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May 10, 1999
Prospectus Q&A: Miles Prentice
Potential new Royals' owner discusses the team
The Kansas City Royals are in a state of flux. The dependence on veteran mediocrity is being abolished, and the team's commitment to youth has provided an opportunity for potential stars like The Brothers Carlos to play every day. And just as the situation on the field has changed, so has the front office, where the unwieldy Board of Directors that has piloted the franchise for the last six years finally approved a new owner last fall. Miles Prentice lacks the deep pockets of predecessor Ewing Kauffman, but his passion for baseball and knowledge of the game has intrigued a city that has been eagerly awaiting a return to winning baseball for years.
Earlier this week I had the privilege of talking with Prentice about his plans for the future of the Royals and Major League Baseball. As advertised, Prentice was friendly, candid and eager to talk baseball--a scheduled 15-minute interview ran close to an hour. I would have expected an interview with one of the Lords of Baseball, as it were, to be rather formal and lacking any meaningful content. But Prentice let his guard down, and didn't hold back his opinions. He trusts others to not take advantage of his openness, and most journalists have kept that commitment.
After speaking with him, I have joined the growing list of people who are no longer surprised that he overcame staggering odds to be awarded ownership of the Kansas City Royals, and who are more than a little excited about the future of the franchise.
(Ed. Note: On Friday, it was learned that Prentice will have to rework his group to provide fewer investors and more cash, so he will remain just outside the gates for a bit longer.)
RJ: While the approval process for your ownership application seems to be going smoothly, there have been a few comments in recent weeks--one by Peter Gammons and one by Tim Belcher--that hint that your application might not get approved. Have you been given any reason by Major League Baseball to worry that they might not approve your ownership?
MP: No! Where does Tim Belcher get his information? (Laughing.)
We do have a large group, there's no question, and that has been of some concern, but mostly from a logistical standpoint. The Giants had 26 investors when they started, and we're a little north of 40, so it's not impossible to deal with. Major League Baseball has a structure for groups of that size, so once they clear everyone, it's not an issue. This is actually as close to a community-owned team as anything in baseball. We have two African-Americans in the group, a woman, a Japanese-American. It's a wonderful group, and while some of them aren't baseball fans, they care about Kansas City. And it's that sort of commitment that I find reassuring as I go down this path.
That's very interesting about Belcher - when did he say that?
RJ: When the Angels were in Kansas City a few weeks ago. He was in his "complaining" mode, as he's been known to do.
MP: No comment. (Laughing.) It looks like the Angels got stuck--I don't think he's going to do anything with them. As you probably know, I own the Double-A Midland team, which had been an Angels' affiliate for many years, so I know that organization pretty well.
RJ: And you probably know the Angels haven't had a very strong farm system during that time.
MP: No, and that's one of the reasons we switched. I like the people in the organization, by the way. I think they're very good--Bavasi, the Autrys--I thought the world of Jackie Autry, and I never heard anyone say a bad word about Gene Autry. We did have some great individual players come through, like Tim Salmon and Jim Edmonds, but actually Midland has had the worst record in the Texas League over the last 15 years. I know a lot of people say they're not there to win, but they have to develop a winning attitude. If someone's never won, my position is they might not know how to win!
In any event, we're with Oakland now, and they have a good farm system. For small market teams, I think you have to have a strong farm system.
RJ: I think the team's poor showing on the field has made your success at the turnstile that much more impressive.
MP: I have a very good organization down there, and of course that is one of the things I believe in doing: getting good people in the right jobs and letting them to do their work. I've got a great GM and a great staff down there, and we've done pretty well.
RJ: If and when you get approved as owner of the Royals, are you going to have to divest yourself of that team?
MP: I've been told no.
RJ: Really? Are you still going to be affiliated with another organization, or do you plan on making them a Royals' affiliate?
MP: I've been told I can keep them as an Oakland affiliate. There would obviously be some rationale for making them a Royals' affiliate, but Wichita is such a natural choice as the Royals Double-A team.
RJ: The Royals currently have a payroll around $25 million, which the current administration is trying to pare down. What, realistically, is a payroll that you think you can afford?
MP: When we have deliberated this, we have always felt that we needed a payroll between 20 and 25 million dollars.
