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BUDGETING

Managing the Impossible

Starting with nothing but the force of his entrepreneurial leadership, Omar Minaya took the orphans of baseball and made them winners -- a lesson in grit.
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Baseball is the only business in America that -- by virtue of a Supreme Court decision -- is exempt from the antitrust laws. But even the Supreme Court can't exempt baseball from the rules that govern the rest of business. Each team faces the same inexorable challenges that other businesses face: the need to recruit and train superior personnel (team-building, literally), the imperative of developing differentiated strategies, the daily mission of instilling a corporate culture. Then there are budget realities. You don't have to tell Omar Minaya about those. When Minaya took over the Montreal Expos, he inherited an organization that had few resources and no hope. In the course of the previous year, the team had lost its TV contract; the owner had fled to Florida; and, to top it all, Major League Baseball had announced that the Expos had been chosen for contraction -- a polite way to say the team was going to be squeezed out of existence. It was like being named CEO of a company that was one step from the auction block. And, as is often true in business, when you start asking questions, things don't get better.

When Minaya inquired about the number of positions he had to fill in the Expos administrative ranks, what he discovered flabbergasted him. A fax from Expos administrative assistant Marcia Schnaar told the tale in stark terms: Minaya had precisely six employees -- and dozens and dozens of vacancies. His response, Minaya says, was, "What is this? A joke? This has gotta be a mistake." Only then did Minaya realize that he'd taken over a team that had been gutted, stripped of its infrastructure. His entire staff consisted of two administrative assistants, a media relations director, the head trainer, a minor league pitching coach, and the assistant farm system director.

Over the next month Minaya would go on to hire close to 100 new staffers: major- and minor-league coaches, minor-league managers, trainers and equipment men, farm-system administrators, scouts -- the works. It was, he recalls, "a complete -- and thorough -- makeover. Not by choice but by necessity."

And yet, six months later, against all odds, Minaya and the Expos surged to the top of the baseball world. To the shock of many who expected the woebegone team to roll over and play dead, Minaya's squad hit the infield running on opening day and didn't look back. And then, in midseason, the rookie general manager stunned the baseball world by acquiring a 20-game winner in a bold deal that no one expected from a team operating under a death sentence. Trades are the baseball equivalent of high-stakes negotiating, and this swap was Goldman Sachs-worthy; it catapulted Minaya to the fore of baseball's intimate fraternity of general managers, a club Minaya had long struggled to join. Suddenly, baseball's old guard took notice that Minaya was young, smart, and a hustler. He worked on four and five hours of sleep. He kept a cell phone glued to his ear and a carefully plotted agenda in his head. And he refused to accept the inevitable. To those who look to baseball for more than sport -- for life lessons -- Minaya's miracle is a case study in overcoming business adversity.

Like a motivated executive vice president always on the prowl for that elusive CEO job, Minaya had been training for this role most of his adult life. He'd interviewed for the GM slot with seven teams in seven cities over the previous three years -- but "always seemed to come in second." More than once he suspected he'd been interviewed merely for show, so that baseball, which had never had a Hispanic GM, could claim to be making progress on diversity.

At only 43 and senior assistant general manager of the Mets, Minaya was getting impatient, even frustrated. He knew there was talk that he had no administrative experience. What had especially galled him was a newspaper story "that followed me everywhere I ever interviewed for a job." The reporter had quoted an anonymous Mets executive as saying that while Minaya was a strong evaluator of talent, he lacked administrative skills. It was the "kiss of death" that had kept many other assistant GMs from reaching the highest rung -- and Minaya knew it. It was probably the reason he had lost some of the plum positions he'd sought: Seattle, Los Angeles, Anaheim. The first was a perpetual contender, the other two had rich corporate parents. But when the call finally came on February 8, 2002, it was not from Fox or Disney: "Mr. Minaya, would you hold for Commissioner Selig?"

Allan H. Selig, better known as "Bud," was calling to make a pitch on behalf of all 29 ownership groups in the game: "Omar, how'd you like to be general manager of the Montreal Expos?"

Montreal?

