WrestleMania 31 in Suplex City

For the second time in five weeks, Levi’s Stadium hosted a major sporting event that would push the venue to its limits. And like the Stadium Series in February, it was a sellout. 76,976 came through the gates to watch WrestleMania 31. I polled Twitter followers after the event. While some continued to have issues coming out of the main parking lot (Green #1), fans in lots farther away appeared to have a much easier time. VTA did well too, with numerous express buses ready to go along with light rail trains going east and west. There’s now over a dozen large events’ worth of traffic data that VTA, Santa Clara, and traffic consultants can use to help formulate solutions to ease the post-burden gridlock, but there’s only so much they can do given how the street grid is laid out.

There were also private buses, like these outside the Fairmont San Jose:

Apparently there was also a ticket snafu, which delayed longtime friend-of-the-blog and fellow A’s fan @LnStrngr:

Inside the stadium the event was a rousing success. I watched parts of it, and though I’m no wrestling fan, the spectacle was impressive and the vast majority of fans loved it, including my two wrestling-fan brothers. For me there was the immediate disconnect of having wrestling matches outdoors during the day, which was necessary to keep East Coast viewers to a somewhat reasonable bedtime.

Over the weekend I saw so many Twitter and Facebook posts from friends who attended the main event tonight, the NXT showcase, AXXESS and WrestleCon, and the Hall of Fame induction ceremony. Some are also going to RAW on Monday night. Most of these events were held in and around downtown San Jose, which undoubtedly was grateful for huge influx of tourists. Though the actual attendance was higher than the Super Bowl, WrestleMania isn’t quite at the scale of SB in terms of hosting, so WM31 made for a solid rehearsal for next February.

After tonight, I guess SC no longer stands for Santa Clara. It stands for Suplex City. Bitch.

Prominent developer SunCal brought in for Coliseum City study

SunCal, a large developer based out of Irvine, was brought into the Coliseum City project this week. Their role isn’t as the project’s master developer, it’s to determine whether the stadium, parking, and ancillary development can all properly fit on the 120-140 acre Coliseum site. Intriguingly, SunCal was brought in by the Raiders and Mark Davis, who have lingering concerns about having enough parking for football games.

SunCal has plenty of experience in the East Bay, having worked previously on Alameda Point before the project drowned in a sea of hubris and red tape. They also resurrected the long dormant Oak Knoll redevelopment plan, which had previously suffered from the depths of the recession.

New City’s Floyd Kephart wanted to make clear that SunCal’s role here is as a consultant:

Presumably, SunCal’s study, which was not a specific requirement for the ENA, will help guide Davis’s decision making process later this year. Just as important, it will probably guide the NFL’s. The league really likes plans with tons of parking, as seen in both the Inglewood and Carson plans. The hypothetical, then, is what if SunCal comes back with a larger parking requirement than is prescribed in Coliseum City? Of the 13,000 spaces programmed into the project, only 4,200 are surface parking (good for tailgating and buses). Everything else is in a garage, which when Lew Wolff mentioned the difficulty with garages, he got hammered. I wonder what will happen when the Raiders want more surface parking for their stadium.

Sure, there is BART, which according to the Raiders currently serves 30% of fans. You still need, well, 13-15,000 spaces for everyone else. And we have no idea whether SunCal’s study will include a baseball stadium.

SunCal could also find the project attractive enough to become the master developer, which would be a huge positive. Unlike Alameda, where SunCal is persona non grata, they don’t have a poisoned relationship with Oakland. They could be exactly what Coliseum City needs, though it’s clear they are acting in a thoroughly noncommittal role at the moment.

When I first heard the news I was surprised that it hadn’t gotten out at the beginning of the week, as the NFL owners meetings started. Then I saw SunCal’s limited role and it made more sense. If they express more interest in May, then it’s something for Kephart and Oakland to hang their hats on.

The small market A’s and some serious equity

Like clockwork, the annual Forbes MLB valuations roteere released yesterday, just prior to the start of the regular season. Unlike last year (which I didn’t bother to write about), there were several surprises. The biggest was the Giants’ 100% boost from $1 billion to $2 billion, on the strength of the team’s third World Series win and development potential at Mission Rock.

The other surprise was the huge gains for small market teams, led by the Royals, Indians, and yes, your Oakland Athletics. Forbes awarded the A’s a 46% gain, from $495 million last year to $725 million this year. While many revenue-related factors are responsible, Forbes also chose to up its revenue multiplier in determining the valuations, which had been falling behind actual sale prices in what has been over the last several years a hot seller’s market.

