The Re-Animator: Tampa Bay Rays owner Stuart Sternberg (Maddux Business Report)
By Bob Andelman
Maddux Business Report
There was a day last summer when Stuart Sternberg knew, without question, that he was playing in an entirely different league. Being a Wall Street whiz kid was cool, but it wasn’t until he became the investor/heir apparent at the Tampa Bay Devil Rays that he was introduced to one of his lifelong heroes, Sandy Koufax.
Fortunately for Sternberg, the Rays’ special advisor Don Zimmer, played with Koufax on the Brooklyn Dodgers and has maintained a personal relationship over the years.
“Is there any way I can meet Sandy?” Sternberg asked more than a year ago.
“Maybe,” Zimmer said.
Several months passed and nothing happened. Sternberg figured Koufax declined.
Early in the summer, Zimmer called Sternberg at home and said, “Sandy might be at Yogi’s ‘thing’ in June.” No more detail than that.
One day in June, the phone rang, this time at Sternberg’s office.
“Mr. Sternberg, we’d like to confirm you’ll be at the Yogi Berra Museum tonight as Sandy Koufax’s guest.”
Thinking quickly, Sternberg asked if he could bring a guest of his own. Of course, came the response. Sternberg flew home and told his wife to get ready for a truly great night. But she had her own surprise.
“Why don’t you take Sanford, instead of me,” she suggested.
Sanford Sternberg, the oldest of the couple’s children, was named for Koufax.
“It was the most magical evening,” Sternberg recalls. “It was the perfect setting of maybe 50 people, including Yogi, Joe Pignatano and John McMullen. It wasn’t a dinner or a banquet. He knew I was coming. What a gentleman.”
Sternberg didn’t make the usual fan error by asking his idol about the Brooklyn Dodgers. Instead, he made the moment infinitely more personal.
“I’d like to introduce you to my son – Sandy,” he said to Koufax.
Shaking his head in mock aggravation and laughing, the Hall of Fame pitcher looked at the 15-year-old boy and said, “He didn’t do that to you, did he?”
In terms of age, baseball fans might think Sternberg a little young to have idolized Koufax in the 1960s. When Sternberg was six, in 1965, he saw Koufax pitch at Shea Stadium, months before retiring.
“When I was three – as I’ve been told – I was influenced by my two cousins, who were teens at the time,” he says. “They taught me to say ‘Koufax, yay!! Yankees, boo!!’ I thought it was natural. (As owner of the Devil Rays) I can still say it: ‘Koufax, yay!! Yankees, boo!!’”
What’s a nice Jewish boy from Brooklyn doing as the new managing partner of what was one of the worst run teams in Major League Baseball?
Seizing an opportunity. Simple as that.
“We looked at the demographics,” Sternberg says. “I liked the area. Some teams were cost-prohibitive, such as the Yankees and the Mets. This looked as good a place as any of the others.”
The price was right – a reported $65 million for 48 percent – especially after former managing partner Vince Naimoli ran the franchise’s value and community profile into the ground over the Rays’ first eight years in business. And what you’ve heard is true: Sternberg only bought in because Naimoli agreed to relinquish control. Otherwise, there was no deal.
And how do we know the price was right?
Because potential buyers have been sniffing around, making it possible for Sternberg to turn a quick and tidy profit if he so chose.
“There have been inquiries,” he says. “There are only a limited number of teams. People are looking at Washington, D.C.; Cincinnati just sold. But they were nipping at us immediately. They were told we weren’t interested. It’s nice to hear from people, but it can be a distraction. If, eventually, there’s some sale to be made, it will be after we get this turned around. It’ll be my children they are dealing with.”
The Maddux Business Report spent two hours with Sternberg in his Park Avenue office just days after he was formally – and unanimously – approved as the new face of the Rays by other owner team owners.
“It was a foregone conclusion, but it was a great feeling to finally, officially, be part of Major League Baseball and all its trappings and possibilities. It was nice to walk in and get that applause. It was really exciting,” he says. “Before that, I attended a few meetings. But it became clear to the other owners I was going to be in charge.”