The Expos had averaged a catastrophic 95 losses per season for the previous four years. And their fans had abandoned them: Attendance had plummeted to 642,748 in 2001 -- the lowest in the majors. Plans for a new downtown baseball park -- a business and urban-planning strategy that had revitalized teams like Baltimore with its celebrated Camden Yards -- had been abandoned. It got so bad that you couldn't watch the team on television. The Expos not only didn't have a French-language TV contract, they didn't even have an English-language one. Then-owner Jeffrey Loria spent most of his brief tenure in Montreal trying to move the team elsewhere.

The nadir of this farce seemed to have been reached in the fall of 2001 when Major League Baseball -- led by Selig -- signaled its intention to "contract" at least two teams, one from each league. The two "small market" teams chosen for this dubious distinction: the Minnesota Twins and the Montreal Expos.

But a judge in Minnesota upset the works, signing an injunction that effectively put off contraction until at least 2003. So MLB had to go back to the drawing board, and what followed was bizarre -- even in the Byzantine annals of baseball. One of the game's most storied franchises, the Boston Red Sox, was on the market. After months of contentious bidding, the Sox were sold in December 2001 for a record $660 million to a group of bidders headed by John Henry. But Henry owned the Florida Marlins and MLB wouldn't sign off on the deal until he disposed of them. So he sold them -- for $158.5 million -- to none other than Jeffrey Loria, letting him bail out on the Expos. But who was going to buy a Montreal team that had fewer fans than Saddam Hussein? The other 29 MLB owners, that's who. They paid Loria $120 million and floated him a loan of $38.5 million to match the price he had paid for the Marlins. This valued the Expos, despite their slide toward oblivion, at more than twice what they were worth when Loria paid $12 million for his original 24% stake in the team two years earlier. Recapping the scoring, Henry had the Sox, Loria had the Marlins, and, well, Bud Selig had the Expos.

Suddenly thrust into the awkward position of having to operate a franchise he wanted to shut down, Selig called Minaya. He didn't have many incentives to offer the prospective GM: no long-term contract, no golden parachute. The best he could do was a one-year deal. After all, there was no telling where the team would be in 2003 -- or even if there would be a team. But for a single season in the sun, Omar Minaya could be a major-league general manager -- if he was willing to take the job on those terms. Selig gave him some time to think about it.

Minaya didn't take long to get back to Selig: "I promise you I won't make you look bad for giving me this opportunity."

If Selig sounded incredulous -- "Omar, are you sure you want to do this?" -- it was because of the speed of Minaya's decision and perhaps because he knew things Minaya didn't. But Minaya would learn soon enough.

It turned out that when Loria fled Montreal, he had invoked Napoleon's scorched earth policy, taking pretty much everything that wasn't nailed down. Minaya had no computers, no scouting reports, few employees -- and 72 hours before training camp was scheduled to open in Florida. He was faced with "thirtysomething contracts to do -- and with no one to help me out." The pressure, Minaya remembers, was "unbelievable, especially knowing that CNN, CBS, Fox, and all the other networks would be there with their cameras to watch this fiasco." He mimics a TV reporter: "Oh, let's go see. This is going to be a joke."

But it was now that Minaya's 20 years of training began to pay off. Working out of a small space in the umpires' offices of Major League Baseball's Manhattan headquarters, he began speed-dialing his many contacts, looking for leads and references. In retrospect, the most important call he made was to Tony Siegle.


Minaya remembers that the pressure of his first days was intense -- "especially knowing that all of the networks would be there to watch this fiasco."

At 61, Siegle was a baseball lifer. Starting out as the scoreboard operator at the old Houston Astrodome, he had had the kind of career that makes real estate agents happy, serving as assistant general manager of team after team across the country. But where Minaya was known for player evaluation and development, Siegle was a master of baseball administration. He was the alter Omar, reveling in the haggling and the arcane rules. While Minaya had been bent out of shape by the newspaper story that questioned his management experience, he recognized that there was some truth to it. And unlike business leaders who refuse to admit their weaknesses, he understood what he had to do. "Tony is everything I'm not -- and just what I need," says Minaya. "When Tony said yes to the offer to be my No. 2, I knew I had a big part of my problem solved."

