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Thursday, September 01, 2011

Biz of Baseball: How Did Jim Crane Slip By?

“An Astro-nomical slip up!”

But, the media, and possibly MLB, slipped on Crane’s background. After all, he was on the precipice of owning the Astros in 2008 when he backed out of the deal with McLane. He was part of number of suitors for the Chicago Cubs in 2009. And, last year, he quickly married up with Dallas Mavericks owner Mark Cuban to be part of the bankruptcy auction process that had them pitted against a group assembled by Nolan Ryan and Chuck Greenberg to own the Texas Rangers.

The media failed.

I’m as guilty as the next. Crane was simply referred to as a “Houston businessman”. No due-diligence was done by the media that would have brought some of the unsavory aspects of Crane and his company to light. His company not only was charged with discriminatory behavior, but was also found to not investigate complaints of sexual harassment and destroyed documents that were to be retained as part of Equal Employment Opportunity Commission (EEOC) investigation. Crane reportedly said to subordinates not to hire blacks. “Once you hire blacks, you can never fire them,” Crane reportedly said.

But, if there’s something that should give those watching the baseball industry thought, it’s this: according to league sources, these aspects – part of the public record – were not fully brought to light until my investigation of Crane for Forbes. As sources indicated to me, until a deal is nearly completed, the league does not begin their investigative work. As one executive said, “If we conducted the process on every suitor involved in the bidding process, we’d expend all our resources. We are thorough in due-diligence for those in the final stages.”

Repoz Posted: September 01, 2011 at 09:02 PM | 32 comment(s) Login to Bookmark
  Tags: astros, business, media

Reader Comments and Retorts

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Statements posted here are those of our readers and do not represent the BaseballThinkFactory. Names are provided by the poster and are not verified. We ask that posters follow our submission policy. Please report any inappropriate comments.

   1. RoyalsRetro (AG#1F) Posted: September 01, 2011 at 09:28 PM (#3914818)
Do you want to know the terrifying truth, or do you want to see me sock a few dingers?
   2. You Know Nothing JT Snow (YR) Posted: September 01, 2011 at 09:33 PM (#3914823)
Dingers! Dingers!
   3. Joe Kehoskie Posted: September 01, 2011 at 09:39 PM (#3914829)
Unless a rival bidder has popped up that MLB prefers or there's very fresh dirt on Crane, I still think this at least partly relates to realignment, which is supposedly a top priority of both MLB and the MLBPA but has no known team(s) willing to make the switch. (I can't get anyone to agree with me, but this is my story, and I'm sticking to it.)
   4. Sean Forman Posted: September 01, 2011 at 09:50 PM (#3914838)
I still think this at least partly relates to realignment


Can't MLB just expand already?
   5. Scott Ross Posted: September 01, 2011 at 09:52 PM (#3914840)
At least now that Crane's in the club, the exclusion of Mark Cuban is certifiably indefensible--not that'll stop Bud from keeping him out, but...
   6. Maury Brown Posted: September 02, 2011 at 02:03 AM (#3915121)
I still think this at least partly relates to realignment
Never understood this. For one, I think if the league went to Crane and said, "Move to the American League, while dancing in centerfield on the jumbotron, or else," Crane would run for it. He's been waiting for a club since 2008, and been active four times (Astros - 2008, Cubs - 2009, Rangers - 2010, Astros - 2011). And the radical realignment discussed (division-less AL and NL) has moved off to the back burner.

There's more going on.
   7. Coot Veal and Cot Deal's cols=“100” rows=“20” Posted: September 02, 2011 at 03:06 AM (#3915189)
(I can't get anyone to agree with me, but this is my story, and I'm sticking to it.)


gimme three dollars... I'll agree with you.
   8. Joe Kehoskie Posted: September 02, 2011 at 03:06 AM (#3915190)
Never understood this. For one, I think if the league went to Crane and said, "Move to the American League, while dancing in centerfield on the jumbotron, or else," Crane would run for it.

Perhaps, but is there any evidence that this is true now, let alone before the negative media coverage started to heat up? McLane came out very strongly against the Astros switching to the A.L., and someone close to Crane was quoted as saying that Crane was also against it. Meanwhile, on the fan side, Astros fans seem strongly opposed to moving to the A.L. West, some for reasons of tradition (50 years in N.L., anti-DH sentiment, etc.) and others because of the late starting times that 27 games on the West Coast would cause.

Personally, I believe a lot of the negative effects of realignment on Houston could be mitigated, but I'm not sure I'd want to pay $680 million to become the new owner of a 100-loss team and then, as my first act, jam an unpopular change-of-league down my fans'/customers' throats (especially with a new RSN coming online in 2013, the rights for which will need to be sold in 2012). Even if I were to agree to the change, I'd want it to look like I was dragged there kicking and screaming.

