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Looking Back on Peter Magowan and the Giants PDF Print E-mail
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Articles & Opinion
Written by Maury Brown   
Friday, 16 May 2008 10:07

Peter Magowan

UPDATE: Peter Magowan, the managing partner of the San Francisco Giants has stepped down, and will retire on October 1, the scheduled end of the 2008 season. He will be succeeded as managing general partner by William H. Neukom, currently a general partner in the ownership group. Giants Executive Vice President and Chief Operating Officer Laurence M. Baer will become President, effective October 1. Magowan will remain a partner in the Giants ownership group. The change requires approval of Major League Baseball, which is expected to take place at the next scheduled ownership meeting (August 13 and 14 in Washington, D.C.). Magowan released the following statement:

"It has been an honor to represent the Giants the last 16 years," said Magowan. "I will remain a partner and, of course, I will always be a Giants fan - as I have been since I was eight years old. I have always felt that no individual or group of individuals is really the owner of a sports franchise, because a team really belongs to the community. I feel very fortunate that my successors - with whom I have worked for more than a decade - feel the same way.

"The decision to retire was not an easy one. But it is the right one for my family and me. I have spent the last 29 years as head of two incredible organizations - Safeway and the Giants. I put everything I had in terms of time, energy and commitment into my work and inevitably I made some sacrifices. Now, I'd like to spend more time with my family. Four years ago I had one grandchild, and now I have 10. This just seems like the right time for me to move on.

"I would like to thank my family, my fellow partners, the Giants front office and guest services staff, all those who have worn the Giants uniform these last 16 years, the Giants alumni, and, above all, our fans for their loyalty, support and friendship over these many years. You have given me many wonderful memories, which I will cherish forever.

"As the Giants begin their next 50 years I believe they are in good hands. I know the management team will not rest in its quest to bring our community the World Series championship that it deserves."

 Commissioner Selig released the following statement after the annoucement:

“Peter Magowan will always be remembered in the San Francisco Bay area for saving baseball in 1992 and for preserving the game for the next two generations of San Francisco fans by building the beautiful ballpark by the Bay. During his 16 years with the Giants, he has made a great impact in the community and within the game.

“Personally, I will miss Peter. I will miss his wisdom and his counsel. I am grateful, though, that he leaves the ball club in the very capable hands of Bill Neukom, the club’s new Managing General Partner, and Larry Baer, the Chief Operating Officer and, now, the President of the Giants.

“My wife, Sue, and I wish Peter and Debby great happiness. They are wonderful friends and Sue and I look forward to seeing them again in the very near future.”

The following tracks Magowan and the Giants during his tenure. The China Basin project that would become Pac Bell Park (now AT&T Park); the signing of Barry Bonds and his extension; Bonds' ties to BALCO and the how Magowan factored into the Mitchell Report;, whether the A's could benefit from Magowan's departure as it pertains to San Jose; and what the Giants front office might look like after Magowan steps down. - Maury Brown, Founder and President, Business of Sports Network 


Three words should come to mind when one thinks of Peter Magowan: Tampa Bay Giants.

If not for MLB, Peter Magowan, the rest of his ownership group (which included Walter Shorenstein, Charles Schwab and Don Fisher), a legion of season-ticket holders that opened their pocketbooks, and a creative City of San Francisco, the Giants would have very easily packed up their bags and moved across the country to St. Petersburg where a newly built domed facility had been built to lure a Major League Baseball team.

That was Bob Lurie’s plan.

Think of it… Just shortly before Lurie was ready to move the team, MLB stopped the move and worked out a deal with a group of investors that stepped up and said they would work to keep the Giants in the Bay Area.

Cost of the Giants then? $100 million.

By December of 1992, Peter Magowan, packed up his bags in New York, headed to San Francisco and in three years, developed, what is to this day, the ballpark in a current crop of new ballparks that required the least amount of public subsidy.

San Francisco, say thanks to Magowan as he moves out of the Giants leadership position.

Peter, not all your ownership brethren saw what you did in San Francisco as good for business. It created a distraction for every owner looking to land as much public subsidy for their new stadiums as possible.

“If San Francisco and the Giants can do it, why can’t you?” became the rallying cry for municipalities from St. Louis to Washington, D.C. and beyond.