One down, and, oh, about another 100 or so to go. Minaya was grappling with the challenge that every turnaround CEO faces, the art of prioritizing: "I'd go to sleep at midnight, wake up at 4, take care of what had to be done at the moment. I'd just let the phone ring." It got so bad, he says, that his wireless retrieval service couldn't handle the backlog of voice mails. At the end of each day, at 8 or 9 in the evening, Minaya and Siegle would "review what we'd accomplished, decide what we had to accomplish the next day, and prioritize all over again."

Talk to successful business leaders and they will tell you that they owe a lot to mentors they had along the way. Minaya understood this intuitively, so he made time to consult with the rabbis who had helped him throughout his career, especially Arizona Diamondbacks assistant general manager Sandy Johnson, the man who'd first hired Minaya as a scout with the Texas Rangers. Johnson's advice: "Just be yourself. You've been preparing for this job for 20 years now. Nobody's better qualified."

Good or bad, one tough decision that all GMs face -- hiring a field manager -- had already been made for Minaya. "Bud had already hired Frank [Robinson] for the job," says Minaya. "But I was cool with that. I knew Frank. He was old school: tough but fair." A Hall of Fame player, Robinson had been the game's first African American field manager, but in recent years he'd had to content himself with being MLB's "chief disciplinarian," handing out fines and suspensions for infractions of the rules. At 66, Robinson, wanting one last turn on the stage, had asked his boss Selig for the job -- and had not been denied. Many new GMs would have chafed under this scenario -- with a key hiring decision having been made for them. But it's a measure of Minaya's maturity that while Robinson might not have been his first choice, he accepted him and supported him -- a lesson that many nonbaseball GMs might take to heart.


The decision to hire Robinson was made by Bud Selig: "But I was cool with that," says Minaya. "I knew Frank. He's old school: tough but fair."

The opening of the season was Minaya's moment -- the opportunity to assert his leadership, build a culture of success and self-confidence in an organization that had lost hope. Surrounded by his new team, Minaya addressed the troops in the clubhouse. "My theme was: 'Guys, it's a pleasure.' I told them that they were the orphans of baseball. I told them they were gonna hear a lot about how we might be someplace else next year. We might not even be a team next year. But we can't control that. What we can control is what we do on a daily basis. I said, 'I was in New York on 9/11. I was there. I'm not just grateful to be in baseball today. I am grateful to be alive today."

Minaya is intensely aware of the history of the game and of his own place in it. His big office at Stade Olympique is adorned with posters of Jackie Robinson and Roberto Clemente. "The world is watching me," says Minaya. "I'm the first Latin American general manager. I still get e-mails, phone calls from other minorities. They identify with me. Baseball is like that. It magnifies everything. It makes us bigger than we are. But it also allows us to set the tone, set the standard, to go forward. To make progress for society."

Lovers of baseball have always seen the game as something larger than itself, a metaphor for life. Minaya is part of that tradition, and, like a socially conscious CEO, he believes he has a responsibility beyond the nine innings. And he acts on it. He serves on the board of a nonprofit foundation started by one of his best friends, Dave Valle, a catcher who was best man at Minaya's wedding. The foundation provides start-up money (often as little as $200 or $300) to mostly female entrepreneurs in the Dominican Republic, a "micro-lending" initiative that is now seven years old and has proven a resounding success. What Minaya is particularly proud of is the default rate: 2%.

Though he was born in the Dominican Republic, he grew up in New York. His father worked on the docks, his mother in a factory. The young Omar attended PS 19 in Queens and played Little League for the Corona Red Wings in the shadows of Shea Stadium -- though he was never a Met fan. Most of all, he "was a fan of the great Latin players, Roberto Clemente, Juan Marichal, the Alous."

When Minaya wasn't playing ball, he was riding the subway: "We'd just ride the 7 train back and forth, from Flushing to Times Square and back." It was, strange to say, "a way of opening my mind to other worlds. You grow up in New York open-minded to begin with. But this way, I could see how diverse the world was. And if I wanted to have goals, how far I could travel." Not for nothing does Minaya think of himself as "a product of the 7 train." (That's the same 7 train, of course, that relief pitcher John Rocker once famously pronounced the home of "felons," "single moms," "freaks with purple hair," and "queers with AIDS.")


