Monthly Archives: May 2009
The Merc’s Mike Swift has a good overview of the 27-page term sheet released by the City of Santa Clara earlier tonight (more here). New cost is $937 million, which includes the PG&E substation relocation and the parking garage across Tasman from the stadium. I gave the term sheet a quick look. Here are the raw notes I made on the document(s):
1. City contributions: RDA is pledged to give $42 million, including a $12 million loan from the team. Reimbursement can occur through additional pledged source revenues (hotel taxes). Hotel taxes – $35 million. $20 million from Silicon Valley Power. $17 million for new garage.
2. Facility rent is $5 million/year. Ground rent is $180k first year, add’l $35k per year after that up to $1 million/year. Revenue goes to SA.
3. All parking and concession revenues are to be controlled by the SA.
4. Team revenue is defined as::
- Ticket revenue (excluding ticket fee/tax)
- Premium seat revenue
- Team service revenue (equipment/technology rental)
- Ad/sponsorship revenue
5. Second team provisions
a. $28 million of RDA money is refunded
b. Add’l $1 million ground rent, goes up $100k every 5 years starting in year 11
c. 49ers responsible for all costs to bring a second team in – except in temporary (2 year max) situations
A. City claims that it is not responsible for financial condition of the SA.
B. Yet SA’s board will include City Council members
C. SA revenue sources
- Stadium Builders Licenses. There are references to “an entity experienced in the marketing and sales of SBLs.” Oakland Football Marketing Association, anyone?
- Naming Rights – A portion of construction bonds may be secured solely from Naming Rights sort. They will obviously have some kind of annual revenue target. If, through investigation, potential deals fall short of the target? What will they do: wait for the targeted number (Cowboys), or approve a lower revenue deal?
- Ticket fee/tax
- Upfront Vendor Payments – concessions and pouring rights
Construction of SA-designated part of project can only continue as long as SA is properly funded. That makes the dilemma in #2 above something of a showstopper. It’s hard to get a loan secured by naming rights done if there’s no naming rights sponsor. Which makes me wonder: Do they already have the naming rights sponsor in hand? When the idea first came up in 2005, I was led to believe that the likely candidate was Yahoo, which is no longer in the kind of fiscal shape to make such a deal. Then again, maybe it’s Intel, who’s no stranger to major advertising and sponsorship pushes.
Again, there is no mention of what occurs in case of an SA revenue shortfall.
The inclusion of the “Second Team” terms is interesting, but there isn’t any significant accompanying information to appraise it. Councilman Dominic Caserta asserts that bringing the Raiders (the document goes out of its way not to mention the team by name) in will make the project a slam dunk. It’s a bit premature to say that, though there’s no doubt that having the Raiders on board will definitely help pay the bills.
I’ll save the extensive review for after the City Council meeting.
Of course, I’m referring to the rare bird that is the natural doubleheader (one admission, two games), not the commerce-driven bastardization known as day-night. The old fashioned double dip was often reserved for lazy midsummer Sunday afternoons. For A’s games it usually meant a matchup with a low-draw Midwestern team. Those were the days of balanced scheduling, when fans didn’t have to worry about seeing a certain team for only a single three-game set at home per year.
My only experience with a doubleheader came on July 5, 1988. I was transitioning between junior high and high school. The summer was spent at an advanced learning program for kids at Foothill College in Los Altos Hills. I took Introductory Pascal and Algebra, plus an open gym session. The lengthy bus rides were filled with A’s games on the radio when available, or tapes procured via a newly opened Columbia Record Club subscription.
July 5th fell on a Tuesday, which meant it followed a lengthy holiday weekend. You could probably forgive a teenager’s disinterest in voluntary summer school due to the weekend. That morning, while awaiting the transfer at San Antonio Shopping Center, I decided to cut class and head to Oakland. Mind you, it wasn’t a spur-of-the-moment decision. I figured it was a good time to do it, so I took another long set of bus trips to Fremont, then took BART to the Coliseum.
