Monthly Archives: February 2006
On AthleticsNation Blez just posted a fantastic interview with Lew Wolff. This is the second interview Blez has snagged with Wolff. A couple of points to consider:
- How many blogs or other fansites get real, non-fluff interviews with team owners? Blez obviously deserves credit for being regarded highly enough to merit the Q&A sessions with Wolff and Beane.
- Wolff also deserves credit for understanding the educated, oft-hidden hardcore fanbase that prowls the net. Even if you’re a cynic, it’s a fantastic PR move.
That said, there’s something I’ve been wanting to get off my chest for the last few weeks. As I’ve learned more about the process and the complexity involved in getting a ballpark deal, it’s become clear that any thoughts of a conspiracy theory are offbase. Especially in the A’s case. There are too many factors and obstacles that can derail a deal for a conspiratorial plan to work. The different cities involved (including those outside the Bay Area) all have significant issues to overcome if they want to talk ballpark with the A’s. If there was some real guarantee of a predetermined outcome it could make sense, but a dealmaker like Wolff knows better than to put his eggs in one basket. Too many things can go out of control as well. Example:
- Remember the big downtown LA hotel that Wolff’s urban development company was building? Wolff had to pull out last month due to rising costs. The project is now being helmed by a partnership of AEG and KB Home, who plans to build condos in some of the areas where hotel rooms were planned. Wolff is still on as an advisor, but the big bucks will go elsewhere. Think about that. Over the last several months, Wolff signaled to LA pols that costs were rising on the project. Hurricane Katrina may have sent everything through the roof. Instead of killing the deal, all parties got together to work out a plan to get the project built. It meant that Wolff had to step aside, but it looks like it will get done. In the case of an A’s ballpark, Wolff won’t be able to step aside, but we should expect that he’ll be upfront on the costs involved, even as partners or plans change.
I’ve even been guilty of fomenting conspiracy theories at times, but that’s been more to promote discussion of the issues than anything else. The process is not at some advanced stage, far from it. However, things can move quickly, and that should be expected the closer we get to Opening Day.
New articles have appeared on the Bizjournals.com website. One belongs to the East Bay Business Times, the other to South Florida Business Journal. The first article calls the Bay Area “saturated,” while the LA market definitely has room for more sports franchises.
It also cites the Bay Area’s total personal income as $375.5 billion, a figure much higher than the numbers I listed in the previous post. I don’t know how they arrived at this figure so I’ve lobbed a request for clarification. Even with this higher figure, there’s little room for new franchises. Over the span of three weeks in February, the Bay Area will field four sporting events unrelated to the four major leagues:
- AT&T Pebble Beach Pro-Am (PGA Tour; Yes it’s outside the Bay Area technically, but it attracts a large number of Bay Area attendees)
- SAP Open (ATP Tour; the yearly men’s tour stop in the Bay Area)
- Tour of California (UCI; new cycling event with four Bay Area stages)
- US vs. Japan (pre World Cup “friendly” at AT&T/SBC Park)
That’s a lot of sports for a month that’s traditionally considered an off-peak period.
Even more interesting is the Florida article, which concludes that the Marlins wouldn’t be automatically be destined for greener pastures if they relocated outside South Florida. The same can be assumed about the A’s and their situation in the Bay Area as well.
A report in Monday’s Charlotte Business Journal discusses the challenges facing Charlotte in its efforts to lure the Marlins. Chief among them is the a lack of financial support because of the size of the Charlotte market and the fact that two teams – the NBA’s Bobcats and the NFL’s Panthers – already occupy it.
The piece referred to an analysis by the paper’s online sibling, Bizjournals.com. In the analysis Bizjournals.com “used data on team revenue and ticket prices to estimate how much total personal income a market needs to support a pro sports team.” This was done in 179 markets, which should presumably provide a pretty good data sample. (The parent company runs the East Bay Business Times, Silicon Valley/San Jose Business Journal, and San Francisco Business Journal.)
The overall conclusion was that the Charlotte market was $86 billion short of being able to support a baseball team, in terms of the market’s annual otal personal income (TPI). The minimum amount required? $89.2 billion.
