Steinbrenner

by Bill Madden

  In spite of the embarrassment of Watergate and the subsequent restraints of his exile, Steinbrenner had a right to feel good about the direction the Yankees were heading in the first two years of his stewardship. The trades for Nettles, Chambliss, Tidrow, Bonds and Piniella, a .300 hitter and the 1969 Rookie of the Year, had laid the foundation for a championship-quality team. As big as the acquisitions of Bonds and Piniella were, Steinbrenner was hard at work after the 1974 season to secure a player whose very signing would have monumental consequences on baseball.

  On the eve of the 1974 World Series, Jerome Holtzman of the Chicago Sun-Times reported that Oakland A’s owner Charlie Finley—who had successfully blocked Steinbrenner from hiring his manager, Dick Williams, the previous year—had been charged with a breach of contract by his star pitcher, Catfish Hunter. On behalf of Hunter, the Major League Baseball Players Association had filed a grievance against Finley, citing the failure of the A’s owner to make a $50,000 annuity payment that was part of the deferred salary in Hunter’s contract. (In January 1974, following his third-straight 21-win season, Hunter had signed a two-year contract with the A’s, at $100,000 per, with a unique arrangement in which $50,000 in salary each year would be deferred in annuity payments to the Jefferson Standard Life Insurance Co. of Greensboro, North Carolina.) With the union’s backing, Hunter argued that Finley’s failure to make the payment had rendered the contract void, which would thus make the pitcher a free agent.

  Initially, the story was viewed as just another dispute between the cantankerous Finley and one of his players. Though Oakland, with its bumper crop of homegrown talent—including Hunter, slugger Reggie Jackson, third baseman Sal Bando, shortstop Campy Campaneris, outfielder Joe Rudi and reliever Rollie Fingers—was baseball’s best team in the early ’70s, winning back-to-back world championships in 1972–73, Finley was constantly feuding with his players.

  Hunter had a strong ally in Players Association executive director Marvin Miller. Since assuming the leadership of the union in 1966, Miller had won a slew of new rights for the players that led to unprecedented improvements in salaries and benefits. Throughout his contentious labor negotiations with the owners, Miller’s ultimate goal was the elimination of the reserve clause in the standard player’s contract, which effectively bound players to their teams for life. The issue had gone all the way to the Supreme Court in 1970 when St. Louis Cardinals outfielder Curt Flood lost a suit in which he contended that the team had no right to trade him without his consent.

  Finley, who’d made his fortune in the insurance business, should have known better than to make the initial deal with Hunter. The reason he’d refused to pay the $50,000 annuity was that he came to realize it was not tax-deductible, like a regular salary, and that he wouldn’t be able to deduct the payments to the insurance company until years later, when Hunter began receiving his deferred payments. It was a blunder that finally gave Miller his opening in his effort to win the most precious right of all for the players—free agency.

  At first Finley downplayed the story, saying, “It’s not even worth commenting on, but you can be assured that we do not owe any player any money.” A few days later, he appeared to backtrack somewhat, telling The Sporting News that the situation was “just a little misunderstanding.”

  Hunter said nothing. He was in the middle of the World Series against the Dodgers (earning a save in game one and winning game three with a 71⁄3 inning, one-run effort), but his agent, Jerry Kapstein, confirmed to reporters that Finley had reneged on the contract.

  Because there was no precedent for such a case, nobody could predict whether Hunter might actually be awarded free agency. (Kapstein, for one, didn’t believe the case would lead to his client winning free agency, and when Hunter later learned that his agent had expressed this opinion to reporters, he fired him.)

  American League president Lee MacPhail downplayed that possibility, revealing that Finley, in his presence, had attempted to make restitution with Hunter prior to the American League Championship Series. This was only partially true. At an October 4 meeting at Finley’s office inside the Oakland Coliseum, the A’s owner had offered Hunter a check for $50,000, to which Hunter replied, “I can’t take it. I’ve been advised by my attorney that the check must be sent directly to the Jefferson Insurance Company.”

  MacPhail contended that the offer by Finley was sufficient grounds for Hunter not being awarded free agency, but baseball’s arbitrator, Peter Seitz, disagreed. On December 13, Seitz ruled that not only would Finley have to pay the $50,000 in the annuity method specified in the contract, but that Hunter was now a free agent and could negotiate with any team in baseball.

