American sport’s strongman George Steinbrenner is gradually fading away but he refuses to sort out the succession at one of sport’s most valuable properties

Who will succeed the Yankee king? 
and who will be left to take the decision?


No one ever thought the day would come when George Steinbrenner wasn’t around anymore. As far as the New York Yankees are concerned, that day has come and gone. In fact Steinbrenner’s last executive act is to stay alive long enough to nominate his successor. And it is going to be no comfortable task.

On the surface, George Steinbrenner, who controls the New York Yankees, the world’s most valuable sports property, has plenty of choices as his successor. As well as three highly capable executives who today run baseball's premier team, he has two able sons and two able sons-in-law ready to take up the cudgels.

But if only it was as simple as that. Like much that he has done in his life so far, Steinbrenner has made his succession process very contentious and highly controversial. At 77, he no longer seems to care.

Part of Steinbrenner’s problem has always been communication. Sometimes it appears he likes taking the tortuous route. Like the comical curmudgeon he was for years portrayed as on the American hit sitcom Seinfeld, he appears to enjoy the drama being played out as his health dramatically deteriorates. According to insiders, he and his family have never talked about succession, or what happens after he is gone. As far as they are all concerned what is, is what is.

Steinbrenner’s four children are now middle-aged and completely in the dark as to what he has planned. Despite impressions to the contrary, Steinbrenner has not managed the day-to-day affairs of the franchise for the past five years. Ensconced in Florida, he has no power, and by the same token he has all the power. He likes it that way and is reluctant to officially cede control and name a successor. So it is doubtful that anyone else will take charge while he is still alive. If there is a Steinbrenner in charge, he has always wanted it to be him.

Luckily for Steinbrenner, he has chosen his executives well. The Yankees organisation is very well managed. The iconic sports property is run day to day by a trio consisting of president Randy Levine, chief operating officer Lonn Trost and general manager, Brian Cashman. They have been doing the job since 2003 and Levine is trusted enough to have Steinbrenner’s day-to-day power of attorney, necessary under Major League Baseball (MLB) rules.

But despite that, none of the hired help are in line to ultimately inherit the crown and the 55% controlling shareholding that goes with it. That will go to one of four people: Steinbrenner’s two sons Hank and Hal, or his two sons-in-law, Steve Swindal, married to Jennifer, and Felix Lopez, married to Jessica.

The succession race, which has been playing out for the past 10 years, has continually switched leaders. Up to a few months ago it was led by Swindal, seemingly happily married to Jennifer, a brilliant businesswoman in her own right. According to insiders he had it in the bag. But then catastrophe struck. Fate intervened and he was arrested on 14th February last year for drink driving. That was not a sacking offence but shortly afterwards his divorce from 47-year-old Jennifer was announced. It indicated he had been up to more than a boozy night out on St Valentine's Day. Afterwards he was on his way out of the family and the Yankees organisation.

Before Swindal, Hank Steinbrenner had seemed to have it in the bag, but then Hal Steinbrenner streaked out in front, only to fall back with Swindal’s ascendancy. Lately Felix Lopez has been figuring as well, despite being the least qualified of the bunch.

Now with the home run in sight, eldest son Hank is once again favourite. Even though Hal is regarded as the most talented businessman, Hank is considered to have a better feel for the sporting side.

But there is a hurdle to achieving a happy ending. Hank has publicly declared that he doesn’t want the job and this seeming indifference has left the door open for Hal, who obviously wants it. It is all too confusing, and by no means clear even to insiders.

Some say that rank outsider Felix Lopez cannot be completely counted out. He is married to children’s book writer, 43-year-old Jessica Steinbrenner. They share four children. People say that Cuban-born Lopez, now a vice president of the Yankees, is an astute judge of players, the main qualification for being an owner. In reality, however, there seems little doubt that younger son Hal is the most capable. Now 38, he has worked for the Yankees organisation on and off for the past 17 years – since he was 21. He has an MBA and has worked his way through every department of the Yankees. But 11 years ago, after some disagreements and poor judgements on the playing side, he left to manage a small chain of hotels his father owned. It came after repeated clashes over the way the team should be run. He has been successful as a hotelier, increasing the size of the chain from three properties to eight.

But Hal has shown absolutely no feel for the sporting talent. And for that reason, Hank remains the most likely heir. He is also the eldest and most sensible son and would be very acceptable to the minority shareholders and the fans. And he would easily get the necessary approval of the MLB committee.

Hank’s lack of interest in the job is seen by many as a feint. They believe he takes the view that the only way to land the job is to show indifference. In fact, in past interviews with journalists, he has even gone as far as saying he would find the job distasteful. As he said: “The big salaries repulse me. The fact that guys were playing a kids’ game and getting enormous amounts of money seems illogical. They get millions a year to bitch and moan and be pampered.” He has admitted it was his father who caused it all to happen, but says in his defence: “Dad didn’t create the system. He just took advantage of it.”