Minaya, who signed Sammy Sosa, believes that in scouting (and elsewhere) you can't be hesitant: "I got a whole bunch of guys I signed working in bodegas."

An All-America catcher in high school, the tall but slight Minaya was signed by the Oakland A's to a minor-league contract. Early in his career he was a highly unusual position player: an outfielder-catcher. But soon it became clear that he wasn't brawny enough to be a major-league catcher, nor gifted enough to play the outfield at the highest levels. "Honestly," says Minaya, "it became clear I wasn't a good hitter."

Released at the A Ball level, Minaya left for Tuscany, where he played baseball, taught himself Italian, "and learned to drink Chianti and Brunello di Montalcino with my meals." He also, he says, "learned political tolerance. I'd read three or four newspapers a day: the socialist paper, the communist paper, the paper of big business. It really opened my mind." Small wonder then that his old boss Sandy Johnson says of Minaya: "Omar is comfortable talking to the President of the United States" -- George W. Bush owned the Texas Rangers when Minaya was there -- "and he's comfortable with a street vendor in the Bronx. It's his incredible ability to relate and to take people on their own terms." Back from Italy, Minaya started looking for work in baseball and scored an interview with a scout, who recommended him to Sandy Johnson. What did Johnson see in Minaya? "I saw myself," Johnson says. " I saw a hardworking kid who loved baseball and wanted to succeed badly."

As assistant general manager for the Rangers, Johnson was looking to hire someone to comb the rich but scattered Latin American market for the team talent. The day after he and Minaya first met, Minaya was sent packing to the Dominican Republic on a midnight flight in the company of a more senior scout, John Young. Within days, Young was reporting back: "Sonofabitch wants to sign everybody." Johnson laughs, recalling, "I let Omar make his mistakes. There are two kinds of scouts. Signers and nonsigners. The great scouts are signers. They like players, and they're aggressive as hell."

Minaya agrees: "To be a good scout, you cannot be afraid. For every major-league player you sign there are going to be eight guys who end up working in a bodega. I got a whole bunch of guys I signed working in bodegas today." But he also has Sammy Sosa, whom he found in San Pedro de Macoris.

Made the Rangers' Latin American scouting coordinator in 1989, he was promoted to director of professional and international scouting in 1994. His big break, though, came in September 1997 when he was appointed assistant GM of the Mets and wound up contributing greatly to the team's success -- especially when his boss, Steve Phillips, was suspended after a tabloid-fueled discovery of marital infidelity. In Phillips's absence, Minaya was key to making several trades that brought players, such as closer Armando Benitez, who helped take the Mets to the World Series in 2000.

But Minaya's career stalled in Flushing. Always hanging over his head was the question of whether he could administrate. "I'd have spit piss and vinegar if I was Omar and was being held back by that bull -- ," says Sandy Johnson. "But, lucky for him, he's calmer than I am."

And then along came Bud Selig, who probably didn't care if Minaya could administrate: This was only supposed to last a year. But Minaya was determined to make it the best year, the most thrilling year he could -- defying the experts and even the Expos' biggest boosters. And that's what happened. Even in June, the team, which did have a nucleus of talented young players, was still contending in the National League East.

A confident delegator who leaves on-the-field decisions to his manager, Minaya focused on supplying Robinson with as much talent as the budget allowed. In July, the rookie general manager decided to take his biggest gamble. With his team still hot in contention, he went for the Hollywood ending, executing the season's most celebrated and unexpected trade -- sending three young players to the Cleveland Indians for pitching ace Bartolo Colon.

"Omar comes to me and says Cleveland is offering us Colon. What do you think? What do I think!" Siegle hollers. "Gotta get him. But then Omar tells me what they want. They want our best kid player, Brandon Phillips, and two other good players. I say, 'Naw, we can't do that.' And Omar looks at me, and he says, 'We're doing it." What Minaya was confronting is the push-pull between short- and long-term decision making that every executive faces; investing in a young prospect is like putting a ton of money into R&D behind a promising new drug or new product. It looks great on paper, but one day you discover the shortstop can't hit or the drug doesn't suppress the gene after all. Minaya chose to seize the moment.


"Omar is comfortable talking to the President of the United States," says Sandy Johnson, "and he's comfortable with a street vendor in the Bronx."