RJ: With the contracts of Jeff King, Hipolito Pichardo and Jeff Montgomery all expiring, that frees up around $9 million in payroll, and if Kevin Appier's option is not picked up, or he's traded, that lowers the it another $5 million. Do you plan on using those savings to sign the team's younger players, or to increase the team's scouting budget, or is that money needed just to keep financially solvent?
MP: Without having a real opportunity to be involved in the day-to-day operations at this point, there are a number of areas in which to use that money: we want to beef up the scouting and development, and that would probably include having money set aside for the signing of draft picks. And if there's a little left over, we'd want to keep it for a rainy day. We would want to devote to the minor league system with an eye towards some of our younger ballplayers as well.
RJ: What's your take on signing the Royals' best young players, guys like Johnny Damon and Jose Rosado and Mike Sweeney, to long-term contracts that give the players security and give the franchise some cost containment?
MP: Well, I can't comment on that at this particular time because I'm not in a position to make those moves, but we'd look seriously at whatever would make financial sense, because the hallmark of our organization will be fiscal responsibility. Maybe to the union that means that I'm not going to encourage the escalation of salaries. And I've got to be honest with you--I'm certainly not going to, because I think it hurts the fan. I want a family to be able to come to the ballpark cheaply.
In Midland, we have maintained as cheap a price as anywhere. Kansas City has some of the cheapest tickets in the major leagues, and they may have to go up a little with time, as does everything. Movie tickets now cost eight dollars for what, an hour and a half of entertainment? Some of our Texas League games go 4 hours with scores of 32 to 25! (Laughing.)
RJ: What do you consider to be the most important qualities for a GM?
RJ: What's your impression of Tony Muser? What is it that you want most out of your manager?
MP: Both those positions require leadership, different kinds of leadership. But the manager--let's take Tony Muser--has to have a multi-faceted personality. He has to be a leader. He also has to be a teacher. He has to be a coach, an instructor. He probably has to be a disciplinarian, and at times he has to be a father to some of these players. He has to do a lot of things, and he might not be able to do it all, so then it's incumbent on him to surround himself with good people who can help him.
We've got Frank White, one of the best second baseman who ever played the game, who can work with Carlos Febles and help him out. The most important thing to me is leadership, and you can go on and on about how to define leadership, but I tend to be optimistic, and I want people with a positive attitude. If you don't believe you can succeed, believe me, you won't.
RJ: How involved do you see yourself with the franchise? Do you plan on having any say in personnel decisions, or do you plan to let others run the ballclub?
MP: Well, I am a hands-on person, and I played the game--without distinction--in college and in the Army. But in any event, I plan on having what we consider to be the best people in the positions that they should be in, whether it be general manager, traveling secretary, financial VP... we want the best possible people. And I'm going to let them do their job. For example, the general manager will have guidance, and I expect to be involved.
But my primary role will be to market the team. And I'm going to go to Wichita, to Topeka, to Jefferson City, to Des Moines, to Omaha, to Lincoln, work my way down into Arkansas. We very much need those people to come back to the ballpark. And if we can get the ballplayers out into the community, so that the people can touch them and see them and really identify with them, I think that's more important in a place like Kansas City than in New York or the other big markets. And you want kids who have that personality, that tendency to warm up to people and not be aloof. The nice thing about Kansas City is that it does protect and respect the ballplayer's privacy.
I am a fan. I love this game, and this game has been so important to this country and helped so many people. Look at the impact of this game on so many minorities, whether it be Italian-Americans, German-Americans, Irish-Americans, African-Americans, or Hispanic-Americans. Each group has benefited from being able to play the game, and that's something we have to nourish and to encourage for the future.
RJ: The Royals have six of the first 59 draft picks this year. In recent years, the draft has become so expensive that some of the small-market teams have been unable to draft the best players; the Royals, for example, passed on J.D. Drew last year. Are you willing to take chances in the draft, to select the best player and spend four or five million dollars to sign him, or do you plan to factor signability into the equation?
MP: The difficulty here is in trying to have the proverbial crystal ball, to know that J.D. Drew is going to be the absolute best ballplayer in the draft. After all, he's struggling right now. I have a real problem with some of these bonuses; remember back when the Yankees signed Brien Taylor for $1.55 million? That guy may never throw a pitch in the big leagues.
