The Athletics Investment Group Business Information, Profile, and History

History of The Athletics Investment Group

The Athletics Investment Group owns the Oakland Athletics franchise, one of the most storied and controversial teams in major league baseball history. Located for 54 years in Philadelphia, and for 12 in Kansas City, Missouri, before moving to Oakland, California, the Athletics (A's) have won 14 divisional titles, 15 American League pennants, and nine World Series Championships. The team makes its home in Network Associates Coliseum (formerly the Oakland-Alameda Coliseum) although their future in Oakland remained uncertain. Sharing the relatively small Bay Area sports market with the National League's San Francisco Giants, the A's financial situation has long been unstable. For at least five years, The Athletics Investment Group has been searching for a buyer for the team. Still, the company realized an estimated $96 million in revenues in 2002.

The Connie Mack Era: 1901-54

While The Athletics Investment Group was formed in the 1990s, the history of the Athletics team may be traced to 1901, when the American League was formed as an upstart organization to compete with the long-established National League. A founding franchise was given to a Philadelphia consortium made up of a group of Philadelphia sportswriters, sporting goods manufacturer Benjamin F. Shibe, and Cornelius McGillicuddy, a manager and former ball player more familiarly known as Connie Mack. Mack brought into the new team his knowledge of baseball and players. He soon became virtually synonymous with the A's, who were often referred to as the Mack-Men. By the time he retired in 1951 at the age of 81, Mack and his family had a controlling interest in the Athletics, and he had become the longest serving manager in baseball history and one of the most beloved figures in the sport.

Mack assembled a team for the new franchise, finding players on the semi-pro and sandlot ball teams and also persuading seven established stars, most notably slugger Napoleon Lajoie, to jump their contracts with the local National League team, the Phillies. The Phillies sued and the Pennsylvania Supreme Court upheld their claim. Mack's response was canny. He traded the disputed players to the American League team in Cleveland, Ohio, outside the jurisdiction of the Pennsylvania court. Mack's baseball smarts brought the A's almost immediate success. The team won the American League pennant in 1902, a year before the first World Series. By the end of the decade, Mack had assembled the greatest powerhouse in the American League. Boasting future Hall of Famers such as Eddie Collins, Home Run Baker, Ed Plank, Rube Waddell, and Chief Bender, the A's won the American League pennant in 1910, 1911, 1913, and 1914, and the World Series every year but the last.

The 1914 loss was a bitter one. Heavily favored to defeat the underdog Boston Brave, the A's were swept in four games. That was the last straw. Suspecting that his players had thrown the Series for gamblers, and facing financial competition from the newly created Federal League, Mack launched a clearance sale of his championship players. It was not the last time a financially-strapped A's owner would dismantle his team, or try to. The A's immediately slipped into last place where they stayed for seven straight years. By the late 1920s, Mack had built another the premier club that the World Series in 1929 and 1930, and the league pennant in 1931. However, beset reportedly by stock market losses, Mack once again sold the core of his team, this time sending three players to the Chicago White Sox for $100,000. The sale sent the A's club into a downward economic spiral as angry fans stayed away from the park. Mack's financial woes increased in 1933, and when the season ended--the A's finished third--he sold four more players, including future Hall of Famers Mickey Cochrane and Lefty Grove, for $225,000. The second gutting sent the A's into a tailspin. During the next ten years, the A's did not once win more than 68 games; they never again finished higher than fourth place during the Mack ownership.

In 1951 Connie Mack stepped down as A's manager, a job he had held uninterruptedly for 50 years, by far the longest tenure of any manager in major league history. Over the years he had bought out his sportswriter partners. In the early 1950s Mack's sons, Roy and Earl Mack, assumed a large mortgage to purchase shares from the Shibe family that gave them control of the team. It was a fateful decision. The huge debt weighed on a club already hurt by nearly three decades of second division finishes and the lack of an effective farm system. Across town, the greatly improved Philadelphia Phillies were drawing fans away from the A's. Adding to their difficulties, in a shortsighted attempt to raise funds, the owners lost a major source of income when they sold their rights to concession at Shibe Park. On the verge of financial collapse, the Mack family put the team up for sale. Philadelphia investors, including multimillionaire Jack Kelly, the father of actress Grace Kelly, tried to purchase the club, but the American League refused to approve the sale to a local buyer. It wanted to see the team move to the West where the populace was showing an increasing desire to spend money on major league baseball. In November 1954 the team was sold for $3 million to Arnold Johnson, a vending machine manufacturer from Chicago.

