Monthly Archives: October 2008
Towards the end of Susan Slusser’s Chronicle article about the A’s hiring Mike Gallego as third base coach is a blurb about the A’s opting out of their current deal with KICU. This appears to be another step towards the rumored deal with Comcast SportsNet California (formerly CSN West). KICU had been broadcasting A’s game for over a decade, and while the team is leaving the door open to returning to KICU, the writing’s on the wall.
In 2008, 45 games were on the KICU part of the schedule, supplemented by 66 on CSNBA. All signs point to an exclusive deal with CSNCA, which will hopefully lead to at least 140 games, perhaps 150. No, that’s not the complete schedule, but it creates allowances for national broadcasts (Fox, ESPN, TBS, and the fledgling MLB Network). Depending on how the CSNCA deal is done, the A’s may have more control over advertising revenue.
The unspoken rationale for such a move is the digital TV transition, which is scheduled to occur next February 17. As it stands, only 6% of the Bay Area audience watches analog TV only via an antenna. The rest watch primarily through cable, satellite, or broadband connections. That 6% is almost guaranteed to drop once the digital switch occurs. The FCC’s traveling band of commissioners visited Oakland last month to educate and survey area residents. The live demo didn’t exactly go smoothly.
Many over-the-air viewers will get fewer channels due to their locations, which brings up two issues. The Bay Area is pretty well spread out thanks to some big body of water in the middle, and here OTA transmissions start to peter out after a few dozen miles. That means if you’re in San Jose and want to watch a digital World Series broadcast from KTVU, you’ll have trouble unless you use a well-powered outdoor antenna that is properly aimed at San Francisco. Ironically, some residents in the various valley neighborhoods of SF have complained of not being able to get OTA digital reception even though they geographically in the transmitter’s backyard.
KICU, which has long been a San Jose-based station, moved their transmitter a few years back from Loma Prieta to Monument Peak near the Milpitas-Fremont border. It’s not a terrible location, but there have been complaints from North Bay A’s fans about the signal. Moreover, the A’s and KICU chose not to do HD broadcasts due to cost. That won’t be such an issue on a regional sports network. With uncertainty about OTA digital coverage on the horizon, it’s not hard to see why the A’s might look at something more predictable.
The flipside of a change to CSNCA is CSNCA’s own carriage. CSNBA has a long legacy of being carried on local cable systems, going back to its days as Fox Sports Net Bay Area and previously SportsChannel Bay Area. That, and the broadcasts of both baseball teams, Warriors, Sharks, and Pac-10 sports, made carriage of CSNBA throughout Northern California/Nevada and Southern Oregon a no-brainer. On the other hand, CSNCA is a relative newcomer. CSNCA only has the Kings right now, and they’re blacked out in the Bay Area. CSNCA has struggled to get carried on non-Comcast cable systems throughout Northern California. While inking the A’s would make CSNCA a more compelling channel, having the A’s would also boost the channel’s subscriber fee, especially if the channel were on basic cable as the A’s are requesting.
Follow-up: ars technica has an article this week citing a survey by ABI Research. According to the survey, 20% of antenna-only viewers will cease to watch TV altogether. Additionally:
70 percent of the surveyed TV watchers plan to hook a digital converter box up to their over the air antennas, while another 10 percent plan to switch over to cable or satellite pay-TV. According to analyst Steve Wilson, though, the rest of the current over the air households will simply stop watching traditional television altogether.
That translates to only 3% of American viewers that will stop watching TV come February. That’s not a bad percentage considering the kind of upheaval the transition is being hyped to be.
The baseball village is not the only development happening in Fremont. Almost 5 miles south on 880, at the county line, is a planned big box/retail center called Creekside Landing. While the merits of having yet another set of big box stores on this stretch of freeway is debatable, Fremont is certainly interested in the sales tax revenue.
Should the shopping center have its EIR approved, grand opening would occur in Fall 2010. The concession the developer is expected to give is an extension of Fremont Boulevard, from where it dead-ends at a flood control channel just north of the property, to Dixon Landing Road. The road there already runs south from Dixon Landing through Milpitas’ McCarthy Ranch development and into San Jose, right by a series of Sandisk and Cisco buildings. When completed, it’s likely that the completed western approach would be part of an alternate route to Pacific Commons and the baseball village.