Higher enterprise ratios are being fueled by the stock market’s six-year bull run (which has inflated asset values and created a lot more buyer than seller of teams), baseball’s unmatched inventory of live, DVR-proof content, real estate development around stadiums, higher profitability (which reduces the need for capital calls) and the incredible success of Major League Baseball Advanced Media, the sports’ digital arm that is equally-owned by the league’s 30 teams.

Even the new A’s valuation may be behind the teams a bit. When Bloomberg released its own independently derived valuations after the 2013 season, then-PR man Bob Rose suggested that the number was closer to $700 million based on revenue. Before franchises started going for insane amounts, it was common for franchise owners – including Lew Wolff – to claim that Forbes’ numbers were incorrect, overselling certain aspects of a franchise’s operation. Now we’re starting to approach $1 billion for a team that has at best average TV/radio deals and no new stadium. A 300% return in a decade is pretty impressive, no matter how slice it – though Wolff and John Fisher can’t realize that until they sell the club. They’ve shown no indication that they’re interested in selling, despite how much the stAy crowd clamors for it.

As nice as the new valuation looks, it’s miles from where the Giants, Dodgers, and almighty Yankees ($3.2 billion) are. The Bronx Bombers recorded more than $500 million in revenue last year, confirming a quote from an unnamed Yankee exec in the fall. The luxury tax was designed to dissuade teams from profligate spending, but until recently that hasn’t stopped the Yankees and the Dodgers don’t seem to care one iota about the luxury tax. Redefining luxury tax penalties may become a sticking point in the next CBA negotiations, one that goes hand-in-hand with shifting the revenue sharing model for lower revenue (small market) franchises.

Let’s do a deeper dive into the Forbes figures. First the A’s:

numbers

Forbes breakdown of the A’s valuation

 

Now the Giants:

Forbes Giants valuation

Forbes’ Giants valuation

In nearly every key measurable, the Giants double or even quadruple the A’s. The Giants hit a perfect storm of on-field success and savvy management, which was parlayed into impressive revenues. The Giants are a money-making machine. They are also a big market club, no doubt. Though they aren’t profligate spenders in terms of payroll, everything else about them is big market, just like the Yankees, Dodgers, and Red Sox.

The A’s, on the other hand, bear all the marks of a small market team. Gate revenues are abysmal compared to the Giants. It’s so lacking that the A’s could untarp all the regular upper deck seats, sell out the entire season, and still only reach 50% of the Giants’ revenue. The flipside to that is that the A’s are a far more affordable, accessible product for baseball fans in the Bay Area. The market itself, which is defined as the East Bay, compares to a lot of other small markets like Tampa Bay and Kansas City. As long as the A’s are pigeonholed to the East Bay, it’s likely they’ll remain small market, or perhaps boost themselves to a medium-sized market if a new stadium comes.

New and improved national media revenues are the tide that has lifted the A’s boat. As big market teams keep getting bigger and bigger annual revenues, the A’s will continue to be a club that receives a nice revenue sharing check, at least as long as they play at the Coliseum. Per the current CBA, they’ll continue to be eligible for revenue sharing until they start playing in a new Bay Area ballpark. So the A’s are in a sort of limbo in which right now they’re considered a small market team in that they receive revenue sharing, but will be redefined as a big market team once they open a new park. That arrangement could continue into the next CBA, or it could change. I suspect that if the A’s build a new park in Oakland, they’ll remain a small market team by definition, simply because they don’t have the same direct access to big sponsors as they would in San Francisco or San Jose.

The other big takeaway from the valuation news is that the A’s debt position has significantly improved from doing nothing. Forbes reports that the A’s debt is now 8% of franchise value, or around $60 million. That leaves an astounding $665 million of equity for the ownership group. Wolff has suggested that he would use equity to help finance a ballpark. He could conceivably cover the entire cost with the team’s equity, but MLB rules about debt load preclude such a plan. The most debt the A’s can accrue without running afoul of MLB is 12 times their operating income if they’re building a new ballpark, 10x if not. If you take the average of income from the last three years you get $25 million. Multiply that by 12 and you get $300 million. The A’s have $60 million of existing debt, but according to MLB rules they can exempt $40 million of that. Combine all of those together and the A’s can in theory finance $280 million of a stadium. Even with the added debt, chances are that by the time the stadium opens it would hit only 35-40% of the franchise’s value, an acceptable amount for a sports franchise.