The key to the deal was convincing Cleveland to take on the contract of aging first baseman Lee Stevens. Eager to get their hands on Phillips, a can't-miss prospect at shortstop, the Indians agreed to take Stevens and his big salary. As a result, Minaya not only came away with one of the best starting pitchers in baseball, he also managed to do it without adding to his payroll. Not bad for someone with no administrative experience.

Ultimately, even with Colon, the Expos were outmanned by the Braves. But that takes nothing away from Minaya's accomplishment: Despite a team payroll of just $39 million, the Expos finished in second place with a winning record (the 2002 Braves had a payroll of $93 million; the last-place Mets, $95 million). "Omar's been put to the test," says Tal Smith, a former GM who's now president of the Houston Astros. "It was a great educational process for him: franchise in distress, 29 owners, an uncertain future, a lot of last-minute decisions. That's a lot for anybody to go up against. In the end, he showed he had very fine executive and administrative skills. He'll be a success with a big-market team someday, watch and see."

The 2002 season ended with the expos playing well, leaving reason to believe that the team might contend again in 2003. Better yet, Major League Baseball, as part of a new labor agreement that averted a strike last season, committed itself to keeping the Expos alive and actively looking for real ownership. But then Selig delivered another body blow: Montreal, he announced, would have to cut millions from its payroll for 2003. Arguably, Minaya had done too good of a job with the Expos; the other 29 owners weren't going to subsidize a contender -- one of the dangers of being owned by your competitors.

Suddenly, all that Minaya had built was at risk. Once again, though, he was determined to find a solution. He looked at the situation the way McKinsey might advise a company faced with the sudden need to raise cash. He knew he did not want to trade his young nucleus of talent. To do so would produce only a small financial gain -- and at a huge cost to the team's prospects for 2003 and beyond. Instead, he elected to give up the very same pitcher, Bartolo Colon, who'd been his crowning achievement. It was a cool and rational decision; not all business leaders can separate their egos from their decisions -- and divest themselves of acquisitions that don't make sense anymore.

In the past, you could easily trade a No. 1 starter like Colon for a top prospect -- someone like, well, Brandon Phillips. But the market had shifted. Minaya's solution: Play the Boston Red Sox off against their archrival New York Yankees (not unlike getting Microsoft and Oracle interested in the same acquisition). Both teams had deep pockets. Though it took months, Minaya eventually made Colon part of a three-team trade that included the Yankees. The Chicago White Sox got Colon, and the Expos got three players, including the ageless Orlando "El Duque" Hernandez, much of whose salary will continue to be paid by the Yankees. In the end, Minaya cut his budget -- and kept his nucleus. A step forward? No. A small victory? Yes.

As a new season begins, there's still plenty of uncertainty in Minaya's life. He and his wife, Rachel, and their two boys still live in New Jersey. His team is still in Montreal -- but playing 22 of its "home" games this year in San Juan, Puerto Rico (where it will draw more fans and collect more revenue). And there's no telling what might happen next year. MLB is currently looking for bidders. Should new owners take over, there's no guarantee, of course, that Minaya would keep his job. But all he can do now -- even having been forced to dump his best pitcher -- is keep trying. He's no different than any CEO in a tough economy, except that he's forced to compete with the better-funded Braves, Mets, and Phillies. That's like going up against Microsoft every day; Minaya can't pick his niche.

Even so, when I next see him, holed up in Montreal's shabby suite of offices, he's still smiling. There's a new season to be played, and field manager Robinson and the boys are raring to go. "Frank," Minaya says, "believes that if we can come out of the first month at .500 we'll be a contender."

Elsewhere, the door to Tony Siegle's office is open and his familiar voice is rising to familiar heights: "Awwww, cuh-RIST!" Administrative assistant Marcia Schnaar still smiles good-naturedly. Life goes on. It is, as Minaya says, "a warm place to be. Good people working together. Family."

No one knows where the Expos will be in 2004. No one knows who the new owner will be. But on the door to the big office there's a sign that says: general manager. And above that: Omar Minaya. In these offices, at this moment, that's all anyone needs to know.

John Anderson is the author of Art Held Hostage (W.W. Norton), which will be published next month.


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