Shortly after buying the Los Angeles Angels of Anaheim from Walt Disney (DIS) in 2003, Arte Moreno did the unthinkable: He cut ticket and beer prices—and then he spent $145 million to sign four of baseball's hottest free agents and fortify an already formidable team.
Today the Angels' $102 million payroll is among Major League Baseball's heftiest, and ticket prices are in the middle of the pack. Yet the gamble seems to have paid off. Moreno routinely fills Angel Stadium to near capacity, has tripled ad revenues, and says the Angels will earn $11 million-plus this year after years of losses. "He's made his [team] one of the real quality franchises in baseball," says agent Arn Tellem.
Moreno, who built an outdoor billboard with a partner that he sold for $8.7 billion in 1999, has been training for the big leagues for years. He and several other investors, including comedian Bill Murray, bought a Class A minor league team, the Salt Lake City Trappers, for $150,000 in 1986, then sold the franchise six years later for $1.75 million. Later he was part owner of the Arizona Diamondbacks, before selling out after a disagreement over how to run the team.
By the time he bought the Angels for $180 million, Moreno, now 61, had learned a thing or two about appealing to fans. A marketing major who graduated from the University of Arizona in 1973, Moreno understands that players win games but cites studies showing folks put an even higher priority on safe, clean ballparks and wholesome fun at the games. "Even the best teams only win 50 of their 81 home games," he says. "That means you have to give them a good time even when the team loses."
Last year a family of four spent less on an Angels game than all but four of the major league's 30 other teams, according to Team Marketing Report. Not bad for a team that just won its third division title in four years. Winning helps; so does a cut-rate $6 Angels cap that Moreno figures will turn kids into walking advertisements. He also has reached out to Hispanics, signing the likes of slugger Vladimir Guerrero—even though doing so busted the budget in 2004. "Arte knew he'd take a loss, but Guerrero is always smiling, always making friends for the team," say Angels General Manager Bill Stoneman. "And he can really hit."
Not that Moreno is some sit-in-the-skybox owner, content to lose billions to stoke his own ego. "I can't go into a Starbucks (SBUX) and order coffee that I can't pay for," he says. "This is about bringing more in than I spend." Just ask high school pitching phenom Matt Harvey, a client of über-agent Scott Boras. Harvey held out for $1 million more than the Angels were willing to offer, says Stoneman. Moreno dismisses the standoff with Boras. "Scott who?" he asks with a smile.