSAY question on a final exam fora graduate management course: The product has been stagnant in the marketplace for almost 20 years. It has no discernible positive identity. The manufacturer has an image of shoddiness, if not incompetence. The plant is antiquated and inefficient. The line workers care more about their own promotions than about the quality of the product. Management clamors for quality improvement, but does not have or will not utilize all the resources needed to foster that improvement.

You have eight years to make this product one of the top eight-in both quality and sales-in a highly competitive market. What management techniques do you utilize to accomplish this end?

If that question ever appeared on a test, students could guarantee themselves an “A” by using the Texas Rangers Baseball Club as a case study. A team that current managing partner Tom Schieffer once described as “kind of a sad-sack franchise” has finally become a playoff team whose young nucleus has the potential for more. It’s also a team that has finally become profitable for the first time in 36 years.

Lest one think the Rangers’ first American League West division championship success was simply because of Juan Gonzalez’s bat. Pudge Rodriguez’s all-around excellence. Rusty Greer’s hustle. Ken Hill’s grit and John Burkett’s poise, it should be noted that none of these would have been in place had it not been for some crucial management decisions at critical times. To wit:

Signing Nolan Ryan in December 1988 gave the Rangers their first superstar, which in turn gave them an identity Dallas-Fort Worth fans could relate to. According to Schieffer. the argument could be made that had Ryan not come to Arlington, the Rangers would be floundering, or even gone, by now

The new ownership, fronted first by George W. Bush and Rusty Rose and now by Schieffer, transformed the organization from a humble, if inefficient, mom-and-pop shop to a modern-day, well-oiled business. No longer was it the corner grocer struggling to keep up with the giant Kroger, Tom Thumb and Albertson’

The owners realized early on that the “physical plant,” known to Rangers fans as Arlington Stadium. was an antiquated facility that was more revenue drain than money magnet. It had to go. to be replaced by The Ballpark in Arlington, a potential money-making jewel

The Rangers steadily improved but could not quite get over the hump and into longed-for post-season play. To provide that extra push, the executives dismissed the longtime department heads who had developed the product to close-but-no-cigar level (Manager Bobby Valentine and two years later, general manager Tom Grieve) and brought in a management team with a new approach (GM Doug Melvin and Manager Johnny Oates).



THE NEW APPROACH PRIM ARILY AFFECTED PERSONNEL: A “team last” workforce was transformed through hiring/firing decisions and attitude adjustments. into one for which, to quote “Star Trek’”s Spock, “the needs of the many outweigh the needs of the one.” Compare Jose Canseco almost ruining his career by convincing coaches to let him pitch an inning, to Rusty Greer’s infectious, dive-for-the-ball, old-time-baseball attitude.

The result was not only the Rangers’ first post-season appearance in its 25 years in Arlington and 36 years inexistence-remember, this team was the Washington Senators for 11 years-but a profit. Schieffer said the Rangers will make “a little money” this year-the books aren’t yet complete but some outside the organization estimate $2 million to $3 million, after losing close to $8 million over the previous two years. That profit should increase as the season-ticket base swells past the 16,000 at which it has been stuck for the past three years; as the few remaining luxury suites at The Ballpark lease for up to $200,000 a year; and as concession and merchandise revenue surges.

Of course, the corollary is that salaries also must grow with success. Rodriguez and Dean Palmer must be signed to new deals, though rumor has it Palmer might be traded. Better relief pitching is needed, and another solid starting pitcher wouldn’t hurt.

“The trick is to try to get revenues to grow faster than salaries,” Schieffer says. He’s not sure what the magic formula is-“That’s the balancing act everybody in professional sports is trying to learn how to accomplish,” he says-but he believes the mix of The Ballpark itself, its Mid-Cities location and the size of the television market will pull the Rangers through. Based on the success of the recently completed season. Schieffer probably wishes he had negotiated the new TV contract with LIN, the owner of Channels 5 and 39, in 1996. instead of 1995.

But this is the road to the future. The final-exam question was about how the Rangers got to this point.



