National crisis: Pinching pennies
http://msn.foxsports.com/mlb/story/6762940
The horror stories circulated among baseball people all spring. The
Nationals, they said, were months behind in reimbursing their scouts for
travel expenses. One scout told a friend that the team owed him approximately
$8,000.
"If I don't get my money," said another Nationals scout who spoke on
condition of anonymity. "I'll just stay home."
Nationals general manager Jim Bowden says that will not be necessary.
"We're going to fix it. We're going to be efficient. And they're going to get
paid," Bowden says.
"Yes, there have been problems. There's enough blame to go around. But the
most important thing is, we're solving them internally. The last sets of
expenses were turned around within eight days. It won't be an issue going
forward."
There are other business-related issues, however — issues that have arisen
since Ted Lerner and his ownership group officially took control from Major
League Baseball last July 21.
The Lerner group, current and former employees say, require a multi-layered
approval process for most expenditures and detailed explanations for outlays
as minor as a Class A affiliate's $8 purchase of sunflower seeds.
Nationals officials say that the Lerner group, seeking to make the
organization more efficient, is entitled to answers after spending $450
million to purchase the club.
But in their quest for efficiency, former employees say, ownership
occasionally produces inefficient results.
In December, for example, Nationals minor-league officials requested approval
to purchase 600 of the team's 2005 caps from New Era for $4 each, former
employees say. The caps were to be used for minor-league players in spring
training as well as players in the Gulf Coast League, Dominican Summer League
and extended spring training.
It took six weeks for the purchase to be approved, according to the former
employees. At that point the caps no longer were available, leaving the
Nationals to purchase 2007 caps for $11 each — a net loss of $4,200.
The lengthy approval process also led to the cutting off of DirecTV for a
time at RFK Stadium last season and created difficulties with the
reimbursement of expenses to the team's Triple-A affiliate, which then was
located in New Orleans
The new ownership is discovering that a major-league club operates much
differently than Ted Lerner's principal holding, Lerner Enterprises, the
largest private real-estate developer in the Washington, D.C. area.
"As I remind people all the time, every owner of a last-place team in every
sport is someone who was rich and fabulously successful somewhere at some
point," says Nationals president Stan Kasten, who spoke on behalf of the
Lerner group for this story.
"It takes learning. It takes studying. My owners are 100 percent dedicated to
studying and learning everything they can."
In the meantime, friction is inevitable.
Employees, unaccustomed to new practices, sometimes are resentful of the
additional work. Bills get paid, but not always promptly.
"Some of those things are incorporating the accounting system of a large,
established company (Lerner Enterprises) into this company's accounting
system," Kasten says.
"And remember, this company's accounting system as it existed until this past
July was in Montreal, New York, Washington and Florida."
Montreal was the Nationals' old home, Washington the new home, Melbourne,
Fla., the spring-training home. New York was the location of the team's
owner, Major League Baseball.
The implication is that under MLB, the franchise was disjointed, if not an
outright mess.
"I have to defend the Lerners," assistant GM Bob Boone says. "It was so
inefficient. It was like, 'Stop this! This is madness! Now let's walk through
it to get efficient, find the snags.'
"If I were the owner, I'd be saying, 'Come explain it to me. Come explain why
I need this many baseballs.' If you owned this thing and just whipped out the
kind of money they whipped out and came into the inefficiency that was here,
I've got to tell you, I would have said, 'Stop! I'm not paying another
stinking bill until I figure this sucker out. My people are going to get in
there. My people, who aren't baseball people. We're going to learn about
baseball as fast as we can.' "
The process takes time.
The Lerner group requires three bids for every significant purchase and
reproductions of MLB's exclusive contracts with bat and ball companies before
ordering such items.
Nationals officials, however, say that ownership is responsive when given its
requested information.
Second baseman Ron Belliard, for example, wanted to order a dozen new bats
even though he already had received a shipment of 36. Ownership
representatives asked why the additional purchase was necessary.
Nationals officials explained that Belliard wanted a different bat after
trying the lighter model used by Marlins second baseman Dan Uggla. The
explanation was accepted. The bats were ordered.
Another lesson learned.
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