First-Draft Follies: Budweiser, Baseball and . . . Communism. Part 4 of 4

Part One --- Part Two --- Part Three --- Part Four Welcome to First Draft Follies, an ongoing series here at the blog. The material is presented "as is" from the first draft of the manuscript that became the book Ambitious Brew. In a few places I added one or two words in brackets -- [like this] -- for clarification. The excerpt is long, so I'm breaking it into manageable bits and posting those bits over the next few days.

This edition of the Follies concerns Gus Busch and the fallout from his purchase of the St. Louis Cardinals.

__________________________

August Busch was not the least bit confused. Angry perhaps, but not confused. He fielded his own team at the hearings: an Anheuser-Busch vice-president plus the company's legal counsel and its advertising manager, the corporation's tax attorney, and an extra lawyer for good measure.

Perhaps the numbers provided comfort as Senator Johnson seized the opportunity to attack Busch face to face. August Busch and Anheuser-Busch, Johnson said, constituted a "selfish" interest that had "openly and without shame . . . prostituted and exploited" the national pastime by making it the "handmaiden and adjunct of the brewing business." (*18) The "Anheuser-Busch-Cardinal combination" posed a "great menace" to the "minor leagues," and a "very grave menace to the small brewing industry . . . ."(*19)

"Stop using the Cardinals as a prop and a stunt to popularize and advertise one specific brand of beer," demanded the senator. (*20)

To his credit, Gus Busch stashed his temper in his hip pocket and stuck to the facts. "Gentleman, I am not a lawyer," he told the senators, but even his untrained eye recognized that Johnson’s bill had "all the appearance and the intent of a discriminatory and punitive law." (*21)

Moreover, Busch added, the Senator was "in error" when he accused Gus Busch and Anheuser-Busch of trying to evade, avoid, or hide tax liabilities and his charges "completely distort[ed]" the legal and tax relationship between Anheuser-Busch and the St. Louis Cardinals. (*22)

With that introduction, Gus handed the proceedings over to the tax attorney, who systematically demolished Johnson’s charges of tax irregularities. Then Gus took the witness seat again, this time to dismantle Johnson’s claim that Anheuser-Busch was destroying minor league baseball and monopolizing the nation’s beer business. In the year since Anheuser-Busch had purchased the team, Busch explained, the Cardinals had signed agreements with five minor league teams and "revived" a sixth that had shut down for lack of money. (*23)

More to the point, Busch argued, if minor league baseball was in trouble, it could hardly be the fault of Anheuser-Busch, which had only begun buying radio time a few weeks earlier at the start of the 1954 baseball season. For the previous eight years, another brewery (Griesedieck Brothers) had broadcast the team’s games on seventy-seven different radio stations, nineteen of them located in cities with minor league teams.

And, Busch added, when Johnson and minor league club owners protested the Cardinals’ purchase of radio air time, the Cardinals organization had promptly canceled all its radio contracts, a move that had provoked an angry uproar and the threat of lawsuits from the affected station managers.

Last but not least, Busch told the committee, Anheuser-Busch sold a grand total of 7.8% of the nation’s beer. "So much," he concluded, "for the charge about so-called beer monopoly." (*24) And so much for Edwin Johnson’s attempts to embarrass August A. Busch, Jr..

The day after Busch’s testimony, Senator Johnson announced that he was abandoning his attempt to apply the antitrust laws to the St. Louis Cardinals.

But Johnson was no doubt pleased to see that even the hated Commie pinkos joined him in denouncing Gus Busch. [The magazine] Soviet Sport denounced Busch’s ownership of the Cardinals and his decision to trade Enos Slaughter to the New York Yankees. "This," pronounced the Communist commentator, "is a typical example of beer and beizbol. The baseball bosses care nothing about sport or their athletes, but only about their profits." (*25)

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SOURCES: *18: Senate Subcommittee on the Judiciary, Subjecting Professional Baseball Clubs to the Antitrust Laws, 83d Cong., 2d sess., 1954, 71.

*19: Ibid., 73.

*20: Ibid., 74.

*21: Ibid., 96.

*22: Ibid.

*23: Ibid., 105.

*24: Ibid., 11.

*25: “Moscow Paper Critical of ‘Beer and Beizbol,’” New York Times, May 25, 1954, p. 30.

End of Newspapers = End of Democracy?

Hmmm...... Good question, and one that is pondered at length at The New Republic. (It's a long article, so if you're looking for a ninety-second, easy in-out roundup, don't bother.) Also at the site, and in the same vein, an editorial piece on the subject of "media" and an article about the impact of Politico. And sadly, all this writing/thinking is, ya know, free........