The Yankees can afford to do that; but I don't think J.D. Drew is worth anywhere near what he got. I don't care if he turns out to be Babe Ruth and Hank Aaron all in one. At that level of money, I don't believe that it is a responsible decision to make. Again, we've got to have good scouts, as I want to be able to know that this particular person that we're going to pay a really high price for really does have more than a 50-50 chance to make it. I don't want to be throwing money at these guys like darts at a dartboard. I don't think you can predict that with the degree of certainty that makes such high bonuses something that we're comfortable with. I really think that long-term, that particular aspect of baseball has to be looked at and has to be, I think, ameliorated.
RJ: How about the team's involvement in foreign scouting? The Royals have never been very involved in competing for the best amateur talent abroad. Do you plan to change that, or do you want to continue to focus the Royals' scouting efforts in America?
MP: That's a good question, and I think we have had some fair success in Latin America, and the Dominican Republic is still a very fertile ground. I think there's going to be a lot of talent coming out of the Dominican and other areas. We've already seen a few players come out of Australia and Japan. The other countries around the world will be slower to develop, and again, it's going to be a cost-effective decision. I'm not going to shut out those possibilities, but I believe that there are a lot of kids in this country who aren't playing baseball but ought to be. And we're going to go and really scout this country. We're going to put a lot of resources and a lot of effort into doing that.
A case in point: the RBI program in Kansas City. Last year, they had about 520 participants with four corporate sponsors. This year, one of the investors in my group became a leader of the RBI program, and they had a very ambitious plan to get 40 sponsors and maybe 700 kids. They got their 40 sponsors--Tom Watson paid for five, and at least half of the sponsorships came directly or indirectly from my investor group. They had, as of last count, close to 1400 applications from kids to play. So that, to me, is a real positive. To have that kind of involvement from the inner cities is wonderful--we need to have the African-American community back in the ballpark, playing baseball.
The Cubs, for example, have signed three players into their farm system out of the Chicago RBI program. That's a fairly recent phenomenon, but one I think you're going to see become more common. Bo Jackson was not really a baseball player, but he was a good athlete, and probably would have been a superstar if he hadn't injured himself playing football. So we need to find those kids.
RJ: Do you have a timetable to make the Royals competitive?
MP: I think they're competitive right now! They played the Yankees pretty tough, splitting the series, and could just have easily won three. They took charge in the first game, they fell behind David Cone in the second game but tried to come back on a grand slam. The problem was that Cone was getting them to swing at his first pitch and fall behind in the count. I can't stand it when hitters swing at the pitcher's first pitch. You have to get a sense for what a pitcher is throwing. In the third game Febles had that great at-bat against Mariano Rivera, fouling off tough pitches and finally getting a single up the middle to drive in a run, even though the Royals ended up a run short. I was listening last night on the radio, and I could sense in the Yankee announcers that their tone changed from the first game to the last game. They recognized that these young kids are playing good ball.
In all honesty, developing a farm system is a three-to-five-year plan. You ask any general manager, any scouting director, and they'll all tell you that. And the Royals have some good young talent that's developing. It's not the same as it was in the '70s and early '80s, but compared to the early part of the 1990s, when the Royals signed all those free agents and gave up a bunch of draft picks, it's a lot better.
If you'll allow me to digress for a moment: I've seen a lot of players come along and a guy who played for the Angels, Orlando Palmeiro, everyone said he couldn't make it. He was a 56th-round draft pick. I watched the kid, the smile on his face and his enthusiasm, and I remember saying to someone (whose name will go unmentioned) that this kid has a lot of heart and he wants it so bad, so don't underrate him and count him out. And he's now a very good fourth outfielder. He doesn't have any power, but he gives you quality at-bats, he's good defensively and he plays smart. But more than that: he loves the game. And you know what? The fans recognize that. Kansas City is a small market, but that can be a benefit, because it's a small town, and people recognize when players are trying hard.
RJ: The Royals have had a very poor home record over the last four years, in large part because the team now plays in a good home run ballpark, but is not built as a power-hitting team. Do you plan on changing the dimensions of the stadium, or do you think the Royals simply need to add more power?