Naturally, the problem is servicing that debt. $280 million over 30 years at 4% is $16 million a year. To ensure that gets covered and it doesn’t have a deleterious effect on payroll, the A’s would have to get 30-32,000 average attendance per game for several seasons, at much more expensive prices than the Coliseum to boot. Then there’s the combination of suite sales, sponsorships, and maybe even seat licenses if fans are willing to invest. If this sounds similar to what the Giants did, that’s because it is. Maybe there’s a real estate component that can come in to offset that debt service requirement, but Wolff indicated in recent comments that grand development concept such as Coliseum City is not forthcoming from him.

Nevertheless, if Wolff and Fisher want to build, and fans are willing to pay, the path is there. Getting to a deal is the hard part.

P.S. – Speaking of getting to deal, there’s been some noise about wanting Wolff to show his plans. Show a rendering, something to indicate that he actually wants to build in Oakland. To which I say – come on. He just finished opening a soccer stadium, the spring training facility renovation, and is finishing scoreboards at the Coliseum. Are those not indicators of wanting to build?

All of these sentiments, while well-placed, are based on some unrealistic expectations. Fact is that the stadium development process is dog slow. It’s tedious. No premature release of renderings will do anything other than getting a small handful of fans excited. Believe me, I’m one of them. But I’ve also learned over the years is that all of that is sizzle, not steak. If you want real progress, you need rules. You need a framework. Here’s the “framework” for the A’s right now:

framework

That’s not a framework for anything other than random discussions between the A’s and East Bay pols. If the A’s, City, and County are going to work on an actual deal, they need to establish a real framework for talks and for a stadium/development deal. It would help if Oakland or the JPA started by creating an RFP (request for proposal), that would allow the A’s to formally propose something. The A’s are in the process of hiring a person to interface with City/County/JPA. If the Raiders wanted to present their own vision, the RFP could accommodate them too. That is how the Coliseum City process started, and is the proper – not to mention legal – way to do government business. Frankly, I’m past renderings. I want steak. You should too.

Alameda County approves ENA, draws line in sand at public money

Early during the Board of Supervisors meeting, President Scott Haggerty hinted that the assembled gallery could see how the Supes were going to vote, as they all had roughly the same comments during their part of the discussion. Nate Miley said he was going to vote for the ENA, but didn’t support “wholesale” use of public resources (land, money) for the project. Richard Valle called the project an “opportunity for private investment” before affirming his long-held no public funding stance. Wilma Chan felt the same while talking about community benefits. And Keith Carson considered the ENA a prudent step so that they could find out if the project had legs.

That sentiment of limited public support didn’t begin yesterday. It was brought up in public in December 2013, at the joint discussion between the Supes and Oakland City Council. It’s a topic that City and County haven’t been able to reconcile when County wasn’t part of the ENA. Now that they are equal partners, they’ll have no choice. It’s impossible to undersell the impact of this. County has taken a hard line on this, and it’s hard to see how City or Floyd Kephart’s New City will be able to reconcile it. In other words, it’s a potential showstopper.

The public contribution issue is big enough for the County that at the same meeting they commissioned a $200,000 study by CB Richard Ellis to appraise value of the Coliseum complex, land and buildings. Even that proved divisive:

Why would the County want the appraisal so badly? If the County wants to work from the notion that it could sell the complex at fair market value, it would help to understand what that FMV is. That doesn’t mean that they’d actually sell it at FMV. They could do a deal like San Jose, offering land at a discount provided that there was a certain price based on use. If County trends towards FMV pricing, that may be to force a decision on preventing a land giveaway by the City. While there are no deal terms yet, Coliseum City has long operated from the idea that the value of the land would offset sunk cost items like new infrastructure or writing off the Coliseum’s debt. The money saved by not spending it on land could be funneled towards the football stadium’s funding gap.

parcels

ENA covers ~140 acres of Coliseum area land

 

But if FMV was sought for the land, there’s no redirection of money to the funding gap. How, then, does that gap get addressed? If all three parties are going to have even a rough framework of a deal by the June deadline, they’ll have to come to some serious compromises that satisfy all three. That problem is one of those proverbial above my pay grade type of problem.

Miley made sure to mention his contingency plan of retrofitting the Coliseum instead of building new. While all five Supes approved the ENA, they didn’t express a ton of confidence in the project coming together. Left unsaid was another even more radical option that may prove more viable in time, one that was briefly mentioned in the adult conversation 16 months ago.

What if the City bought out the County?

