Malek’s group still the one

Fred Malek’s Washington Baseball Club has reached a one-year extension of its exclusivity deal with the D.C. Sports & Entertainment Commission, keeping WBC as the city’s preferred baseball ownership group.

The two sides signed a two-year memorandum of understanding in January 2002, creating a formal framework by which a ballpark could be developed in the District and providing Malek some protection against competing bidders seeking to own a local team.

The extension, completed late Friday, became necessary because Major League Baseball’s ownership of the unprofitable, vagabond Montreal Expos has extended beyond the intended one-year tenure into a third year. Permanent relocation of the club is now targeted for the 2005 season, but even that timetable is not guaranteed.

“This [extension] was always going to get done,” Malek said. “But after all the changes we’ve had at the sports commission, it’s very gratifying to have a sensible deal in place that keeps us going forward together.”

The last nine months have been a period of turmoil within the sports commission, with its mission, organizational structure and fiscal policy coming under significant review by the D.C. Council. Former chairman John Richardson and executive director Bobby Goldwater both resigned under political pressure.

Malek’s original deal with the sports commission provided it with exclusive use of both RFK Stadium and a subsequent new ballpark. Had those terms been broken, most likely by MLB’s direction, Malek would have been entitled to receive either a chance to become an equity holder in the new ownership group or lost expenses and opportunity costs up to $4million.

The new agreement removes the opportunity costs from a potential repayment to Malek. Should someone else own a District-based team and Malek not be involved, the total repayment to him would be $1.23million. The money, amounting to expenses already paid out by Malek’s group in the pursuit of baseball, would come mostly from the new owner, with the sports commission aiding the transfer.

“This deal gives us a lot of comfort, and I believe keeps us way out in front in this race,” said Jack Mahoney, sports commission interim chairman. “We’re not going away easily, that’s for sure.”

Immediately after the completion of the extension, Mahoney briefed John McHale, MLB executive vice president and a key figure on its relocation committee.

“John was very upbeat and certainly appreciated hearing what we had done,” Mahoney said.

Jack Evans, D.C. Council finance committee chairman and a strident critic of sports commission fiscal policy, also helped broker the new deal.

“This is a much better package,” Evans said. “The cost structure to the city has been reduced, and we’re still putting out what remains a very serious ownership group.”

The extension also comes in tandem with the announcement of David Bradley and Jeffrey Zients joining Malek’s group as general partners. Bradley is the chairman of Atlantic Media Company, publisher of several magazines including the Atlantic Monthly and National Journal. Zients is the chairman of the Advisory Board Company, a District-based health care research and analysis firm.

“We’ve had plenty of people approach us wanting to get involved, and we’ll expand the group assuming we reach the finish line,” Malek said. “What David and Jeff do for us is add quite a lot of intellectual capital. They’re both very, very sharp.”

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