they gave the steal sign!
Reilly should go in hard and break up this Sox play
By Will McDonough, Globe Columnist, 12/23/2001
Tom Reilly beat me to it.
Before I could finish asking one of his aides if Reilly was looking into the stink that was the alleged sale (and I'm demeaning the word ''sale'' here) of the Red Sox, I was told Reilly was already on top of it. And I hope he stays on top of it like a 1,000-pound legal gorilla. As the attorney general of this Commonwealth, that's how he should be handling it.
I don't know how deep Reilly is going into what has to be the most bogus transaction in Boston sports history, but I want him to explain when his research is complete how the Red Sox can get around this bold-faced lie: ''The team will be sold to the highest bidder.''
That was expressed over and over again by John Harrington, CEO of the Red Sox, and his law firm of Bingham Dana. You can throw Major League Baseball commissioner Bud Selig into this mix as well, because I have a copy of a fax Selig sent to a friend of mine (under his name and signature) within the last two weeks, saying the team would be sold to the highest bidder and MLB would not be involved. Time has proven both of those statements to be a joke. The highest bidder didn't get it, and Major League Baseball manipulated the deal all the way to the finish line.
Reilly can get involved to a degree, because his office is supposed to oversee charitable foundations and trusts in this state. Some $400 million-plus from this deal - the full majority interest owned by the Yawkey Trust, which is under Harrington's control - is supposed to go to charity. With the fiduciary responsibility given to Harrington by Jean Yawkey before her death nine years ago, Harrington is compelled to do what is in the best interests of the trust and the charities to which it contributes.
Hopefully, Reilly's due diligence will bring the truth to the surface. There were two bids better than - and another equal to - the bid accepted from a group of outsiders led by John Henry, present owner of the Florida Marlins. (By the way, there is no other sport that would let a person be involved in the ownership of three teams at one time: Henry owns the Marlins, is on deck to own the Red Sox, and still owns 1 percent of the New York Yankees.)
Miles Prentice, with Comcast behind him, bid upward of $750 million, and Chuck Dolan bid $720 million, according to a source with knowledge of the final bids. Plus, before withdrawing, the Boston group of Joe O'Donnell and Steve Karp had a bid on the table - and it was all their own money - of $660 million, which was reportedly equal to that of Henry and his friends. (The Red Sox are claiming debt service of an additional $40 million pushes the deal to approximately $700 million, but the offer was actually $660 million.)
If this is all true, and people who were on the inside say it is, how does Harrington explain to Reilly that he was operating in the best interests of the trust and its charities by taking $90 million or $60 million less than he would have gotten from others?
A top lawyer who has looked at the trust told me Mrs. Yawkey had great faith in Harrington and gave him wide latitude and power in orchestrating the deal. This might be hard for Reilly and his people to overcome, even if he gets a sense - if not in legal terms, then in moral terms - that Harrington did not do what most people would feel was the right thing.
I think Dolan, through his lawyer, Bob Popeo, should bring a lawsuit against this entire deal. Dolan followed all of the rules. From Day One he put the most money on the table - all cash - and had it there at the end.
Meanwhile, he and the others, including O'Donnell and Karp, were being manipulated. The rules of the sale were supposed to include a stipulation that, the day the bids were submitted to Bingham Dana, the groups were supposed to be finalized and the bids all cash. The day the bids were submitted, Henry wasn't part of any group, and the bid made by Tom Werner had contingencies that were not supposed to be there. Yet Werner was allowed to continue. Why? Because MLB, meaning Selig, wanted him to be part of the next ownership group.
But there was a major problem. Werner's group didn't have the money to pull it off. What to do? Follow this bouncing ball (the bounces provided by sources involved in the negotiations): The league allows Henry to sell his majority interest in the Florida Marlins. They need a buyer. They go to Montreal and get Expos owner Jeffrey Loria, who is despised there, out of town and set him up to take Henry out of Florida. MLB has no buyers for the Expos, so it says it will run the team until it can close it down. Then, after the Sox bidders supposedly are set, Henry is allowed to put some of his substantial wealth behind the Werner group, giving it enough financial clout to be a legitimate bidder.
But the Werner group still doesn't have the muscle to match Dolan. So what does baseball do? The league office has Henry call O'Donnell and Karp to get them to merge in order to knock Dolan out of the box. It is made clear to the Boston guys that this is their only hope because, they are told, Harrington doesn't want them but will give in if they join the Henry-Werner group. This looked like the perfect solution: Harrington is taken off the hook with regards to the growing resentment against him in Boston for dismissing the local group, and Selig is happy because it would take care of Henry and Werner, two of his buddies.
But the merger falls apart when Henry insists on running the team. O'Donnell is giving in to this, but while they are still negotiating, it comes to light that Harrington, in a secret deal, has signed off on giving the concessions and merchandising at Fenway Park to Aramark Corp. for the next 10 years. O'Donnell's main business is concessions. Karp is large in merchandising. They never were told about Aramark's extended deal until months after the fact and hours before they pulled out. The concessions and merchandising could be worth approximately $40 million a year at Fenway, and O'Donnell-Karp was going to use that money to help pay for and operate the team.
O'Donnell and Karp then walked away, thinking Dolan, still the high bidder, was going to get the team. But the night before, under the direction of the league again, Henry and Werner were trying to arrange a partnership with Dolan. As background, all of the bidders signed an agreement months before that they could not speak to one another unless they were given permission by the Red Sox and their lawyers. Now these permissions were coming from Major League Baseball.
So in the end of this disgrace, it appears the highest bidders and the local favorites became the suckers in a major league endgame. And who said the Red Sox don't know how to turn a double play? Or is it a double cross?
Will McDonough is a Globe columnist. His e-mail address is mcdonough@globe.com.
This story ran on page C1 of the Boston Globe on 12/23/2001.
© Copyright 2001 Globe Newspaper Company.
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