Steinbrenner

by Bill Madden

  Indeed, Steinbrenner and Katz got along fine in social situations, but their business relationship became quite acrimonious. On one occasion they were having lunch at the Post House restaurant in Manhattan when Katz “semi-mooned” Steinbrenner. According to Katz, the two were poking fun at each other’s attire when Steinbrenner said, “The only thing I like about you is your belt.” Katz got up from the table and tore off his belt, allowing his pants to slip down to reveal his boxer shorts beneath. “We both had a big laugh over that,” Katz related, “but the business times with George were not so much fun.”

  In late December 1999, Steinbrenner had lunch at the Regency with Randy Levine, who, after working for him as part of the legal team that got him reinstated to baseball, had gone on to serve as baseball’s chief labor negotiator and later as deputy to New York City mayor Rudy Giuliani. Steinbrenner was 69 now and, with Bill Fugazy in exile from his inner circle and his other cronies from his days of late-night gallivanting in Manhattan either dead or “retired” from that lifestyle, he was spending more and more time with his family in Tampa.

  “It’s time I started cutting back and begin letting the young elephants into the tent,” Steinbrenner told Levine, explaining that he wanted to get his son-in-law Steve Swindal (who was married to his older daughter, Jennifer), along with his two sons, Hank and Hal, more involved in the Yankees operations. “I’m going to need someone in New York to keep an eye on things for me,” he told Levine. “I want you to come to work for me as president of the Yankees. I’m getting more and more fed up with this Yankees Nets thing, and I need your help. We’re nowhere on the network. These guys can’t do shit.”

  Steinbrenner realized baseball had changed drastically from when he bought the Yankees for $8.5 million in 1973, and that no one man—not even him—could oversee every aspect of the increasingly complex business operations of the Yankees the way he used to. In Levine he saw a shrewd legal mind who’d successfully negotiated an end to the ruinous 234-day baseball work stoppage in 1994–95 (after two predecessors had failed) and who was also well connected in New York political circles. Steinbrenner felt Levine would be a good partner to work with Lonn Trost, who had served as the Yankees’ in-house counsel since 1997 and whom he’d just appointed chief operating officer of the team. The diminutive 5-foot-6 Trost had more than earned the promotion from Steinbrenner as one of the attorneys who had drawn up the contract with Cablevision containing the opt-out clause that led to the landmark MSG deal. But, as in-house Yankees counsel, he also came in for the brunt of abuse from Steinbrenner, who once told him half-kiddingly: “You’re a little man in every way.” Trost often repeated that to associates, taking it as a sort of badge of honor.

  For his part, Levine could see that Steinbrenner was serious about wanting to turn the heavy lifting of the greatly expanded Yankees business over to younger hands, and he was excited at the prospect of becoming the point man in the effort to create a new TV network and procure a new stadium for the Yankees.

  Levine took over as president on January 1, 2000, and immediately plunged into work on the network project. His first call was to his friend Joe Ravitch, an investment banker at Goldman Sachs, about the possibility of the bank becoming an equity partner with the Yankees. Ravitch connected Levine with Gerry Cardinale, managing director of Goldman Sachs’s

  media-focused private equity group, who, along with his boss, Richard Friedman, a partner and head of the investment committee at Goldman Sachs, told Levine and Trost that he wanted Goldman to partner with Yankees Nets in the network.

  Then Schiller, who’d been unsuccessful in finding an equity partner for the network, made the fatal mistake of portraying himself in Forbes magazine as Steinbrenner’s boss at YankeeNets. When Steinbrenner saw Schiller’s picture on the cover of Forbes with the headline THE BOSS’ BOSS, he flew into a rage. “Who the fuck does he think he is!” he screamed to his Yankees execs. Not long after, Schiller was no longer chairman of YankeeNets.

  As the programming and the equity partnership fell into place, the parties now needed to find the right person to head the fledgling network. On the recommendation of Goldman Sachs, Leo Hindery, who had previously been president of AT&T Broadband, was hired as the first chairman of the Yankees Entertainment and Sports (YES) Network and given a small equity share. YankeeNets owned a 66 percent share, and Goldman Sachs paid $300 million to YankeeNets for their 32 percent.

