1000 Ballpark Way
Texas Rangers Baseball is the official company name of the Major League Baseball franchise in Arlington, Texas, situated between the cities of Dallas and Ft. Worth. Because of its state-of-the-art stadium, The Ballpark at Arlington, and a lucrative television rights deal, the Rangers are one of America's most valuable sports franchises, estimated by Forbes magazine in 2001 to be worth $342 million. After 30 years of mediocrity on the field, the team has enjoyed recent success, although it has not fared well in the playoffs, winning but a single postseason game. Perhaps the Rangers' most notable achievement has been to serve as a springboard for the political career of George W. Bush, who served as the club's managing general partner before becoming Governor of Texas. The 1998 sale of the Rangers to financier Tom Hicks, whose Southwest Sports Group now runs the team, provided the basis of Bush's personal fortune, granting him the financial freedom that was instrumental in his ability to make a successful bid to become President of the United States.
Awarding Franchise to Washington, D.C. in 1960
Ironically, the Rangers' connection to Washington, D.C., dates back to the foundation of the franchise when it became the second version of the Washington Senators to play in the American League. After 50 years of stability, Major League Baseball saw a number of teams relocate to new cities in the 1950s. In 1958 the Senators' owner, Clark Griffith, expressed interest in moving to Minneapolis, but faced stiff opposition from both President Eisenhower and the Congress, which threatened to strip Major League Baseball of its privileged exemption from the nation's antitrust legislation. The American League fashioned a remedy by allowing Griffith to move the Senators to Minneapolis, where they became the Twins, while granting an expansion franchise to the Capital. The right to own the second Washington Senators baseball team was then awarded to an investment group headed by retired Air Force General Elwood "Pete" Quesada.
Since 1958, Arlington Mayor Tom Vandergriff spearheaded efforts to bring baseball to the Dallas-Ft. Worth area. In 1962 American League officials studied the region and found it a suitable location for a team, although it rejected a bid by the Kansas City A's owner Charley Finley to relocate there. In 1968 Dallas-Ft. Worth would lose out to Montreal and San Diego in gaining a National League expansion team. The reincarnated Senators, in the meantime, proved to be as disappointing as the original version. A variety of partnerships owned the team until 1968 when Robert E. Short bought a majority interest. A Minneapolis lawyer primarily involved in the trucking and hotel industries, Short became involved in professional sports in 1955 when he bought an 80 percent interest in the Minneapolis Lakers for $200,000, then later moved the team to Los Angeles where he sold it for more than $5 million. He hired legendary player Ted Williams to manage the Senators for 1969, and the team enjoyed its only winning record in Washington and saw attendance reach 918,000.
When the Senators reverted to their usual standard of poor play and declining attendance in 1970, American League team owners, tired of their share of slim visiting gate receipts, urged Short to relocate his team. A year earlier, another American League team, the Seattle Pilots, had decided to change cities, and again Vandergriff and Dallas-Ft. Worth lost out. Vandergriff learned about Short's difficulties and began a campaign to urge American League owners to pressure Short to moved to Texas. After a dismal start to the 1971 season, Short failed to sell the team to investors who would keep the Senators in Washington and finally turned to Vandergriff. The mayor offered $7.5 million in low-interest loans provided by a group of ten local banks, as well as $7.5 million from the City of Arlington for the team's broadcast rights. The team also was offered the use of Arlington's 10,000-seat Turnpike Stadium, home of the local Texas League minor league franchise, and Vandergriff pledged to increase seating to 35,000 for the 1972 season. Even after Short agreed to move the Senators, he had to receive approval from nine of the other American League owners. When the league meeting took place, one of Short's supporters, Angels' owner Gene Autry, was hospitalized, resulting in his vote being recorded as abstaining. Finley tried to take advantage of the situation by offering to trade his deciding vote in exchange for the Senators best young player. In the end, American League President Joe Cronin had to visit Autry in the hospital to obtain a proxy allowing him to vote in Autry's absence, and only then did the Dallas-Ft. Worth area finally get its major league baseball team.