The deal, known then as the China Basin project, was unlike anything that had come before, and has since. It came right on the heels of the Loma Prieta earthquake, which opened the window to develop away from Candlestick Park, and gave the public more of a heart to approve the funding measure (it passed by a 2-1 margin)

The timing of the unique funding model was perfect, as was the location: the Dot Com boom in and around Silicon Valley, which fueled a large amount of discretionary income for those fans willing to open their pocketbooks to keep the Giants from relocating.

The funding model that came about was as follows:

  • $170 million loan from Chase Manhattan Bank
  • $70 million from the sale of charter seat licenses (1/3 of the total cost by way of fans)
  • $102 million from the sale of naming rights (Pac Bell, at the time), sponsorships and other sources
  • $15 million in tax increment financing by the city's redevelopment agency.
  • The land on which the ballpark now called AT&T Park is owned by the City of San Francisco and is leased to the Giants.
  • To allow the development of the ballpark, a change in the City Planning Code was granted to allow for an exemption from height limits.

While not privately funded in entirety, it is the one that used the least amount of tax dollars to get built. One could make the claim that by putting so much weight into the Charter Seat License program, it forced season-ticket holders to pay for a third of the funding, but still... That is private funding, is it not?

While the effort to keep the Giants in San Francisco was not wholly a Peter Magowan matter, he was, none the less, the face of the club. The efforts to get the gem of a ballpark built on the Bay landed Magowan the 2000 Sports Executive of the Year by Street & Smith's Sports Business Journal.

Select Read More to see this orginal article on Peter Magowan and the Giants

Pac Bell Park Brings Attendance Back to the Giants 

The new ballpark also did something else for the Giants: increase attendance. The Giants had been woeful in the attendance department playing in the multi-purpose Candlestick Park/3ComPark drawing 1,241,500 (12th of 14) in 1995, 1,413,922 (13th of 14) in 1996, 1,690,869 (11th of 14) in 1997, 1,925,364 (10th of 16) in 1998 and 2,078,399 (10th of 16) in 1999 leading up to the opening of Pac Bell Park.

When Pac Bell opened, attendance skyrocketed, ranking them at the top of attendance for the NL: 3,318,800 (2nd of 16) in 2000, 3,311,958 (1st of 16) in 2001, 3,253,203 (1st of 16) in 2002, 3,264,898 (1st of 16) in 2003, 3,256,854 (3rd of 16) in 2004, 3,181,023 (3rd of 16) in 2005, 3,130,313 (4th of 16) in 2006, and 3,223,215 (5th of 16) in 2007.

The added revenues would also allowed Magowan to sign a star player that would bring fans and controversy. It is the latter that unfortunately seems why he is stepping down today.

Barry Bonds and Peter Magowan

In 1992, even before the sale of the Giants was completed, the new ownership signed Barry Bonds to a then-record $43.75 million, 6 year contract. From that moment on, the Giants and Bonds became synonymous, for better and worse.

As Bonds incredible string of homeruns continued well past his prime, the BALCO scandal broke in 2003, thus forever shifting the view of many that Bonds chemically enhanced his performance.

As the Bonds homerun chase of Henry Aaron escalated and the his ties through the BALCO investigation wound its way through the Grand Jury, pressure on Magowan and the Giants escalated. After all, how does one fire a player that has not been proved to use knowingly use PEDs, or lie to a Grand Jury? And, to add to that quandary, the player in question is the greatest homerun hitting player of all time? It added to wins. It added to fan interest in San Francisco, while it added to the national debate as to how the game was “dirty”.

According to the Mitchell Report, in 2004 -- right in the midst of the BALCO investigation -- Magowan called up Bonds and asked, "I've really got to know, did you take steroids?" According to the report, Bonds said he took substances that he didn't know were steroids and found out later they were.

The problem was, Bonds said to the Grand Jury that he never knew what he was taking was steroids, but rather was flax seed oil and a balm that he had no idea had PEDs within (now known as “the cream”).

Two days after Magowan met with investigators for the Mitchell committee, a lawyer for Magowan called and said he had misspoke when saying Bonds knew later the substances were steroids.

The stories didn't jive. 

In 2006 – the year that Bonds was almost assured of passing Aaron on the all-time homerun list –Bonds hit free agency.