CONSIDER THE FOUR TEAMS IN THIS YEAR’S AMERICAN LEAGUE playoffs. One was the New York Yankees, which is owned by deep-pocketed George Steinbrenner and which has the most lucrative local-television deal in the history of sports. The other three contenders-the Rangers, the Baltimore Orioles and the Cleveland Indians-have beautiful new stadiums. It’s no coincidence.

“The new ownership brought more resources to the party,” says Grieve, who remained with (he Rangers as a TV broadcaster after his dismissal as general manager. “The new stadium, the increased revenue from the new stadium and the media contracts signed have created a bigger revenue stream. They have poured back a lot of that money into the baseball operation.”

Schieffer, who spearheaded the development of The Ballpark, said the ownership group knew early on that the Rangers needed a new facility in order to compete artistically and financially.

“The more we learned about baseball,” Schieffer says, “the more we found out that Arlington Stadium was not a major-league facility, given the potential of the franchise. It wouldn’t produce the revenues to meet the demands of a major-league payroll. It would not generate the ticket revenue, the concessions revenue-virtually every part of the business. The facility just couldn’t do it. It was like having an obsolete factory; it wouldn’t produce the widgets like the other, modern factories.”

Schieffer is quick to point out that had it not been for The Ballpark, the Rangers could not have signed Gonzalez to a seven-year. $45 million contract in 1994. They could not have signed Will Clark to replace Rafael Palmeiro in November 1993. They could not, after Kenny Rogers left for the Yankees, have signed both Hill and reliever Mike Henneman, though the latter turned out to be a bust.

“When we built the new ballpark, that just changed everything,” Schieffer says. “When the labor negotiations started, we started out as a small-market club. Now we’re considered a big-market club.”

Though they didn’t do so as dramatically as Cleveland, which used projected revenues from Jacobs Field to sign players such as Albert Belle, Kenny Lofton and Carlos Baerga to long-term contracts and parlayed that into a 1995 World Series appearance, the Rangers didn’t wait until the money from The Ballpark came flowing in to spend that money.

“When we knew we had The Ballpark coming on-line, then we could start thinking more about revenues.” Schieffer says. “Actually, the last year or so in the old ballpark, we kind of started borrowing money from future revenue and started increasing the payroll.” In the early ’90s. the Rangers had suffered extensive media criticism for capping player payroll at about $31 million. Now, it’s at about $41 million and growing, competitive with all the large-market, playoff teams except the Yankees. Atlanta Braves and the Orioles.

In hindsight, perhaps the Rangers should not have done that borrowing. Just as The Ballpark opened in 1994, the season-ticket base swelled from less than 10,000 to 16.000. luxury suites were leasing like hotcakes, attendance was on pace to draw 3 million plus and-STEEE-RIKE.

The players* strike that wiped out the last part of the 1994 season and 18 games in 1995 might not have set back the Rangers on the field, but it sure did on the balance sheet.

“The strike cost us between $25 and $30 million, in the combination of losses and foregone profits.” Schieffer says. The hacklash certainly was felt in 1995 and even 1996. “In 1995, we had the All-Star Game, and traditionally that is something that you’re able to build on and get several thousand more seasontickets out of. We weren’t able to do that, The All-Star Game helped us maintain the status quo. but it didn’t give us a boost. The hangover effect kepi us treading water this year as far as season-ticket sales are concerned. What 1 hope to see in this off-season is a big boost in season-ticket sales.”

The Ballpark revenue is more than tickets and suites. Schieffer recalls the epiphany that taught him that tickets, nachos and caps aren’t the only revenue-generalors.

In 1990. before plans for The Ballpark had been announced. Schieffer attend-ed the All-Star Game at Wrigley Field in Chicago. During an interminable rain delay, he noticed a bunch of kids wearing rain ponchos. He asked them where they’d gotten the ponchos so quickly, and they told him across the street. Why, he thought, should people have to go across the street to buy them? Why not have a mini-city right inside the stadium?