Tip o' the mug to Chris Moody of Moody's Pen (and to Stan, who, if I remember correctly, first directed me to Chris's blog.)

Maybe It's NOT the "Housing Bubble"

We've all heard that the "housing bubble" is to blame for the current economic disaster -- well, the bubble and global shuffling-about-of-subprime-loans-from-one-investment-house-to-another.

Maybe. Maybe not. Might be that the housing mess simply proved the tipping point for something deeper that had been rumbling about underneath for a longer time. Think about it:

Ten years ago, we bought plane tickets from travel agents. When's the last time you did that? Ten years ago, we paid for newspapers.

Ten years ago, Amazon's 30% discount was just gaining "lift." Most people bought books at full price in a store.

Ten years ago, if I wanted to buy a pair of shoes, I went to a shoestore and paid (usually full price) for the shoes and a sales tax. Now? Zappos. Where I can buy and try on ten pair of shoes and return all of them -- pay zero for the privilege of doing so. No shipping to me. No shipping fee to return. No sales tax.

Translation: The digitization of life-as-we-know-it has nibbled away at our financial underpinnings for years. Nibbled. Rearranged. Undermined. Eliminated.(*1)

We live in a capitalist economy. Ain't supposed to be no free lunch. Something was, eventually, bound to give.........

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*1: Apropos of nothing, it reminds me of novels set in 18th and 19th century England. When a monied character wants a suit altered, he assumes the tailor will provide the service, without asking for money upfront. Monied character pays tailor when he damn well pleases, if at all. Ditto for landlords and the always-present "char lady." They dole out the services, but mysteriously, buyers often neglect to pay. And everyone assumes, ya know, it'll all work out. (Usually the char lady and tailor are left holding the jacket, er, bag, pushing them deeper into poverty.)

First-Draft Follies: Budweiser, Baseball and . . . Communism. Part 3 of 4

Part One --- Part Two --- Part Three --- Part Four Welcome to First Draft Follies, an ongoing series here at the blog. The material is presented "as is" from the first draft of the manuscript that became the book Ambitious Brew. In a few places I added one or two words in brackets -- [like this] -- for clarification. The excerpt is long, so I'm breaking it into manageable bits and posting those bits over the next few days.

This edition of the Follies concerns Gus Busch and the fallout from his purchase of the St. Louis Cardinals. _____________________________

A Senate subcommittee opened hearings into the matter in March. Johnson’s cause was lost almost the moment the gavel landed.

The first witness was Stanley W. Barnes, speaking on behalf of the Attorney General and the Department of Justice. Barnes got right to the point: as far as the Attorney General was concerned, Senate Joint Resolution 133 appeared to be a "discriminatory" and virtually unenforceable proposal and Justice planned to oppose any effort to enact said resolution. (*9)

Johnson gamely carried on, accusing August A. Busch, Jr. of tax fraud, condemning Busch’s "lavish and vulgar display of beer wealth and beer opulence," and attacking the company’s decision to parade the "magnificent" Anheuser-Busch Clydesdales at Busch Stadium and at the Cardinal’s spring training park in St. Petersburg, Florida. (*10) Anheuser-Busch, Johnson also told his audience, had recently snatched the number one rank away from Schlitz Brewing, and "the reason for it is the ownership of the Cardinal Baseball Club." (*11)

Joseph H. Garagiola, catcher for the Chicago Cubs, showed up at the hearings, although it was not immediately clear to him or to anyone else why he’d been called. Perhaps it was because he’d played for the Cards back in the forties and had lived in St. Louis his entire life.

In any case, Senator William Langer, the North Dakota Republican who presided over the hearings, quizzed Garagiola about his baseball history, the shoulder injury that had caused him to rethink his career in sports, and his current plan, which was to exit baseball and go into sports broadcasting.

After a long series of often confusing questions (and even more confusing answers that may have led the audience to wonder if Joe had injured his head rather than his shoulder), Garagiola’s (tenuous) connection to the Anheuser-Busch matter finally came out: The catcher had talked to one Harry Renfro about switching from baseball to radio or TV. Renfro worked for d’Arcy Advertising, and d’Arcy handled the advertising for Anheuser-Busch.

