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What Went WronG
Michael Silver
August 03, 1998
Having built the 49ers dynasty, Carmen Policy and Eddie DeBartolo saw their partnership crumble under the weight of mistrust and front-office power plays
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August 03, 1998

What Went Wrong

Having built the 49ers dynasty, Carmen Policy and Eddie DeBartolo saw their partnership crumble under the weight of mistrust and front-office power plays

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•Money. Policy was skilled at manipulating NFL salary-cap restrictions by restructuring player contracts and relying on prorated signing bonuses and incentive clauses, but DeBartolo came to believe that he was not adhering to corporate wishes in regard to the bottom line. In July 1997 DeBartolo, who had been under the impression that the 49ers would break even that year, saw financial records projecting a loss of more than $10 million. He also expressed anger to team officials that Policy had not informed him of signing bonuses given to several players.

•Organizational turmoil. After the '96 season DeBartolo began negotiating with his sister on a spin-off arrangement that would have broken up their financial partnership, essentially allowing DeBartolo to buy the 49ers, who are owned by the DeBartolo Corp., in exchange for his share of the family business. Policy believed at the time that if the deal had gone through, he would have been ousted by DeBartolo. But the agreement was derailed that summer by the onset of the Louisiana probe, and with DeBartolo expecting the NFL to step in, Policy helped devise the plan that eliminated DeBartolo from active ownership, put the team under York's stewardship and increased Policy's power, even allowing him to replace DeBartolo on the DeBartolo Corp.'s board of directors.

•A power struggle. In January, DeBartolo reviewed minutes from DeBartolo Corp. board of directors meetings and was enraged to learn that Policy had voted for the sale of the jet DeBartolo had used as his personal aircraft. DeBartolo's feelings of betrayal increased when he heard that Policy had met with several investors interested in buying the 49ers. Policy concedes that such talks took place, but says they were done with the DeBartolo Corp.'s blessing. One potential investor, who did not want his name used, says that he and a partner talked with Policy about buying the team and including Policy as a minority owner. The investor says the DeBartolo Corp. knew of those talks. In response, York said, "The DeBartolo Corp. has never authorized the sale or marketing of the team."

•Communication breakdowns. Policy says that during a February meeting in Youngstown, York instructed him and two other team officials, executive vice president Dwight Clark and chief financial officer Bill Duffy, not to discuss business with DeBartolo—something for which Policy believes DeBartolo blames him. "I never did one thing that wasn't approved by the corporation," Policy said as he cleaned out his office at the team's Santa Clara, Calif., headquarters last Friday night. "Here's what Eddie has to understand: Things changed. For so long, we all viewed Eddie as the solitary power, which he was. But then we were told to act in a certain way, and Eddie wasn't involved. What can I say? It's like telling the king, 'Sorry, your majesty, but you're just not the king anymore.' "

In March DeBartolo and his sister were close to a deal on another buyout, after which DeBartolo planned to fire Policy and replace him with former 49ers coach Bill Walsh. The deal fell through, but Policy knew he was vulnerable, and in early July he began speaking to Lerner. On the day after his dinner with Tagliabue, Policy met for 15 hours with Lerner at the Manhattan office of MBNA Corp., the $65-billion credit-card company of which Lerner is CEO. Policy, who enjoyed a striking amount of freedom after being appointed team president by DeBartolo before the 1991 season, said he wasn't convinced until Lerner told him, "My successes in life are attributable to picking the right people for a particular business, then stepping aside and letting them run the business."

The next day Policy met with York and Thrailkill in Youngstown. Citing his strained relationship with DeBartolo as a major factor, he asked for and received a release from his contract, which was due to expire in February.

That night York called her brother with the news, a sign that their relationship had improved following a meeting in Youngstown two weeks earlier. In early July, relations between them had been so strained that Thrailkill had asked Tagliabue to rule on the validity of ownership papers, signed by DeBartolo, York and their father, Edward J. DeBartolo Sr., that gave the younger DeBartolo operating control of the team through 2006, as well as veto power over any sale. (The commissioner says the matter is still under consideration.) Tagliabue, among others, believes DeBartolo and York may now resume negotiations for a buyout deal. Says Policy, responding to criticism that he left the Niners in the lurch: "Not only do I not feel I abandoned ship, I feel my leaving could facilitate an agreement between Eddie and Denise to finally get the ownership situation settled. My being [in San Francisco], I think, served as a flash point, the dry gunpowder for the continuing problems they were having."

Before leaving the Niners, Policy hammered out contract extensions for Clark, Duffy, player personnel director Vinny Cerrato and other employees believed to be vulnerable if DeBartolo were to resume active control. Once a close friend of DeBartolo's, Clark expressed his regard for Policy after the resignation announcement by saying, "Our group upstairs just lost their Jerry Rice." Yet Rice and the other San Francisco players were far less fazed by Policy's departure, which they learned about from coach Steve Mariucci after being rousted from their dorm rooms at the team's Stockton, Calif., training camp late on the night of July 21. "A lot of the younger players said, 'Does this mean the cafeteria's still open?' " said quarterback Steve Young. Strong safety Tim McDonald added, "I had a few young guys ask me, 'Who's Carmen Policy?' "

Assuming the 49ers have another successful year (they advanced to the NFC Championship game last season), Mariucci would seem to be on solid ground with DeBartolo. But there has been much media speculation that the return of DeBartolo might bring with it a run at Mariucci's former boss, Green Bay Packers coach Mike Holmgren. Under his contract with the Packers, Holmgren, a former 49ers offensive coordinator and a San Francisco native, will be free after this season to field outside offers to become a general manager. Until then, the rest of the 49ers front office should remain intact, although DeBartolo is known to be interested in bringing in Walsh to perform some of the duties formerly handled by Policy.

In the meantime the team will be run by Thrailkill, a Nashville native with no football background. Thrailkill displayed some charm of his own at Policy's press conference, when he said, "I didn't plan on this, and we'll face some difficult decisions, but I don't think I'm mistaken in saying Eddie trusts me and Denise trusts me."

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