In keeping with the rollout plans, a draft EIR is on file for Creekside Landing at the City of Fremont’s Environmental Documents website. As is often the case, this large EIR has been split into some 25 documents. The first several PDFs cover the background on the development. That’s followed by sections on air quality, aesthetics, geology, water quality, transportation, and land use, just to name a few. The executive summary covers all of the various environmental impacts in brief.
An EIR is meant to look both forward and backward, but it does this in a fairly narrow manner. For instance, the transportation study focuses mostly on traffic effects at 31 intersections within approximately 5 miles of the project site. Within the 82 pages of the transportation section, only one page covers public transportation, and it only describes existing service in the vicinity, not future planned service. No assumptions are made on future service availability. That will not be the case with the baseball village EIR, since the A’s are making the claim that a similar percentage of fans (15-20%) will not drive to Cisco Field as they are traveling to the Coliseum. Still, the uncertainty of future transit planning makes it difficult to gauge impact, so it’s likely that a worst-case scenario will be discussed at length. Interestingly, the Creekside Landing EIR does not factor in other developments’ impacts, such as the baseball village. The village’s EIR, coming right on the heels of this EIR, probably will have the same treatment. This is despite the likelihood that both developments operating simultaneously will have measurable impacts on the area, on each other, or they will compound each other’s effects. Keep this in mind as the election season ends and we enter the EIR phase.
Sports Business Journal reported earlier in the week that MLB’s ratings slipped compared to last year. The hit was taken for both national and local broadcasts. Some of this can be attributed to the Yankees’ on-field performance. Typically, they’re a massive ratings grabber that pulls the league’s weight, but as it became clear they wouldn’t surpass either the upstart Rays or the World Champ Red Sox, ratings plummeted. Surprisingly, the Red Sox had an even bigger percentage drop than the Yankees despite their success (are Red Sox fans getting spoiled?).
A look into all of the local ratings for 2008 (courtesy Sports Business Journal) shows some interesting market characteristics.
Here in the Bay Area the Giants took a big dump, as was expected with their first post-Bonds lineup. The A’s, who came off a disappointing 2007 season and went into full rebuilding mode, didn’t show a significant ratings drop and generally held onto their audience. That’s good news, as it indicates there may be a baseline from which the A’s TV audience can be built – especially on a different network that features them more prominently.
The table also shows which markets are “baseball towns” as opposed to “football towns.” Midwestern markets with the exception of the two Ohio teams and Kansas City pulled in ratings of 6 or 7. Three of the four AL West teams don’t do great within their own markets, whereas Seattle holds up fairly well. And the combined Washington-Baltimore market is absolutely pitiful. MLB and the O’s have to be looking long term with MASN, because they’re severely overpaying the Nats for TV rights.
Going back to the baseline, the A’s respective numbers (1.7 rating/42,000 households) set a bar that other cities would have to significantly clear in order to attract the A’s. Let’s see how these numbers hold up against three would-be out-of-state candidates. First, a comparison of the Bay Area to the three candidates in terms of Nielsen market size:
- Bay Area (#6 in nation): 2,476,450 households
- Sacramento (#20): 1,399,520
- Portland (#23): 1,175,100
- Las Vegas (#42): 728,410
That puts the Bay Area as 77% larger than Sacramento, over twice as large as Portland, and over three times the size of Vegas. So for those three to match the A’s rather lackluster ratings in the Bay Area (each rating point here equals 24,400 households), they’d have to hit the following local numbers:
- Sacramento: 3.0
- Portland: 3.6
- Las Vegas: 5.8
Sacramento’s target would be the easiest of the three to reach, but their lack of corporate dollars and their own difficult economic status would drive the ratings requirement higher. The Northern California/Nevada television region, which is shared by the Giants and A’s, would also likely be redrawn to divide it between the Bay Area, Central and North Coast (Giants) and the Central Valley (A’s). The net result would diminish the market size for both teams. Portland isn’t as hard hit economically as Sacramento, but their bar isn’t exactly low as they’d have to approach a 4 to make it worthwhile, a number that would make it second to Seattle among West Coast teams. As for Vegas, fuhgetaboutit.
