The New Managing Partner isn't the Largest Investor?

by noahthek on May 20, 2008 8:24 AM PDT

This seems odd to me:

The Giants said that William Neukom, one of the team's investors since 1995, will replace Magowan as managing general partner and that Larry Baer, the chief operating officer and executive vice president, will be promoted to president.
...
"Bill [Neukom] will be a major investor," said Magowan, who is believed to own 10 to 15 percent. "Sue [Burns] will still be the largest, but he will be right up there."

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So it seems that our largest investor will have no front office power. There's got to be more to this story. Does she not want to be involved? Is this just another example of the old boys club? I'd rather Baer be given a glorified front office title than actual power -- hopefully he's being promoted outward, as opposed to upward. Although I doubt it.

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how is the office chosen?

is it voted on? how does one become managing general partner? are there criteria that must be adhered to? i admit to my general lack of knowledge on this (and many other) topics

my adoptive son is pat misch... because he spent time in fresno and he isnt zito...

by Headhunter Rollins on May 20, 2008 8:29 AM PDT reply actions

Step One. Become a general partner (meaning buy some share of the team)

Step Two. Become the general partner that the other general partners vote on to manage the company and act for the owners, thus they elect you the one who does the managing. Hence the term ‘managing general partner.’

DFA all Giants over 34 years old.

by Mayor of 311 on May 20, 2008 9:09 AM PDT up reply actions

Isn’t it a “principal partner” that just means you have some share in the team? The Giants website lists about 20 “principal partners” but only 3 “general partners”, namely Magowan, Burns, and Neukom. I thought that the general partners were partners with a large enough stake and an active role in the club’s operations.

All-Father Watch: 1.16 ERA, 4 saves, 0.99 WHIP, 23 Ks in 23 1/3 IP

by EliminateMe on May 20, 2008 10:37 AM PDT up reply actions

Magowan never had a majority stake, either. The Burns family has controlled the most shares in the club since 1993, so I really don’t see any change.

by tyrannoman on May 20, 2008 8:35 AM PDT reply actions

isn't that the problem

the the front office, the partners, the team finally has a chance to change the direction of an obviously struggling franchise and they just rearrange the deckchairs. Maybe I just don’t understand the rationale behind announcing the decision now instead of waiting until the off-season when they would be more willing to make a major change.

Although I guess Magowan’s decision had already been leaked so they had to announce it. Still I would have rather a major shift as opposed to what this appears to be.

Do they know to win the game a team has to actually score at least once?

by noahthek on May 20, 2008 8:50 AM PDT up reply actions

too soon to say direction has not changed

The whole point is that Magowan had control of the franchise. So blaming Neukom for all the ills of the management team would like like blaming you for the struggles of a stock that you owned some shares of but did not have management control over it.

They have made the nicey-nicey corporately appropriate statements about the change, I would not have expected any less, particularly when a lawyer is taking over. He’s not going to piss over Magowan’s legacy right after being announced as the new owner, he’s going to say the nice things to give Peter a nice bon voyage.

He won’t really show what his true colors are until the off-season when he really takes over and we see by the actions of Sabean what the new marching orders (if any) are. We don’t know what Neukom has been saying internally for years now. Maybe he’s been the one dissenting owner who spoke up vehemently enough against the current plans and that’s why they chose him. Maybe he is very smooth and talked his way into the job (he is a lawyer after all) and it will be rearranging the deckchairs.

I will note here what I wrote on my blog, I think he is just a transitional managing partner anyway. It seems to me that they are preparing Larry Baer to run things eventually, he has handled the non-baseball side with Peter all these years, now they are giving him Peter’s baseball duties while Neukom will be handling Baer’s non-baseball side duties. Neukom is just as old as Magowan, 66, so he’s probably not going to be in this role more than 5-7 years (though you never know).

Lastly, I also think that there has already been one key break from the Magowan years, at least in talk. Neukom said that winning is now the litmus test for how the team is managed when he was asked if the team would keep their budget the same going forward, and that budget would be secondary. So the team could start spending more on player development by signing more international players and spending more on the farm system, upgrading facilities, providing more tools and instructions.

Remember, he’s been adding shares over the years while others have backed off. He probably has at least $50-100M still even after investing in the Giants and giving $40M to universities, as his stock was worth $100M back in the early 1990’s when he left Microsoft, before the boom of the 90’s. He is also leading a group of owners in buying some of Magowan’s shares, and presumably they believe in what he says and would answer capital calls the way that he did, eagerly, unlike the others who grumbled about it. He could be leading a new era of spending if he walks the talk.

It will be an interesting off-season.

Adoptive parental unit of Kevin "Most Spectacular Pitcher" Pucetas.

"I'm a Giant now... I like watching the ball get up there" - Wendell Fairley
"I'm really proud to be on this team." - Nate Schierholtz

by obsessivegiantscompulsive on May 22, 2008 10:20 AM PDT up reply actions

Addendum

Forgot to also add at the end, that the Giants could end up spending more on free agents as well, depending on his taste for spending. Though, if they keep the budget at $95M, the Giants should have about $10-15M to spend, as Durham, Vizquel, Kline, and Aurilia will fall off the payroll, offset a little by Zito getting a big raise, another $4-5M or so. Any young stud hitter hitting free agency in 2009?

Adoptive parental unit of Kevin "Most Spectacular Pitcher" Pucetas.

"I'm a Giant now... I like watching the ball get up there" - Wendell Fairley
"I'm really proud to be on this team." - Nate Schierholtz

by obsessivegiantscompulsive on May 22, 2008 10:25 AM PDT up reply actions

Just as her husband did, Sue Burns likes to do the work from behind the scenes.