And the radical realignment discussed (division-less AL and NL) has moved off to the back burner.

Radical realignment might have moved to the back burner, but basic realignment (15/15 A.L./N.L.) apparently hasn't. At the recent owners' meetings in Cooperstown, Jerry Reinsdorf made it clear (perhaps unintentionally) that realignment was a higher priority than adding an additional wild card team.

There's more going on.

To be clear, I don't doubt your coverage of this at all; I just believe there might be an additional (and somewhat Machiavellian) layer to all of this. MLB wants realignment but can't force any specific team(s) to move. MLB now has a sale pending of the team that's the most natural candidate for realignment and with a buyer who has a few issues in his (or his companies') past. I'm generally not big on conspiracy theories, but it's not hard to imagine MLB using Crane's issues to create the leverage it needs to get realignment done. Otherwise, MLB might not have a similar opportunity for years if not decades.

I just can't believe MLB would allow the opportunity to accomplish a major objective like realignment to fall by the wayside because of some skeletons in an owner's closet, unless those skeletons were not only horrible but very recent. As you said in the article today, there's been almost no media uproar over Crane, and if it hasn't happened by now, it's not going to happen. It's not like MLB scheduled Crane for a vote in Cooperstown and the media went berserk. This whole transaction has been a non-issue except for a very small number of media outlets (led by Biz of Baseball).
   9. base ball chick Posted: September 02, 2011 at 03:23 AM (#3915205)
joe

the whole transition has been a non isssue because no one in the media even bothered to look - sort of like the media and steroids before barry lamar bonds. it's houston, a podunk nothing town - who cares?

the owners had a problem with crane the other 2 times he wanted to buy a team - and funny that the problem would just vanish.

the problem with the significant overleveraging of the team is the problem

and if you think that crane wouldn't agree to go to the AL or anything else to get his hands on a ML team, you are dead wrong
   10. Joe Kehoskie Posted: September 02, 2011 at 03:51 AM (#3915231)
the problem with the significant overleveraging of the team is the problem

I always thought that if anything derailed this deal, it would be the financing, but as recently as 1-2 days ago, people have reported that the delay has nothing to do with the deal's financing or debt.

and if you think that crane wouldn't agree to go to the AL or anything else to get his hands on a ML team, you are dead wrong

No doubt, I could be dead wrong about all of the above, and as I said in my first post, no one seems to agree with me on this. It just seems odd that everyone, up to and including Bud Selig, was saying this deal was on track for August approval, and then, three days before the vote, it got tabled. Even if we accept at face value that MLB was surprised by aspects of Maury's Forbes article(s), that was in June or July, not mid-August. Unless MLB found something that no one has published, the last-minute delay was a very odd turn of events.
   11. valuearbitrageur Posted: September 02, 2011 at 04:06 AM (#3915235)
At least now that Crane's in the club, the exclusion of Mark Cuban is certifiably indefensible--not that'll stop Bud from keeping him out, but...


But how does the league know whether Cuban would be any better than Crane?

For example, what evidence is there he would ever hire blacks?
   12. Tripon Posted: September 02, 2011 at 04:11 AM (#3915236)
Didn't Jim Crane and Mark Cuban do a joint bid for the Rangers?
   13. Dan The Mediocre Posted: September 02, 2011 at 04:41 AM (#3915243)
For example, what evidence is there he would ever hire blacks?


The first piece of evidence is that he owns a basketball team.
   14. Drew (Primakov, Gungho Iguanas) Posted: September 02, 2011 at 04:47 AM (#3915244)
Crane reportedly said to subordinates not to hire blacks. “Once you hire blacks, you can never fire them,” Crane reportedly said.


Obviously I don't know context, but I can see this as an angry response to affirmative action.
   15. Maury Brown Posted: September 02, 2011 at 05:07 AM (#3915247)
The question is, why now? Or more correctly, why did it take so long?

It would be lie to say that I am the one that brought certain aspects of Crane’s background to light, and thus, that is the reason for the delay (see Why Jim Crane Could Become Baseball's Most Controversial Owner). After all, the Houston Chronicle reported about Crane and his company’s discrimination claims by blacks, Hispanics, and women of child-bearing age as early as 2000. It wasn’t until searches against “Eagle Global Logistics”, Crane’s company, that that, and later war profiteering charges, by the Justice Dept. came to light.
But... whether it is the league saying as much, or something else, several high-placed national and Houston area reporters that have followed up on the story have been told to them by league sources that something in my Forbes piece spooked them.

What it could be (and I have no proof, just apply some logic)... The situation with McCourt has altered Bud's view of what is, or isn't, acceptable. His POV may have shifted on Crane in the overall -- no one thing, but all of it together -- that has created the issues.