Short planned to conduct a contest to name the new Texas team, but with little time to prepare for the first season he simply chose "Rangers," which many fans had suggested in letters sent to him and Vandergriff. There was also interest in renaming Turnpike Stadium after Vandergriff, an idea with little appeal for the Mayor, who eventually was able to have Turnpike renamed Arlington Stadium.
Sale of Rangers to Brad Corbett in 1974
Baseball in Dallas-Ft. Worth was far from an immediate success. Attendance for the first season was just 662,974, only 7,000 higher than the final season in Washington, and last in the American League. The situation for management was aggravated by the configuration of its new stadium. Significantly more than half the seats were located in the outfield and inexpensively priced. Premium-priced seats were minimal. From the start it was apparent that the limitations of the ballpark would dictate the franchise's finances and ability to field a winning team. A second season brought only a slight increase in attendance, prompting Short to sell the club for $9.5 million and the assumption of more than $1 million in debts to a group of investors headed by area businessman Bradford G. Corbett, who ran the plastic pipe company Robintech Inc. He enjoyed his newfound celebrity and became active in trading players, much to the dismay of his experienced front office. Nevertheless, the Rangers showed significant improvement on the field, posting a winning record and finishing second in their division. As a result attendance soared to nearly 1.2 million.
In 1976 Arlington and the Rangers attempted to address the problem with the stadium by announcing an expansion of the facility that would be completed in two years. Essentially, 7,000 new seats were added by building an upper deck behind home plate. Nevertheless, the bulk of seats remained in the outfield. The team fared relatively well in the late 1970s, posting winning records and seeing attendance rise steadily. Corbett began to have financial problems, however, and early in the 1980 season was forced to sell his majority stake to celebrity Texas businessman Eddie Chiles.
Chiles was almost 70 years old when he bought the Rangers, after making his fortune with the Western Company, which was involved in oil-field services and drilling. He was the quintessential self-made man, who worked his way through college to earn a degree in petroleum engineering. He started Western in 1939, but it was not until the 1960s and 1970s that the company hit its stride, when Chiles became a radio and television pitchman. He drew on the movie "Network" to fashion his signature bit in which he opened his commercials with "I'm Eddie Chiles, and I'm mad." He would then rail on the horrors of big government before ending with his famous pitch, "If you don't own an oil well, get one." As a result, the engineer by training built Western Company into a $500-million-a-year business.
Chiles brought corporate discipline to the Rangers, delegating authority but demanding that his subordinates formulate a clear plan that was then carried out. In 1984 he installed Western Company executive Mike Stone to serve as the team's president. Under Chiles, the franchise bolstered its commitment to scouting and player development. The Rangers were especially aggressive in scouting Latin American players, a region to which other teams had failed to devote significant resources. The Rangers would develop such stars as Juan Gonzalez and Ivan Rodriguez, who would be instrumental in the team's success in the 1990s, as well as a star that got away--Sammy Sosa. Although the team failed in its efforts to land a new ballpark, Arlington Stadium was renovated in 1984. A new scoreboard was added, as well as revenue-generating billboards above the outfield bleachers and 52 luxury suites. In 1987 the team purchased the facility from the City of Arlington. Nevertheless, the ballpark continued to be a drag on the franchise's ability to maximize its potential.
When the bottom fell out of the oil market, Western's revenues, which had peaked in 1981 at $725.7 million, plunged to $176.5 million in 1987, and Chiles was forced out as chief executive and chairman. Although devoted to the Rangers, Chiles could no longer afford to own the team. An effort to sell to Edward Gaylord, however, was denied by the American League because of Gaylord's television interests. In 1984 Gaylord had purchased a one-third stake and television rights, as well as the right of first refusal over any deal to sell the team. He would exercise that prerogative in 1988 when Chiles tried to sell the franchise to a group of Tampa Bay, Florida investors who likely would have relocated the Rangers. Gaylord's matching bid was again rejected by American League owners, but at least the team remained in Texas.