If the County were leaning in that direction, an appraisal would make even more sense. Then they could start to figure out how to split the property, the remaining debt, and the JPA itself. Divorces are always messy, so don’t expect anything like this to happen as long as talks with Kephart continued. It’s not hard to see Coliseum City’s demise leading to a divorce. After all, if the sports teams are the JPA’s kids, and the kids have all grown up and moved away, what’s left?

Yet another possibility is that the County, which has a good relationship with Lew Wolff, is waiting just like Wolff for Coliseum City to die. Then they can work with the City on ballpark plan at the Coliseum. The no public funding demand would arise yet again, which would scare off many developers – but not Lew Wolff, who is not thinking about developing the Coliseum extensively right now. But that would be at odds with the City, which has grander visions for the Coliseum area than a stadium surrounded by parking.

Going back to the next-six-months-narrative, Friday’s City Council approval had optics that were designed to look good in reporting progress to the NFL. However, the NFL’s LA point man, Eric Grubman, continues to maintain that Oakland is neither “aggressive” nor “specific” about its plans. It’s easy to figure out what he means by “aggressive,” but “specific” appears to be a vaguely coded term. Is that just about Oakland’s desire for a 80,000 dome? That appears to have been put aside in recent weeks, especially by Mayor Schaaf. Does it mean something else? Coliseum City continues to be this amoeba that could contain anywhere from three to zero teams. The next three months are meant to provide some specificity, and the following two months even more fine tuning. The NFL signaled that it may announce or authorize moves during the fall, before the 2015 season ends. That puts Oakland, San Diego, and St. Louis under the gun to resolve their stadium problems, or else become abandoned. Even as it seemed the NFL had lost control of this game of musical chairs, they may have regained it.

Are we having fun yet?

Corey Busch talks Blue Ribbon Committee on CSN

Comcast Sportsnet Bay Area provided a bit of a surprise on Yahoo! Sports Talk Live, when they had Corey Busch, former Giants executive and member of the three-person Blue Ribbon Committee (Irwin Raij & Bob Starkey were the other two). Busch explained some of the panel’s activities and charges. Jim Kozimor did his best to pry what little information he could out of Busch, who didn’t answer a number of key questions because of the state of the San Jose-vs.-MLB lawsuit.

Corey Busch interview Part 1

Corey Busch interview Part 2

Busch clarified the territorial rights deal that occurred in 1991, giving the Giants control of the Santa Clara County, which prior to that point had been an open territory. He also called San Jose’s lawsuit a mistake on their part. While you may glean additional information from the segment, you’ll probably come out of it even more frustrated than before, whether you’re an Oakland or San Jose partisan or are location-agnostic. My preference for the show: Ray Ratto in a talking head box in a corner, providing running commentary as Busch answered questions. Good work on the interview Koz, and maybe we’ll get to uncover the bodies when the lawsuit business is over. Busch promised!

Happy Opening Day, Earthquakes

Sure, they did a dry run a few weeks ago with a 10,000-strong crowd, but this was to be the test. Opening match at Avaya Stadium, full house, new infrastructure in place, systems tested to the fullest. The Quakes scored two quick goals and then held on for dear life, 2-1 over the Chicago Fire. The fans were ebullient, raving about the home they’ve wanted and deserved for more than 40 years.

I asked about how people were doing with with transit or parking. Some of the feedback:

All in all, it seemed as if the team, the fans, and the league got everything they wanted out of the experience. A privately funded stadium with great amenities, but not done in a way that would take the focus away from the game.

The original vision for the stadium, unveiled during the throes of the recession, had no club seats or suites. The horseshoe-shaped bowl was the same, including the huge double-sided scoreboard at the open end. As the economy improved and the team reached out to the community, there was interest for luxury seating options, though in implementation they weren’t like those at other stadiums. The result is a tight seating bowl configuration with a steep rake, allowing for great sightlines. An extensive roof over the bowl provides ample shade and holds in noise. And the price tag rose from $60 million to $100 million. About $10 million will be paid for by real estate sales in South San Jose. It’s a refreshing example of restraint that somehow comes without a great deal of compromise. Even Don Garber, the MLS commissioner who approved the previous Quakes incarnation’s move to Houston, understood:

“Not every stadium’s got to be several hundred million dollars. It’s actually got to have them built in a way where the economic model makes sense. That’s what we have here.”

The biggest issue going forward is the fact that there’s no room to accommodate an expansion. There’s always Levi’s and Stanford for the bigger crowds. For decades to come, this is home. It’s something to be proud of, no need to make any apologies. I suspect Quakes fans will be savoring it for some time to come, sellout after sellout.

