On-field success of Anaheim Angels could hasten sale of team
By GARY GENTILE
09/19/02 13:26 EDT
LOS ANGELES (AP) -- Fans are thrilled by the Anaheim Angels' winning season, but the team's success could hasten a breakup with its corporate parent, The Walt Disney Co.
Disney, which first bought a share of the Angels in 1996, has been trying to sell the team for several years, even as it poured $100 million into renovating Edison Field and ponied up millions more to pay star players such as Tim Salmon, Kevin Appier and Darin Erstad.
The investment is finally paying off. The team is contending for its first playoff spot since 1986 after setting a record for victories for the 41-year-old franchise.
Success has made the team a hotter commodity, although the weak economy is making it a hard sell.
``It's more likely they will be sold,'' said Harold Vogel, an analyst with Vogel Capital Management in New York. ``This is not a critical asset to Disney by any means, and that's not going to change much even if there's a big success. It will help get them a better price, and I think they'll be happy to be out of it.''
Owning the Angels has amounted to a failed attempt at corporate synergy for Disney and an expensive political gesture designed to make Anaheim the kind of tourist destination it successfully created in Orlando, Fla.
Disney spent nearly $100 million to refurbish the ballpark, renaming it Edison Field. It also signed a 33-year lease with Anaheim with a clause that keeps the Angels in the city until at least 2017, even if Disney sells the team.
Last season, the Angels say they lost $9.6 million before revenue sharing, according to figures reported to major league baseball. Annually, Disney says it has lost as much as $16 million a year on the baseball team and another $8 million on its NHL franchise, the Anaheim Mighty Ducks, according to David Miller, an analyst with Sander Morris Harris.
Disney took the plunge into sports after deciding to expand Disneyland into a resort similar to Walt Disney World.
As part of its overall plan, the entertainment giant wanted the city to make substantial improvements to roadways and to bury ugly overhead utility wires. Anaheim made the improvements and, partly as a political move, Disney landed an NHL expansion team to fill an empty arena that the city had built for more than $100 million.
``Having a professional hockey team and programs related to it was good for Anaheim, and therefore also good for Disneyland,'' Disney chief executive Michael Eisner wrote in his 1998 autobiography, ``Work in Progress.''
Disney bought a minority interest in the then-California Angels in 1996 from Gene Autry to keep the team from moving. It acquired the rest of the team after Autry's death in 1998.
The idea was that Disney could promote its teams at its theme parks and tout those parks and other products at games. The cross-promotion was designed to keep tourists in Anaheim.
It hasn't worked.
``The Angels don't command a national following the way the Yankees do,'' Miller said. ``If you're coming to visit from out of town, you're probably not going to go to an Angels game.''
The Ducks were formed a year after Disney's movie ``The Mighty Ducks'' hit theaters. Two sequels, released in 1994 and 1996 and promoted heavily through the team, did not score with audiences. The third film earned less than half of the original at the box office.
The Disney movie ``Angels in the Outfield'' was released two years before Disney acquired its stake in the team. No sequels have been made.
Disney has always said it would sell both teams if the right deals came along.
``Out of a fiduciary responsibility to our shareholders, we would have to consider any legitimate offer,'' said Leslie Goodman, a spokeswoman for Walt Disney Parks and Resorts.
In recent years, escalating player payrolls discouraged prospective suitors. Meanwhile, the number of buyers who could afford to pay the $250 million to $400 million the team is estimated to be worth has also shrunk along with the economy.
Publicized talks in the last few years, including discussions with Henry Nicholas, co-founder of Broadcom Corp., and others, have led nowhere.
While no ongoing negotiations have been made public, analysts say a sale could happen now that the Angels are winners.
The team's success comes after years of fans blaming Disney for not investing in the team and trying to turn it into a promotional tool instead of a contender.
``There was a learning curve with the Disney company and a sports franchise,'' said Tim Mead, vice president of communications for Anaheim Sports Inc., the Disney unit that owns the Angels and Mighty Ducks.
Among other things, the team has shown its willingness to pay for star players in recent years, Mead said. A payroll that totaled $25 million in 1996 was at $61.7 million at the start of this season.
``Between that, the losses they have absorbed, their commitment to the ballpark and long-term contracts, I'm not sure they could do much more,'' he said.
