Jerry Reinsdorf got Michael Jordan back playing basketball, but the federal courts stymied his assault on baseball's economics.
From the Print Edition:
Jack Nicholson, Summer 95
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His fast-talking routine began in law school at Northwestern University in 1957. While enrolled there, he was offered a full scholarship by the University of Chicago Law School. Playing them off against each other, he told a Northwestern dean he couldn't turn the Chicago offer down. A few days later, Reinsdorf had a Northwestern scholarship.
Ironically, after Reinsdorf graduated and went to work for the Internal Revenue Service in 1960, his first case was a tax delinquency by Bill Veeck, the colorful owner of the White Sox. The IRS experience proved invaluable. Learning how to establish tax shelters, he and cigar-toting buddy Bob Judelson ("the guy who introduced me to smoking," said Reinsdorf) founded Balcor in 1973, a company specializing in the sale of real-estate limited partnerships.
Structuring these syndications by dint of his lawyering savvy and hard-boiled charm, Reinsdorf quickly raised $650 million to throw into construction projects; he got rich in those go-go real-estate days. When asked what his business was, he roguishly replied, "OPM: Other People's Money." The sale of Balcor to Shearson Lehman Brothers for $104 million made him wealthy enough to join law school classmate Eddie Einhorn in buying the Chicago White Sox for $19 million in 1981. (While Reinsdorf wasn't named as a defendant, Balcor became embroiled in the early 1990s in a $3 billion class-action suit. The suit has never come to trial.)
The Sox's finances were in a shambles. In the shadows of the popular Cubs and perennial losers for over 20 years, the Pale Hose had been poorly run by Veeck. But unlike the business dilettantes who operated most clubs, Reinsdorf and Einhorn, once dubbed the "Katzenjammer Kids" by Steinbrenner, began paring fat. The Sox soon became so competitive, on and off the field, that they have an estimated worth of $130 to $150 million today, and Reinsdorf's reputation as a brutally smart, money-making sharpie has taken on epic proportions.
"We hooked up together and did a limited partnership; Jerry is clearly a moving force, he knows it all--taxes, real estate," said Judd Malkin of JMB Realty, one of the world's largest real-estate firms, who invested in the Sox. "The guy has the highest integrity and he performs. I didn't know anything about the Sox. I clearly invested in Jerry, and if he showed me another deal I'd go in with the expectation it made sense."
Admitting "I love to negotiate, to create leverage, and when I'm in a competitive situation I have to win," Reinsdorf comes across as the prototypical 1980s businessman: cocksure and relentless. As Wall Street Journal reporter John Helyar writes in his book Lords of the Realm (Ballantine Books/Random House, New York, 1994), "Reinsdorf looks at baseball with a pretty cold, calculating eye. I think it offends his sensibilities to run a franchise in an unbusinesslike way."
Reinsdorf also has a caring, sentimental side. Despite taking numerous potshots in the media depicting him as an unfeeling villain, he's especially loyal to favored employees. Other basketball owners would quickly fire their GMs if they became enmeshed in a public pissing contest with not just one but two star players. Not Jerry. He stood behind the Bulls' Jerry Krause throughout his battles with Horace Grant and Scottie Pippen. And after his beloved assistant Sheri Berto died in 1991, along with naming the Bulls' practice facility in her honor, Reinsdorf supported her family financially.
But Reinsdorf's sentimentality extends only so far. Business is still business. So in 1983, claiming the old Comiskey Park was "disintegrating," and "if we didn't get a new ballpark we'd go broke," Reinsdorf again played hardball. Threatening to move the Sox to St. Petersburg, Florida, if Illinois legislators didn't fund a new stadium, he now explained, "a savvy negotiator creates leverage. People had to think we were going to leave Chicago." Those machinations angered St. Petersburg city administrator Rick Dodge. Realizing Reinsdorf was simultaneously negotiating with him and Illinois officials, he told his attorneys, "He was playing us off against each other. I'm not going to sit here and get chewed up like this."
Chicagoans were equally annoyed with Reinsdorf's Florida flirtation. Eddie Einhorn remembers going to a Cubs game with Reinsdorf and a fan yelling, "I wouldn't get into that car after the game." Reinsdorf received so many death threats, with anti-Semitic slurs, that he was forced to hire bodyguards and 24-hour security agents to protect his Chicago home.
Known as a negotiator who "lets things linger until he gets what he wants," Reinsdorf did have one friend during the three-year imbroglio, Illinois Governor Jim Thompson. By June 1988, when it seemed certain that St. Pete would lure the Sox to its new Suncoast Dome, Big Jim twisted arms on the floor of the Illinois Senate, and the deal was done. Illinois funded a new stadium. As John Helyar writes, "Reinsdorf got the gold mine, and [St. Petersburg] got the shaft."
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