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Investor group has local links

Second of two parts
Read Part 1 here

Of the four or five groups interested in buying the Cincinnati Reds, only one has emerged publicly - a group of four businessmen with poker, ponies and Penthouse in their backgrounds.

That alone makes an alliance with Cincinnati billionaire and Reds majority owner Carl Lindner seem unlikely. But one thing the group - whose members all have Cincinnati connections - share with Lindner is the financial means to buy the ball club.

The group is headed by Broadway produce Rick Steiner, who grew up in North Avondale and still has a home here.

He's working with three other investors: Dan Staton, Rocco Landesman and John Osher.

The Steiner group is one of four teams of investors that have cleared preliminary hurdles in the now five-month-old process that may lead to the sale of what amounts to a 51.5 percent stake in the team. The only Reds owners not selling their stakes are Lindner and William J. Reik Jr., a Northern Kentucky native who is a managing director of William D. Witter Inc., a New York investment firm. Reik, who also is a director of Cincinnati-based Frisch's Restaurants, has an 11 percent stake in the team.

Major League Baseball routinely declines to identify any prospective owners and for that reason would not comment about the Steiner group, which has been approved by the league to examine Reds financial records as part of the bidding process.

Steiner and his partners became the first to be identified publicly last month when Steiner, a self-described Reds fanatic, talked with a baseball writer in Phoenix.

But Steiner isn't talking baseball anymore. His assistant in Cincinnati said her boss would talk about anything except the Reds, which may mean he's decided that he shouldn't have been so chatty in July.

Some background on Steiner and the other investors who are working with him:

Steiner is a 1964 graduate of Walnut Hills High School and one of the sons of the late Philip Steiner, one of the three founders of Cincinnati's Kenner Toy Co. He's made the theater a career, producing some of Broadway's biggest hits in recent years. His resume on Broadway includes "The Producers," "Little Shop of Horrors," "Hairspray," "Smokey Joe's Café," "The Secret Garden" and "Big River."

Steiner is one of the principals in the Walnut Group, a venture capital firm that has offices at 312 Walnut St. downtown and in New York.

He appears to be a first-rate poker player, having won six poker tournaments, including the 1992 seven-card stud competition in the World Series of Poker tournament in Las Vegas, according to his Walnut Group biography.

His investments have included several minor-league sports franchises, the biography says.

Staton, a St. Louis native, is the president and managing general partner of the Walnut Group. He moved to Cincinnati in 1980 to work with what is now Duke Realty, which has grown to become one of the major players in commercial real estate in Cincinnati and the Midwest.

As a vice president of Duke, Staton was one of the founding members of Downtown Cincinnati Inc. in October of 1993. In the mid-90s while Staton was running Duke, his firm was one of the four companies that comprised the Cincinnati Development Group, which was selected to develop Fountain Square West, the city's ambitious but ill-fated plan to revitalize downtown with new commercial investment.

In May of 1997 when he was 44, Staton left Duke to create Walnut Capital Partners, which later became part of the Walnut Group, with Cincinnatian Fred Mayerson, who had unveiled his Walnut Venture Fund two years earlier.

Later in 1997, it was reported that Staton and Mayerson had tried to buy a stake in the Reds from the late Marge Schott, who eventually sold her shares to Lindner in 1999.

Staton's latest venture surfaced last year, when he teamed up with dot-com multimillionaire Marc H. Bell to acquire Penthouse magazine out of bankruptcy.

Staton is now chairman and chief financial officer of Penthouse Media Group while Bell is CEO. The company has offices in New York and Boca Raton, Fla., where Staton is based. He could not be reached for comment.

Both men found themselves in the center of controversy last month when it was revealed that they had made political contributions - personally and through Penthouse - to the state of Florida's chief financial officer, Tom Gallagher, a Republican who has been running a gubernatorial campaign that focuses on family values.

John Osher, who's been described as a "serial entrepreneur,'' is a Cincinnati native who graduated from Walnut Hills High School and went to Boston University. He graduated in 1971 after "struggling" through seven years of undergraduate work at three universities, according to a biographical sketch published by the Wharton School of Business. The sketch also said Osher never attended classes on a sunny day.

After graduating from college, he listed his occupation for the next seven years as a licensed plumber, carpenter and Boston cab driver.

Another campus bio - this one for the Sloan School of Management at MIT - was prepared in advance of a presentation Osher made entitled "The Innovator as Entrepreneur" or "How I Made $475 Million From A Battery-Powered Toothbrush."

In 1999, Osher developed the Dr. Johns' SpinBrush - a $5 electric toothbrush - and sold it less than two years later to Procter & Gamble. P&G rechristened the product the Crest SpinBrush, and it quickly became the largest-selling toothbrush in the world. Osher's initial investment was $1.5 million and the sale price to P&G was $475 million.

Before that, Osher founded CAP Toys, which he built into a $125 million business from 1988 to 1996. He then sold the business to Hasbro.

Like fellow Walnut Hills alum Steiner, Osher has been a producer and/or investor in Broadway shows "The Producers," "Little Shop of Horrors," "Hairspray," "Smokey Joe's Café" and "Big River."

Rocco Landesman, college roommate of Steiner at the University of Wisconsin, owns New York's Jujamcyn Theaters. The company owns five theaters, establishing it as the third largest theater chain on Broadway. He is also one of the partners in the Dodger Theatricals production company.

Landesman closed on the acquisition of Jujamcyn in February and, according to a New York Post story that was published last month, is trying to sell a 50 percent stake in the company for $50 million "so he can buy part of a baseball team (most likely the Cincinnati Reds)."

Landesman and Steiner have worked together on a long list of productions, and Landesman's producing credits date to 1982 and "Pump Boys and Dinettes."

In a story about the producers behind "The Producers," one of Broadway's biggest hits, the Guardian in England described Landesman and Steiner as professional gamblers and pointed out that Landesman had owned a stable of racehorses before he bought the Broadway theaters.

"Producing is a terrible business," Landesman told the Guardian. "The rewards are lousy. Only 15-20 percent of shows recoup their investment, just as 15-20 percent of horses pay for their oats."

Landesman was described by the New York Times as a "renowned horse player."



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