  The next step was for Hindery to broker deals with the local cable companies to carry the new network. But while he quickly succeeded in reaching agreements with Comcast, Time Warner and DirecTV to carry YES on basic cable, Cablevision, which was suing YankeeNets for breach of contract, claiming their MSG Network had not been allowed to effectively match a bid for a new cable contract, remained a holdout. YankeeNets eventually settled the suit for $30 million during a mediation process in a New Jersey federal court, but it did not get the YES Network on Cablevision. Steinbrenner was only too happy to pay the $30 million in exchange for his cable “free agency.” But in reluctantly agreeing to the settlement, Charles Dolan told Steinbrenner, “We’re still never going to put you on the air.”

  “We’ll see about that, Chuck,” Steinbrenner said.

  (The stalemate continued until April 20 of the following year, when, with the intervention of New York State attorney general Eliot Spitzer and Mayor Michael Bloomberg, both sides agreed to submit their cases to binding arbitration, while Cablevision agreed to begin carrying Yankees games on basic cable on a temporary basis, charging an extra $1.95 per customer. A year later, the arbitration board ruled 3–0 in the Yankees’ favor, and Cablevision agreed to keep the YES Network on basic cable for an extra 95 cents per month to its subscribers.)

  Once the YES Network was created, Steinbrenner saw no more reason for the YankeeNets partnership. After years of wrangling, in early 2004, Steinbrenner, Chambers and Katz agreed to dissolve YankeeNets and go their separate ways. The first step was the sale of the Nets to real estate developer Bruce Ratner for $300 million. Under the terms of the dissolution of YankeeNets, Chambers and Katz kept the money from the sale of the Nets, while Steinbrenner regained much of the equity in the Yankees that he’d given up to the Nets owners when the company was first formed in 1999. In addition, Chambers and Kats kept their approximately 33 percent in the YES Network, which, Forbes magazine reported in August 2007, “could be worth up to $3 billion.” The Yankees then formed a company called Yankee Global Enterprises, in which Chambers and Katz had a limited, nonvoting share.

  In 2009, Forbes valued the Yankees at $1.5 billion, of which Steinbrenner and his family owned just over 60 percent. Combined with his 33 percent of the YES Network and his 33 percent interest in the $500 million Legends Hospitality concessions company—which Yankee Global Enterprises formed with Dallas Cowboys owner Jerry Jones in 2008—his Yankees assets as of 2009 were worth somewhere between $2 and $3 billion. Not a bad return for that original outlay of $168,000 in 1973.

  THE ’99 YANKEES led the Eastern Division from June 9 on, finishing four games ahead of the Red Sox, with the high point of the season being July 18, Yogi Berra Day, when David Cone upstaged Yogi’s return by pitching a perfect game against the Montreal Expos. The pitching staff ranked second in the AL in ERA, shutouts and opponents’ batting average. Four Yankees—Derek Jeter, Tino Martinez, Paul O’Neill and Bernie Williams—drove in 100 or more runs, and Jeter had a career season, batting .349 with 24 homers and 102 RBI.

  For all the success, the season was marked by much tragedy. On March 8, Joe DiMaggio passed away in Hollywood, Florida, at the age of 84. Two days later, Torre revealed that he’d been diagnosed with prostate cancer and would be taking an undetermined leave of absence as manager, from which he returned on May 18.

  Paul O’Neill, Luis Sojo and Scott Brosius all lost their fathers in 1999, and on September 9 the organization was devastated by the news that Catfish Hunter, only 53, had succumbed to Lou Gehrig’s disease at his home in Hertford, North Caroli
na. The previous March, Steinbrenner had arranged for Hunter to come to spring training for what turned out to be his final visit with his former teammates. After calling Hunter’s widow, Helen, to offer his condolences, Steinbrenner told reporters, “She’s a very brave woman with a great family around her, but she has lost one of the greatest people I have ever known. Catfish was the foundation on which our tradition here was built.”

  The ’99 Yankees won a second-straight world championship, and their third in four years under Torre, with their most dominant postseason of all, sweeping Texas in the Division Series, taking four out of five from the Red Sox in the ALCS, and then capping it all off with another sweep of the Atlanta Braves in the World Series. In the triumphant clubhouse afterward, Steinbrenner, once again teary-eyed, with his voice cracking, declared: “This was the team of the decade . . . it’s sweet. We had three guys who lost their fathers this year, but they were really a mentally tough team.”

  “So how long can it go on, George?” asked a TV reporter.