I haven't reported on some information I have that I could not confirm with a second source. If one of them is true (and I told the league; they said there was nothing of it) it would be a huge taboo, especially for Bud. Were they telling me one thing but it was another? Now I'm just being a paranoid conspiracy theorist. For one, while my source is a high place exec that clearly looks out for the league's interest, I think I know him well enough that my BS meter would go off if he were trying to mis-direct. He is, by all accounts, very straight up.
   16. Joe Kehoskie Posted: September 02, 2011 at 06:08 AM (#3915250)
But... whether it is the league saying as much, or something else, several high-placed national and Houston area reporters that have followed up on the story have been told to them by league sources that something in my Forbes piece spooked them.

Sure, but that goes directly to my theory: MLB could be using your reporting as an excuse for leaving Crane to twist in the wind, in the hopes that he'd become more agreeable to realignment. Otherwise, once the Astros sale is approved, MLB will be back to wanting realignment but having absolutely no power to make it happen.

I understand the stories are being sourced at least partly out of the Commissioner's Office, but it's one thing for MLB people to talk off the record, and quite another for them to give statements against interest. (Hell, self-serving leaks by MLB execs are basically what keep MLB writers in business.)

Anyway, it's all just a conspiracy theory. It will be interesting to see how this turns out. I can't recall another time like this in MLB in the past 25 years, with three big-market teams simultaneously battling ownership issues.
   17. Jim Wisinski Posted: September 02, 2011 at 11:42 AM (#3915297)
The first piece of evidence is that he owns a basketball team.


Whose best player is white!
   18. JoeHova Posted: September 02, 2011 at 12:52 PM (#3915319)
The first piece of evidence is that he owns a basketball team.

So does Donald Sterling.
   19. Matt Clement of Alexandria Posted: September 02, 2011 at 01:05 PM (#3915326)
Crane reportedly said to subordinates not to hire blacks. “Once you hire blacks, you can never fire them,” Crane reportedly said.

Obviously I don't know context, but I can see this as an angry response to affirmative action.
The context is that Crane's company was investigated by the EEOC and determined to have systematically (a) refused to promote women and minorities into managerial positions, and (b) refused to advertise job openings to prevent qualified minority applications from going into the record. Crane's company paid a $9M settlement.

So, it was an angry response to affirmative action, but it was in the context of doing illegal and discriminatory things in part due to that opposition to affirmative action.
   20. base ball chick Posted: September 02, 2011 at 01:05 PM (#3915327)
joe

i have also heard stuff (ahem) i can't publish/repeat saying that maury's piece in FORBES gave some, uh, interesting points to a few people in MLB who never wanted crane - not with the rangers OR cubs
we ALL know that no matter WHO offered more cash for the rangers that nolan ryan was gonna get that team. just like john henry and the redsox

and like i said, it is more than weird that none of the baseball media in either houston OR national bothred to so much as glance at crane - got bigger fish to fry with dodgers/mets, yeah, but NOTHING???
realignment might could have been a sticking point with drayton but why you think it is with crane i don't get. it's not like the team is any good, or is gonna be any good, or has much of any fans left. and true that a LOT fewer people are gonna watch all those west coast games, but cable doesn't care because people have to get it in the package whether or not they want it. so crane will make plenty of $$$ as long as he keeps the payroll low like he is doing and hires low paid crappy GM/managers like he drayton did
   21. Roger Cedeno's Spleen Posted: September 02, 2011 at 01:19 PM (#3915338)
I can see this as an angry response to affirmative action.


I can see it as naked cynicism... a refusal to hire anyone who might get an extra edge in disputes over wages, conditions, supervisory conduct, etc...
   22. HowardMegdal Posted: September 02, 2011 at 02:50 PM (#3915424)
You guys are being silly, denigrating Jim Crane like this. Why, he serves as a model to current franchises!

In seeking to attract people willing to buy what amounts to a vanity share in the Mets, the owners will be pursuing an option that was previously available to them. The Mets’ investment banker, Steve Greenberg of Allen & Company, said he was contacted by dozens of small investors when the team was initially conducting a search for a minority partner.

“Our initial plan was to find a single partner for $200 million because we thought that would be the simplest way to go,” Greenberg said on Thursday. But in retrospect, he said, cobbling $200 million from perhaps dozens of investors “is the way we should have done it.”

“We got a lot of calls from people who said, ‘We can’t put up $200 million, but we love the Mets and we can put up $10 million or $20 million,’ “ he said. He noted that Jim Crane, the prospective owner of the Houston Astros, is raising $375 million in 15 units of $25 million each.


Who you gonna trust? Met ownership, or the best sports business reporter around?
   23. Drew (Primakov, Gungho Iguanas) Posted: September 02, 2011 at 04:41 PM (#3915521)
I can see it as naked cynicism... a refusal to hire anyone who might get an extra edge in disputes over wages, conditions, supervisory conduct, etc..