This is a good sign for the A’s as we await an announcement about their television future. I don’t expect the A’s to surpass the Giants anytime soon. The Giants are sinking back to earth after repeatedly doubling the A’s ratings in their Bonds period. If the A’s ratings can consistently stay above 2 (or roughly 50,000 households), they’ll be in pretty good shape for the foreseeable future, even with the economic crisis we are currently muddling through.
As awful as this sounds, this may be a good time to revisit the subject of contraction and why it could or could not happen.
I know you and others have stood by the theory that the only reason it was brought up last time was as a premptive threat leading up to renewing the players association contract.
People forget though that at time we were still getting over the high tech bust as well as 9/11; and that the economic future looked very shaky.
So as the dow tanks yet again this morning, I ask the question: What about now? If the Fremont project is put on hold for an extended period, the A’s won’t stay in Oakland beyond 2012, and it makes no sense to move out of the Bay Area, what’s left to do?
Perhaps this is where San Jose finally comes into play, but I’m sorry Tony; the Giants will still want to be compensated for it. And in this economic climate, who’s gonna come up with the money to do it?
Sorry, but we need to discuss contraction.
Let’s separate this into the two core issues. First, is contraction possible or likely? Second, what is the A’s next move should the Fremont plan fail?
I’ve maintained a pretty consistent stance regarding contraction over the years. The current economic downturn won’t change that. Over the last decade, the commissioner has timed talk of contraction to gain concessions – either from cities deciding whether or not to publicly finance ballparks, or from the players union during CBA negotiations. Of all MLB teams, only three remain in outdated or suboptimal facilities: Tampa Bay, Oakland, and Florida. Florida had the bulk of their legal obstacles removed in their quest for a ballpark at the Orange Bowl site, so they can be removed. Tampa Bay ownership’s waterfront ballpark plan was shelved in June, and though they may want to take advantage of the team’s success to piggyback a new deal, a fast-track situation such as the proposed plan isn’t likely. That leaves the A’s, and we know what that situation is.
In retail or the service industry, talk about closing locations comes up because they underperform as individual entities. That doesn’t really apply here thanks to revenue sharing and the fact that teams rarely if ever lose money. MLB made $5 billion last year. I don’t think they’re struggling in the least.
Contraction doesn’t work with a single team. Two would be required, thanks to MLB’s constant, serial scheduling format. Realignment would also happen, bringing two NL teams into the AL (Colorado/Arizona and one Central/East team), a prospect either target team’s owner would surely fight hard. Then there’s the issue of buying out both teams. Team valuations aren’t likely to drop much if at all, compared to the stock market and real estate. Why? Because the valuations are based on long-term deals such as stadium and suite leases, naming rights and sponsorship agreements, broadcasting deals, and of course, fans attending games. These factors tend to be locked in for years at a time, and while fans tend to be transient for the lower revenue teams, those teams aren’t going to become insolvent just because they lose a half-million fans from one year to the next. Let’s say that despite these issues, MLB decides to contract anyway. The combined price for the two teams will approach $700 million, because they couldn’t be contracted until after the current CBA expires after the 2011 season. That translates to $28 million per team. Perhaps new Giants managing partner Bill Neukom might be interested in paying $28 million to get rid of the A’s, but would any other owner? I doubt it. Even if you drop the Rays and A’s from the current revenue structure, other teams’ shares and net payout/receipts don’t budge more than $1 million (assuming the basic terms of the CBA are carried over), creating little financial incentive to perform the contractions. And would MLB be able to make up for the loss of revenue in affected parts of the country? That’s hard to say. The Giants certainly won’t change from being a $200 million revenue team to a $300+ million revenue team due to the factors described previously.
It’s for these reasons that I can’t see contraction happening anytime in the next decade.
