Today marks the 44th anniversary of the greatest deal George Steinbrenner ever made, and in fact, the greatest deal any owner has ever made, in any sport. It is arguably the greatest investment in the history of investments, and most likely, the one baseball record that will truly never be broken.
On this date — January 3, 1973 — George M. Steinbrenner III, shipbuilder from Cleveland, and a group of investors, took a rapidly declining asset off the hands of the CBS television network for the then-healthy sum of $10 million. After some adjustments, the final purchase price came down to $8.8 million, and according to Bill Madden’s well-researched Steinbrenner biography, The Boss’ personal investment may have been as little as $168,000.
Forty-four years later, the New York Yankees have been valued at $3.4 billion.
Do the math — that is a return on investment of 38,636 percent. Or put more simply, the team is now worth nearly 400 times what Steinbrenner and his partners paid for it. On top of that, the Steinbrenner syndicate made another sort of history — the New York Yankees remain the only baseball team, and indeed U.S. sports franchise, to be sold for less than its previous owner had paid for it. Eight years before, CBS had bought the club for $13.2 million. In every sense of the word, this was a steal of monumental proportions.
Compare that with the deals made by Steinbrenner’s modern counterparts: Seventeen years ago, Mark Cuban bought the Dallas Mavericks for $265 million; they are valued at $765 million today. In 2014, Steve Ballmer bought the Los Angeles Clippers for $2 billion; according to Forbes, that value hasn’t moved a tick. To match Steinbrenner’s feat, the value of Clippers would someday have to skyrocket to $772 billion. Good luck with that.
Even Jerry Jones, who became a business partner with Steinbrenner in the 1990s, can’t match The Boss’ windfall; his Dallas Cowboys are now the most-valuable sports franchise in the world, valued at $4 billion, but Jones paid $140 million for the club 28 years ago. Nice payoff, but not quite the New York Yankees.
But Steinbrenner’s legacy is more than just having made an incredibly astute and fortuitous investment at the expense of an inept and disinterested owner. Despite this crock of malarkey uttered at his first press conference — “We plan absentee ownership as far as running the Yankees. We’re not going to pretend we’re something we aren’t. I’ll stick to building ships.” — George Steinbrenner soon set about to becoming the first celebrity owner, the blueprint for guys like Jones and Cuban, with a nod to Charlie Finley.
And within four years, he had restored the luster to a franchise that under CBS looked to be played out. Within three years of buying the club, the Yankees were back in the World Series, and went back four times in the next six years.
In addition to that, Steinbrenner changed the pay structure not only for baseball, but for all professional sports; if he can’t get into Cooperstown (and how can he be kept out when Bud Selig, steroid co-conspirator, is in?) at least he should have a plaque in MLBPA head Tony Clark’s office, alongside Marvin Miller’s. No one did more to raise the pay scale for major-league ballplayers than George M. Steinbrenner.
Plus, he was accountable in a way that owners never had been before. For all his blaming of others (“my baseball people”) and impulse-firing and rehiring, Steinbrenner was possibly the first team owner who was always just a short walk from the pressbox or phone call away; on July 4, 1995, I called his home on a lark, having received a tip that the Yankees were about to sign Darryl Strawberry. George Steinbrenner picked up the phone. I had my story.
And his sense of timing and business acumen were hardly limited to that January day in 1977; when his cable TV deal with the MSG Network was about to run out — an unprecedented 10-year, $486 million — rather than take the safe route and renew with them, Steinbrenner heeded what seemed like risky advice from Bob Gutkowski to opt out and start his own regional network, to be called YES. Fifteen years later, just about every other team in professional sports either has or is planning to follow suit. Regional networks are the goldmine that George Steinbrenner discovered.
The Boss’ faults were many, of course, and there is no need to engage in either hagiography or demonization in order to fairly tell his story. Yes, the Yankees, particularly their farm system, thrived while he was under suspension and GM Gene Michael was left alone to do his job. Yes, his meddling derailed careers and in some cases, ruined lives. Can you imagine what it would have been like had social media existed in the era of Reggie, Billy and The Boss? And the strong suspicion is that he would have difficulty operating under baseball’s new world order of revenue-sharing and a far more level playing field for everyone. The game his son, Hal, is playing bears little resemblance to the game his father re-wrote the rules for nearly a half-century ago.
But there is no disputing that on January 3, 1973, something momentous happened in the world of baseball, and really, in all of professional sports, even if few if any of us realized it at the time.
George Steinbrenner took a tarnished franchised and made it shine like never before. That is worth commemorating forty-four years later, and probably still will be 44 years from now.