That too. Combined with MCoA's details (and Crane's lack of capital), why exactly was he allowed to buy the Astros? Is Bud looking for a contraction excuse?
   24. valuearbitrageur Posted: September 02, 2011 at 05:00 PM (#3915537)
Whose best player is white!


Not just white, Aryan white!

Didn't Jim Crane and Mark Cuban do a joint bid for the Rangers?


How awful a man that Mark Cuban must be, that he needs JIM CRANE as a partner to even have a chance to get into the owners club.
   25. Drew (Primakov, Gungho Iguanas) Posted: September 02, 2011 at 05:09 PM (#3915544)
It's become obvious that Bud doesn't want money in MLB. Which makes no sense, but there it is.
   26. spike Posted: September 02, 2011 at 05:31 PM (#3915572)
Owners whose wealth is independent of baseball would be a bit of a threat to the other kind.
   27. Bring Me the Head of Alfredo Griffin (Vlad) Posted: September 02, 2011 at 06:05 PM (#3915629)
Obviously I don't know context, but I can see this as an angry response to affirmative action.


So is \"#### you, ######!"

The mere fact that it's "an angry response to affirmative action" doesn't make it a reasonable position.
   28. Bring Me the Head of Alfredo Griffin (Vlad) Posted: September 02, 2011 at 06:06 PM (#3915633)
OK, I understand why both \"####\" and \"######\" get nannied out, but why does the former get a \ in front of it?
   29. Bring Me the Head of Alfredo Griffin (Vlad) Posted: September 02, 2011 at 06:07 PM (#3915635)
And now both get one one each end. Curiouser and curiouser...
   30. Drew (Primakov, Gungho Iguanas) Posted: September 02, 2011 at 06:10 PM (#3915639)
The mere fact that it's "an angry response to affirmative action" doesn't make it a reasonable position.


Agreed, I was just trying to present a mitigating distinction. Not that he deserved one, it looks like.
   31. Joe Kehoskie Posted: September 02, 2011 at 08:07 PM (#3915756)
Crane's company paid a $9M settlement.

Just in the spirit of accuracy, something like $6 or $7 million was returned to Crane's company after the courts reviewed the claims. In other words, it was still bad, but not as bad as the original headlines.

and like i said, it is more than weird that none of the baseball media in either houston OR national bothred to so much as glance at crane - got bigger fish to fry with dodgers/mets, yeah, but NOTHING???

No question, the Astros sale generated far less media coverage than I would have expected. Oddly enough, I thought the timing might actually help Crane -- i.e., if the Astros were the only team for sale, I could see MLB looking for the perfect buyer. But with the Dodgers and Mets problems and with the Braves being rumored as possibly hitting the market next year, I thought MLB would be thrilled to get one of these resolved, even if it meant a buyer with a few skeletons.

and true that a LOT fewer people are gonna watch all those west coast games, but cable doesn't care because people have to get it in the package whether or not they want it.

If this is true, it might put a dent in my theory, but I was under the impression that the Astros' new RSN was facing a tougher-than-usual battle in being added to Houston-area cable systems as a non-premium channel. Maybe something has changed and I missed it.

He noted that Jim Crane, the prospective owner of the Houston Astros, is raising $375 million in 15 units of $25 million each.

This is interesting. Also interesting that Greenberg used the Mets' deal's implosion as the time to talk about details of the Astros sale, after everything re: the Astros deal was hush-hush for the past 3-4 months. (I wonder if this $375 million includes Crane's investment or if this is just for his partners. Taken at face value, it implies a debt load of $305 million on the $680 million sale price.)

Anyway, aside from knowing MLB wants realignment and that the Astros are the most logical candidate, the No. 1 thing that drives my theory is that MLB already has two built-in excuses for vetoing Crane -- (1) the deal apparently would violate the debt rule, and (2) the deal has a very high number of investors -- and yet MLB hasn't invoked either of them. That's what makes me think there's more here than meets the eye.
   32. Something Other Posted: September 03, 2011 at 04:25 AM (#3916004)
“We got a lot of calls from people who said, ‘We can’t put up $200 million, but we love the Mets and we can put up $10 million or $20 million,’ “ he said. He noted that Jim Crane, the prospective owner of the Houston Astros, is raising $375 million in 15 units of $25 million each.
Well, nothing suspicious about this. After all, the chance to hand over a small fortune to Fred Wilpon in return for the privilege of handing over a small fortune to Fred Wilpon doesn't come along every day.

Wait a minute. Yes, yes it does.

Just curious--is it possible to identify one person who is doing this, and what on earth could they be getting out of it?

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