Many said that Bonds should be released due to the circus of media and fans that followed the Giants wherever they went. The Giants and Magowan chose to gamble and resigned Bonds in 2006 to a one-year, $16 million deal. The inference in light of the Mitchell Report was that Giants management knew of Bonds PED use, and chose instead to reap the benefits of homerun chase. Once Bonds passed Aaron, the club would divest itself of all things Bonds, which they did.

Following the season he wrote a letter to Giants season ticket holders apologizing for re-signing Bonds for the 2007 season and all images of Bonds have been removed from AT&T Park.

The Mitchell Report, and Magowan's Departure

Which leads us up to today

When the announcement that changes to the Joint Drug Agreement would be coming based on recommendations within the Mitchell Report, Commissioner Selig also indicated that any fines imposed on management personnel for conduct described in the Mitchell Report would be donated to the Partnership of a Drug Free America (PDFA) and the Taylor Hooton Foundation.

With Magowan the highest ranking executive mentioned in the report, it was clear that Selig would be focusing on the Giants.

There have been reports that Magowan is stepping away from the Giants due to his age. At 66, he ranks 17th out of the 30 owners. Jon Heyman of SI.com writes that it has not been Magowan being citied in unsavory terms within the Mitchell Report that is forcing him to leave the Giants, but rather, “the recent reversal of team fortunes in terms of the standings and the bottom line [which] are much more a factor.”

This doesn’t seem to ring true, but at 10:30am PT, Magowan scheduled stepped down.

The fortunes of the club have been incredibly bolstered by the work that Magowan did. Also, how the team performs in the standings is directly tied to the bottom line. In that, shouldn’t Brian Sabean be shown the door, not Magowan? Other clubs with inept ownership have fired the GM rather than be pushed aside. Magowan does not strike one as "inept."

In fact, more than one source has said to me over the past day that as early as January, the removal of Magowan was being broached as a matter of damage control in the wake of the Mitchell Report. If true, Sabean’s time with the Giants should be short lived as well, although word early today is quite the opposite.

Peter, you may be leaving the Giants at the right time after all.

Could the Change in Leadership Assist the Athletics? 

Lastly, this may all play into the Oakland Athletics plans. In 2004 I wrote in Expos Relocation: No A's to San Jose:

When Bob Lurie was looking to get out of Candlestick Park in the late 80’s, baseball expanded the Giants territory to include Santa Clara County where there were efforts to pass funding to build a new ballpark in San Jose. The voters in Santa Clara County rejected tax hikes to fund the stadium in both 1990 and 1992, yet baseball reaffirmed those rights when Peter Magowan purchased the team and built Pac Bell Park.

Since that time, the A’s have been looking to regain the San Jose territory. As Magowan said at the time that Schott and Hoffman owned the club, [Steve Schott] wants to get out of the Coliseum, and I don't blame him. He wants to get a new stadium. I think that's a noble objective. But there are plenty of places to put it in the Bay Area that are not in the Giants' territory. Good places. That's where I'd like to see him concentrate, but I don't run the A's."

With Magowan out of the picture, it is possible, although unlikely, that the territory could be resended and placed back with the Athletics. That could allow Lewis Wolff to negotiate with San Jose, as opposed to sitting on the edge of what is now Giants territory in Fremont.

As with most everything, the matter would revolve around money. Money for a stadium. Compensation for the Giants. Could a regional sports network also MASN be created? The Orioles and Nationals created the blueprint.

Conclusions 

All a discussion for another day. All discussions that will not have Peter Magowan at the table (although he is retaining partial ownership). Word is that a search by Larry Baer to find a replacement investor for Magowan is in the works, and that the ownership group is comfortable with Baer taking a more visible role in Magowan’s absence. He will move into the position of president with William Neukom as the managing general partner.

In a year that Barry Bonds is sitting on the sidelines and out of uniform, so will Peter Magowan for the most part; the two forever linked. Whether one brought down the other is debatable.

In the end, one asks about the manner that Magowan is leaving under. Owners worth far less have continued to make haphazard and damaging errors which impact the bottom line. Most cities would be grateful to have had an owner like Peter Magowan.

REFERENCES:

San Francisco City Planning Code

Magowan stepping down as Giants' boss - Henry Schulman, San Francisco Chronicle (5/16/08)

The Giants, after Magowan… - Tim Kawakami, San Jose Mercury News (5/14/08)

Ballparks.com

Baseball-Referfence.com 

Business of Sports Network research

 
 
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