Move, or contract and expand
The simpler prospect would be to move either or both franchises. Coincidentally, Forbes published a new article two days ago titled, “The 10 Sports Franchises Most Likely to Move.” Surprisingly, the A’s aren’t on the list. The article appears to be a bit behind in its assessments of teams, especially the Marlins’ situation. That said, the list isn’t surprising at all – other than the prospect of the Phoenix Coyotes possibly moving back to their original home, Winnipeg (Go Jets!). Moving a team is now a competitive situation. As alluring as Las Vegas once was, it has suffered significantly from the real estate crisis and probably can’t support more than one major league team. No one there is talking MLB, preferring to focus on either the NBA or NHL (hockey is more likely). An arena is planned for east of the strip, the principals being sports giant AEG and a consortium including financiers and blockbuster movie producer Jerry Bruckheimer. Other cities such as Portland and San Antonio may not be in financial dire straits, but the current credit market makes even publicly financed venues much more difficult than they were a decade ago. Sacramento is as bad off as Las Vegas, and there’s already one team there struggling to get a new venue.
I suppose there is a chance of MLB doing the same sort of “sale” that was done with the Expos when they were moved to DC. MLB and the owners effectively contracted the team, then expanded anew, extracting a franchise fee from new owner Ted Lerner. It’s a akin to a publicly traded company initiating a stock buyback program, then issuing new stock down the road. That was made more complicated due to the “musical chairs” method of shifting ownership groups among teams, and that’s one among several reasons why I don’t think MLB could pull it off again. Despite the fact that the move process IMHO was rigged in favor of DC, all sorts of machinations had to take place for it to occur. There’s no large market out there that would elicit such large offers should either the A’s or Rays be contracted and moved like the Expos. Having both available would drive down their potential post-contraction sales prices since they would be competing with each other for the same bidding pool of prospective owners. If the remaining MLB team owners’ primary motivation is to make money from the purchase and sale of one or more teams, there’s no guarantee of it now or in the immediate future.
Wolff angered many Oakland partisans by claiming on multiple occasions that the A’s won’t stay in Oakland. Still, I wouldn’t put it past them to stay, especially if the economic mess remains for years to come. The reckoning will come in 2011, when the Raiders have to decide what to do next. It won’t be possible to house both in different stadiums within the Coliseum site due to the expense and upheaval required. Oakland and the Coliseum Authority will have to choose who to deal with. Take away your green-and-gold colored glasses, and it’s hard to say which team they should choose. Should the A’s have difficulty getting a stadium deal done outside of Oakland, they can continue their lease through 2013, stifling the Raiders’ ability to transform the Coliseum – if that’s what they want to do in the first place. The political and economic realities of getting something done in Oakland remain, though it’s possible that the next mayor may be more sports-friendly.
That leaves the elephant-in-the-room option, the South Bay. I’ve said for a while that if Fremont falls through, the A’s will look there before they look anywhere else, including out-of-state. That’s where the A’s biggest corporate support will come from, that’s where Lew Wolff has such deep roots in the community. San Jose has the certified EIR, transit links, the land for the ballpark, and available adjacent land to be developed for other purposes.
However, there’s a question of how a ballpark would be financed. A lifestyle center shopping village couldn’t be built there. Housing could but it would be of limited height. Lastly, there’s the issue of territorial rights. There’s no reason to believe Neukom won’t be as recalcitrant as Peter Magowan.
Look at it from a different perspective. Which option, of the ones I’ve described, sounds easiest? Contracting teams is incredibly expensive and doesn’t show any tangible financial benefit for the remaining teams. Moving, or contracting and expanding, is a difficult proposition for the governing parties and also doesn’t move the needle appreciably. Staying put is still at best an interim step until the permanent move is made, wherever that is. Territorial rights negotiations may be the least difficult proposition because of its fundamentals: it’s done only within the confines of MLB, doesn’t require changes to the basic tenets of t-rights, precludes an owner from suing, doesn’t require another team such as the Rays to accomplish, and has real prospects for better revenues coming from the A’s. I continue to think that much of this still goes back to Selig, who wants to cement his legacy by having new or renovated venues and unprecedented “prosperity” in place for all 30 teams before he leaves office. Should Fremont fail, one of these options appears to be far easier to accomplish than the rest.
This week’s East Bay Express has an article on the three (four?) -man race for Fremont mayor, and how it maps out in terms of the baseball village issue. The piece was penned by Robert Gammon, who also co-wrote the excellent “How we got to this point” article from two years ago. This comes on the heels of Wes Bowers’ coverage (Fremont Bulletin) of a candidate forum from two weeks ago.
