The Arte of Baseball

By Sean Gregory/Anaheim

About an hour before the first pitch on a breezy Southern California evening, Arturo (Arte) Moreno, billionaire owner of the Major League Baseball team now known as the Los Angeles Angels of Anaheim, walks the concourse of Angels Stadium, picking up cigarette butts and greeting fans. In January Moreno upset many Orange County supporters of the former Anaheim Angels by tacking Los Angeles onto the team name, relegating Anaheim, a city of 343,000, 30 miles southeast of Los Angeles, to a mere appendage. He also granted the Angels the dubious distinction of being the only major pro-sports franchise identified by two cities. Yet tonight awestruck fans greet him like a savior. A man in a WE ARE NOT LA Angels T shirt praises him. "It means so much to have a Mexican-American owner," a Hispanic fan tells Moreno, the first Latino team owner in major U.S. sports. "As long as we win," says another, "I don't care if you call them the Schenectady Mud Hens."

Maybe laid-back Southern Californians don't like pregame shouting matches (imagine Bronx fans smiling at George Steinbrenner if he tinkered with the hallowed Yankee name). Or maybe the Angels faithful know that despite the garbled name, with Moreno they still have it good. In building Outdoor Systems, a small outfit based in Phoenix, Ariz., into the country's largest billboard-advertising company, which Infinity (now part of Viacom) swallowed for $8.3 billion in 1999, Moreno, 58, has been guided by a basic mantra: "When you take a risk, you're either thinking you're real smart or you're real dumb." Moreno is feeling pretty bright right now as he moves to expand the Angels brand throughout the 16.7 million-strong Los Angeles metropolitan area--and beyond--by phasing out a small-market moniker. "If you're going to niche market," says Moreno, "you're going to get trapped."

Moreno's critics are scratching their heads. Why would an owner who last season generated so much good will, and extra revenues, by cutting ticket prices and signing American League MVP Vladimir Guerrero provide fodder for late-night comedians? (Craig Ferguson joked of another name change: "The San Francisco Giants on Steroids"). More important, why would Moreno potentially alienate an affluent suburban fan base in Orange County? Says Anaheim mayor Curt Pringle, a red T shirt that reads THE ANAHEIM ANGELS OF ANAHEIM hanging in his office: "We're sad, and we're very disappointed."

The city is suing Moreno and the Angels for violating the spirit of a 1996 agreement with prior team owner Disney. The city conceded the bulk of revenue sharing with the Angels in exchange for the Anaheim label (the team was called the California Angels from 1965, the year before it moved from Los Angeles to Anaheim, through 1996). "He's stepping on the little guy, the taxpayer," says Pringle, who claims that under the pre-1996 contract the city would have received $11.5 million more from the team last season. The Angels note that Anaheim is still in the title. A trial is set for November; an injunction to revert to the former name until then has already been rejected (and is under appeal). "The name change stinks," says Nancy Chavez, 52, a 15-year season ticketholder from Orange County who seriously considered dropping her ticket package this year. "We are not L.A. It's a slap in the face."

The rancor isn't keeping fans, or sponsors, from the ball park. Under Moreno, who purchased the club from an indifferent Disney ownership in May 2003 for $183.5 million, the Angels are soaring. Soon after buying the team, which was a surprise winner of the 2002 World Series but finished under .500 the next year, Moreno did the unthinkable for a sports owner: he lowered the cost of family-ticket packages and upper-deck seating, cut the price of premium draft beer from $8.50 to $6.75 and increased payroll to field a competitive team. The Angels have the 22nd lowest (out of 30) average-ticket price in baseball and the fourth highest payroll. Result: the team won a division title last season and drew a record 3.4 million fans to Angels Stadium; 2.8 million have already purchased seats this year. Overall revenues jumped 16.7% last season, to $140 million, and Moreno expects about $155 million in 2005. He says he lost $20 million on the team last year--"You have to invest in your product to get a return later"-- but expects to turn a profit next season.

The outdoor-ad magnate pasted the team's A logo on 480 billboards throughout the Los Angeles metro area. "We're not trying to sell a city," says Moreno. "We're selling Angels baseball, period." He has tapped into the region's booming Hispanic population by ramping up Spanish- language advertising and signing Latino stars like Guerrero and pitcher Bartolo Colon. The Angels say they doubled the percentage of Hispanic fans over the past four years and have attracted more season ticketholders from Los Angeles, Riverside and San Bernardino counties, beyond the team's base. In-stadium advertising revenues have more than tripled, to $17 million, since Moreno took over--the team signed Anheuser-Busch, General Motors and Verizon to new sponsorship deals this season. "I can't say Verizon is buying us now because we changed the name," says Moreno. "Verizon is buying us because we're putting a winning product on the field."

But Moreno is betting that the Los Angeles tag will raise the fees broadcasters pay to show Angels games. Fox Sports Net pays the Los Angeles Dodgers $35 million a year to show its games; this year it is paying the Angels just $19 million. "All our broadcast partners come out of L.A.," Moreno says. "Plus, when I go to New York and turn the Angels on the TV, it will be New York/Los Angeles, large market vs. large market, and over time that brand grows." Not everyone agrees that the L.A. tag will affect TV deals. Says Robert Hollander, president of Los Angeles-- based Brand Sense Marketing: "I'm not sure that's going to be critical."

Moreno is not backing down from the pundits, the city or the Dodgers, who have begun selling LOS ANGELES DODGERS OF LOS ANGELES T shirts and caps. At the end of the day, he notes, the fans will determine his fate. Says Moreno: "If the ball park is not a safe, affordable place, guess what--you as a fan, you as a customer are not coming back." Guess that's the real name of the game.