The 50-year-old Hank admits his father would like him to take over and has trained him for the role. This consists of teaching him the three prime rules of being an MLB team owner, which according to him are: “hustling, risktaking and dictatorship.”

For that reason many believe that Hank will take the job if it is offered, mainly because he couldn’t bear to see the Yankees move out of family control. He says: “The temptation would be to throw up my hands and say, ‘fuck it’. But when my dad bought the Yankees, fans were getting tired of rooting for a piece-of-crap team. I’m certainly not going to sell a club with a strong farm system to some jackass and have him get credit for winning the World Series.”

In private moments, Hank has admitted that his father has stayed too long and is past his sell-by-date. And by all accounts, the day of the final exit will not be long coming as George Steinbrenner is gradually fading away. People who have seen Steinbrenner recently say he is not in the best of health. They describe him as bloated, pale and swollen and seemingly not with it. At 77, he seems no longer interested in his beloved Yankees and was last seen in public at the opening day of the NFL season on 2nd April last year. These days he spends most of his time at his home in Florida, an imposing white stucco palace with Roman style white columns protected by huge electric black wrought-iron gates, which borders the Palma Ceia Golf and Country Club in Tampa.

His appearances have been spasmodic ever since he fainted, very publicly, in 2003 at the funeral of his friend, Otto Graham. Since then he has had well publicised medical problems with his knees, which have left him partially crippled. People close to the situation say he has had a mini stroke and suffers from Alzheimer’s. Certainly he can no longer walk unaided, which is even more noticeable for a man who was known for his “uncontainable” energy.

According to friends, nowadays he rarely gets dressed and spends his time wearing slippers and silk pyjamas over a terry-cloth robe. He only speaks to the world through his public relations agent, the legendary Howard Rubenstein. The days of verbal sparring with journalists are over and his executives and family members are banned from making any comments to journalists. And that will remain the position for the “forseeable future”, according to Rubenstein.

One sports agent said recently: “George’s passion for the game seems to have faded along with his health.” Another added: “He’s been so detached this season that I wonder if he’s still in the hunt.” It comes hard for a man who once said he would only leave his office “horizontally”.Major League Baseball requires that each team has one managing partner to head it in league meetings. That precludes handing control to the broader family. As Steinbrenner’s health has deteriorated, Randy Levine has increasingly taken that role. Undoubtedly Steinbrenner is having problems facing up to that “forseeable future”. And it appears he has not managed his affairs to prepare for his death. Unless a successor has time to prepare, the inheritor will likely face a US$400m estate tax bill as a minimum.

The timing for that couldn’t be worse. In any normal situation, the new Yankees owner would be able to borrow the money. But Steinbrenner is currently building a new stadium that will cost more than US$1bn and is set to open in 2009. He is financing it with a novel hire purchase deal by the issue of a 40-year bond under which the Yankees will make 40 payments of US$55m, meaning the 40-year cost of the stadium will be US$2.2bn. The new stadium will increase revenues by as much as U$50m thus it is effectively a no-cost deal, with a pay off at the end and the chance of bumper profits in the last 20 years. The immediate boost is a US$44m tax break from the city.

With the stadium borrowings, raising more cash to fund estate taxes may prove difficult, if not impossible. The share stake can transfer to his wife tax-free, but she has already said she doesn’t want the responsibility of ownership. Joan Steinbrenner currently owns 5% and appears happy with that.

If raising the cash does prove impossible, the solution will inevitably be to sell off the Yankees’ biggest asset – its ownership of 35% of a regional cable TV channel called Yes. That stake could be worth US$400m. The other possible outcome is an outright sale of the team. Indeed if Steinbrenner nominates no clear successor, then that is the most likely outcome. When Steinbrenner bought the club 34 years ago from Bill Paley of the CBS television network, he paid US$10m and had to put down only US$168,000 to seal the transaction. He ended up with 55% ownership personally but absolute control. Various other members of his family and close circle owned the rest. Today the team might be worth as much as US$2bn with the TV stake included.

Naturally prominent New Yorkers would would form an orderly queue on his death, headed by Donald Trump who has made no secret of his interest in buying the team. The family would become very rich by selling, but as one observer pointed out, “they are very rich already”.

Of course any buyer has to have the approval of the nine-member Major League Baseball ownership committee. It has absolute say over admission to the club of owners. Insiders say they are likely to approve a Trump but reject an anonymous hedge fund owner. One observer said the committee wouldn’t want anyone too rich who would increase wage inflation amongst players: “The owners don’t want another George Steinbrenner.”