By GARY GENTILE
09/19/02 13:26 EDT
LOS ANGELES (AP) -- Fans are thrilled by the Anaheim Angels' winning season, but the team's success could hasten a breakup with its corporate parent, The Walt Disney Co.
Disney, which first bought a share of the Angels in 1996, has been trying to sell the team for several years, even as it poured $100 million into renovating Edison Field and ponied up millions more to pay star players such as Tim Salmon, Kevin Appier and Darin Erstad.
The investment is finally paying off. The team is contending for its first playoff spot since 1986 after setting a record for victories for the 41-year-old franchise.
Success has made the team a hotter commodity, although the weak economy is making it a hard sell.
``It's more likely they will be sold,'' said Harold Vogel, an analyst with Vogel Capital Management in New York. ``This is not a critical asset to Disney by any means, and that's not going to change much even if there's a big success. It will help get them a better price, and I think they'll be happy to be out of it.''
Owning the Angels has amounted to a failed attempt at corporate synergy for Disney and an expensive political gesture designed to make Anaheim the kind of tourist destination it successfully created in Orlando, Fla.
Disney spent nearly $100 million to refurbish the ballpark, renaming it Edison Field. It also signed a 33-year lease with Anaheim with a clause that keeps the Angels in the city until at least 2017, even if Disney sells the team.
Last season, the Angels say they lost $9.6 million before revenue sharing, according to figures reported to major league baseball. Annually, Disney says it has lost as much as $16 million a year on the baseball team and another $8 million on its NHL franchise, the Anaheim Mighty Ducks, according to David Miller, an analyst with Sander Morris Harris.
Disney took the plunge into sports after deciding to expand Disneyland into a resort similar to Walt Disney World.
As part of its overall plan, the entertainment giant wanted the city to make substantial improvements to roadways and to bury ugly overhead utility wires. Anaheim made the improvements and, partly as a political move, Disney landed an NHL expansion team to fill an empty arena that the city had built for more than $100 million.
``Having a professional hockey team and programs related to it was good for Anaheim, and therefore also good for Disneyland,'' Disney chief executive Michael Eisner wrote in his 1998 autobiography, ``Work in Progress.''
Disney bought a minority interest in the then-California Angels in 1996 from Gene Autry to keep the team from moving. It acquired the rest of the team after Autry's death in 1998.
The idea was that Disney could promote its teams at its theme parks and tout those parks and other products at games. The cross-promotion was designed to keep tourists in Anaheim.
It hasn't worked.
``The Angels don't command a national following the way the Yankees do,'' Miller said. ``If you're coming to visit from out of town, you're probably not going to go to an Angels game.''
The Ducks were formed a year after Disney's movie ``The Mighty Ducks'' hit theaters. Two sequels, released in 1994 and 1996 and promoted heavily through the team, did not score with audiences. The third film earned less than half of the original at the box office.
The Disney movie ``Angels in the Outfield'' was released two years before Disney acquired its stake in the team. No sequels have been made.
Disney has always said it would sell both teams if the right deals came along.
``Out of a fiduciary responsibility to our shareholders, we would have to consider any legitimate offer,'' said Leslie Goodman, a spokeswoman for Walt Disney Parks and Resorts.
In recent years, escalating player payrolls discouraged prospective suitors. Meanwhile, the number of buyers who could afford to pay the $250 million to $400 million the team is estimated to be worth has also shrunk along with the economy.
Publicized talks in the last few years, including discussions with Henry Nicholas, co-founder of Broadcom Corp., and others, have led nowhere.
While no ongoing negotiations have been made public, analysts say a sale could happen now that the Angels are winners.
The team's success comes after years of fans blaming Disney for not investing in the team and trying to turn it into a promotional tool instead of a contender.
``There was a learning curve with the Disney company and a sports franchise,'' said Tim Mead, vice president of communications for Anaheim Sports Inc., the Disney unit that owns the Angels and Mighty Ducks.
Among other things, the team has shown its willingness to pay for star players in recent years, Mead said. A payroll that totaled $25 million in 1996 was at $61.7 million at the start of this season.
``Between that, the losses they have absorbed, their commitment to the ballpark and long-term contracts, I'm not sure they could do much more,'' he said.