P.S. – The USGS, which has an office in Menlo Park, set up a seismograph at the stadium.

Kroenke releases new Inglewood stadium renderings on eve of NFL owners meetings

The jockeying for position in the race for LA continues. Oakland approved its ENA extension on Friday, paving the way for Alameda County doing the same on Tuesday. I’ll have more on that following the Tuesday meeting. The Carson stadium project has gotten enough signatures for a public vote later this year (or more likely a City Council action bypassing a vote). Rams owner Stan Kroenke has new renderings of his proposed stadium at the old Hollywood Park in Inglewood. All of this is in advance of the NFL owners meetings in Phoenix this week. All of the players want to give the impression that they have the most advanced, stable plan. All of them, except perhaps Mark Davis, who continues to prefer riding on the coattails of others’ plans (Carson, Coliseum City). Both Dean Spanos and Kroenke are making the case for having their own stadia, privately financed, with no need to house a second team – but the capacity to do so if the opportunity arises. This saga will continue to unfold over the coming months, with everything coming to a head after the Super Bowl 50 when the relocation window opens. Unlike 2014, these stadium plans are becoming more concrete with each passing week, thanks to political actions by Inglewood and Carson.

Previous renderings of the City of Champions development showed zoomed out, distant images of the stadium. Now we’re getting closeups of the exterior and interior. The design is groundbreaking and familiar, all at once. Undertaken by HKS, the architectural firm that penned the more showy NFL stadia of recent years (Cowboys Stadium, Lucas Oil Stadium, the upcoming Vikings’ stadium), the stadium is is covered by a transparent roof canopy, with open sides to allow for air to circulate from outside.

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Like (half of) the fixed, transparent roof at the Vikings’ football cathedral, Kroenke’s roof will be covered in a fabric called ETFE (ethylene tetrafluoroethylene). It’s extremely thin while having excellent light transmissive and insulation properties. Most importantly, it’s very light for a roof material, weighing around 3 ounces per square foot depending on the number of layers used. The lightness of ETFE allows the roof structural work supporting it to be lighter and less complex compared to steel roof structures, and more reliable than the previous generations of fabric roof technology that used Teflon or fiberglass-embedded fabric. ETFE was first used in high-profile sports applications such as the 2008 Beijing Olympics, where it was employed at the Birds Nest national stadium and the Aquatics venue. Instead of being part and parcel with the stadium, the roof will extended over a public plaza, acting like one gigantic canopy. While Southern California never needs a roof for football, the canopy will allow the stadium to be used for numerous big indoor events, such as the Final Four.

Baseball in the Vikings' stadium? Yes! Golden Gophers, baby.

Baseball in the Vikings’ stadium? Yes! Golden Gophers, during the early spring of the college baseball season.

Google’s proposed campus in Mountain View is also likely to use ETFE as a canopy over constantly evolving workspaces.

google-campus1

Google’s buildings will be surrounded by transparent roof canopies, with fresh air allowed to circulate from open areas.

Technology has come a long way since the first domed stadia were built. The Astrodome, which used skylights for the roof, was fatally flawed as not enough light came through to grow grass indoors successfully. That led to the invention of Astroturf, which had the even more appealing original name of ChemGrass (should’ve stuck with it, Monsanto). Numerous other domes became the unfortunate going trend in many cities in northern climates. Most had an air-supported roof, such as the Hubert Horatio Humphrey Metrodome, Pontiac Silverdome, BC Place, and the Hoosier (later RCA) Dome. After a number of deflations and weather-related incidents, air-supported roofs gave way to more reliable technology. Some of the newer domes in the late 80’s and 90’s used fabric roofs but weren’t air supported, using compression rings or cable supports to hold the roof up (ex.: Alamodome, Georgia Dome, Tropicana Field). Few air-supported structures remain in use, most notably the Carrier Dome at Syracuse University. Many of those will give way to replacement venues if not replacement roofs.

OLYMPUS DIGITAL CAMERA

The always aesthetically pleasing ceiling at the Trop

 

That gets me thinking about St. Petersburg. Yes, the location of the Trop is terrible for the other Bay Area trying to get to a Rays game, but what if the dome roof were replaced by ETFE? Would that help the aesthetic there? At least fans would be able to see the sky instead a dull roof, and maybe the use of a lighter material would allow the roof to be re-engineered so that one or two of those compression rings could go away. Too practical to be a solution, right?