MP: To be honest, I'm not totally sold on those statistics which say that the Royals need to change their ballpark. I know Joe Posnanski [a columnist for the Kansas City Star] and some others have suggested that. I think a big part of the problem has been that the Royals haven't been drawing many fans to the ballpark. If you think about what it's like when the Royals come home and play against, say, the Yankees, and there's only 8,000 fans in the park, the fans aren't loud and into the game, the players themselves don't have the enthusiasm to play well. Then when they go on the road and play in front of 20,000 or more people, the underdog mentality sets in and the players are more focused. Muser does a great job of keeping the team very focused on their jobs.
So if we can get the attendance to go up, I think you'll see that problem go away.
RJ: I'm aware that after the 1981 strike, you refused to attend a baseball game for almost 10 years. Now that you're in an ownership position, there is a lot of talk around baseball that at the conclusion of the current bargaining agreement (either after the 2000 or 2001 season), there could be a lockout by owners to get a salary cap, a lockout that could wipe out an entire season. What is your take on baseball's financial situation? What do you think can be done, and can it be done without a work stoppage?
MP: Unfortunately, I'm not in a position yet where I'm allowed to comment specifically. But I would hope that everyone recognizes the benefits of the game continuing. It's in nobody's interest to have a work stoppage--players, agents, unions, owners or fans. So it's my hope that people will be able to sit down and do what's really good for the game. And that means what's good for the fans. I mean, the players are in pretty good shape, financially and in every other way. Maybe it's time for everybody to say, let's look at the fans a little bit here, and see where this game is going. We don't want to be the ones who killed the goose that laid the golden egg.
In my view, we can all succeed if we have a common goal of trying to be fair to all parties. I understand that the players want fair compensation. But starting at $200,000 is something not even lawyers or doctors get to do. From an economic point of view, the players are in pretty good shape, and maybe they ought to sit back with the owners and say, what can we really do for the fan? What makes sense for the fan? I don't know whether anybody will approach it that way, but that would be something I would hope people give some thought to.
RJ: Do you have any interest in becoming heavily involved with labor relations and the financial issues surrounding the game?
MP: Maybe they don't want me involved! (Laughing.) Maybe that's where Belcher was coming from!
RJ: The Montreal Expos, perhaps the epitome of the small-market team, may end up the first team in almost 30 years to move. What is your feeling on that? Do you think that more of an effort should be made to stabilize the franchise up north, or is it time for them to move to Virginia? At what point does a team have an obligation to move?
MP: That's a difficult question. The first thing is that the community has to want the team--you can't force that. I can tell you that I have seen what has happened to communities that have lost teams, and then it's too late. People will say that I'm just in a potential ownership mode and I would say things like that, but that's not true. I had a chance to move Midland when I bought the team in 1990, but I didn't. At first we struggled a bit, but not much. We worked hard to improve the team as much as we could. But we had local support. We had the city agree to spend some money to improve the ballpark, and now they're even thinking about building a new ballpark, which they really need to do if they want to keep a Double-A team for the next 50 or 60 years.
You have to look long-term, and so many people are just looking one or two years ahead. If Montreal moves, I doubt that they'll ever get a team again. And that's something the citizens of Montreal have to understand. And it's not dollars and cents that is the issue. Do they want major league baseball? If they don't, that's a decision they have to make. That's really true of any community, major or minor leagues.
But let's look at Pittsburgh. The Pirates, just three years ago, drew something like 900,000 people. Last year, they brought in close to 1.5 million fans. Their payroll has been among the lowest in baseball during that time. They've been competitive some years - two years ago they took Houston down to the final week, last year they were not as successful. But they have managed to put 600,000 more people in the ballpark. If the Royals put 600,000 more people in the stands, we're over two million. And you've got to have around two million in attendance to have any semblance of opportunity to succeed. Unless you really have a bare-bones operation, and then you run the risk of not being able to be competitive.
And if you've got two million people in the ballpark, if you spend your money wisely and develop players and talents, I think you can put a very competitive team on the field.
Baseball Prospectus thanks Miles Prentice for his time and his candor.