Tuesday, November 01, 2005

November 1st, 1979

Edward Bennett Williams Buys Orioles

Williams--a respected Washington DC attorney who was also a part owner of the Redskins--bought the Orioles from previous owner Jerold Hoffberger for $12.3 million. It is a statement oft-repeated, usually by owners around the time collective bargaining agreements with players are up for negotiation, that buying a team is a money losing proposition, that teams lose money every year but owners stick around out of a sense of civic pride. There are probably some owners for whom that is true but the huge majority leave out what is often the most crucial element in owning a team, its sale.

Now, to be fair, Williams is not the best example of this, he didn't strictly speaking sell the team; it was sold by his estate in 1993. However, the profit made reflects just how good an investment a sports franchise can be. Adjusted for inflation, Williams' 1979 purchase of the Orioles cost roughly $26.5 million in "1993 dollars." However, the team was sold was to a Peter Angelos led group for $173 million, a pure profit of $160.7 million and one adjusted for inflation at $146.5 million. Williams then, could've lost nearly ten and a half million a year running the team and still broken even upon its sale. As I said, Williams' estate rather than the man himself was the beneficiary of the profit, but it is a number worth remembering the next time your local team owner cries poverty.

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