The Royals Could Be the Packers of MLB

Brian Frederick had an interesting column speculating about the possibility of the Kansas City Royals, host of this year’s All-Star festivities, being owned by the people of Kansas City. It’s not a crazy concept. The Green Bay Packers have thrived for decades under such a model in the NFL.

The Packers are owned by the fans, not a wealthy owner operating with a profit-at-all-costs (PAAC) philosophy. The Green Bay Packers are a publicly-owned non-profit with a unique stock ownership structure. Ownership pays no dividends and doesn’t provide any other perks (most notably, there aren’t any game ticket privileges). All profits are invested back into the team.

Green Bay’s bylaws state that the Packers are “a community project, intended to promote community welfare.” What a refreshing approach.

“It makes them an example,” according to journalist Patrick Hruby. “A case study. A working model for a better way to organize and administer pro sports.”

As this year’s All-Star Game demonstrated once again, Kansas City is a great baseball town. It deserves far better than the private ownership it’s been stuck with under the David Glass regime. Which led Frederick to dream a little.

“It’s time for sports fans to fight back,” wrote Frederick. “Imagine a Kansas City-owned Royals team. The revenues from the club would go back into the community. The team would never be in danger of being hijacked by an owner looking only at his bottom line. And the city could spend as much as it wanted to build a winning team. A team of the people and for the people … Imagine feeling such a sense of optimism about the Royals and their future again.”

To be sure, Major League Baseball (MLB) owners have shot down community ownership in the past. In the 1980’s, Joan Kroc offered to donate the San Diego Padres to San Diego, plus $100 million for operating expenses. The owners killed the idea even though a transfer of ownership like that is not specifically banned in MLB’s by-laws. MLB also prevented Montreal and Quebec from buying the Expos. Their rationale? MLB has said that such arrangements would be “awkward.” “Awkward” for MLB owners means they don’t want financial information to become public, as would be the case under a community ownership model, because that would hurt their position in negotiating collective bargaining agreements and new stadium deals. Of course, that would be to the benefit of fans and taxpayers, who suffer from the greed and profit-at-all-costs (PAAC) policies and decisions inherent in the current self-regulated monopoly system.

To his credit, former Royals’ owner Ewing Kauffman wanted the Royals to always remain in Kansas City. So, he came up with a unique method for ensuring that outcome. Kauffman donated the team to charity in 1995 with two conditions: 1) the charitable foundation had to sell it to someone who would commit to keeping the team in Kansas City; and 2) the proceeds from the sale had to go to local Kansas City charities. The IRS (and somewhat surprisingly, MLB) approved this ownership transfer. Unfortunately, while Royals fans still have their team, they’re stuck with Glass as an owner. If Kauffman would’ve pushed for a community ownership model instead, the Royals would undoubtedly be better off today.

While the Green Bay Packers remain the only major professional sports team with a community ownership structure, there are plenty of minor league examples in professional sports:

The Wisconsin Timber Rattlers are a Class A baseball team. They are structured as a non-profit in a similar fashion to the Green Bay Packers. They pump all proceeds back into the team and stadium.

· The Harrisburg Senators AA baseball team is owned by Harrisburg, Pennsylvania. The city paid $6.5 million in 1995 to save the team for the local community. The previous owners were planning to move the team to Massachusetts.

· The Memphis Redbirds, a AAA baseball franchise, are structured as a non-profit charitable organization. Owner Dean Jernigan spent $8 million in 1997 to bring the team to town and then turned it over to a foundation. “If the main identity of a city is tied to a sports team, who are we going to entrust this to?” asks Jernigan. “Who can be responsible? It’s not an individual I can assure you.”

· The Rochester Red Wings and Syracuse SkyChiefs are AAA teams in New York state. They became fan-owned teams via stock offerings in the 1950’s, when their major league affiliates cut financial support to the teams.

· The Toledo Mud Hens, made famous by Corporal Klinger in the television show M-A-S-H, have been part of Toledo’s heritage since 1883. However, in 1952, an outside investor bought the team and moved it to Charleston, West Virginia. Another team moved in for three years before moving to Wichita, Kansas. In 1965, frustrated civic leaders created the Toledo Mud Hens Baseball Club, a nonprofit corporation, and with financial backing from Lucas County, acquired the Richmond, Virginia franchise. The team has a permanent home now in Toledo, Ohio.
There’s no reason a community ownership structure couldn’t work in Kansas City — or in all of professional sports for that matter.

— Ken Reed, Sports Policy Director, League of Fans