By Sam Levin
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DeWitt and Bush have much in common. Both graduated from Yale and Harvard Business School. Both men's fathers invested in the oil business. Both men love baseball and often chatted about the game during flights between business meetings in the Spectrum 7 days.
In 1988, DeWitt set in motion the deal that made Bush a millionaire and eventually helped put him in the White House. Through his baseball contacts, DeWitt heard that Texas Rangers owner Eddie Chiles, who'd known the Bush family for years, was looking for a buyer. Here was a chance to get back into the major leagues. DeWitt called Bush, who was helping his dad campaign for president: Would he be interested in putting a deal together once the campaign was over? Bush jumped at the chance.
While DeWitt raised money from Cincinnati investors, Bush worked the Texas end -- major-league officials wanted substantial local investment to ensure the team wouldn't move. With help from then-commissioner Peter Ueberroth, who twisted the arm of a well-heeled Dallas-area financier, Bush landed sufficient commitments from Texas investors to gain league approval of the sale and crafted an ownership framework that would install Texans, including himself, as managing general partners. Bush was the frontman, even though his investment of $600,000 in borrowed money was relatively small, giving him a stake of less than 2 percent of the team. That investment mushroomed into a $15 million windfall within 10 years, thanks to a stadium deal that has taxpayers paying $135 million of the $195 million cost of the Ballpark at Arlington, which is owned by the public. The team pays $5 million a year in rent and maintenance and has the right to eventually buy the stadium, with the annual payments counting toward the purchase.
The team's value soared thanks to the stadium deal. Under the partnership agreement, Bush was entitled to 10 percent of the team once other investors got their money back, plus 2 percent interest, and, with a $250 million sale price in 1998, there was plenty of money to go around. By then, Bush was governor of Texas, having won election in 1994 with a campaign that focused on his record as the man who turned around the Rangers on the field and made the team a successful business venture.
But DeWitt wasn't around to share in profits from the Rangers sale. As an out-of-town investor with a minority stake, DeWitt's role in the team was limited once he lined up investors. He wanted a chance to be the main man on a daily basis, and so he made a $140 million bid for the Baltimore Orioles in 1993, with a substantial portion coming from the same group of Cincinnati investors he'd brought into the Rangers. The attempt failed, but DeWitt didn't give up. Confronted by rival bidders with deeper pockets, DeWitt joined forces with Baltimore lawyer Peter Angelos and bought the team for $173 million, a then-record price for a major-league franchise. Under league rules, DeWitt couldn't have interests in more than one team, and so he sold his share of the Rangers.
DeWitt had planned to run the Orioles, but once the sale closed, Angelos installed his own management team, keeping DeWitt from having any real say over team operations. In the spring of 1995, less than two years after buying his share, DeWitt sold his $4 million interest to Angelos for what he had paid. He wasn't out of baseball very long. Within six months, a better deal came along in St. Louis.
The deal for the Cardinals started when DeWitt asked a neighbor in Cincinnati who was on the Anheuser-Busch board whether the brewery was interested in selling. DeWitt and Hanser had been politely rebuffed a few years earlier when Hanser wrote a letter of inquiry to the brewery, but this time was different. One factor was the recently concluded baseball strike, which promised to depress attendance and cut revenues.
DeWitt proved a savvy negotiator during the purchase talks with Anheuser-Busch. "One time we were in a key conference involving the purchase of the Cardinals with a very important person from the Cardinals side," Hanser recalls. "There was going to be a consulting agreement. They wanted me and Bill and Drew [Baur] to guarantee the money. They were very serious. Bill looked at them and said, 'I'm not a guarantee type of guy.'" Almost immediately, Hanser says, DeWitt proposed an alternative solution acceptable to both sides.
DeWitt chuckles when asked about that meeting. "I don't view myself as a huge risk-taker," he says. "I don't take lightly guaranteeing notes and obligations and things like that. I do it as necessary for business reasons. I don't make it a habit, or try not, to have a lot of open-ended exposure."
On paper, at least, the Cardinals deal was a steal for DeWitt and his 16 partners, who include Michael E. Pulitzer, chairman of the company that publishes the St. Louis Post-Dispatch. Several other partners had also put money into the Orioles and Rangers with DeWitt. For $150 million, they got the team, Busch Stadium, parking garages and land beneath two nearby hotels. Within a year, they recouped $91 million by selling the garages and another $9 million by selling the hotel land. Besides helping the owners pay off loans they used to buy the team, the sale of the garages and land increased the portability of the Cardinals, who in recent years have generated more than $15 million in annual tax revenue for the city. If the owners can't get the deal they want for a new downtown stadium, it will be much easier for them to move now that they've reduced their downtown financial interests.
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