The Arnold Johnson Era: 1955-60

Johnson moved the team to Kansas City, Missouri. The new owner and venue did nothing to improve the performance of the Athletics, who continued to finish each season near the bottom of the league standings. The A's did get their share of good players. By the time Arnold Johnson passed away in March 1960, the Kansas City Athletics had become a synonym for futility. In the five years of his ownership, the A's had not finished higher than sixth place. Hampered by the ball club's high costs, Johnson's family put the A's back on the sales block. In Kansas City, as in Philadelphia earlier, a local group was interested in purchasing the team, but circumstances conspired against them. By the time the group was able to mount a weak bid, Charles Finley had gone into Chicago probate court where Johnson's estate was and made a higher bid.

The Charles Finley Era: 1961-80

Charles O. Finley was one of the most colorful and controversial figures in the history of organized sports. By education an engineer, by avocation a talented semi-pro baseball player, Finley made his fortune in insurance and in the early 1950s set his sights on purchasing a major league ball club. As soon as he had the A's, Finley began grabbing headlines. He dressed the team in gaudy green and gold uniforms that contrasted boldly with the white or grey flannels worn by other teams. Instead of traditional black spikes, the A's wore white baseball shoes, supposedly made from kangaroo leather. Finley installed a mechanical rabbit that would pop up from the ground behind the plate with new balls for the umpire. In the late 1960s, when the rest of baseball kept up a clean-cut, all-American image, Finley paid his players $300 to grow moustaches.

He was not allowed to implement all of his ideas. When Finley moved in the right field fences by more than 40 feet and called it the "Pennant Porch," Commissioner Ford Frick ordered Finley to move it back. Major league baseball also nixed Finley's idea to introduce orange baseballs, which he claimed would be easier for batters to see. However, some of Finley's ideas changed baseball forever. He was one of the first advocates of the designated hitter rule, implemented by the American League in 1976. He was a strong proponent of World Series night games, an idea first tried in 1971.

When Finley assumed ownership in December 1960, the A's franchise was in disarray. Not only did it bear the weight of nearly 30 losing seasons, it was playing in Municipal Stadium, a ballpark better suited for minor league ball. In 1961 the club was so bad it managed to finish behind one of the two expansion teams that were added to the American League. Meager attendance dropped even more. From the start Finley was dissatisfied with everything about Kansas City and tried to get out of his Municipal Stadium lease to move the team somewhere else. He negotiated with a string of municipalities throughout the early and mid-1960s, including Dallas, Louisville, Kentucky, Washington, D.C., New Orleans, and Denver. At the end of the 1967 season, Finley finally reached an agreement with Oakland, California, and moved the A's there in time for the start of the 1968 season.

While still in Kansas City Finley's organization had nevertheless begun a major overhaul of the A's farm system. In 1966 a bumper crop of young talent that included the likes of Reggie Jackson and Jim Hunter was ready to be harvested. In its first year in Oakland, the team finished sixth. However, it had managed a significant achievement, finishing above .500 for only the fourth time since the early 1930s. The 1969 and 1970 seasons offered the first hints of the team that would soon be the most powerful and popular in baseball. In the first half of the 1970s, the A's would win five consecutive American League West divisional titles, three consecutive American League pennants, and at their peak, from 1972 to 1974, three consecutive World Series titles, a feat achieved previously only by the New York Yankees.

Unfortunately the A's field successes did not always translate into success at the turnstiles. In two of their championship years, 1972 and 1974, home attendance failed to top the one million mark. More disturbingly, the A's frequently failed to sell out their home games in the playoffs or even in the World Series, leading players to regularly disparage Oakland fans in the media. Dissatisfaction did not stop with fans. Just as frequently the players fought among themselves and with Charles Finley. Finley himself was personally responsible for much of the contentious feeling in the club house. He forced his players to accept oddball nicknames, such as "Catfish" and "Blue Moon," claiming they would increase popularity with fans. He flat out refused to give raises to players even after career seasons. He publicly humiliated players. After a game-losing error in the 1973 World Series, Finley pressured second baseman Mike Andrews into signing a public statement that he was not physically able to continue playing and wanted to be removed from the lineup. Two games later the A's players decided on their own to bring Andrews back, whether Finley approved or not.