George W. Bush Part of 1989 Buyout Group
In 1989, when his father was President of the United States, George W. Bush began his involvement with the Texas Rangers. At the time, he was long on name recognition and short on cash. His previous oil businesses backed by family connections had folded. Although he never lost his own money on these ventures, he had limited financial resources at his disposal. A former business partner, William DeWitt, whose father had once owned the Cincinnati Reds, first approached Bush about teaming up to buy the team. Bush and his parents were longtime friends of Chiles, who immediately expressed enthusiasm over the prospect of selling the Rangers to Bush, who then assembled a group of investors that included relatives and friends. Because Bush's primary partners were not from Texas, Baseball Commissioner Peter Ueberroth torpedoed the deal. Ueberroth then recruited Texas financier, Richard Rainwater, to buy the team. Rainwater approached a Dallas investor, Rusty Rose, about joining him in the deal, but after talking it over they decided that neither one of them wanted the burden of dealing with the press and as a consequence told Ueberroth that they were uninterested. Ueberroth suggested they contact Bush, who was more than happy to serve as the public face of ownership. Of the $45 million raised by the investors, Bush contributed just $500,000, which he borrowed from the United Bank of Midland, for which he had once served as a director, pledging oil company stock worth more than $900,000. Eventually he would sell the stock to pay off the loan and increase his investment in the Rangers to $606,000, or 1.8 percent.
In March 1989, Bush and his fellow investors purchased a 58 percent controlling interest in the Texas Rangers for $25 million and $9 million in assumed debt. After acquiring Arlington Stadium and surrounding real estate, the price tag reached $80 million. By all accounts, Bush performed his responsibilities well, ingratiating himself with the press as well as the hot dog vendors and ticket takers--on a first name basis with everyone. Rather than sit in a luxury suite, he sat behind the Rangers' dugout and made a point to introduce himself to the fans. Bush was intent on selling tickets and, indeed, in the first year under new ownership the Rangers drew two million fans for the first time. There was already talk that Bush's connection with the Rangers could lead to a run for the office of governor of Texas.
It was little-known Rose, however, who did the heavy lifting with the Rangers. After earning an M.B.A. from Harvard in 1967, he went on to an investment career in which he specialized in uncovering overvalued stocks and shorting them, earning the nickname "the Mortician." He established his Cardinal Investment firm in 1973 with just $25,000 and a secretary. By the time he became a partner in the Rangers' ownership group he had amassed a personal fortune in the neighborhood of $70 million. He refinanced the franchise's long-term $25 million debt, then renegotiated the team's television contract. Arlington Stadium, however, remained a sore point. Almost half of its 43,508 seats remained in the outfield, priced at just $4, while $10 premium seats numbered only 8,000. To completely renovate the facility was cost prohibitive, so the only solution was to build an entirely new facility, which was estimated to cost $200 million.
Bush and his fellow owners, intent on obtaining public financing for a new facility, hinted that they might move the franchise. The City of Arlington would eventually agree to contribute $135 million to the building of a new stadium, funded by an increase in sales tax. While the Rangers would gain complete control, it would simply pay a modest rent and, therefore, be exempt from property ownership obligations such as paying school taxes. After 12 years the club would be able to assume ownership at no cost, but it made no economic sense to do so. In fact, later ownership would waive the option. The Rangers contributed $90 million to the deal, but did not have to invest any new capital. The team's stake would come from future commitments of revenues generated by the public largesse, from luxury suites and concessions.