I’m trying to figure out how Bizjournals.com derived this figure, but for now let’s for the sake of discussion accept it based on their due diligence. Values were given to other leagues’ franchises as well. Here’s the breakdown:
- MLB – $89.2 billion
- NBA – $38.4 billion
- NHL – $35.7 billion
- NFL – $33 billion
- MLS – $16.1 billion
Step back and look at that for a second. According to Bizjournals.com it takes over twice as much total personal income to successfully back a major league baseball team as it does any other sport. That makes some sense because of baseball has twice as many games as the NBA and NHL. Then again, the winter sports’ average ticket prices are usually higher. The NFL only has 10 or so home games per season and its tickets are the most expensive, but its national TV contracts are so lucrative that local support is far less necessary than with MLB (this also justifies the blackout rule).
Taking this a little further, I went over to the Commerce Department’s Bureau of Economic Analysis and pulled the latest (2003) MSA-based economic data. Since the Bay Area is split into five different statistical areas, one has to do a little hunting to compile the information correctly. Here’s how the Bay Area looks:
While the Bay Area is high in per capita income (and the associated high costs of living), we don’t have a particularly high population at less than seven million people. Pool the required income for all six major teams, and the deficit appears above. There are obviously other factors to consider like the state of facilities, transportation, and location, but the figures point to the idea that we are somewhat oversaturated with sports. Add the various event-oriented sports like golf and tennis tournaments and motor sports, plus minor league teams and college sports, and it is clear that we have more than enough sports in the Bay Area to go around. Which is why we should get down on our knees every morning and thank whoever’s in charge that we have this luxury. Not to sound like a homer, but combine these amenities with our fabulous weather, and it’s easy to see why the Bay Area consistently ranks at the top of annual “Best Places to Live” lists.
What’s more interesting is how the Bay Area compares to other regions. Other than the three largest markets in the country (NY, LA, CHI), few regions have a substantial surplus. In fact, many operate at a sizable deficit. That doesn’t mean those cities can’t field teams, it just highlights how competitive those markets are and can help explain why some teams struggle with sagging attendance, low TV ratings, etc.
The Washington-Baltimore market provides the best comparison to the Bay Area. It has six teams (the Nats’ stadium problems not withstanding), a fair amount of geographic spread, and differing TV markets, just like the Bay Area. Though it has one million more people than the Bay Area, it pulls in only slightly more TPI, just enough to put it “in the black” relative to having six teams. Add the region’s MLS team, and suddenly the market is in the red. Philly appears to be in good shape even though it is stuck between two larger markets. Boston has the pull of the entire New England market to compensate for its slight deficit. San Diego has its hands full with two teams. Portland has a $27 billion surplus, but that’s not nearly enough to handle the burden of a MLB team added to its portfolio. Sacramento faces a similar situation. Even Las Vegas, which has no teams currently, falls over $40 billion short when trying to accommodate a MLB team. Again, this concept of TPI is only one of many factors that determine a market’s fitness. Markets like Green Bay, WI, are anomalies due to the sheer size of their rabid regional fanbase and intangibles like legacy and tradition.
Now go back to the first table. In an ideal situation where income levels are equal throughout the Bay Area, it may serve the individual teams best if they were distributed throughout the region instead of concentrated in primarily two places: San Francisco and Oakland. For instance, San Jose has a single major league team, but in the Sharks’ wake numerous minor league teams (baseball, arena football, lacrosse) have stepped in to claim some of the South Bay’s surplus ($44 million). It might make more sense to move a NFL franchise south to even things out. Or it might make sense to move the Sharks to the North Bay and the A’s or Giants to the South Bay. Obviously, this is not realistic of the venue situation and the fact that Bay Area residents by in large have little trouble driving wherever they need to go, including sporting events. Nor does it take into account preferences, since the individual sports don’t substitute for each other equally among hardcore fans. It does show a more mechanical way the teams could service the market based on each micropolitan area’s individual wealth, similar to the way Starbucks places its stores by using census-based income information.
However, these figures highlight one issue in particular: there is little room for failure. There is so much entertainment variety that it’s easy for the casual fan to substitute other entertainment for a game. Many outsiders and the Bay Area’s own media blame the market’s fickle, fair-weather fans for attendance woes. In the end, does this have more to do with simple market dynamics? It’s true that when teams do poorly on the field/court/ice, their marketing departments have to do quite a bit of “circle the wagons” strategizing to hold onto their season ticket holders and suite lessees. They are, after all, competing with each other for the same limited fanbase. Just as it’s easy to find a Giants fan in Danville or an A’s fan in Novato, a corporation can switch allegiances once their lease is up.