The differences between the team’s first managing partner and its second are striking:
Sternberg: Brooklyn Dodgers fan
Naimoli: New York Giants fan
Sternberg: Office across the street from MLB Commissioner Bud Selig
Naimoli: Office perpetually in Selig’s doghouse
Sternberg: Well-liked, personable
Naimoli: Not so much
Sternberg is careful not to denigrate his predecessor, who is still a minority partner in the Rays organization. He clearly doesn’t agree with many of the decisions made and stands taken by Naimoli, but he insists on being respectful.
One of the early differences in the Sternberg era is that executives on the team have, well, executive titles instead of traditional baseball titles. New hire Gerry Hunsicker, who most recently was the general manager of the Houston Astros, is the Rays “senior vice president of baseball operations.” Andrew Friedman is the executive vice president of baseball operations.
“This is a business. It’s a very large business,” Sternberg says. “More important, it draws a lot of recognition. Executive titles send out a message, internally and externally, to fans, bankers, business people, potential employees, and all of our partners, that it is a structure. It more clearly defines the roles than in a normal baseball opera.
“If you started from scratch, as we looked at this, you wouldn’t stick in a general manager and then delineate his responsibilities,” he continues. “Each GM has a different set of responsibilities. We’re trying to clearly define what are Gerry’s responsibilities and what are Andrew’s responsibilities, and so on with the people below them. I’m not big on titles. But it sends a message that the team has a structure. Andrew is on the baseball side. While baseball will drive what we do, a lot will have to do with how our business and community side feeds that. It’s a three-legged stool and all three legs have to be in coordination with each other.”
Sternberg made a huge splash on October 6, 2005 when he stepped forward and confirmed what only St. Petersburg Times reporter Marc Topkin has been confident of until then: Naimoli was out, Sternberg was in. Upon taking charge, he immediately engaged in a charm offensive that no other Tampa Bay sports franchise owner ever attempted or pulled off. And it comes naturally to him; he’s a likable, effervescent guy, a guy’s guy who can talk sports, rock ‘n’ roll or Wall Street with equal ease. Prolonged, direct exposure to Sternberg only increases the perception that he’s the real thing.
Ironically, the high profile his new position creates is not something he ever imagined for himself, and not something he’s sure he wants.
“It goes very much against my grain,” he says. “It’s the only piece of this opportunity on the debit side of the ledger. It could be value-added in other ways, but it never appealed to me before. We gave it a lot of thought. There was a lot of talk in the family. If it becomes a distraction, I’ll have to figure out how to handle it.”
He knows that the honeymoon with the Tampa Bay media and fans will only last so long. Sports, after all, may be a business to him, but its paying customers are known for being fickle and fair-weather.
“I know bad things will be written and said,” Sternberg acknowledges. “After we lose our first game, or we make a trade half the fans don’t care for, the bloom is off the rose. But that’s the thrill of baseball. People will pick on me. They pick on (Yankees owner George) Steinbrenner, and (Mets owner Fred) Wilpon. They pick on every owner at some point. When you have a fan base and they watch what you do, it’s fair to some respect. They can cheer and yell things out. You just hope it doesn’t cross the line. As long as it doesn’t become personal, I should be able to adapt to it.”
During the Devil Rays extended infancy, enfant terrible Vince Naimoli repeatedly found new ways to turn off the team’s constituency. Fans were unhappy with the product on the field and the experience at Tropicana Field. Sponsors, in turn, saw diminishing returns from their expensive affiliations with the team.
Sternberg feels their pain. He is also putting several sedatives in place.
“The important part is to put that infrastructure in place,” he says. “It would almost be detrimental if we were to win a bunch of ballgames and not improve getting in and out of stadium, or the food, or the bathrooms, or the ‘I wanted a T-shirt from the team store and they didn’t have medium,’ or ‘It’s too difficult to print tickets from the Internet or I called the team and nobody picked up the phone.’”
Put another way, if you’ve attended a Rays game at Tropicana Field and were turned off by broken toilets, worn out paint, children’s attractions that were neither child safe or friendly, Stuart Sternberg is your new advocate.
Think you’re pretty good at ticking off all the things that are wrong with the fan experience at the Trop? In a game of “Can You Top This?” Sternberg has you beat.
