Angels' halo effect

Team value soars as sales talk swirls

By JOHN DEMPSEY

Eisner

NEW YORK -- Michael Eisner is acting like the No. 1 baseball fan in the country.

The Mouse House chairman is showing unbounded elation that the Disney-owned Anaheim Angels have scratched and clawed their way into the World Series for the first time in the team's 42-year history.

But his newfound love affair with the Angels may not lead to the altar: Behind the scenes, Disney has made no secret of its ongoing attempts over the last three years to unload the team, along with pro hockey's Anaheim Mighty Ducks. The franchises have been seen as non-strategic businesses, diversions from the core Disney assets of movies, broadcast TV, cable TV and theme parks.

Indeed, Eisner's high spirits may be traceable to an analysis from David Carter, a principal with the Los Angeles-based Sports Business Group, who says the value of the Angels may have shot up to as high as $250 million from $200 million as a result of the World Series appearance.

Interested buyers in the Angels include billionaire Carlos Peralta; the Nederlander family, which owns and books theaters throughout the U.S.; and a consortium of investors being put together by former commissioner of baseball Peter Ueberroth.

But finding buyers for baseball teams has been tough. The Cleveland Indians sold for $320 million in February, 2000; the Toronto Blue Jays nabbed a paltry $112 million; and the Red Sox, one of the game's most storied franchises, was recently purchased for $660 million in a deal that included the regional cable sports network NESN and Fenway Park. The differences in prices are almost always tied up in real estate -- whether a team owns its stadium and/or training facilities. News Corp. paid $311 million for the Dodgers four years ago.

Luxury draw

Dean Bonham, head of the Denver-based Bonham Group of sports consultants, said the value of the Angels comes chiefly from ticket sales, particularly for luxury boxes, both in the postseason this year and for next year's regular season, and from lucrative "official" sponsorships in a whole group of categories ranging from beer and soft drinks to automobiles and telecommunications.

For a large fee, a soft-drink company, for example, not only gets the monopoly on drinks served at the ballpark but becomes the exclusive 30-second-spot advertiser in the category on the TV (both broadcast and cable) and radio coverage of the Angels games.

Disney bought a 25% stake in the team from founder Gene Autry in 1995. The company upped its stake to 50%, and after Autry's death in 1998, acquired the rest of the team in 1999.

Despite Eisner's full-throated cheerleading for the Angels in the series -- and public hints that Disney might retain at least some ownership stake in the team -- Carter and Bonham said he hasn't changed his mind about selling the team.

"If the last five or so years have told us anything," Bonham said, "it's that sports is not a good fit for a huge media conglomerate." For example, AOL Time Warner's Atlanta Braves have suffered disappointing attendance at the stadium this year, as well as diminished Nielsen ratings on the TBS cable network. News Corp.'s Los Angeles Dodgers, who failed again to make it to the post season despite a bloated payroll, have given Rupert Murdoch plenty of headaches over the last few years.

The collective-bargaining agreement reached by the owners and players last month that slammed the door on a threatened strike by the players, though, is a plus that helps to make the Angels more saleable, Bonham said.

No rights halo

On the down side, the Angels won't be able -- at least in the near future -- to take advantage of the World Series halo in rights fees for broadcast and cable because the team is in the fourth year of a 10-year cable deal with Fox Sports West worth close to $100 million. Similarly, the Angels' contract with KCAL for broadcast-TV rights won't expire for four more years.

"Disney should really be having second thoughts about selling the Angels," said Kevin O'Malley, a sports consultant and former sports VP at CBS and Turner Broadcasting.

O'Malley points out that the team's location has its advantages. "The Angels operate in the second largest market in the U.S.," he said. "The team is right down the road from Disneyland, and it can tap in to a great suburban base. You often see whole families attending the games together."

And if the team continues to deliver winning seasons over the next few years, he concluded, the Angels could eventually power its way out of the shadow of the more established Los Angeles Dodgers.