A team can turn its fortunes around, making itself more attractive to the casual fan. This should be viewed as a virtue since competitive drive should keep all teams active to make their respective products as attractive to Bay Area denizens as possible (the 49ers are about to find this out the hard way, the Raiders have been suffering the last few seasons). With the market as limited and competitive as it is, teams have to place incentives for fans to go. The best incentive is a championship of some sort. A sparkling new venue with new amenities is another. When Lew Wolff talks about the A’s being competitive, he’s not just talking about the American League. He’s talking about the Bay Area as well. So far with the increased season ticket subscriptions that are being reported, the Bay Area is responding to the A’s offseason changes on and off the field. Isn’t that the way things should be?
Greetings from Odessa, TX, where I am on an unusual business trip. No meetings, no appointments, just a lot of driving around for testing purposes. Believe it or not, I encountered a tumbleweed 30 seconds after I exited the parking lot this morning. West Texas really is like that.
The rental was already tuned to a local ESPN radio affiliate, which was a relief. As my route took me further and further away from the bustling Midland-Odessa market, the station became more difficult to receive. I had my iPod with me just in case, but I decided to flip through the dial first to see what was out there.
I hit the SCAN button on the radio, and to my dismay, every single time the radio stopped the same thing came out of the speakers:
- Rush Limbaugh
This happened six times, on six different frequencies. Since I tend to avoid any kind of talk radio outside of sports (regardless of political bent or content), I plugged in the iPod and kept driving until I found an area with more variety. That didn’t happen until I got back to Odessa a few hours ago.
The lesson, besides the fact that no one should get stuck in Eunice, NM? Talk radio rules. Especially the conservative flavor. Christian radio is gaining a stronger foothold in the Bay Area with each passing year. That’s what the A’s are up against, even on the stations they currently inhabit. Let’s take a look at the three stations that will carry A’s games in the Bay Area for the next three years:
- KYCY-1550 (San Francisco/Belmont) – I would say that CBS/Infinity should be lauded for taking a chance with the podcast format on “KYouRadio”, but I have to temper that with the thought that the format could change overnight to more talk, or some other overplayed concoction. To me, the curious thing about KYCY is that they had an application to relocate to San Jose and become a 50,000-watt station. That application was rescinded in November without a peep. It’s not realistic to think the A’s will push any of its affiliates in one direction or another because of the historically low ratings. But if you’re looking for a Exodus-to-San Jose angle in the radio dealings, Infinity’s retraction doesn’t help the case.
- KNTS-1220 (Menlo Park) – The station’s parent company, Salem Communications, has until now had a mixture of conservative talk and college sports. Salem has apparently taken a stance that gives their talk programming a priority over the A’s. Since their weekday/weeknight schedule does repeats after 6, it’s quite convenient for them to shoehorn the A’s into repeat time. It’s possible that if the A’s do spectacularly well on KNTS, they could add full Eastern Time Zone broadcasts to the schedule, though the producers of Dennis Prager’s daily show wouldn’t be too pleased with their show being preempted on a semi-regular basis. The problem with the KNTS situation is that the current nighttime signal is so weak, many listeners will be turned off by the static and tune in to KYCY, XM, or the MLB.com streaming feed instead. Ratings won’t look impressive on KNTS as a result, which means the A’s wouldn’t be able to truly prove themselves on weeknights on KNTS. I asked A’s VP of Broadcasting and Communications Ken Pries if Salem had told him when KNTS plans to build that 50 kW facility in Hayward. He said they didn’t.
- KVON-1440 (Napa) – One of few independently-run stations in the market, KVON has a somewhat center-left talk lineup rounded out by more eclectic programming. KVON has been carrying the A’s for some time, but their role becomes significant because KYCY doesn’t reach the North Bay.
Obviously, there’s room for growth. Pries indicated that the team is working to add more affiliates. Hopefully, the targets will be Sacramento and the Central Coast, the two remaining (and gaping) holes for the A’s to cover. With radio dominated by certain types of programming, it’s a tough sell. Maybe there’s a station willing to do an equity exchange the way KNBR and the Giants work with each other, but even then, there have to be ratings to back the A’s placement on any station. The new setup is problematic in that the three stations could cannibalize each other to a degree.
