NEW YORK (CNN/Money) - Donald Watkins could end up being Major League Baseball's
worst nightmare or the best thing that has happened to the game. Or maybe both
things at the same time.
A wealthy African-American attorney and businessman from Alabama, he has been
given clearance to enter negotiations to buy the Minnesota Twins, one of the two
teams that baseball leadership has been considering eliminating as part of its
With Baseball Commissioner Bud Selig and other baseball officials repeatedly on
record in favor of more minority executives in the game, it'll be difficult to
say no to him if he and Twins owner Carl Pohlad do reach a sales agreement.
But even if baseball finds another team to eliminate through contraction,
Watkins' view of how to operate a profitable baseball team could make other
owners very uncomfortable.
Most other owners argue they desperately need the crutches of public finance for
stadiums, greater revenue sharing and controls on player salaries in order to be
profitable and competitive.
Watkins says he can make money with the Twins and field a winning team without
any of those.
As to the stadium, he says he'll build a privately financed $350 million
retractable-domed stadium, without tax dollars being spent for anything other
than surrounding infrastructure improvements.
"The attitude of much of ownership is to seek publicly financed stadiums --
that's the easier route to travel," Watkins told me in an interview this
week. "Because of the political climate, the more viable solution now is a
privately financed facility."
"I have a project financing model that serves me well in other
businesses," he said. "It requires only modest adaptation to work in
Watkins said a privately financed facility will give him access to all the
revenue streams available, instead of having to share them. He also plans to
locate a museum dedicated to athletes of color in all sports there to make it a
year-round tourist attraction.
"The goal is to have revenue flowing 365 days a year, 24 hours a day,"
he said. "I predict my approach will become the industry model in the 21st
As to revenue sharing, Watkins says his business model for the Twins doesn't
foresee any significant increase in assistance from the big-market teams that
Selig and other owners say is needed for the team and other small market
franchises to compete.
And he says that his way of making money calls for spending significantly more
on payroll to improve the team's on-field performance, rather than keeping it at
the bottom of league in terms of payroll.
"I anticipate there will be a significant increase in payroll," he
said. "I see that as an investment in the club beyond the acquisition cost
and the cost of stadium financing. I expect to recoup it in the future when the
team's valuation increases."
Still Watkins isn't ready to completely challenge baseball's current economic
arguments. For example, even though he sees a future for the Twins, he says he's
not opposed to contraction of two teams.
"As an outsider, I've only studied the issue from public statements made by
Major League Baseball," he said. "I support Bud Selig. He's studied
this situation. In his judgment, contraction of two teams is a needed step. I
would defer to his expertise."
Of course that is a smart position to take for a potential owner, since the
support of Selig and other owners is of vital necessity to win approval to buy a
The battles taking place in Boston this week, when two apparently higher bidders
lost out on their efforts to buy the Red Sox, are proof that it's whom you know,
not how much money you have to spend, that's crucial for getting in the
exclusive club of baseball ownership.
But the idea of an owner saying he could build new stadiums on his own nickel,
raise team payroll as an investment, and still make money has got to be a scary
thought for owners arguing just the opposite is true.
Watkins has been circumspect discussing his wealth, raising some questions about
whether he has the resources to pull off his ambitious plans. He says he's
provided the proof of his net worth necessary to satisfy baseball officials,
"I do believe I enjoy the right of privacy because I am not requesting any
public assistance," he said. "I doubt very seriously Major League
Baseball would green-light me to go to the next level if they had any question
about my finances."
And Watkins says that baseball officials are also on board with his stadium
finance plans, even if others have raised questions about its economic
For example, his plans to have a retractable-roof stadium don't make economic
sense for the team unless public funds are used to pay for it, according to
Roger Noll, Stanford University professor of economics and an expert on sports
"The act of building a dome costs you $150 million right off the top,"
said Noll. "The attendance effect you get from having a domed stadium is
way too small to justify the additional costs. You'd have to think 50 percent of
attendance is at stake without a dome for it to make sense."
Still, it's tough not to pull for Watkins to succeed, if only because his
success would shake up the powers-that-ain't in baseball and the rest of
professional sports. But his views might yet be enough to keep him out of the
Watkins said the reception he's received convinces him that his ideas would be
welcomed by other owners.
"I don't think success threatens other people," he said. "I think
intelligent people learn from the success of others."
Of course that's assuming the other owners are intelligent people. There's
plenty of evidence to the contrary.