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Original Issue


Richard Holtzman owns five minor league baseball teams

Richard M. Holtzman lives in a dream. It is Opening Night, and he is standing in the infield of the ballpark he owns. He is surrounded by the team he owns, all the players dressed in new double knits. A sky diver descends; fireworks erupt; the crowd sings The Star-Spangled Banner. "Play ball!" shouts the umpire, as Holtzman strolls over to his box behind home plate. He waves graciously to the adoring fans and lights up a 10-inch black cigar.

That was no dream. It really happened, on the night of April 20 in Midland, Texas, where Holtzman owns the Double A Angels. It also happened on April 16, in Davenport, Iowa, where Holtzman owns the Class A Quad City Angels. And two days before that, it happened in Chattanooga, where he owns the Double A Lookouts. And before that, in Tucson, where he owns the Triple A Toros. And before that, in Columbia, S.C., where he owns the Class A Mets.

In less than four years, this 39-year-old Chicago real estate entrepreneur has become the largest single owner of minor league franchises.

To be sure, it's fun to be a mogul out in the bushes—but the good times don't come cheap. Holtzman has spent a cool $8 million for the five teams he owns. Until a decade ago, a buyer could pick up a minor league club for a little cash and a willingness to pay overdue bills. Bob Richmond, of Scottsdale, Ariz., who has been a broker for minor league franchises for eight years, says, "When I ran the Northwest League from 1972 to 1980, all you really needed to buy a team was a credit card and a warm body. Franchises were going for about $500."

Today, Class A teams start at about $800,000, but there are some that can set you back better than $2 million. Double A clubs fetch $2 million and up. In 1989 Holtzman paid $3.5 million for the Triple A Toros. In addition, he made a deal with the city of Tucson in which he agreed to spend still another $1.5 million to fix up Hi Corbett Field in exchange for the control of all the food and souvenir concessions.

This has paid off in something more than dreams. Holtzman has already turned around the three money losers among his acquisitions—Chattanooga, Tucson and Quad City—and has increased home attendance for all of his teams by an average of nearly 80%. All five clubs are making money, according to Holtzman, who insists that he's in the baseball business for more than sentimental indulgence.

Traditionally, minor league franchises have been run like mom-and-pop stores—keep the overhead low and pinch each penny. Holtzman was well prepared to become a minor league owner. He had made his fortune rehabilitating old buildings on Chicago's gentrified North Side, a risky enterprise in which inattention to small details can sink you. In his short time as a team owner, Holtzman has changed the business by taking more risks and spending more money than has been customary at the minor league level. He hires young, aggressive marketing people for his franchises and lures fans to games by offering quality giveaways more typical of the majors than the minors. At each of his ballparks, youngsters who join the Knothole Gang get free admission during the week when they're accompanied by a paying adult. The Famous Chicken, far and away the biggest draw in minor league baseball, visits each of Holtzman's ballparks twice a season, at an average cost of $7,000.

During games, each half inning produces another round of giveaways, birthday cake contests and the drawing of lucky numbers that are good for prizes. Corny as it seems, the fans in Chattanooga love to hear organist Charlie Timmons play Let Me Call You Sweetheart when one of the Lookouts picks a "lucky lady" out of the crowd and presents her with a corsage from a local florist.

Holtzman is just one of the new breed of minor league owners, men who have gained experience in other businesses and then applied that knowledge to the minors. Bobby Brett, 39, of the famous baseball family, has spent 15 years investing in the volatile Southern California real estate market, during which time he and his brothers acquired the Spokane Indians (short season Class A) and the Riverside (Calif.) Red Wave (A). Craig Stein, 39, a real estate developer in Warrington, Pa., bought the Double A Reading Phillies for $1 million in 1986. Bob Rich, the 49-year-old scion of a frozen food manufacturing family in upstate New York, moved his Triple A Buffalo Bisons into a new $43 million stadium in 1988; he also owns the Double A Wichita Wranglers and the Niagara Falls Rapids (short season Class A).

Holtzman and his fellow entrepreneurs are riding the crest of renewed interest in the minor leagues. According to the National Association of Professional Baseball Leagues (NAPBL), the ruling 'body for the minors, more than 23 million people attended games in 1989, up nearly a million and a half from 1988 and a whopping 56% increase over the past decade.

The value of minor league teams has been greatly enhanced by the law of supply and demand. As prices soar, new owners must work to get a decent return on their investments. "I've seen the books, and these teams aren't cash cows," says Ron Barton, a consultant with Laventhol & Horwath, the Tampa-based consultants on sports-and-convention facilities. "They may pay only a 10 percent return, and there's plenty of risk, too."