  The players were overjoyed. The owners were outraged, though that didn’t stop them from trying to sign Hunter. All of a sudden, the best pitcher in baseball was available to the highest bidder. Kuhn set December 18 as the starting date for the historic auction.

  All the negotiating took place at the Ahoskie, North Carolina, offices of Catfish Hunter’s attorney, J. Carlton Cherry, about an hour’s drive from Hunter’s farm in Hertford, North Carolina. With the exception of one team, the San Francisco Giants, club officials began making the pilgrimage to this tiny rural hamlet to meet with Hunter and his new celebrity country lawyer. Even notoriously tightfisted Minnesota Twins owner Calvin Griffith wanted in. “I think this is one of those once-in-a-lifetime happenings,” Griffith said. “I think most of our players would be glad to see us get Hunter, because it would add $25,000 to their contracts if he pitches us to the World Series.”

  On Friday, December 20, Gabe Paul flew from New York to Tampa to discuss the situation with Steinbrenner. As he would later tell Yankee confidants, Paul did not believe this was a violation of Steinbrenner’s suspension agreement with Kuhn, since a Hunter signing would involve a sizable investment on the part of the team that could not be made without the knowledge and approval of the principal owner. By then, speculation in the papers and TV had put the top bid over $2 million for five years, and Paul told Steinbrenner that they needed to be prepared to go $3 million or more if they were going to lure the country boy to New York. The one advantage the Yankees might have, Paul said, was Clyde Kluttz, a former big league catcher and a onetime neighbor of Hunter’s who was now a scout for the Yankees. It was Kluttz, as a scout for Finley, who had signed Hunter to his first professional contract with the A’s in 1964, before they moved from Kansas City to Oakland.

  “You do what you feel you have to do,” Steinbrenner told Paul. “We have to get this guy.”

  On December 23, Paul caught a 7:25 A.M. flight out of Tampa, changed planes in Atlanta, took a charter flight to Raleigh and then drove to Ahoskie for a one o’clock meeting. As he began the discussion with Cherry, Paul remembered being “flabbergasted” to hear the lawyer say the bids were getting higher than he and Hunter ever expected; that teams had told them they were prepared to bid between $3 million and $5 million. And Kluttz had told him it would probably take $2 million to sign Hunter.

  Paul’s meeting with Cherry lasted almost two hours, while Montreal Expos executives John McHale and Jim Fanning were waiting anxiously in another room. At the conclusion of the meeting, Paul, as usual, made a relatively low offer of $1.5 million over five years that he quickly realized was not even close to the offers from other clubs. Cherry told him he’d get back to him, prompting Paul to say the Yankees were prepared to be competitive with whatever offers other clubs made for Hunter. In the meantime, Paul instructed Kluttz to hang out in Ahoskie to monitor the developments and continue to lobby Hunter and his friends and family.

  For a week, Kluttz stayed in his hotel room in nearby Elizabeth City, reading the papers and watching TV all day before venturing out at night to visit Hunter’s friends in Hertford, subtly selling the virtues of New York. Every other day, he would stop at Hunter’s house and give his New York pitch firsthand. At one point, Hunter asked him about living in New York. Kluttz said, “I hated it too. But people’s people. The c
ity’s fast, and you wouldn’t want to live downtown. But just get a place in the country. There’s plenty of country not far from the city.”

  Hunter then asked Kluttz about San Diego, where the Padres (whose manager, John McNamara, had managed the A’s in 1969 and ’70) had offered $3 million over five years.

  “San Diego’s nice,” Kluttz said. “But how many players from San Diego have ever made it to the Hall of Fame?”

  That prompted another question from Hunter that Kluttz had been prepared for.

  “How about Steinbrenner?”

  “Look,” said Kluttz. “It can’t be any worse than playing for Finley. You’re going to get a lot more press in New York, and you can handle the media. And you’re going to make a whole heckuva lot more money up there off the field. New York is where everything’s happening.”

  After that conversation, Kluttz sensed that he was winning Hunter over to signing with the Yankees, but he worried that another team might make an outrageous offer at the last moment. He called Paul and told him he’d better get back to Ahoskie to nail the deal. At Steinbrenner’s suggestion, Paul brought with him Ed Greenwald, a Cleveland attorney and one of Steinbrenner’s limited Yankees partners, to handle the contract negotiations.