Although a number of critics were upset by the public financing of the new stadium, area landowners were outraged when the city used its power of eminent domain to purchase land at nominal prices for the project that already had enough space, then sold it to the Rangers for commercial development. The heirs of television tycoon Curtis Mathes sued the Rangers and the City of Arlington when their land was seized. According to the New York Times, "Confidential memos among the Rangers owners became part of the public record in subsequent litigation, and they paint a picture of the owners casting a proprietary eye over the area and then telling the city what land to seize." After a seven-year court fight, the Mathes family was awarded a settlement, which the Rangers refused to pay, insisting that the City of Arlington bore the legal obligation. It was not until 1999 when, under new ownership, the Rangers agreed to repay the city.
The Rangers' new home, named The Ballpark in Arlington, opened on April 1, 1994. The 49,115-seat stadium was replete with club level seats, luxury suites, and all the other revenue-generating amenities of a modern facility. It was located in a 270-acre complex that would include a four-story office building located within the ballpark, a youth ballpark with seating for 600, a Legends of the Game Baseball Museum, a natural grass amphitheater, and a 12-acre lake and adjoining recreational space. Rangers' attendance soon soared to almost three million, as the team in the mid-1990s also enjoyed its greatest success on the field. Although the Rangers won division championships, however, they failed to advance to the League Championship Series, let alone the World Series.
Bush, meanwhile, relinquished his role with the Rangers to become the governor of Texas. In 1998, when the ownership group decided to sell the team for $250 million, Bush's $606,000 investment netted him $14.9 million, with the possibility of another million or two in later years. With his finances now secure, he was able to freely entertain the possibility of running for the presidency of the United States, which he would eventually win in 2000.
The new ownership group of the Rangers was headed by Thomas O. Hicks, a University of Texas graduate who returned home to become a venture capitalist after learning the trade on Wall Street. He recovered from the 1980s collapse in oil prices that ruined Chiles to make a fortune in soft drinks, which he parlayed into a broadcasting empire. He became involved in professional sports in 1995 when he bought the Dallas Stars National Hockey League franchise. What Hicks recognized was that by buying the Rangers he could control the television rights to two major sports teams and would be in a position to start up his own regional sports network, as well as move the Rangers' over-the-air games to an area television station he owned. In that light, paying $250 million for the Rangers was a smart economic move. It is more likely, however, that the idea of a cable sports channel was more of a threat aimed at Fox Sports Net, which was building a national chain of regional sports channels to rival the established cable sports franchise ESPN. Fox could not do without the country's seventh largest TV market, and securing the rights to both the Stars and Rangers was imperative. In the end, Hicks and his newly formed Southwest Sports Group were able to coerce a 15-year $550 million deal from Fox that included both cable and over-the-air broadcasts. The new deal tripled the money the Stars received and doubled the Rangers' amount.
With this guaranteed money, Hicks was then able in 2000 to broker one of the most controversial free agent player signings in baseball history, when he beat out larger market teams like the New York Mets to secure the services of star shortstop Alex Rodriguez. The ten-year $252 million deal was highly criticized in many quarters as both an exorbitant amount to pay, especially since it was $2 million more than Hicks had paid for the entire franchise, and as a further widening of the breach between the poor and rich teams of baseball. In reality, the Rodriguez deal was shrewdly structured so that much of the money was spread out and the costs remained in line with the Rangers salary structure. Moreover, Rodriguez had marquee value that would be instrumental in the all-important Rangers' television ratings. In his first year with the team, Rodriguez lived up to his end of the bargain, providing the offensive output expected from him, but the team's pitching was so porous that the Rangers languished in last place in its division. It was the second criticism of signing Rodriguez that threatened to have a more lasting effect on the sport and the Rangers' long-term plans. As Jay Weiner assessed the situation in Business Week: "For years, there has been building concern about the disparities between big-media-market teams--with fat TV deals and new stadiums--and teams with neither. As the collective bargaining agreement between sports' most unmoving union and sports' most undisciplined owners heads toward expiration after the 2001 season, a civil war between the have and have-nots owners appears to be on the horizon."
Principal Competitors: Anaheim Angels; Oakland Athletics; Seattle Mariners.