No one seems more fit for the game than Holtzman. Trim, athletic and youthful, he talks like a ballplayer (using expletives liberally) and walks like a ballplayer (pigeon-toed) and, in fact, is a ballplayer. He still plays softball in the Chicago Bar Association League, and two years ago joined the Men's Senior Hardball League, which limits its membership to players 35 and over. "I got into trouble in softball because I took out a guy standing on second and he landed on his head. The umpire said I was playing too aggressively," he says. He prefers hardball "because it's serious. They insist you wear the complete uniform."

Like many successful businesspeople, Holtzman is compulsive about organization. "I've always been that way," he says. "When I was a kid, I organized my days with lists that began, Brush your teeth." He can be open and generous with those he trusts, but like many wealthy people, he is wary of the motives of others. "I probably stopped trusting people about 20 years ago," he says.

Holtzman has been obsessed with baseball since his childhood in Chicago. "My life seems to have always revolved around the game," he says. He grew up in a middle-class household in the shadow of Wrigley Field, where he often went after school when the gates were thrown open for the last couple of innings. After games, young Holtzman would run through the stadium flipping up the wooden seats for the cleaning crew, earning a ticket to the next Saturday's game. Oddly enough, he never became a Cub fan. Instead, his loyalty belonged to the White Sox. He idolized Luis Aparicio and Nellie Fox. He still has a Fox foul ball that he caught in 1960. It is displayed with about 400 others in his collection of autographed baseballs. "Here's a 1931 Yankees," he says, picking up an old ball encased in plastic. "Look, Tony Lazzeri, Bill Dickey, Babe Ruth, Red Ruffing, Lou Gehrig...." He buys them at auctions, once paying $1,200 for a ball autographed by the 1927 Yankees.

Regardless of whether his love of baseball's lore and legend is the cause or the result, Holtzman's life is steeped in the past. Because his business has been rehabilitating old buildings, he delights in cruising his city's streets in his Porsche Targa, pointing out examples of Chicago's rich architectural history.

Four years ago, when he decided to diversify into baseball, Holtzman weighed the investment in the same cold, methodical way he would have for a piece of prime property. "I studied it for six months and talked to a lot of people," he recalls. "I was frightened that if it didn't work out and I lost money, I'd come to hate the one thing I've loved all my life."

For Holtzman, taking risks—financial and physical—is nothing new. In August 1968, fresh out of Chicago's Lane Technical High School, he joined the Army, and by Christmas he was in Vietnam with the 101st Airborne. It is with great reluctance that Holtzman will talk about his experiences in that war. For 18 months he was "almost continually in combat" as a gunner on a Huey, sometimes doing troop evacuations, during which they would draw enemy fire. His helicopter was shot down once. Under his Rolex watch is a scar where a bullet pierced his wrist; he also has scars on one shoulder.

Returning from Vietnam, in 1970, Holtzman attended the University of Illinois for about a year, dropped out, then returned to Chicago in '72. Over the next several years, working 18-hour days and seven-day weeks, he built his firm, Preservation Chicago, into the city's largest real estate management company. He was also renovating historic country inns in Vermont.

A few years ago Holtzman went to a Christmas party for his staff and was shocked to realize that the firm was so big he couldn't remember many of his employees' names. Time for a change, he thought. He scaled back the company and began investing in things that gave him "more psychic rewards." He invested with Chicago Bears coach Mike Ditka in a restaurant. Then he began researching the investment opportunities in baseball.

First, he decided that while baseball may not pay as well as real estate, the business is more fun and the people in it a lot nicer. "My experience in real estate is that there's a lack of integrity and it's hard to develop personal relationships," he says. "In baseball I met people I could see the potential of being lifelong friends with." Second, he realized that many of the same strategies that had made him rich in real estate could be applied to baseball.

In his first minor league venture Holtz-man paid $1 million in 1987 to buy the Midland Angels, the Double A affiliate of the California Angels. Midland was already a strong franchise. It was well managed and attendance was high, so it became a lab in which Holtzman could study the business. A few months later he was ready for a new challenge; he bought three more clubs during the winter of 1987-88: the Quad City Angels, an affiliate of the California club; the Lookouts, an affiliate of the Cincinnati Reds; and the Columbia Mets, an affiliate of the New York Mets. Quad City and Chattanooga provided plenty of challenge to the new baseball executive. Both franchises were losing money; both had ramshackle stadiums verging on collapse; and Quad City was in an area down on its luck.

When Holtzman went into these towns, he was like Professor Harold Hill in The Music Man, peddling virtue. In River City, Iowa, Professor Hill persuades the townspeople to form a band so that their kids will play musical instruments (which he sells, of course) and stay out of pool halls. Similarly, Holtzman sells baseball to Middle America with the promise that the game will bind families together, raise community spirit and provide a lot of good, clean entertainment.

