Jerry Reinsdorf Partially Exposed!

Jerry Reinsdorf Partially Exposed!
A face only a moneyed investor could love // Chris Sweda, Chicago Tribune

Editor's Note--The following is the first contributing piece from Chris Lamberti.  You may remember him from your favorite string of absurdist joke sequences in the comment section.  I've brought him on to provide a variety of much more business and culture-oriented pieces about the franchise.  Chris is a very dedicated lifelong White Sox fan, which I mention because what follows is a detailing of some of the more self-interest-driven financial masterstrokes of the Chairman.

Since Jerry Reinsdorf the influential businessman/Chicagoan will be the subject of numerous posts for as long as James will permit me the WSO forum for free-form ranting, I figured I’d start with an introductory piece about the darker side of The Chairman.  You may have noticed that, despite bringing six Bulls championships and one White Sox World Series title to Chicago, the fan base has never entirely warmed to Big Jer, even in a town with a pretty low standard for Jerrys.

When Reinsdorf purchased the team, it didn’t help that his predecessor, the venerable Bill Veeck, was going to be a tough act to follow.  Questionable roster moves aside, Veeck was an everyman (at least as much as a major sports team owner with a hollowed out ash tray in his prosthetic leg could be considered an everyman) who wanted to remind us that baseball was fun, much in the same way that Reinsdorf is constantly reminding us that baseball is a business.  There was something romantic about Veeck’s last stint as an owner; the White Sox had a bit of that ad hoc, low budget, camp quality, accented by Harry and Jimmy’s Falstaff fueled diatribes.  Reinsdorf represented the new zeitgeist of “sports entertainment.”

So Reinsdorf and Co swooped in, called Veeck’s operation amateurish, Comiskey Park aging, and the surrounding neighborhood dangerous.  But the old yard wasn’t really that bad, save a night when Steve Dahl wanted to blow disco albums to smithereens.   In truth, what it lacked for new ownership were luxury suites and scout seats and stadium clubs and sightlines galore!  Nothing spends like corporate money, and corporate money spends on amenities.

But new baseball stadiums are expensive, and people who own baseball teams didn’t make their fortunes by taking on large expenditures; that’s what the government is for!  So in a bait-and-switch move, Reinsdorf and Co went to the Illinois state legislature, hat in hand, talkin’ not about corporate profits but the taxpayer benefits of a new stadium, through the miracle of trickle-down economics!

In Reinsdorf’s version of the story, legislators couldn’t wait to fork over the dough:  "You mean, if somebody walks up to you and hands you money, you shouldn't take it? The fact is — I was offered this stadium by elected officials,” he said.  I’d need more information to answer unequivocally the question posed in the first part of this statement, but I’ll accede to the second part, the Illinois General Assembly did eventually offer Reinsdorf the money.  What The Chairman omits is the drama, the stalemate, and his own role in propagating the cash windfall.

"A savvy negotiator creates leverage,” Reinsdorf confided to his fellow high-end cigar smokers in 1995.  And create leverage he did, initiating negotiations for a move to suburban Addison before it was blocked by skeptical townsfolk (who were somehow oblivious to the increase in jobs, revenue, and quality of life the major league ballpark was going to provide) and then threatening to move the White Sox to Tampa/St. Petersburg into a domed stadium that had already been built. “People had to think we were going to leave Chicago," said Big Jer.

Shortly thereafter, Michael Madigan and Jim Thompson famously stopped the clocks to get a deal done that would prevent the relocation of Chicago’s beloved White Sox.  The immediate result was $167 million in taxpayer dollars for the development of new Comiskey Park, which would include displacing some seemingly nice folks in the South Armour Square neighborhood.  The long term result has been a lousy deal for state and city taxpayers whose local governments are cutting public services and scapegoating public employees.

Chicago is not alone.  Since 1990 owners of MLB, NFL, NBA, and NHL franchises have netted nearly $20 billion in taxpayer subsidies for new stadiums.  Yes, TWENTY BILLION DOLLARS.  Not a typo.  Plus, most if not all enjoy cushy state and city tax deals that have left taxpayers in the lurch.  "If you want to inject money into the local economy,” remarked University of Chicago’s own economist Allen Sanderson last year, “it would be better to drop it from a helicopter than invest it in a new ballpark."

Thankfully, in light of this new information and independent study upon independent study revealing the pitfalls of publicly funded stadium development, our legislators have learned their lesson and have been proceeding with the best interests of their constituents in mind.  Ha!  Just kidding.  Not at all.

In order to negotiate the White Sox stadium deal, and to handle the dirty work of “eminent domain” relocations of neighborhood residents and impending law suits, the Illinois General Assembly formed the Illinois Sports Facilities Authority.  Since the late 1980s the IFSA Board of Directors has been appointed jointly by the mayor and the governor, and the body’s primary reason for existing seems to be to dole out money to Reinsdorf when he asks for it.

But Reinsdorf isn’t asking for more money.  Considering, at the very least, an overwhelming concern about the public’s return on these investments, that would be unnecessarily predatory and borderline unethical!  Again, I joke. Of course he asks.

Reinsdorf paid for the $41 million renovation of the new park in 2003-4 with the $68 million he made when the Sox sold the naming rights to the stadium.  That was after the state granted the team the right to do so for nothing, despite the fact that taxpayers built and own the structure.   The government funded ISFA also paid for the new Bacardi at the Park restaurant at The Cell, as well as some recent infrastructure upgrades, for a cool $6.9 million.

“Where’s our piece of the pie?”  Jane and John Q. Public may ask.  Well, as former Gov. Jim Thompson (also former IFSA chair) explained after flushing Reinsdorf with cash:

"We said to Jerry, 'Jerry can we have part of the profits?' and he said 'no.' We said, 'OK.' …I've known Jerry for 52 years. He's tough. He's tough."

Wait, what?  “He’s tough.”  That’s it?  Instead of cowering in fear, how ‘bout try this?:  “Hey, Jer ol’ buddy, why don’t you invest your money in your business if you want to reap the profits exclusively?”  Sheesh.

In case you think any of this nonsense will be abating now that the White Sox fan is out of the mayor’s office, think again.  Ben Joravsky recently outed Jerry Reinsdorf as a Rahm campaign donor and as being among the city's twenty-five "power players" who have direct access to the mayor.

Leverage.  I get it.  How savvy.

Comments

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  • Moneyball aside, why hasn't Hollywood brought Veeck's colorful story to the big screen?

  • In reply to Aquinas wired:

    Hollywood would probably find a way to screw it up, but I'd shell out dutifully for the Bill Veeck biopic.

    Who would play Veeck? I'm thinking John Hurt or Ron Perlman.

  • nice column lamberti! i'm a sox fan but I'm sick of the downright theft by billionaire owners.

    ps. does your presence mean less fegan? that would be a win-win situation!

    :p

  • In reply to The Wizard:

    Thanks I appreciate it. But less Fegan? Good god I hope not! Nobody wins when James isn't writing. Which is why I have him locked in my cellar, chained to a desk, and tethered to his laptop on a T1 dedicated line. That reminds me, it's time to go feed James . . .

  • In reply to The Wizard:

    Et tu, Wiz?

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