  On Sunday, December 29, Paul, Kluttz and Greenwald checked in at the Temple Motor Inn, in Raleigh, and drove to Ahoskie the next morning. On the trip, Kluttz briefed Paul on what he knew about the offers Hunter was considering. Before leaving New York, Paul had called Cherry and upped the Yankees’ offer to $2.6 million.

  “It’s obvious to me Hunter wants New York,” Kluttz said, “but San Diego was so strong with him, he might accept.”

  To Paul, that sounded as if the Yankees might be out. They pulled the car over at a Gulf station where Greenwald rushed to a phone booth and called Steinbrenner.

  “I think we’re probably going to up our offer to $2.8 million,” he said.

  “It’s Gabe’s decision,” Steinbrenner said. “But there’ll be no problem with the bank.”

  As they arrived at Cherry’s office, Cleveland Indians owner Ted Bonda and his general manager, Phil Seghi, were just walking out. From the tone of Cherry’s voice, Paul sensed that the Padres had also upped their offer. Nevertheless, he informed Cherry of the Yankees’ intention of going to $2.8 million. The lawyer smiled but didn’t say anything.

  “Well,” Paul said after a few tense moments, “I guess we’ll be on our way. We’ll wait to hear from you.”

  “You will,” said Cherry.

  From Ahoskie, Paul, Greenwald and Kluttz drove to Suffolk, Virginia, where two charter planes were waiting, one to take Paul back to New York and one to ferry Greenwald to Cleveland. While they were waiting at the airport, Kluttz put in a phone call to Hunter. Upon hanging up, he turned to Paul and said: “He wants to come to New York to look around the area.”

  Paul shrugged. “There has to be a breaking point here,” he thought to himself.

  The next morning, Kluttz called Paul from the Tomahawk Motel, in Ahoskie, where he had met with Hunter.

  “He wants a $50,000 insurance policy up front for his kids, and then $100,000 for each of the next five seasons,” Kluttz said. “If you’re willing to do that, I’d say you’ve got him.”

  Paul was exasperated.

  “This cat-and-mouse game has got to stop,” he sighed. “We can’t keep upping the ante like this!”

  At that point, Kluttz put Hunter on the phone.

  “Mr. Paul,” Hunter drawled, “if you all are willing to take this offer, I promise I’ll sign.”

  Paul told Hunter he’d have to get back to him after discussing the deal with other Yankees officials. He then called Greenwald, who discussed it with his Cleveland law partner and fellow Yankees limited partner, Daniel McCarthy.

  “You’re going to need to make a decision, Gabe,” Greenwald said. “I just don’t know.”

  “Well,” said Paul, “the way I look at it, we’ll all be dead in 20 years and this is a chance to change the course of baseball in New York from a secondary position to one of dominance. It’s worth it. I say let’s do it.”

  Greenwald called Steinbrenner. But instead of being elated over winning the Hunter sweepstakes, Steinbrenner erupted.

  “How much?” he screamed at Greenwald. “I don’t know if the banks are going to go for this! What’s the matter with you? You’ve let them manipulate you into looking like fools.”

  “But, George—” Greenwald interrupted.

  “Shut up,” Steinbrenner yelled. “You’re just a fucking errand boy!”

  A shaken Greenwald called Paul back to report Steinbrenner’s reaction.

  “I’m quitting,” Greenwald said. “I can’t take being talked to like that. I’m going sell my shares. McCarthy too. I’ll draw up the contract if you want and get the hell out of it and let Pat Cunningham do the rest.”

  “Just hang in there, Eddie,” Paul said. “Cunningham’s a political guy who’s just serving as George’s surrogate. We can’t have boy scouts doing this job. It’ll be all screwed up.”

  Paul then called Steinbrenner, who had calmed down and was now prepared to go through with the deal.

  “Greenwald has to be in this, George,” Paul said. “It’s a very complicated deal.”

  “All right,” said Steinbrenner, “but I don’t want Greenwald speaking at the press conference.”

  “Don’t worry about the press conference,” Paul said. “We’ll handle that.”