Therefore, announced a triumphant Senator Johnson, Harry Renfro was actually "doing a fancy bit of tampering with [Garagiola's] contract," and Garagiola himself had come close to violating one of baseball’s sacred rules. (*12)

"Could I say what my thinking is,?" the frustrated ballplayer asked after Johnson finally wound up his confusing and wholly inaccurate assessment of the conversation between Garagiola and Renfro. (*13)

Oh, Johnson replied, "[y]ou could not be held in anyway to blame for anything that may have happened, but I cannot say that for Mr. Renfro, I cannot say that for the Anheuser-Busch people because they knew very well what they were doing." (*14)

The obviously baffled Garagiola kept trying to persuade Johnson otherwise, but finally gave up and let Johnson ramble on.

"I am still confused," said Joe as he prepared to leave the witness chair. (*15) "You do not know whether you are on the air or up in the air," replied Senator Harley Kilgore (D-West Virginia). "Joe, we want to thank you very much," added Senator Langer. (*16)

"I am thoroughly confused," replied Garagioloa. (*17)

______________________________

Sources:

*9: Senate Subcommittee on the Judiciary, Subjecting Professional Baseball Clubs to the Antitrust Laws, 83d Cong., 2d sess., 1954, 4.

*10: Ibid., 18.

*11: Ibid., 24.

*12: Ibid., 55.

*13: Ibid.

*14: Ibid.

*15: Ibid., 65.

*16: Ibid.

*17: Ibid.

A (Former) Insider's Report on Anheuser-Busch InBev

I got an email the other day from a person who used to work at A-B InBev, who wrote to share some thoughts about what it was like to be on the inside during the turmoil of the past few months.

He was kind enough to allow me to share his comments with you, although I'm posting his comments anonymously in order to protect his identity. (I hasten to add that I have confirmed he is who he told me he is.) I've deleted some of the text for the same reason. His observations are fascinating and thoughtful.

. . . .I don't think any of the messages on the blogs fully convey the train wreck that this InBev deal appears to be. The company was fat with management, but thin on technical people -- and the company has a lot of highly automated systems. The tech people that understand these are leaving.

For example, there is only one man who knows how the entire domestic system's order write system works (written in Fortran years ago -- not a common language nowadays), and he just took the early retirement package. I think they realize the peril and are bringing him back for 3-5 hours of consulting a week, but the whole thing is on thin ice . . . . The news that the contractors are getting 10% cuts hit the contractors this morning, and they're mad as hornets. It's approaching the level of mass revolt.

The place has always been somewhat dysfunctional (at least as long as I've been there), but I think most large organizations are. . . . But the Busch culture has been really odd, because the dysfunction has heretofore always been gilt (masked) with gold. My own feeling regarding that is that the Busch family has always had a sort of inferiority complex associated with the working-class nature of the drink: I suspect there was always some back-of-hand chatter at the coming-out balls in early 20th century St. Louis. So those old Germans ran roughshod over all that with money. Lots of it.

In any case, the gold is gone now, and the dysfunction is now out in the open. I was in a meeting . . . with several members of good, competent mid-to-upper management types, and the tone was astonishingly similar to the tone you see in one of those old war movies, where grim GIs sit in a bunker under heavy fire and make quiet, wry jokes about the hopeless situation and the incompetence of the top brass. No one was angry, just jaded and tired. These guys are trying to do their jobs and make this work, but it's almost like they've been ordered to charge into withering fire -- they're not sure it'll do any good, or if they'll survive the task.

One of the problems ABInBev will face is that they are following a script that will probably not work well in the environment AB built. . . . .[S]upposedly that script is a book that Brito thinks is the bible of business called "Double Your Profits: In Six Months or Less". It sounds to me a lot like something you'd see hawked on an infomercial, but I know someone that's ordered and read the book, and supposedly you can go through it with a pencil and check off the steps Brito's taking, item by item . . . .

Supposedly, one of the tenets in this book is that you cut until someone screams loud enough, and when they do, you put that part back.

Problem is, these aren't things you turn off and on at will -- even if you have lots of money to do so (and I'm not sure InBev does). For example, the warehouse picking system is a complex program which only two men really understand. And one of those men is now working elsewhere. There is no way to train someone on this stuff in short order, and there will likely be no successful way to beg people back: no one I know yet is either leaving for money or would return for it. . . .

He's spot-on about the "inferiority complex": In the 19th century and into the 20th century, the rich-and-powerful of St. Louis society looked down on many of the German immigrants who'd done well, and being a brewer didn't help. St. Louis elites held people like the Busch family at arm's length

And to his comment about that, I would add this: When I started researching my book, I figured out right away that American beermakers, and especially the Busch family, had reason to be paranoid and suspicious of "outsiders." Beermakers in particular faced real hostility from prohibitionists. The more well-known the brewer, the greater the venom. And of course because of their German heritage, many of them were accused of disloyalty and treason during World War I. (Never mind that they were American citizens...)