From that idea sprang restaurants (Friday’s Front Row Grill and the Diamond Club); retail outlets that feature souvenirs, memorabilia and art; a museum and learning center; and an office building with tenants such as KRLD Radio, Dean Witter, doctors and dentists, and Aikman Enterprises. Yes. that Aikman,

This diversity of Ballpark products and services also has attracted some huge revenue-producing sponsors. Schieffer points out with pride that the Rangers are the only big-league team that has attracted two beer sponsors and one of only two or three teams with two soft-drink sponsors. Ballpark signage is almost sold out. and advertisers have a lot more opportunities for exposure. “Now we have a huge marketing arm that is marketing all sorts of things- the Legends of the Game ( museum), the Learning Center, the youth ballpark. Now we have whole programs to sell sponsors rather than just an ad in the program,” Schieffer says.

He chuckles when he thinks of the hype surrounding the sponsorship deals Texas Stadium struck with Pepsi, Nike and AT&T, among others. “My hat’s off to the Cowboys to be able to get people to those press conferences announcing things like that,” Schieffer said. “We haven’t had too much success in that area; it’s treated as non-news with us, whereas with the Cowboys, it’s big news.”

Although Schieffer and his staff are always seeking new money-making options, one thing they’re not looking at right now is joining the current trend of selling naming rights to The Ballpark.

“I hope we’ll always think of something else to do,” Schieffer says. “When David Schwarz was chosen to be the architect, he was asked, ’When do you think you’ll be finished?’ He said. ’1 hope it is never finished.’ ” The Rangers have the authority to build up to 2 million feet of additional office space and 400,000 square feet of retail space on land it owns or leases from the city of Arlington with an option to buy in the future. Plans are still in the works for an amphitheater that could compete with Starplex at Fair Park.

Schieffer is coy about any desire to build an arena for the Stars and Mavericks. “An arena would be great; I’d love to do it.” he said. “But the city of Dallas would also love to do it. and my plate’s full right now. So that’s up to other people.”

The Ballpark has potential not found in Baltimore, Cleveland. Denver, Phoenix and the other cities with new stadiums, which are invariably located downtown. In fact, Schieffer said. The Ballpark in Arlington is a throwback to development of the past.

“The Polo Grounds, Yankee Stadium, even Fenway Park:, they were built out from the center of town, and the city was built around it,” he explains. The twist is that the Giants. Yankees and Red Sox didn’t own the land surrounding their ballparks. The Rangers club does, so it will earn the profit from future development.

THE AGREEMENT TO BUILD THE BALLPARK IN ARLING-ton was announced on Oct. 24. 1990. Yet that announcement may never have come about if not for what had happened on Dec. 7, 1988. For North Texas baseball fans. Dec. 7 will live as the greatest day in Rangers history. That was the day the Rangers signed Nolan Ryan.

Finally, a team that in 17 seasons had boasted only three All-Star Game starters and one-American League Most Valuable Player (Jeff Burroughs in 1974) had a superstar. Not only a superstar, but a Texas icon who had had five no-hitters and more strikeouts than anyone in the history of the game. Plus, his combination of down-home humility and urban savvy played well with local fans.

“Nolan took us a step up because he was a superstar before he got here,” Schieffer says. “It almost gave us a kind of big-time status that we did not have.” During five years in a Rangers uniform.

the Ryan Express recorded two more no-hitters, the 5,000th strikeout and 300th career victory. More important, Ryan focused a positive spotlight on the franchise it hadn’t had before.

“It made people realize we were here and that we were a major-league franchise,” Schieffer says. “I don’t think there is any question that Nolan’s stardom rubbed off on the franchise and did help us pass the bond election.”

That was the Jan. 19, 1991. election in which Arlington voters approved, by a 65 to 35 percent margin, a half-cent sales tax to help build The Ballpark. Who knows what would have happened had Ryan not been around and had the Rangers still been perceived as the kind of franchise for which, as Schieffer put it, “if anything could go wrong, it would.”

Say the referendum hadn’t passed. Remember, this was a team that was all but sold to Tampa Bay interests when Major League Baseball stepped in to quash any relocation then helped put together the 20-some-odd-person consortium (now closer to 30) that now owns the team.

“If there were no new ballpark and no prospects for a new ballpark, what very easily could have happened is that this could have become one of the smaller franchises with a stripped-down payroll. And I don’t know if that basically could have survived in this market. This is a major-league market, and they want major-league stars and they want a major-league attraction,” Schieffer says,

Perhaps fortunately, nobody is referring to The Ballpark as “The House that Nolan Built.” But it would be accurate. The Ryan Express might even be responsible for saving baseball in North Texas.