“We’re going to be spending a lot of money this year,” he says. “When things are tough for cities, the roads fall into disrepair, the lights go out in parks, ball fields fall into disrepair. We have maintenance issues in our organization. The infrastructure is in disrepair. The stadium needs more than a reasonable amount of work. We need to freshen up what goes on inside. Our business structure needs to be augmented with people from the outside, training the people inside. New lighting, new bathrooms, new signage, new sound system, new entryways and freshening the concession areas. The seats are not in tip-top state. So we can bring people in, but if you’re sitting in creaky seats, the bathrooms don’t work, and on and on, it’s a hollow fan experience. And I, personally, don’t feel good about the person walking into my house under those circumstances.
“I grew up at Shea Stadium. I like it. Planes fly over; I don’t mind. The thing I don’t like about Shea is the concessions aren’t well run. On the other hand, the restrooms always had an attendant in the bathroom. My wife often said to me, ‘I love coming to this place, it’s clean.’ I’m sure all owners are focused on this issue – comfort. But I don’t have the legacy of our stadium being kept up.
“This year, the money – out of my back pocket and the team’s back pocket – is being spent on the infrastructure. That’s the most pressing need as I see it. We are in the process of spending well in excess of $10 million. Our guys have a blank checkbook to do anything reasonable to improve the fan experience in the stadium.”
Sternberg says some people in the organization have told him that fans “won’t notice we cleaned the floor or scrubbed the seats.” He emphatically disagrees, citing an endemic problem of broken seats, broken mirror and signs pointing fans in the wrong direction around the Trop.
“Before we go out and appeal to fans and businesses to try our product once more, this has got to be fixed,” he says. “I’m not pleading with people to come. I don’t want people in our building until they’re ready to give it a try. There are no sticks here. This is a carrot approach. You’ve got to have a fan base thru thick and thin.”
Time is not on his side, considering the ambitious nature of his intended corrections.
“I can’t tell people, ‘We’ll be fine by July.’ We have to be ready by opening day in April,” he says. “When the last fan leaves on Opening Day, whether we have 15,000 or sell out, I want them to walk out and say, ‘They did a great job here.’ They’ll have complaints, of course. You can’t have 40,000 people without lines or crowding issues. But people will walk out and go, ‘I want to come back.’ I want them proud to tell people, ‘I went to Opening Day at Tropicana Field and you have to try it out.’”
Around the time of the transfer in the Rays’ management from Naimoli to Sternberg, the new guy hosted an employee meeting/breakfast presentation.
Everyone received a goodie bag; everybody got a few minutes of individual face time with Sternberg and was encouraged to offer suggestions.
“It brought tears to my eyes, the pent-up desire to do good and care about the team,” Sternberg recalls. “I think people were numb to the experience. People were crying. They said, ‘Thank you.’ I said, ‘Thank you for holding down the fort.’”
Of the 90 people present that morning, more than 60 percent had been with the franchise from the beginning. “You can imagine the ups and downs,” Sternberg says. “In a short period of time there has been so much emotion. From the first peak there has been so much bad till it just flatlined.
“I said, ‘It’s your responsibility to look outside your own area. If you see something wrong, maybe you can’t fix a bathroom, but please tell someone who can. And if, two days later, you still see the problem, tell me.”
Whatever the situation that Sternberg inherited here, he doesn’t blame the community for its current hesitation to embrace the Rays.
“Maybe people never got passionate enough. The team’s a baby. It’s existed 10 years, been on the field for eight. As more people move to the area and grow up, there will be a lot of passion at the games. In order to feel pain, you have to have a little pleasure, I guess. They might be a little numb to this point to the performance and the view nationally,” he says.
Sternberg’s approach this season has been to move the team’s marketing ahead slowly. In fact, demand – in terms of ticket and sponsorship inquiries –is outstripping the Rays’ attempts to generate interest.
“The business community has been inquisitive, but we’ve said we’re not prepared yet to address what we can offer you,” he says. “We’ve also been seeing the interest from fans, who have been very supportive in their desire to get involved, to purchase tickets. They’ve been behind the bushes and they’re coming out. The rain has stopped. We have to service the fans. The fan experience should be premium as soon as possible. Then we will get to the business community and see what kind of relationship we can extend, see what mistakes were made, see those who would like to get involved.”
The sponsorship situation was a huge question mark before Sternberg took over. Short-term sponsors already bailed on the team and those companies tied by long-term deals are finally on the verge of seeing those end.
“The reason our sponsorships are not at the bottom (of Major League Baseball) like attendance has been, is because there are some legacy sponsors. But it’s still dramatically below where it was the first few years,” he says.