To this message Holtzman adds a bit of financial reality that he calls Baseball 101: "Baseball can bring millions of dollars into your community. I'll do my share and run the franchise right. You have to do your share and spend money on this facility." In Davenport, Holtzman found that the city elders were eager pupils. Once a hub of farm-equipment manufacturing, the Quad Cities (Moline and Rock Island, in Illinois, and Davenport and Bettendorf, in Iowa) hit the skids when International Harvester, Caterpillar and John Deere all closed plants there. Now Davenport is trying to parlay its Mississippi River location into a tourist attraction. John O'Donnell Stadium, named after a revered sports editor of the Davenport Democrat, delighted the preservationist in Holtzman. It was built back in 1931 for $185,000; in 1988, at Holtzman's behest, Davenport spent $3.5 million renovating the stadium, with an eye to luring a Triple A team. "The expansion of major league baseball was foremost in our minds," says Davenport's director of parks and recreation, Wayne Boyer. "We wanted to offer a Triple A-quality stadium."

But the principles of Baseball 101 aren't always persuasive. In Chattanooga, Holtzman found the city unresponsive after he sprang his estimate for renovating the city's dilapidated 59-year-old Engel Stadium: $2.5 million to $3 million. Though the stadium could never be called an architectural gem, it holds a significant slice of baseball history. It is named after the Lookouts' celebrated general manager of the 1930s, Joe Engel, who was known locally as the Barnum of Baseball. His promotions are legendary. Once, during the Depression, he gave away a house at a game and drew 24,000 fans. Walter Johnson, Frankie Frisch and Rogers Hornsby played for the Lookouts. Harmon Killebrew is the only player to have hit a home run over Engel Stadium's centerfield fence, which, at 471 feet, is perhaps farther from home plate than any other in baseball.

Faced with the recalcitrant politicians, Holtzman decided to look into the possibility of moving the team, which had played in Chattanooga for 125 years. "First, I spent a month reading everything I could find about baseball franchises that had moved—from the St. Louis Browns' moving to Baltimore, to the Dodgers' going to L.A.," he says. Then he met with the mayor of Mobile, Ala., who was eager to welcome the Lookouts. Next he sidestepped county and city officials and disclosed his plans to Chattanooga's aggressive press corps. "That really ticked off the politicians," recalls Holtzman. "Wherever they went, somebody said, 'I think you ought to renovate Engel Stadium.' "

In the end the city came up with $2 million for the renovation. ("I got an Olds-mobile, not a Cadillac," Holtzman says.) In turn, Holtzman promised to keep the Lookouts in Chattanooga for at least 10 years.

For Holtzman and the other minor league owners, the most frustrating thing about their investments is the plantation-owner mentality of their major league affiliates. Holtzman especially blames former major league baseball commissioner Peter Ueberroth for fostering this attitude. During Ueberroth's tenure, for example, major league teams began charging anyone who sold equipment with their logos—including their own affiliates—a $1,000 licensing fee.

The relationship between the majors and minors is described in the densely worded Player Development Contract, signed by Major League Baseball and the NAPBL. A six-page document, the contract spells out everything that a major league team must supply to a minor league affiliate, from salaries for the manager and players to the number of baseballs, bats and sanitary socks. The PDC expires this year, and Holtzman thinks it's high time it was rewritten so that the majors shared their wealth.

On his own, Holtzman has won a few perks from his affiliates. Owners of minor league teams have nothing to say about players, managers or coaches—they have to make do with what the major league affiliates send them, but as Holtzman sees it, you can always ask. He has asked for better players from the Houston Astros for his Tucson team. So far his tactic is working: The Toros have more talent, and for the past two years the Astros have played an exhibition game in Tucson.

Holtzman would like to see all his affiliates play exhibitions at his stadiums. He has read about those barnstorming baseball days of yore when teams crisscrossed the South and West on their way home from spring training, and he wants them back. Says Holtzman, "Look, I don't think teams have to play in one of those concrete doughnuts for fans to enjoy a game. I'd like to see the Reds, instead of flying directly from Plant City, [Fla.] to Cincinnati, take the train and play five or six exhibition games along the way at minor league parks."

He pauses, puffs on his cigar, and says, "Let the people see them play."



In Davenport, beside the Mississippi, Holtzman seems every inch the mogul.



Elliot Johnson, a Toro fan, was one of 1,000 kids given a ball at a game against Portland.



In an exhibition, Toro Gary Cooper was toppled by opponents from a Little League team.



A hands-on owner, Holtzman helped set up the picnic area during a visit to Chattanooga.



Holtzman has yet to collect as many teams as baseballs, which he keeps in his Chicago den.

John F. Berry, of Larchmont, N.Y., has written several business-related stories for SI.