She has had a major share of the Giants. It does not necessarily mean she has to run it. That’s why they have someone like Baer & Sabean.

It works just like a corporate environment.

Adopted father of the AnVil / GIANTSPACE™ returns!

by SoFa King Mike on May 20, 2008 8:36 AM PDT reply actions

It's a corporation, no more and no less

The CEO of a corporation almost never has the majority of shares. So? The owners of a corporation are privileged to have anyone they want run the thing. In small, privately held corporations, they often pick one of the owners to be more hands-on than the rest of the owners, who remain silent partners for the most part. (Hence the phrase “silent partner”- that’s an owner, i.e. a partner, who doesn’t get involved in the running of the business.) Magowan was never owner of a huge share; the Burnses have always held the biggest share BY FAR; Neukom’s ownership position isn’t different from Magowan’s was. The owners - who are general partners—are simply appointing a different one of their own to do the managing for them, hence “managing general partner,” i.e. the general partner who does the managing for the partners.

DFA all Giants over 34 years old.

by Mayor of 311 on May 20, 2008 9:06 AM PDT reply actions

Honestly, what’s the different Managing General Partner going to do differently anyway? It’s still the exact same ownership group he’s acting on behalf of. I’m sure there’s going to be differences in the operation in general, but getting annoyed that Sue Burns isn’t the one who’s going to be the MGP seems to me a silly thing to be concerned about.

"He called the sh** POOP!" -- Adam Sandler

by JRPhillips on May 20, 2008 10:39 AM PDT reply actions

You would be surprised

Often in a corporation there is significant dissent in what direction to take – and a change in CEO (even if only pulled from the same group) can signify a change in what the majority thinks is the way to go.

Eugeniooooooo!!!!

by FairweatherFan on May 20, 2008 11:36 AM PDT up reply actions

Think of this Scenario

For the past X years, Magowan (plan A) has said “this is how we should do it” and the majority of the ownership group has agreed.

Meanwhile(maybe the last 5 years specifically) , Nekum has been dissenting, saying he thinks plan B is a better plan. Maybe he spoke out loudly against the Zito trade, about pushing for the playoffs around Bonds Vs. rebuilding. Maybe he predicted similarly to how many of us did the downfall of the team because of a failure to plan, and history has now shown him to right.

So now, Magowans plan A has not worked – so the ownership is willing to go w/ Plan B, and put Nekum in charge.

Make sense?

Eugeniooooooo!!!!

by FairweatherFan on May 20, 2008 11:39 AM PDT up reply actions

If it helps

I was actively involved on the board of a small corporation and rarely did everyone think the current plan was the best plan. It was just the plan the majority could agree on. Several times I dissented strongly, and when events finally showed that I was correct, I gained credability and people were willing to go with my direction.

And then I quit ;)

Eugeniooooooo!!!!

by FairweatherFan on May 20, 2008 11:41 AM PDT up reply actions

What you're saying makes perfect sense

My question really – and no, I didn’t phrase this at all – is how anyone outside the boardroom would know if it’s better or worse to have Sue Burns be the MGP instead of Bill “Duke” Neukom.

"He called the sh** POOP!" -- Adam Sandler

by JRPhillips on May 20, 2008 11:49 AM PDT up reply actions

We won't

Until the results are in, which will likely be several years. If Sue Bruns, as the Majority shareholder, isn’t the MGP (CEO) it is probably because she doesn’t want to be.

People have different skills. Smart people are those who recognize what skills they DON’T have and delegate those tasks to those who do.

Just because you own a baseball team doesn’t mean you know how to run it. The smart thing is to hire / appoint someone who does.

People bring different things to an ownership group like this. Some purely money – others bring money and ability. Other’s bring ability alone. They all contribute (and are necesary) to the overall success of the company.

Eugeniooooooo!!!!

by FairweatherFan on May 20, 2008 11:57 AM PDT up reply actions

Wooord

Couldn’t have said it better myself.

Seriously, I couldn’t have… I’m not all that eloquent.

"He called the sh** POOP!" -- Adam Sandler

by JRPhillips on May 20, 2008 12:16 PM PDT up reply actions

This is true of the A's too

Fisher has more shares than Lew Wolff, but Wolff is the public face of franchise ownership.

Your 2008 Athletics: It's Nothing Personal.

by PaulThomas on May 20, 2008 10:42 AM PDT reply actions

Passive vs. Active

The Burns family owns the largest share of the Giants. Neukom may end up buying into a larger share, but it was determined by the investors that he would best serve as the public face of ownership, attend owners meetings with Baer, etc., the amount of his ownership stake has nothing to do with the position he now holds.

This move was not about strategy or policy or vision for the direction of the team, but a pure business/investment play that just happens to be taking place in the boardroom of a baseball operation.

Neukom has already announced that Baer will handle the majority of baseball operations while he will handle just about everything else.

It has also been reported that Magowan’s exit was driven by two issues: one, his desire to step aside after his 66th birthday for an easier retirment; and two, some what-could-generously-be-termed-as gentle pushing from the commissioner’s office and Major League Baseball for him to take a lower profile role in the aftermath of the Bonds scandal. Basically, he was told either directly by MLB officials in NY – or indirectly by colleagues within ownership – that it might be a good idea for him to step aside.

by esfads on May 20, 2008 12:29 PM PDT reply actions

Basically, he was told either directly by MLB officials in NY – or indirectly by colleagues within ownership – that it might be a good idea for him to step aside.

So, do you have any evidence of this or is this just more internet hearsay?

Eugeniooooooo!!!!

by FairweatherFan on May 20, 2008 12:36 PM PDT up reply actions