What do sponsors want?
“What we’re planning to offer is to be associated with a smart thinking, well intentioned, well-meaning brand,” Sternberg says. “When people come to the park, watch the games on TV or the Internet, if companies are associated with us, we think people will see the brand and feel good about it. It’s an organization doing good things, smart things.
“I need to prove I am committed to making this organization an extraordinarily well-run, sustainable business that the entire area can be proud of and feel it’s a part of their lives. If we can prove that, there are many things we can do in the framework of the organization that will allow us to uplift spirits, to provide a ballpark experience and beacon to the hundred surrounding miles. People will get a good feeling about it.
“We’re a sales organization,” he continues. “But my way is not to be too preachy. We’re fortunate our message gets spread in the media. People are getting a sense of us being different, which is terrific. As our fans and sponsors come in to view our product, we need to perform on the field and off. When I am convinced we can perform off the field, I’ll be convinced we can perform on the field.”
Inevitably, there is the question of when, not whether, the Tampa Bay Devil Rays will need a new stadium. The current one was built in 1985 on a municipal budget with no guarantee it would ever be occupied. Corners were cut – ever noticed the tilt in the fabric domed roof? – and Tropicana Field has aged faster than some of its counterparts due to neglect and indecision.
The week that Sternberg took over, he was separately interrogated by the editorial boards of the St. Petersburg Times and Tampa Tribune. Each came to somewhat different conclusions about whether the new baseball team owner would be seeking a new facility.
Sternberg laughs at the apparent gap.
“The St. Petersburg Times editorial board asked if I was going to be demanding public funds for a new stadium in the near future. I said no.
“The Tampa Tribune asked if we were going to need a new stadium in the future. And the answer is yes. It’s not happening anytime soon. If we accept that and understand it, we can do well in the home we’re in for many years. I don’t think a stadium that started on the boards 20 years ago would expect to be a 40-year-old stadium. I know we won’t be there 20 years from now. We will be there five years from now. The answer is somewhere in between.”
Funny thing about baseball. It can turn even the smartest, hardest-nosed business leaders into jelly. That’s how $30 million player salary budgets balloon into $60 million budgets. Owners get starry-eyed, put ego ahead of sense or can’t handle the heat from fans and spend money they don’t have, committing themselves to a future generation of debt.
Sternberg thinks that he can apply restraint to the Rays’ field operations while still building a contender with measured payroll growth over the next few years.
“I think the team is fortunate this year; we’ve got a lot of positions filled,” he says. “Many players, such as Carl Crawford and Rocco Baldelli, already know they’ll be here a long time. Jorge Cantu and Scott Kazmir are only in their second year. Johnny Gomes, too
“The pressure and focus needs to be on something sustainable for a very long time,” Sternberg continues. “It doesn’t alleviate the desire to put the best team on the field tomorrow. I am quite certain, talking to our baseball guys, that we can turn around in a month and have a team that can compete with Boston and New York this year with a payroll not much more than this year. How? You can trade away your future, all your youth, for veteran players in the last year of their contract. Other teams pick up the bulk of their cost near the end of that contract. But I don’t know where that leads us the year after and the year after that.”
Fans want the Devil Rays to spend more money on players than 2005’s Major League lowest $28-million. Of course the Florida Marlins, a team that won the World Series in 1993 and 2003, followed each championship with a fire sale of veteran players and drastic cuts in salary. Winning never paid off at the box office for Florida’s other baseball team.
“You’ve got teams with $200 million and $100 million payrolls that also didn’t win the World Series,” Sternberg says. “If there were guarantees, you might consider it. But it’s one thing to mortgage your future; it’s another to give it away. It’s a competitive balance. Do you trade off 10 wins this year for 10 next year? Or 15 wins the year after? I take a businessman’s eye to how we prepare our business side.”
Okay, okay, but will you spend more on player salaries this year than last?
“It’s going to go up,” he says, almost laughing at the predictability of the question. “We want to be sure it’s sustainable and something we can lift for the next three to five years. I’ve been talking about increases of 15 percent to 20 percent for each of the next three to five years – significant, gradual, sustainable payroll increases. Winning is not a light switch. It’s an ocean liner.”
That’s the logic. Now here’s where emotion and a competitive spirit comes into play.
