Angelos to get lots of advice Team ownership agreement sets up executive committee

THE BALTIMORE SUN

Later today, Peter G. Angelos is expected finally to take charge of the Orioles. As the team's managing general partner, the Baltimore lawyer will have the last word on virtually every decision affecting the club, from setting ticket prices to lusting after free agents.

But despite that sweeping authority, Angelos should be on the receiving end of a fair amount of advice.

He'll get it from, among other sources, the team's executive committee and newly constituted board of directors.

The executive committee will consist of advisers closest to Angelos, including other owners with the most money invested in the team. It meets whenever Angelos asks.

Though probably less influential, the Orioles board will give all team owners a chance to make their points. Each investor in the group will have a seat. As many as 10 "outside directors" with no investment in the team also may be named. All told, the board could include 30 members.

The two panels are described in documents setting out the rights of investors in the limited partnership formed by the new Orioles owners. Angelos agreed to discuss portions of the agreement with The Sun.

Angelos said he expects to listen to advice from the Orioles board and executive committee, though control of the team ultimately rests with him.

"These are people of diverse talents and personalities. I would expect to use that," he said recently. "I won't hesitate to take to them any matter of substance that deals with the club, its success and civic image."

Angelos declined to say who will serve on the Orioles board and executive committee. His attorney, George Stamas, said some appointments have not been made yet.

It's not clear exactly how the Orioles board and executive committee will develop. They could be fairly passive groups whose primary function is to rubber-stamp decisions brought to them by Angelos. Or they could work closely with Angelos and influence the team's policies.

However, the agreement states that Angelos, as managing general partner, will have "the exclusive right to manage the business" of the team. That includes decisions involving the signing of players, negotiation of television and radio contracts and decisions regarding front-office personnel, he said.

Several other investors in the Orioles say they had no problem giving those powers to Angelos. They say it was the only way for their group to be approved by Major League Baseball, which requires each team to have a single owner running the team. A few add that they were willing to put up their money because they have a good feeling about Angelos, a man they say they are confident will hear them out.

"All business ultimately comes down to trust," says novelist Tom Clancy. "Peter is an honorable guy. I take him seriously, and he takes me seriously."

Stephen A. Geppi, who built a fortune as the country's largest distributor of comic books, says of Angelos, "Even though he has the final say, he'll listen to us, he'll listen to what common sense dictates."

How millions are spread

Testimonials such as those are all the more meaningful considering how many millions of dollars the two investors are entrusting to Angelos.

The lawyer will hold the largest share of the team. His investment is expected to exceed $40 million, giving him about a 50 percent stake in the Orioles. Clancy is next, with an investment estimated between $12 million to $14 million. Geppi, a serious Orioles fan and participant in a fantasy baseball camp at Memorial Stadium last week, is believed to have the third-largest stake in the Orioles, with about $3 million to $4 million.

Cincinnati businessman William O. DeWitt Jr. controls another large share, having brought about $10 million into the group when his Ohio investors merged with Angelos. But no individual in the DeWitt camp put up as much as $3 million.

The Angelos investors bought the Orioles for $173 million, a TTC record price for a sports franchise, at a court auction on Aug. 2. A U.S. bankruptcy judge supervised the sale because outgoing owner Eli S. Jacobs is in personal bankruptcy.

Angelos, despite his power to control the team, has given some indications that he intends to bring others into his circle. The move to create an executive committee suggests Angelos is likely to seek a consensus before acting on important matters affecting the Orioles, says Mark A. Sargent, a University of Maryland law professor whose specialty is the form and function business entities.

"That strikes me as an unusually collaborative model," Sargent said. "There's nothing in the law that requires it."

Angelos already has shown he's ready to delegate some key duties. He has a fan's interest in the game, but he knows little about how to run a team, so he will be getting help from DeWitt and Larry Lucchino.

At the start, Lucchino, the team's president and a 9 percent owner under Jacobs, will be vice chairman for operations, a job in which he will continue to have day-to-day responsibilities for the organization. DeWitt, whose father was owner and an executive with baseball franchises in Cincinnati and St. Louis, initially was given the title of vice chairman for baseball by Angelos.

Recently, DeWitt said he didn't think the title quite fit anymore, and that he expected to be advising Angelos about a wider range of issues.

"I think I'll be involved in areas involving the business side as well as the baseball side," said DeWitt. "Hopefully, I can be helpful on a consulting basis."

Extra money

Angelos said the new owners have agreed to establish a roughly $20 million "equity revolver." The revolver is like a checking account into which the largest investors have agreed to make payments.

"The notion that a limited partnership can call upon additional equity is not unusual," said Sargent, the law professor.

Angelos could call on the additional money whenever the team needed it. But it probably would be dipped into because of a players strike or to pay down the more than $90 million the owners borrowed to buy the team.

"That gives us sinew, muscle, strength. It represents a guarantee that this organization will not have fiscal problems of any kind in the future," Angelos said.

Angelos says the partnership documents also address situations that might cause some investors to leave the Orioles. Members of the DeWitt group, for example, are assured that they will be able to divest their stake in the team if they have a deal to buy a larger interest in another major-league franchise -- most likely the Cincinnati Reds.

Film director Barry Levinson and businessman David Bernstein have a similar deal. The only members of Angelos' group who also are investors in Leonard "Boogie" Weinglass' bid for an NFL expansion team, Levinson and Bernstein could be required by Major League Baseball to leave the Orioles if Weinglass gets a team this month. If Levinson and Bernstein are forced to sell their baseball interests before Dec. 31, 1994, Angelos would buy them.

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