TOM GRIEVE SAID IT HIMSELF.

“I think we were given an excellent opportunity for what was, in baseball, an extended period of time. I think ownership showed a great deal of patience, since it certainly wasn’t happening in terms of a championship.”

Grieve is a Rangers lifer. All but two of his 30 years in organized baseball have been spent with the Senators/Rangers organization. It is a testimony to his reputation within the organization that when it came time to pick a TV announcer, the Rangers chose Grieve, who had one year of broadcast experience, over established broadcasters Steve Busby, Jim Sundberg and Norm Hitzges.

Bin during his 10 years as general manager. Grieve-and Bobby Valentine, his field manager for eight of those years-could not clear the final hurdle into post-season play. The pair, along with scouting director Sandy Johnson, did leave one important legacy: They developed the Rangers’ nucleus. Gonzalez. Rodriguez. Greer, Palmer. Rogers. Roger Pavlik, Darren Oliver and Bobby Witt all were signed and bred as big-leaguers under the GrieveValentine regime. Grieve traded for Palmeiro, then signed Clark before Palmeiro bolted for Baltimore.

Of course. Grieve also traded prospects such as Sammy Sosa, Wilson Alvarez and Robb Nen, all of whom are excellent players.

Schieffer says of Grieve: “I think he’d be the first to tell you that he just couldn’t figure out a way to get across that final step.”

Well, maybe not.

“To be fair to Bobby Valentine and to be fair to the scouts, that whole regime that begins and ends with the scouts started from a lot lower position than the team is now.” Grieve says. “One thing 1 would have to say is, when our regime ended, we were where we were. The fact is, when Doug Melvin and the new group came in, they did win. Having been a part of the old regime. I would not concede the point that we wouldn’t have been successful, too. But I do concede the point that the new group has been successful, and they deserve the credit.”

Melvin, while expressing respect for the job Grieve did, said that the management team may have been getting a bit stale.

“I think a lot of times you try to do things from within, but if it does not get done, you have to bring in somebody from the outside because they have a fresher attitude; they don’t have any bond to people or philosophies or whatever.” Melvin says. “You need to bring in something fresh, something new. something creative. I think that works in a lot of businesses. You can get a little stale and stagnant in your thinking. Somewhere along the line, I might fall into that. too. I hope I don’t.”

Melvin immediately made two management decisions that signaled his own fresh ideas. He hired Johnny Oates as manager to replace Kevin Kennedy (though Schieffer said, “I would have kept Kevin Kennedy, but Doug felt very strongly he had to have his own man”). And he traded Jose Canseco to Boston for Luis Ortiz, who has gone on to Japan, and Otis Nixon, whose departure via free agency after one year resulted in the signing of Daryl Hamilton, an invaluable contributor in 1996 as center fielder and leadoff hitter.

That was a change in philosophy.

“I think the main part was that I had to manage a team, not so much dwell on individual accomplishments and individual players,” Melvin says. “That was important in the first step I made in trading a player of Jose Canseco’s stature and getting two players back and saving the money to get a third player.”

It was a week in Canseco’s life in 1993 that epitomized what the Rangers had become at that point. This gifted slugger became a laughingstock when a ball bounced off his head and over the fence during a game in Cleveland. On the same road trip, Kennedy finally acquiesced to Canseco’s longtime pleading to pitch an inning. He threw a frame during a blowout in Boston-and nearly destroyed his arm. He hardly played the rest of that season and didn’t play the outfield regularly again until this past year.

Meanwhile, the Texas Rangers* many Latin American players had developed a clique that bisected the team. Gonzalez was winning home-run titles but not hitting those taters in key situations.

“We had some very talented players come through here.” Schiffer says. “But they were not really team-oriented. We had not won with that philosophy. We had overlooked some of that, thinking talent would overcome the lack of a team-oriented philosophy. Doug is very big on the selfless player; someone with good character.”

Grieve agreed. ’That, to me, was another strong management decision: to get players with a great attitude, less selfishness and less whining.”