“If we’re knocking on the door in June or July, we might borrow from the future to do it,” he admits.
Who Is Stuart Sternberg?Sure, Stuart Sternberg is a St. John’s University-educated, Wall Street-experienced husband and father of four. But we asked him the really tough questions to find out what really moves the new Rays owner:
Crackerjack or popcorn: CRACKERJACK
Hot dog or hamburger: CHEESEBURGER
Bugs or Daffy: BUGS
Shea Stadium or Yankees Stadium: SHEA STADIUM
Springsteen or Sinatra: SPRINGSTEEN
Mantle or DiMaggio: MANTLE
Seaver or Gooden: SEAVER
Britney or Jessica: BRITNEY
Community Endorses ChangeDid a change in the ownership of the Tampa Bay Devil Rays make any real impact on the community?
“Are you kidding?” says Bill Berry, owner of the Corner Barber Shop on 4th Street N in St. Petersburg. “It’s the only thing people want to talk about!”
Maddux Business Report asked our readers for their thoughts on the change in ownership about the Rays. Here are excerpts from what you told us:
“Looks good at this point… Refreshing. We’ve been sponsors/season ticket holders since day one. The pitch is elevated and still in the strike zone – lots of positive vibes.”-- Steve McAuliffe, JMC Communities, St. Petersburg
“(Sternberg) seems very laid-back, willing to work with the community and has a huge love for the game of baseball, which I think is important for the sport. I love baseball, and part of the charm of it is the ‘Sunday afternoon in the park’ feeling. It seems like the new management is really trying to bring the fun back to baseball in Tampa Bay.”-- Lisa Stansell, Downtown Relations Director, Church of Scientology, Clearwater
“As one of the few remaining charter season ticket holders with four seats, I am pleased with what I’ve seen so far. Sternberg’s style has class (sorely missing in the past). I think Matt Silverman and Andrew Friedman are perfect for re-engineering an organization. (Great leaders pick smart protégés.) I fully expected to get a huge bump in my season ticket package because I had “locked in” my ticket price for three years in 2003, and I figured they would make up for lost time (well, Vince would have). My total package increase with parking was about 6.5 percent. More than reasonable. I anxiously await to see what they do with the facility. I know they realize the inside of the dome looks like a Home Depot warehouse (what with the grey walls and dirty floors—actually Home Depot has clean floors), and certainly they will make some aesthetic improvements. And the God-awful advertising signs need addressing, which they said they would be doing—so I look forward to that. And you can bet that a name and uniform change are imminent.
“As for the team, I think they have made good choices so far. Hunsicker gives us new credibility, which was sorely needed, and Andrew doesn’t have any battle scars, so he’ll be willing to jump out of a plane. I’m excited and very upbeat. It was evident from the start that Naimoli wasn’t the guy to make this successful. He just had too many style issues, some of which poisoned the water. The new ownership will do well. We certainly found that out with the Bucs, and the Lightning!”-- Alan C. Bomstein, President, Creative Contractors, Inc., Clearwater
“About four years ago, when my twins were four years old, we attended a game on a Sunday and were asked to leave the kids’ juice boxes outside the stadium – not cool. Thanks for the new policy.”-- Jose R. Bello, VP of Sales & Marketing, Shooting Stars Post, Inc. Tampa
“I typically attend two to four Ray games a year. Considering the new ownership’s rededication to fun, I can see going to a dozen or so games a year.
“One idea for improvement comes from my experience with hockey. Starting in the first season in the fairgrounds my family has shared six “nosebleed, general admission” tickets to all the games. Going to so many games became a chore once married life and children followed so we traded quantity for quality…
“And for the last four years I have a quarter share in four tickets to the Lightning Games in the XO Club. This is a 400-500 person luxury skybox with comfortable leather seats, unlimited food, beer and wine. You know you are ensconced in luxury when the men’s bathrooms have televisions over every urinal. I would rather go to several games in luxury than lots of games in the nosebleeds. It is a special event for me and my clients. If the Rays had something like this I could see myself going to more games.” --David D. Repka, Bison Financial Group, LLC, St. Petersburg
“We will think about sponsorship or ticket purchase. We think he's going to endear the fans to the team. Looks like they want to bring a winner to town.”-- Mark Klein, Klein & Heuchen, Clearwater