The A's were at the forefront of free agency in the mid-1970s. In the middle of the 1974 World Series, pitcher Jim Hunter announced that Finley had reneged on $50,000 in payments. As a result, Hunter said, his A's contract would be null and void at the end of the season. The courts upheld Hunter's claims and the next season he signed as a million dollar free agent with the New York Yankees. After the 1975 season, when general free agency was introduced in baseball, nine of the A's core players, including Reggie Jackson, Vida Blue, and Rollie Fingers, were about to become free agents. Finley, a less well-to-do owner in a smaller media market, realized that he had little chance of competing for his star players on the open market. Like Connie Mack 35 years before him, Finley set about dismantling the team. He traded some players and sold others. When baseball commissioner Bowie Kuhn learned of the sales, however, he nullified them and ordered the three players to return to the Oakland club, claiming they threatened the competitive balance of the American League. Finley countered that he wanted something for his players rather than nothing when they signed with a new team. Seeking to overturn the commissioner's ruling, Finley sued Kuhn. The court ruled in Kuhn's behalf. A Finley-led effort to rouse other owners to depose Kuhn also failed. In the end, all the players except one signed with other teams.

Thanks to the lackluster team and competition from the San Francisco Giants across the bay, attendance dropped so badly in 1977 that the league pressured Finley to offer weekday tickets at half price. Facing a potential loss of $1 million for the year, Finley began exploring ways to move the team out of Oakland. He focused his efforts on moving the A's to Washington, D.C., where they would compete in the National League. The 20-year lease with the Oakland-Alameda Coliseum stood in the way of any move, however. An arrangement with major league baseball and the Giants to help buy out the stadium fizzled. Moreover, National League owners were loathe to bring Finley's contentious personality into their ranks and blocked the move. By the 1979 season, the A's had virtually stopped promoting themselves. The Coliseum sued, asking for $1.5 million for in lost earnings, as well as another $10 million in punitive damages for failing to maintain a team of "character and standing" as league rules stipulated. Personal woes added to Finley's business problems. His divorce was a costly one, and in September 1977 he underwent heart bypass surgery in Chicago.

The team reached rock bottom in 1979, posting a 54-108 record and attracting only 307,000 fans to the Coliseum. Finley's hiring of a manager as controversial as himself, Billy Martin, helped the A's recover slightly in 1980. Finley had, however, had enough. On August 24, 1980, he sold the club to Walter A. Haas for $12.7 million.

The Walter Haas Years: 1980-94

64-year-old Walter Haas was the chairman the Levi Strauss Company, based in San Francisco. He and his family lived in Oakland, and they brought to the team a strong commitment to keep the team there. Haas himself did not participate in the day-to-day operations of the A's; he knew next to nothing about baseball and later said he had only made the purchase as a gesture to Oakland. The A's organization was run by Haas' son, Walter J. Haas, and son-in-law, Roy Eisenhardt. The Haas family, though wealthier than Finley, learned to their chagrin that running a professional baseball club was not an inexpensive proposition, particularly in the tight Bay Area they shared with the San Francisco Giants. Between 1980 and 1987 Haas lost almost $30 million dollars, due in part to the refurbishing of the Coliseum, and the rebuilding of the A's farm system and promotional machinery. It was eight years before Haas was able scratch the first meager profit from his franchise.

By 1987, it seemed the investment might be about to pay off. The team developed a roster of promising young stars, including sluggers Jose Canseco and Mark McGwire. The greatly increased involvement of the A's organization in Oakland community affairs won the team new respect in the city--fans reportedly broke into spontaneous applause when they saw Haas at games. The A's finally resumed their winning ways in the late 1980s, winning the American League pennant in 1988 and 1990, and the World Series in 1989--the so-called Bay Bridge series against San Francisco that was delayed by the Loma Prieta earthquake. In 1990 the A's drew 2.9 million fans, a record for a Bay Area baseball team.