Added Melvin: “It was just changing the philosophy of the organization and recognizing that winning games and putting people in the seats were the important things. It was an attitude of if we lose games together, we’ll win games together. I look out the window when we have a home game, and they all come out together to work out, and they’re in the same uniform. That ’ s Johnny Oates.”

The Rangers may have had playoff-caliber talent in the early “90s-in fact they’ve had winning records six of the past eight years, but there wasn’t that extra oomph that results from workforce synergy.

’ “Eventually, any organizational team has got to feel a cetrifugal force,” says Bruce D. Evans, an associate professor of management in the University of Dallas’ graduate school of management. “It’s clustering the several individual efforts into a common mold. When a player believes that ’what I do is a part of what the whole team has to do.” then a marvelous synergy can come forward, and perhaps that’s what’s happening with the Rangers.”

Positive teamwork chemistry is occurring. Melvin said, because of Oates. “Johnny is well disciplined in his own work ethic,” he said. “He’s got a plan: he’s got a schedule. He’s flexible, but he has a plan in operating his team. And I think he gets the message to the players that when you come here at 2:30, you’re arriving at your workplace. It might be a locker room, but it’s a workplace. The workday doesn’t start at 7 o’clock (a half-hour before game time), it starts when you walk into the workplace.”

Said Evans: “The job of Johnny Dates is to screen out any friction that may be going on in the front office and get these players to focus toward on-the-field performance. There is a great gift in doing that. You have to thoroughly know the game of baseball; you have to know the realistic potential of the player; you have to have brought the player through conditioning and training to know what to do; and you have to figure out what stimulants or needs will turn the player on at the right time at the right place.

“From the player’s viewpoint, it’s very singular. ’I know I’m needed; 1 want to make contributions; that’s the type of behavior I want to bring up to the plate.’”

In other words, it’s the model of a successful supervisor-line worker relationship.

BEFORE THE CONSORTIUM CAME IN, THE RANGERS had three majority owners, all of whom ran the team as a mom-and-pop shop. Neither Robert Short, Brad Corbett nor Eddie Chiles had the money to make the team a winner, and each created obstacles by meddling.

The current administration has built the Rangers from a 50-employee outfit where everybody did everything to a 150-employee business with its own merchandising department and marketing aim.

“We have a much more professional approach to things,” Schieffer says. “We’re a lot bigger, and we do a lot more things. As a result, we’re organized better. People have more defined roles and specific duties.”

Rangers management is also of the type that lets the baseball people work the baseball. Whether that’s the correct philosophy for success in the sports world is a subject of debate.

“Clint Murchison (the Dallas Cowboys” original owner) comes into my head as the ideal owner of any sports situation anywhere,” says Evans. “He provided the money; he provided the extra resources. He did not meddle: he did not steal the headlines. He tested Tom Landry and Tex Schramm and Gil Brandt, and he liked what he saw. He gave them long-term assurance, and I think anyone in any organization backed with that kind of support will flourish.”

Attorney, sports-law expert ( for KTCK Radio ) and Rangers season-ticket holder Bruce Morrow doesn’t agree. He believes the Rangers have gone as far as they can.

“The way the team is structured with the partnership. Tom Schieffer may be the front for them, but it is not a personal emblem,” He points to the Yankees and Braves as being successful because their owners. George Steinbrenner and Ted Turner, respectively, see their teams as extensions of themselves.

“They have a personal stake.” Morrow continues. ’They’re willing to take the hardships. The Rangers aren’t ever going to be that way. They’ll continue to want to take profits from baseball operations every year. They realize that to keep the fans happy, they’ll go upon the payroll to a real decent level, but I’m not sure they’ll ever push the envelope.”

Grieve’s answer is that he has seen the Rangers increase “their willingness to devote added revenue to signing and developing more baseball players.”

Melvin points out that not many fans understand that the Rangers are in business to make money. “But we need to make sure we put a winning club on the held, have a fun club for the fans to watch and make sure that the owners don’t lose a lot of money. As long as they don’t lose money, that’s the important thing.”

Maybe. But a World Series in Arlington sure would be fun, not to mention highly profitable. And it’s not a bad accomplishment for the annual report.