Again, that was especially true for the Busch family, which has been denounced by name not once, but twice, on the floor of Congress.

Also, his comment about the clash-of-cultures is dead-on. David Kesmodel predicted as much in a piece in the Wall Street Journal last summer. But anyone who knows the history of A-B would have predicted it: A-B's philosophy has always been "spend money to make money and make friends."

Or, as industry analyst Harry Schuhmacher calls it, A-B's "all in" approach: At a meeting for sales reps or distributors, it wasn't enough to have one shrimp platter; there would be fifteen shrimp platters. InBev under Carlos Brito operates from a completely different philosophy: Return maximum value to shareholders and do so by slicing costs to the bone. Those two approaches to business are at opposite ends of the spectrum, so, well, it was easy to see this trainwreck coming.

My thanks to my (anonymous) correspondent. MUCH appreciated!

First-Draft Follies: Budweiser, Baseball and . . . Communism. Part 2 of 4

Part One --- Part Two --- Part Three --- Part Four

Welcome to First Draft Follies, an ongoing series here at the blog. The material is presented "as is" from the first draft of the manuscript that became the book Ambitious Brew. In a few places I added one or two words in brackets -- [like this] -- for clarification. The excerpt is long, so I'm breaking it into manageable bits and posting those bits over the next few days.

The edition of the Follies concerns Gus Busch and the fallout from his purchase of the St. Louis Cardinals.

____________________

Gus Busch was all smiles and good humor then--and a good deal less cheerful ten months later, when Senator Edwin C. Johnson, Democrat from Colorado, rose on the Senate floor to engage in that time-honored profession: Busch-bashing.

"Mr. August A. Busch," Johnson informed his colleagues, "is using the St. Louis Cardinals to promote the monopoly of Anheuser-Busch over his competitors in the brewing industry" and "ruthlessly and deliberately annihilating minor-league baseball in a large area of the Midwest."(*3) Baseball, "America’s great national game" and symbol of "everything that is clean and wholesome," meant nothing to Gus Busch except as it provided him with a "cold-blooded, beer-peddling" "opportunity to sell" more Budweiser. (*4) Until and unless Busch was stopped, baseball would be ruined.

Johnson then introduced Senate Joint Resolution 133, which would subject any baseball club "affiliated with the alcoholic beverages industry" to antitrust laws, legislation from which baseball was otherwise exempt. (*5) And in case anyone misunderstood his intent, Johnson added that S.J.R. 133 "was aimed specifically at” August A. Busch and his “beer-baseball combination in St. Louis." (*6)

Johnson’s timing was no coincidence. Baseball’s antitrust exemption had been affirmed just three months earlier in a Supreme Court ruling. Johnson seized on that as a way to leverage Busch out of baseball: if the Cards lost their exemption from antitrust laws, they would also lose access to the reserve clause, which prevented players from jumping ship the minute their contracts expired. Johnson regarded the reserve clause as the "very cornerstone of organized baseball," without which it could not exist, and so believed that the threat of an antitrust suit would be enough to persuade Gus Busch to sell the Cards. (*7)

Nor was Johnson’s motive hard to understand. When he was not serving as senator from Colorado, Johnson presided over the Western Baseball League (WBL), an organization of midwestern and western minor league clubs. In 1953, WBL member Wichita had earned six thousand dollars from radio broadcasts of its games. In 1954, however, it stood to earn zero dollars because the airtime had been purchased by the St. Louis Cardinals.

"Six thousand dollars may seem like peanuts to some," Johnson observed, "but it is the difference between local baseball or no local baseball in Wichita." Because of the Anheuser-Busch "invasion," Johnson added, "it is my considered judgment that the Western League will not operate in 1954." And he, Edwin C. Johnson, would be out of a job. (*8)

___________________________________________

Sources:

*3: Congressional Record, 83d Congress, 2d sess., 1954, 100, pt. 2: 2116, 2119.

*4: Ibid., 2115, 2117.

*5: Ibid., 2115.

*6: Ibid, 2116.

*7: Senate Subcommittee on the Judiciary, Subjecting Professional Baseball Clubs to the Antitrust Laws, 83d Cong., 2d sess., 1954, 8.

*8: E. C. Johnson to August A. Busch, Jr., February 9, 1954, quoted in Senate Subcommittee, Subjecting Professional Baseball Clubs, 103.