  “Forever,” choked Steinbrenner, wiping his eyes.

  The next season, after jockeying back and forth with the Red Sox for the AL East lead for much of the first half, the Yankees took over first place on July 7 and gradually built their lead to nine games by September 13. But then, in a slump that mystified Torre and cast doubts on their ability to make it three championships in a row, the Yankees lost 15 of their last 18 games to finish a scant 2½ games ahead of the Red Sox, with just 87 wins. Once in the postseason, however, it was as if they flipped the “on” switch again, dispatching the Oakland A’s in a five-game Division Series and Lou Piniella’s Seattle Mariners in six games in the ALCS. All the while, though, Steinbrenner was fretting about developments on the other side of town, where the Mets, having crept into the postseason as a wild card, had beaten both the NL West champion Arizona Diamondbacks in the Division Series and the NL East champion Atlanta Braves in the NLCS to advance as the Yankees’ opponent in the World Series.

  “We cannot afford to lose to the Mets,” Steinbrenner said to Torre the day before the World Series was to begin. “There’s just too much at stake here for us. I hope you realize this.”

  In truth, there was much at stake for Steinbrenner besides just the New York bragging rights. There was the new TV network to consider. He thought that losing to the Mets in spring training games devalued the Yankees; losing to them in the World Series, he believed, could mean a decrease of millions of dollars in the Yankees’ value. After two extra-inning wins by the Yankees in games one and two at Yankee Stadium, the scene shifted to dilapidated Shea Stadium, in Queens, where Steinbrenner was immediately appalled at the shabby conditions in the visiting clubhouse, with its frayed carpeting and small wooden stools instead of chairs. At the last minute before game three, the presence of Steinbrenner’s longtime gal pal Barbara Walters in the visiting-club box created a panic among the Yankees security force when it was learned that Joan Steinbrenner had decided to fly up from Tampa to attend the game. George’s son Hal led the advance party to the box to move Walters before his mother got there. “She had the right tickets,” said one of the security men, “but as soon as Hal saw her, he said: ‘You have to get out and move to another box. You really need to get out now!’ ”

  Embarrassed and annoyed at this unceremonious eviction, Walters reportedly said, “I always thought George had a nice son,” to which Hal replied, “You must be talking about my brother. Now please leave.”

  After the Yankees lost game three, Steinbrenner blamed it on the fact that they weren’t able to get comfortable in the clubhouse. Accordingly, after the game he ordered the Yankees’ clubhouse staff to pack up all the high-backed leather chairs and the leather couch his team used at Yankee Stadium and have them transported in moving trucks over to Shea for game four. “I can’t have my players sitting on these little wooden stools,” Steinbrenner grumbled. “I want them to feel they’re at home. Hell, they are at home. Just in the wrong ballpark. This place is a dump!” After all the furniture was in place, Steinbrenner went around the room doling out $100 bills to all the clubhouse attendants.

  Steinbrenner was watching game four on television in the Yankees’ clubhouse—from the comfort of that leather couch—when, during the eighth inning, a cascade of water came gushing from the ceiling. There had been a fire in a trash bin on the third deck of Shea, and when firefighters opened a standpipe to extinguish it, another pipe, located above the visiting clubhouse, burst, sending a deluge of dirty brown water out of the ceiling, which eventually collapsed from the weight. As the Yankees filed back into the clubhouse after their 3–2 win, they were stunned at the sight of the mess—and even more so at the sight of the principal owner of the Yankees in the middle of it all, furiously bailing the six inches of water and debris in his expensive loafers.

  The Yankees wrapped up the World Series the next night with a 4–2 win at Shea. It was their 26th title, but it had been anything but easy. They outscored the Mets only 19–16 in the five games and, in the process, set a World Series record by stranding 52 base runners in the five games.

  “As far as heart, there has never been a team with more heart than this one,” Steinbrenner said during the clubhouse celebration afterward. Wiping a mixture of tears and champagne from his face, he saluted his troops for a job well done and then pondered their place in history.

  “The Mets gave us everything we could want,” Steinbrenner said. “It was the Battle of New York, and it was a great way to win. This team has done something that very few teams will ever do.”

  Steinbrenner’s appreciation for what the team had accomplished was short-lived. A few days after the World Series, he informed Torre that he would not be giving bonuses to the coaches, and it was later reported that none of the Yankees scouts were given World Series rings. The latter slight would become known as the Yankees’ “Curse of the Rings,” as it would be another nine years before they would experience another World Series champagne celebration, and Steinbrenner would not be a part of it.

