George Steinbrenner cemented his family’s control over the New York Yankees two years ago, ceding power to his sons to ensure the “unified strength” of one of the most successful franchises in sports.
Steinbrenner, who helped to usher in Major League Baseball free agency and multimillion-dollar contracts during his 37-year tenure as Yankees’ owner, died today at the age of 80 from a heart attack.
Steinbrenner’s death probably won’t change the direction of a franchise that’s won a record 27 World Series titles. The team’s succession plan was another example of Steinbrenner’s business savvy, said Michael Cramer, the former president of baseball’s Texas Rangers who is director of the sports and media program at the University of Texas.
“It appears that the passing of George will have no impact on the team,” Cramer said in a telephone interview. “It sounds a little cold, but the key was good succession planning here. Are there going to be some things going on, a little infighting? Maybe. But they’ve done a good job and we’ll see how it plays out.”
Hal Steinbrenner, 40, formally took over as controlling partner of the Yankees in November 2008, and brother Hank, 53, was put in charge of baseball operations.
The brothers have run the team’s daily operations since their sister Jennifer announced in March 2007 that she was divorcing Steve Swindal, whom George had deemed his successor.
No Succession Issues
Yankees President Randy Levine said the team won’t be sold and there are no succession issues.
Steinbrenner’s family will inherit his estate tax free, thanks to Steinbrenner’s residency in the state of Florida and an effort by former President George W. Bush to repeal what he called the federal “death tax,” a tax attorney said.
“It is the ultimate home run,” said Ronald Aucutt, a partner at law firm McGuireWoods in McLean, Virginia.
The Economic Growth and Tax Relief Reconciliation Act of 2001 allowed the federal estate tax to expire on Jan. 1, 2010, before resuming again on Jan. 1, 2011.
When the tax returns next year, most estates worth more than $1 million will be subject to a minimum 41 percent tax, Aucutt said.
Florida isn’t among more than 20 states that charge an additional estate tax. Steinbrenner lived in Tampa, site of the team’s spring-training facility.
Steinbrenner’s heirs may face complicated capital gains taxes if they sell assets they inherit.
Steinbrenner, nicknamed “The Boss,” had run the team since buying it in 1973 from CBS Corp. for $10 million.
The Yankees became a worldwide brand under his ownership and won seven World Series titles. The most recent championship came last year after he turned over control of the team, which has an estimated value of $1.6 billion, the highest among Major League Baseball’s 30 clubs, according to Forbes magazine.
The Yankees went 13 years with no playoff appearances before winning four titles in a five-year span from 1996 through 2000, a run fueled by Steinbrenner’s spending to acquire talent.
“He could have taken the money out and did other things with it, but he brought players to New York and spent money in free agency,” Hall of Fame second baseman Joe Morgan, who’s a major-league analyst for ESPN, said on the cable network. “A lot of people may not like that, but that’s what you do to make your company better.”
William Sutton, a professor in the DeVos Sport Business Management Graduate Program at the University of Central Florida, said the question for the Yankees is whether Steinbrenner’s sons have the same passion to win as their father.
“He was a fan as well,” said Sutton, who consulted with the Yankees for the opening of their new stadium in 2009. “He loved the Yankees, and he loved baseball. Those things make a big difference.”
The Yankees last season ended an eight-year championship drought after spending $424 million to acquire players such as CC Sabathia, Mark Teixeira and A.J. Burnett. George Steinbrenner praised the team’s accomplishment in a statement immediately after the championship, adding: “The quest for No. 28 begins.”
The Yankees this season have baseball’s highest payroll for the 11th straight year and a league-leading 56-32 record at the All-Star break. Harvey Schiller, the one-time president of YankeesNets, a former umbrella company of the franchise, said that while “The Boss” is gone, the Steinbrenner legacy of success will probably continue under Hal and Hank.
“For all practical purposes, they’ve been managing the team for the last couple of years,” Schiller said in a telephone interview. “When you blink, you’re going to see the same Yankee team on the field and my guess is they’re going to work even harder to bring a championship this year.”