The news hit the press box right after most of us had come back from the clubhouse. Bill Neukom, no longer the Managing General Partner of the San Francisco Giants. Before we get to some postgame notes from what was an extremely well-pitched game featuring tremendous defense from Pablo Sandoval, let’s touch on the biggest transaction the Giants have made in a season that’s gone from euphoric to, let’s face it, a little bit sad.
According to multiple baseball sources, Giants’ managing general partner and chief executive officer Bill Neukom will not return in that role for the 2012 season. The sources say that Neukom has been asked to step aside by the Executive Committee of the Giants’ ownership group. The action is believed to be the fallout from a series of disagreements with the committee during Neukom’s three-year stewardship of the team.
The baseball sources also say that Larry Baer, currently the Giants’ president and chief operating officer, will assume CEO duties when Neukom steps down. The Giants may try to spin his abdication as some sort of organizational restructuring in which Neukom and his trademark bow tie will be voluntarily assuming another position with the organization.
But make no mistake, it won’t be Neukom’s idea. And the announcement, when it does occur, has to be considered a stunner and a bit puzzling.
For those of you who aren’t fans of Larry Baer and/or baseball teams who install hard salary caps upon themselves — even though they’re selling out every game and push more merchandise than Harry Potter — brace for more playoff-free seasons like this one. Just without the sellout crowds and some of the players people have grown to love.
Neukom’s own falling-out with the Giants’ executive committee, say the baseball sources, began over how to spend the additional millions that flowed into team coffers following the World Series championship. For example, one source says that beginning last October, the Giants’ merchandising revenue alone has increased by $1.5 million to $2 million per month over previous years. Ticket sales also boomed. The Giants have effectively sold out every game this season.
Neukom, it is said, believed that this was his money to spend as he saw fit — and he did so, to increase payroll and buy new technology for the baseball department, among other expenditures. Instead, the executive committee allegedly wanted the money to be put in a “rainy day fund” for use in leaner times. The committee also believed that Neukom needed the committee’s authorization before making such major financial decisions.
I think we’re all smart enough to connect the dots here. The owners didn’t want to soar over $100MM in payroll, and Neukom put himself out there by giving Brian Sabean the go-ahead to trade for Carlos Beltran. If the Beltran move succeeded, if it had spurred the Giants to become a league-average offense and propelled the team to the playoffs (where they’d accumulate some more money for that “rainy day fund”) we probably wouldn’t be hearing this story.
But the executive committee must have been scared to let this news slip out as early as it did. Why not after the World Series, when people are kind of ignoring baseball? Perhaps they were worried that if they didn’t get rid of Neukom quickly, he’d spend more of that surplus that THE FANS provided in 2011 with all the money spent on tickets. With dynamic pricing and a marketing-friendly team that the Bay Area and all of Northern California really couldn’t get enough of after the team’s first World Series win since moving out west, there is an incredible amount of money that fans would like to see put back into the team.
Really, executive committee? You want to squander all the good will this team created in winning it all last year? You don’t understand that you’re sitting on a gold mine? The debt service on the ballpark’s going to be paid off in about seven years. After decades of looking up to the San Francisco 49ers you’ve built the marquee franchise in the area, and you want to save a few bucks? Sure, it’s not my money. But it is OUR money, and based on the immediate reaction to this news, fans are petrified.
Matt Cain’s set to make $15MM next year? Maybe he’s on his way out. Carlos Beltran definitely isn’t coming back (not that I wanted him back, but after he hit two homers today I can see why someone would). Even though the Giants look and sell like a big market team, and reside in a big market, it looks like there’s a good chance the Giants are going to pretend like they’re Milwaukee or Minnesota again.
I have a bunch of videos from postgame interviews with Tim Lincecum, Pablo Sandoval and Beltran, and I’ll post those later this evening. For now, I’m off to Oracle Arena to hear Joe Lacob, Peter Guber, Jerry West and Mark Jackson talk to season ticket holders who are probably nervous about paying for tickets when there might not be a season. I’ll keep you posted on that, as well.
Its sounds like a "Mean Girls" situation. Neukom was popular because of the WS win. Neukom started to exert more power and leverage. As the early poster said, he didn't consult with others in the "corporation" and made the big decisions himself. The other 20 or so managing partners didn't like that. I assume they also got jealous that Neukom got all the credit for the WS win. You get the idea. You have to remember that the Giants are not just a baseball team. They are a megacorporation similar to any of the big mammoths out in Silicon Valley.
If its about ego and Neukom's "pea-cocking" (Urban's words on 95.7), then hurt feelings and hopefully business as usual. If its P "Puljos can help us but that's kind of expensive" or "Tim and Matt won't leave, they'll take a hometown discount" then uh-oh.
[...] future of the Giants. You can read a range of opinions and analyses here, here, here, here and here. I recently wrote a post praising Neukom after the Giants released Aaron Rowand and [...]
Now that I think about it, why don't the Burns sisters just come out and run the team themselves since they're pissing and moaning so much
The Burns daughters who have the largest ownership stake are also two morons. Tori especially, what an imbecile! You'll be lucky to win another World Series in 56 years by ousting your managing general partner less than a year after winning it all.
Whoa..what a problem to have, this proves that San Francisco is out of touch with the rest of the world. You make more money and you want to get rid of the guy who basically helped you make that money. Its a sad state of affairs when a profitable company makes money and still beheads its staff. Is Larry Ellison on the Executive Committee
Follow up - Confirmation from the Chronicle that he was let go for not consulting the executive board on his decisions: "According to sources close to the team, as well as the Mercury News report, the issue at hand was Neukom's communication with the Giants' executive committee." http://www.sfgate.com/cgi-bin/blogs/giants/detail?entry_id=97570
I'm not sure if you have ever had experience working in a large corporation, but breaking the chain of command is a huge no-no. It doesn't matter if its over purchasing, raising salaries or changing procedures, a CEO cannot make certain decisions without consulting the investor board. This is probably one of the most common reasons CEOs get fired or asked to step down. I think the focus on your editorial turns the executive board into looking like bad guys when they're just letting go of an CEO that makes decisions without consulting with his bosses first.
Those quotes about the Giants executive committee being unhappy with Neukom because he spent more on payroll and "new technology" (iPads for everyone?) sound ominous. Will 2012 be the last time we see Matt Cain in a Giants uniform? And 2013 for Lincecum? Dang it, just when I was feeling good about the Giants sweeping the Padres they go and do something like this.