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Michelle Conroy, a fiercely loyal Cleveland Indians fan, is settling into her box seat just off third base at Jacobs Field, home of the division-leading baseball team. Besides the starting lineup, she's mulling over something else: buying stock in the Tribe. ''Is it smart to purchase it?'' she asks, contemplating the shares' lack of voting rights. ''No. But I'd frame my shares next to my World Series tickets.''

The Indians broke new ground with their IPO on June 4, the first since Major League Baseball allowed teams to sell stock last September. In all of an hour, the club sold 4 million shares at $15 apiece. But the deal has been more of a single than a grand slam. The Indians had hoped to raise about $4.2 million more than they netted, and by June 8, the shares had slipped close to $14 on the NASDAQ stock market. Even so, the speed of the sale underscored the team's popularity. Once the goat of the American League, the Indians have sold out for three seasons, earned World Series billings twice, and put the club on solid financial ground. The net income for last year was $22.5 million, more than double the year before, as revenues rose from $114 million to $140 million, including $17 million from TV.

Other teams, including the Pittsburgh Pirates and even the hapless Florida Marlins, are watching the Indians' stock offering with an eye toward IPOs of their own. ''Anybody who's in the game or in sports would be interested in this,'' says Richard J. Freeman, chief operating officer of the Pittsburgh Pirates.

LOCAL LIMIT. Indeed, the Tribe IPO may presage a new trend in financing pro baseball. Smaller teams without sugar daddies such as New York Yankees boss George Steinbrenner, or Tribune Co., owner of the Chicago Cubs, still need cash for star players and new stadiums. Unlike nationally known teams like the Yankees or the Atlanta Braves, which under Ted Turner boasts coast-to-coast reach and income from cable TV syndication, the smaller teams have to feed off their immediate regions. Says Cleveland fan Vincent Mancuso, 43: ''The Indians' potential is tapped. They're already sold out. You can't make any more money.''

Certainly, other sports IPOs (table) have not been star performers. H. Wayne Huizenga's Florida Panthers Holding Co., which owns the Florida Panthers hockey team, saw its stock triple from a starting price of $10 in 1996. Then it took a long, slow slide to about $22. That's still double the IPO price. But investors are distressed that it's no longer a pure hockey play: It has added six luxury resorts in Florida and Arizona to its portfolio. The Orlando Predators arena football franchise, meanwhile, has been a dud. And in the 12 years since the Boston Celtics sold limited partnership interests on the New York Stock Exchange, their price has crept up all of about $3, to $21.

Moreover, because the partnership's exemption from federal corporate income taxes expires June 30, the team is now reorganizing. Current partnership owners will be able to swap each unit for $20 in subordinated debt plus a share in a new partnership that will be taxed as if it were a corporation. Holders of 100 shares or more can exchange them for a stake in a private partnership whose income will be passed on to its owners. But the units won't trade on any markets.

The Indians may also face a muted market future. David Menlow, president of IPO Financial Network Corp. in Springfield, N.J., an analytical group, observes that the Indians are boxed in by the Pirates to the east, the Cincinnati Reds to the south, and the Detroit Tigers to the west. Moreover, Richard E. Jacobs, the mall developer who bought the Indians in 1986 for $35 million, plans to keep total control of the team.

Jacobs' stock has 10,000 votes per share, while those sold to the public have one vote each. Jacobs declined to comment. But some fans don't mind. ''Give Dick Jacobs more money?'' asks Fred Cropp, 65. ''For all he's done for the Indians and Cleveland, that's O.K.'' Cropp wants to will shares to his children. That's a testimony to America's love affair with baseball--not necessarily a tribute to the stock's potential returns.

By Peter Galuszka


TABLE: The Lowdown on Team Offerings


Updated June 11, 1998 by bwwebmaster
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