P.S. The new affiliate list is now up.
P.P.S. I’m going to take a peek at Midland’s quaint Citibank Park while I’m here. The Midland Rockhounds are the A’s AA affiliate.
As 2010 approaches, Oakland, the A’s, and the Raiders will have some very difficult decisions to make. Oakland is severely cash-strapped and still stings from the 1995 Coliseum renovation, which brought back the Raiders but has put the JPA in deep for the next two decades.
The Raiders have settled most of their issues with Oakland, but their lease ends after the end of the 2010 season. That would appear to pave the way for the Raiders to leave, but there aren’t that many cities capable of building a NFL-sized stadium, and NFL commissioner Paul Tagliabue holds the keys to the Los Angeles market, where Al Davis is most interested in relocating.
The A’s, who had felt neglected because of the way the Coliseum was renovated, aren’t getting too warm fuzzies from Oakland in their desire to build a ballpark village. Their final year in Oakland, if they don’t leave early or extend the lease, will be 2010.
Today an article in the Trib discusses how the Bay Area could attract a Super Bowl. The 49ers have an ambitious multi-use development plan in the works with housing giant Lennar and the city of San Francisco. Despite the strained relationship between the Raiders and Oakland/Alameda County, the Raiders came up with a way to keep the 2003 Super Bowl in the Bay Area (where it was originally meant for a revamped Candlestick Park): add 7,500 seats to the Coliseum. That idea fizzled and the 2003 Super Bowl ended up in a more familiar locale, San Diego. The article notes that a Bay Area Super Bowl would be bolstered by a joint 49ers-Raiders effort, but doesn’t elaborate on how the competing interests (49ers vs. Raiders, SF vs. Oakland) could make it work.
The Raiders haven’t released any plans for a another Coliseum redo, but it stands to reason that with the newly friendly relationship they have with Oakland, along with the team’s inability to relocate as easily as they did eleven years ago, they could try to work a deal to “complete” the renovation in Oakland. The Raiders could take advantage of the NFL’s G3 loan program, which provides $150 million for new construction or expansion. Myriad problems await, including financing the rest of it ($150 million won’t cover it all) and getting pols to sign off on the deal. The sales pitch would involve getting the Super Bowl in Oakland (and its oft-overstated positive economic impact) sometime in the next 20 years, a carrot that has been the main selling point in getting new stadia built or upgraded (San Diego, Dallas, Kansas City).
Should the Raiders and Oakland venture down this path, the A’s would once again be on the outside looking in. For how would Oakland and Alameda County be able to invest in multiple new facilities again? Therein lies the rub. Oakland’s going to be forced to decide who it wants to support. And I doubt that anyone’s looking forward to making that decision.
San Jose officials nixed an $80 million deal to build a soccer stadium near the Diridon South ballpark site. The controversial deal, which received little public scrutiny before it initially passed last month, involved a commitment from the city to build a SSS (soccer specific stadium) on city-owned land that currently houses a fire training site. Operating subsidies were included for the years in which the new San Jose Earthquakes expansion team were forced to play in Spartan Stadium while the SSS was being built. The plan also called for funds earmarked for public recreation facilities and parks to be rerouted to the stadium. MLS commissioner Don Garber visited San Jose two weeks ago and had meetings with the city.
This could affect the A’s interest in the team, since it is unclear whether there would be any public share for a SSS, and that’s what attracted Lew Wolff to the idea in the first place. After the $80 million plan was announced in December, Wolff expressed his interest and has been in touch ever since. The article states that the city still plans to meet with Wolff in the next 45 days, which could mean any number of things.
Does this mean that all hope of getting the Quakes back is lost? Hardly. I wouldn’t be surprise if a different plan came out of the woodwork. It may even be *gasp* a multi-purpose facility, though it wouldn’t be anything like the multi-purpose stadiums of decades past. Neither MLB nor MLS wants to share stadia with other tenants, but if it is a single ownership entity that owned both franchises, it might make more sense, especially from the construction standpoint. The difficulty lies in building a stadium that can capably handle both sports without compromising size, sightlines, or amenities in either configuration.