  The next day, December 31, Greenwald flew back to Ahoskie, where he met with Cherry, Hunter, Kluttz and Cherry’s law partner, Joe Flythe. After going over the terms of the deal, all five flew to New York on Steinbrenner’s private AmShip plane. During the flight, Greenwald drew up the contract in longhand. But when they got to New York, Paul reported that Steinbrenner had told him he still didn’t have the bank clearance. It didn’t arrive until 8:15 P.M., and it wasn’t until 8:25 that Hunter finally signed the contract.

  Meanwhile, Marty Appel was frantic. Earlier in the day, Paul had instructed the first-year Yankees PR director to round up the local media for a 6 P.M. press conference at the Yankees’ office inside the Parks Administration building. By the time Hunter finally signed, several dozen newspaper, TV and radio reporters had been waiting in the group sales office for over two hours, angry that they had ditched their plans for New Year’s Eve. Paul didn’t tell Appel why the press conference was being delayed, and as the eight o’clock hour came and went, Appel began feeling a sense of dread.

  As soon as Hunter signed his name on the contract, Appel hastily escorted him down the corridor with Paul, Cherry, Flythe and Kluttz to the group sales office for the press conference. Terms of the deal were never announced by the Yankees, and the next day reports varied from $3.2 million to $3.75. In fact, the contract was worth $3.35 million, broken down thus:

  $500,000 in salary for five years

  $250,000 deferred salary

  $100,000 signing bonus

  $1.5 million in deferred bonus

  $750,000 life insurance policy

  $50,000 for each of Hunter’s two children

  $200,000 in attorneys’ fees

  Steinbrenner became the first owner to award a seven-figure contract—and only two years after chewing out Mike Burke for raising Bobby Murcer’s salary to $100,000. In absentia, Steinbrenner had rocked the foundation of baseball. Hunter became the highest-salaried player in baseball history; more important, his example had demonstrated what free agency would mean for the players. “What we saw happen here,” said San Diego Padres president Buzzie Bavasi after the Hunter deal was announced, “fully demonstrates the importance of the reserve clause. This manifests why we can’t afford to change the reserve rule. The richest clubs would offer the top players the biggest salaries and the biggest bonuses.”

  Bavasi’s fears for the owners’ control over the players were well founded, as Marvin Miller had only just begun to fight. At Miller’s prompting, over the next year, pitch
ers Dave McNally and Andy Messersmith would also challenge the reserve clause and become free agents, opening the floodgates of free agency and providing George Steinbrenner with the vehicle he needed to restore the Yankees to greatness.

  Considering the magnitude of the Hunter deal, it was curious that only Paul and a couple of midlevel front office executives from the Yankees were present at the press conference. But this was the way Steinbrenner wanted it. And instead of Greenwald, who could have explained the contract for the media, Steinbrenner arranged for his friend Neil Walsh, a New York City commissioner, to present Hunter with a fishing rod as a welcoming gift from the city.

  Paul was particularly irritated by Walsh’s presence at the press conference—“just another of Steinbrenner’s cronies who doesn’t know anything about baseball but is allowed to get involved nevertheless.”

  A couple of weeks after the Hunter press conference, Paul was informed by Steinbrenner that Neil Walsh’s insurance company would be drawing up a policy on Hunter. Paul showed the policy to Greenwald, who said, “I don’t like this, Gabe. There are tremendous premiums in this. It’s just not a good policy for us.”

  “I don’t know what to tell you, Ed,” said Paul. “It seems like everything that Neil Walsh recommends to Steinbrenner is the greatest thing since indoor plumbing.”

  Then, a couple of weeks before 1975 spring training, Walsh informed Paul that, with Steinbrenner’s approval, he was bringing in a disc jockey and friend of his from the West Coast, Johnny Magnus, “the host who loves you the most,” to help out in the group sales and promotions departments. “This is what George wants,” Walsh said. “I told George the Yankees need a promotions and PR guy—somebody who knows how to do this kind of work—and he agrees.”

  Paul couldn’t believe what he was hearing.

  “We have no plan of organization,” Paul complained on his daily taped diary entry. “It all depends on what bar he goes to and who gets his ear last. This Steinbrenner is just not gonna stay out of it! All this stuff about us having no problem with the banks, and we didn’t get the approval until 8:15 that night and then almost blew the Hunter deal! I love this guy, but he’s not a guy to be working with or be in business with! Everything is falling apart internally. Especially all this stuff with Walsh—the insurance policy, Magnus—it’s an unsound way of doing business.”