During the initial discussions about the plan, both Mayor Bob Wasserman and Councilman Steve Cho painted themselves as supportive of it, though Cho distinguished himself in remarking that a public vote would be a proper thing to do. He also said at the time that he felt that voters would support the plan. Wasserman and the other council members did not support a referendum, declaring that they didn’t support ballot box planning.
The third mayoral candidate is former Mayor Gus Morrison, who was termed out prior to Wasserman assuming the reins. Morrison has been to date the most vocal critic of the plan, even after a one-on-one with Lew Wolff.
Morrison’s interest anti-growth stance has been well documented in Fremont. There’s an interesting wrinkle to it, captured in this quote:
“Originally downtown was supposed to be equidistant between 880 and 238. We had a plan for a life center when I left office the only life center between Oakland and Santana Row and it sort of died after I left,” he said. “Now the A’s want to come along and build a project with a life center the only one between Oakland and Santana Row and we can’t have two. There seems to be a conflict.”
So is the issue so much about the development in general, or where the development is located? There’s no chance of the A’s looking to downtown Fremont even though it has BART, because the area is 2 miles of traffic lights away from either 880 or 680. Are there business interests who’d prefer to push such a development downtown? Is that realistic?
He’s not alone in his disapproval. Local Sierra Club chapter leader, Vinnie Bacon, is running for city council. Bacon has also been against the project from the beginning. Two city council spots are up for election, and those could also have a huge effect on the plan’s status. Cho’s term is up at the end of the year, as is Councilman Bob Wieckowski, a noted plan supporter.
A look at the LWV roster of candidates for the two council seats shows a laundry list of interests: public safety, budget/revenue matters, growth, business development. Another council candidate, Alan Stirling, is obviously anti-stadium when he said this:
“Not one sports stadium in the history of this country has been built without public money,” he said. “You have to look at your money when looking at this process. (Teams) have walked away from deals when public money wasn’t offered.”
I can name a stadium that was built without public money: Stanford Stadium. And it was built in record time, by a developer who knew what he wanted, and partnered with public and private entities to get it done. The quote above smacks of vague generalism, and isn’t reflective of the current political/economic environment in California, and to a finer point, the Bay Area.
I can’t say I know much about any of the other candidates. Planning commissioner Suzanne Chan and Larry Montgomery are supporters of the plan. Curiously, Montgomery supports building a convention center adjacent to the baseball village. As a San Jose resident, I’m an outsider to the process and have my own home issues to worry about (BART to San Jose).
The desirable outcome for plan supporters would be to have incumbents Wasserman and Wieckowski to keep their seats and leave the final seat up for grabs. Even if Bacon were to get the final seat, that would leave the Mayor and four out of five councilmembers as supporters of the plan. The nightmare scenario for the Wolffs would have Morrison winning and Bacon displacing Wieckowski.
While looking through my Comcast onscreen program guide this weekend, I noticed a channel name change. Digital channel 400, which was previously abbreviated CSNW (Comcast SportsNet West), is now CSNCA. As you might guess, that CA stands for California, making the new name Comcast SportsNet California.
Curious about this, I immediately hit the CSN home page to see what happened. The CSN West page is still up, but it has been updated with a new logo to reflect the name change. All of the corporate scrubbing will assuredly follow suit soon.
There’s nothing in the press releases section or anywhere else about the name change. The Wikipedia entry for CSN shows that the reference to the name change was edited on Friday.
Was the change precipitated by the A’s possible TV deal with CSN? Perhaps, but I’m guessing “No” because I don’t see any conceivable difference in brand recognition between CSN West and CSN California. Instead, it may be that the launch of Comcast SportsNet Northwest in the Seattle area prompted the change, in order to avoid confusion. CSNNW had already been operating in Portland for some time, so there’s a hole in that theory there. Whatever the case, I’ll try to find out later today. Interestingly, CSNNW is not carried by either DirecTV or Dish. According to this press release, some Sharks games will be carried by CSNNW.
This isn’t major news. Still, look for a November press release announcing the deal between CSNCA and the A’s.