  THE 2001 SEASON began well, with the Yankees taking first place in the division on July 3 and never relinquishing it, winning by 13½ games over the Red Sox. On the morning of September 11, Steinbrenner was at the Regency, scheduled to appear at a speaking engagement before the National Urban Coalition later that day, when he got word of the terror attacks on the World Trade Center. Associates described him as being “subdued but very much engaged” in the days following the attacks. With Commissioner Bud Selig having canceled all major league games for the rest of the week and many of the Yankee players having flown home, Steinbrenner called New York mayor Rudy Giuliani. “We want to do whatever we can,” he told Giuliani, “but we don’t want to get in anyone’s way.”

  On Saturday, September 15, at Giuliani’s suggestion, 13 Yankees, including Torre, Bernie Williams, Derek Jeter and Paul O’Neill, went to the Javits Center, in Midtown Manhattan, which the New York City cops and firemen were using as a holding area between shifts at Ground Zero, then visited the Armory, on Lexington Avenue and 25th Street, where the families of many of the missing victims were congregated.

  Nearly seven weeks later, the city was still numb with grief as the Yankees and Arizona Diamondbacks played out games three, four and five of the World Series at Yankee Stadium, a few miles north of Ground Zero, where the bodies were still being dug out of the rubble that had once been the Twin Towers. In those three games, however, the Yankees provided an intense emotional lift to the city. With President George W. Bush throwing a defiant ceremonial first pitch—a strike, despite the constraints of a bulletproof vest—the Yankees, who had lost the first two games in Arizona, came away with a 2–1 victory behind the combined three-hit pitching of Clemens and Mariano Rivera. The next night, Halloween, they were one out away from losing game four when Tino Martinez, 0 for 9 in the Series to that point, hit the first pitch he saw from Diamondbacks closer Byung-Hyun Kim high into the right field bleachers to tie the score, 3–3. Derek Jete
r then won the game an inning later with a home run on the stroke of midnight. In game five, the Yankees came back from a two-run deficit with one out to go on yet another homer off Kim—this one by Scott Brosius—and then went on to win, 3–2, in 12 innings.

  Watching the delirium of the 56,018 fans in the Stadium from his private box, Steinbrenner turned to Levine and Trost and said, “Look at this! I can’t believe this team’s courage. They [the Diamondbacks] didn’t think we’d be going back to Arizona!”

  It was unbelievable—almost as unbelievable as what happened in game seven, after the Diamondbacks won game six. The Yankees had gone ahead 2–1 in the eighth inning on a home run by Alfonso Soriano. Steinbrenner, pacing back and forth in the visitors’ clubhouse, was interrupted by a pounding at the door by the Fox TV camera crews and MLB maintenance workers seeking to come in and begin setting up the podium and the camera stands for the trophy presentation.

  “Don’t let them in!” Steinbrenner ordered.

  When Phyllis Merhige, the MLB VP of club relations, attempted to explain to him the necessity of letting in the TV crew, Steinbrenner erupted in what witnesses said was a blistering, vile, expletive-filled verbal assault. It finally took Steinbrenner’s old friend Paul Beeston, who was now president of Major League Baseball, to prevail upon him to let the crews in. Turning to Rick Cerrone, the Yankees’ public relations director, who’d been standing off to the side during the commotion, Steinbrenner snapped, “If we lose, this is all your fault.”

  A few minutes later, the Diamondbacks began to mount a winning rally—against Rivera, who was undefeated in 51 previous postseason games—and all the Fox and MLB crews rushed to haul all their equipment over to the home-team clubhouse. The scene that followed, as the defeated Yankees trudged in from the dugout, was almost surreal. Here was Torre, standing in the middle of the room, addressing and consoling his players, many of whom were weeping openly, while Steinbrenner stood scowling, arms crossed, on the other side. When Torre was done and the media were allowed in, a grim-faced Steinbrenner walked around the clubhouse, followed by the writers and camera crews, spitting out congratulations to the Diamondbacks while vowing darkly that “there’s gonna be changes. . . . I believe in what Ernest Hemingway said: ‘The way to be a good loser is to practice it,’ and I’m not gonna be practicing.”