The days of high attendance and successful teams were short-lived. After winning the divisional title in 1992, the A's dropped out of contention for the rest of the decade. The financial problems returned immediately. In 1993, the club lost almost $5 million and was facing possible losses of $10 million in 1994. That April the team asked the Coliseum for a year-to-year lease and at the same time began a search for new owners. The team was formally put up for sale in May 1994. The asking price was $84 million, well below its appraised value. The only string attached to the bargain basement price was that the buyer keep the club in Oakland at least until 2001. If the team were eventually resold it had to be first offered to another local buyer at a reduced price. In early 1995, shortly before Walter Haas passed away at age 79, he sold the A's for $85 million to Northern California business partners Steven C. Schott and Kenneth Hofmann.

The Schott-Hofmann Years: 1995 and Beyond

When they took over the club, Schott and Hofmann had definite ideas about how a baseball club should be run, and they began putting their ideas in place immediately. Under their stewardship, the A's took an active role in the promotion and presentation of baseball in their home park, which had been renamed Network Associates Coliseum. They also took over as many ancillary money-making operations as possible, including parking, maintenance, and concessions at the stadium. At the same time, costs, especially player salaries, were to be kept as low as possible. As a result of their efforts, Schott and Hoffman made The Athletics Investment Group, and the A's, one of the finest organizations in the majors, one lauded as exemplary not only for its baseball but for its business acumen in general. The A's, especially under General Manager Billy Beane, rationalized the system of player selection, relying on statistical evidence rather than the anecdotal reports of human scouts that had been the norm in ball for the entire 20th century. As a result of its new philosophy, the team was able consistently to field teams that could over the course of a season challenge clubs with budgets three times greater.

Systematically cultivating its minor league organization and searching out talented players who for one reason or another were undervalued by the rest of baseball, the A's made it to post-season play every year between 2000 and 2003. Success not only boosted annual attendance six-fold between 1998 and 2003, it earned the A's organization back-to-back Organization of the Year honors in 1998 and 1999. The group was paid a much higher honor when other clubs started imitating the A's system. The Boston Red Sox went so far as to try to sign Beane away from Oakland--unsuccessfully.

After three losing seasons marked by poor attendance, the team finally turned the corner in 1998, finishing second. The return to success was welcome, but there were problems in Oakland, particularly with the Coliseum. In 1995 the stadium had been renovated to focus on serving professional football, and modifications interfered with the sight lines for baseball fans. In addition, each season brought the potential for losses in the millions. Schott and Hoffman considered various solutions, one of which to sell the team. The terms of their original purchase, however, required that an Oakland buyer be first given an opportunity to purchase the franchise at a reduced price. In 1999 an Oakland group that included broadcaster and ex-major leaguer Joe Morgan came close to acquiring the A's. The deal fell apart at the 11th hour, when organized baseball postponed any action on the sale until its panel on the reorganization of baseball finished its work. Schott and Hofmann also explored moving the team to Santa Clara, where Schott's real estate business was based. In 2001, following rumors in the Bay Area press that a Las Vegas buyer was interested in the team, the city of Oakland took important first steps toward the construction of a brand new, baseball-only park. As the 2004 season began, the A's had agreed to play at the Coliseum at least through the 2007 season, with options to stay through 2010. Schott and Hofmann highlighted their commitment to the city with a series of community programs that included activities for underprivileged children, for minority children and seniors, as well as fundraising efforts for worthy charities. While new ownership loomed on the horizon, and its financial health was ever a challenge, The Athletics Investment Group and the Oakland A's had enjoyed an impressive turnaround and were poised for more success.

Principal Competitors: San Francisco Giants.

Chronology

• Key Dates:
• 1902: Athletics (A's) win American League pennant for the first time.
• 1929: A's win first of two consecutive World Series championships.
• 1932: After suffering severe losses in the stock market, manager Connie Mack once again sells off key A's players.
• 1951: Connie Mack retires after 50 years as A's manager.
• 1955: Connie Mack's sons, Roy and Earl sell A's to Arnold Johnson for more than $3 million; Johnson moves team to Kansas City.
• 1960: Arnold Johnson dies; A's are sold to Charles O. Finley for $4 million.
• 1968: Finley moves the A's to Oakland.
• 1972: The A's win first of three consecutive World Series.
• 1980: Walter A. Haas buys the A's for $12.7 million.
• 1990: The A's draw 2.9 million fans, more than any other northern California baseball team in history.
• 1994: Haas puts the A's up for sale on condition that the team remains in Oakland.
• 1995: New owners, partners Schott and Hofmann, begin turning the floundering organization around.