As satisfying as the original $1 Double Play Wednesdays were in their heyday, nothing beat the $3 bleacher seat for that A’s-Indians doubleheader. Despite the A’s being swept by Cleveland, I have a hard time recalling a better experience at the ballpark than that day. The sky was as clear blue as any I’ve ever seen, and it was quite warm. Perfect conditions, and the young A’s were playing well, July 5th notwithstanding.
I watch today’s rain-caused doubleheader with a little sadness for today’s kids. As a child of immigrants who couldn’t care less about baseball, I didn’t have the extensive baseball rearing system inherent in a typical nuclear American family. My immersion came through friends, little league, and radio/TV. Maybe there’s a child of immigrants in the DFW area whose passion for baseball might get an everlasting boost from attending today’s doubleheader in Arlington. But to know that institutionally the doubleheader is dead for most MLB fans around the country, I despair just a tiny bit. Frankly, it sucks.
Also: Tommy Craggs has the first in a series of articles on Deadspin called “Why Your Stadium Sucks.” The first target? AT&T Park.
When discussing an A’s move south, it can be easy to ignore the fact that a professional baseball team already lives down there. Plenty of people from outside the region don’t know the team exists, yet the San Jose Giants have been an institution at venerable Municipal Stadium that goes back over two decades. They have been undoubtedly the most stable franchise in the patchwork history of pro baseball in San Jose.
MLB and MiLB rules dictate that when a major league team enters a territory occupied by a minor league team, the MLB franchise has the right to kick the little guy out, with the proviso that the little guy is duly compensated. Imagine my surprise when Lew Wolff indicated to me that his ownership group would have to buy the SJ Giants. Should this be an eventuality, the SF Giants will have made an incredibly shrewd investment in the High-A club, one that could pay off big when taken in combination with MLB territorial rights compensation.
What then, is to be done with the San Jose Giants? The A’s can’t exactly buy them and operate them as the SJ Giants. Let’s take a look at a few possibilities, and you can chime in with your own ideas as well.
A’s swap Stockton for San Jose, sell SJ franchise to a new owner
This would keep the High-A’s a short drive from the MLB A’s. While this could be compelling for certain local fans who are really into tracking player development, it’s not without issues. Both teams could play to the finite – yes, I said finite – South Bay baseball market to some extent, causing cannibalization. The 21-year relationship forged by the SJ Giants and local fans would be broken and not easily mended, especially by the archrival organization. Long term, there remain questions about Municipal Stadium, which for all its charm lags severely behind its much newer Stockton counterpart in terms of amenities. The ballpark situation combined with the market saturation dilemma could contribute to a dilution of the future value of the minor league franchise, which means Wolff/Fisher could fetch only a fraction of the a price they paid to facilitate the swap.
A’s swap Stockton for San Jose, move SJ franchise to North/East Bay and sell
Market saturation is not an issue in this situation, but finding a viable new market for Single-A baseball is. Assuming that the other existing Cal League markets are well served by their existing franchises, there are few places to turn to in the end. The best and perhaps only options are markets that are either unproven or have failed to significantly back teams in the past. The North Bay appears to be ripe for a franchise, but there are no clear options. Petaluma has been talked up especially since the demise of the Sonoma County Crushers, but it would require public money that simply isn’t there. Same goes for Napa. Vacaville’s stadium at the old Nut Tree was dismantled and shipped up to Redding, where it will be used by Simpson University. (Trivia: former A’s reliever Greg Cadaret was recently an assistant coach on the Simpson University baseball team, and he helped broker the move. He’s now the manager of the GBL’s Chico Outlaws.) There may be options in the East Bay, though it’s hard to say where. Oakland? Richmond? Concord?
A’s swap Stockton for San Jose, move SJ franchise south or east and sell
The Quakes have for the moment halted plans to build a training center near the Morgan Hill Sports Center, citing economic concerns. There is ample space for both the Quakes’ facility and a small ballpark, though the latter is not in Morgan Hill’s immediate plans. Population for the combined Morgan Hill-San Martin-Gilroy area is less than 100,000, making it way too small to support Single-A baseball on its own. A better option may be to explore Salinas, which still has the bones of an old ballpark which used to be home to the Single-A Salinas Spurs. Central Valley communities are largely spoken for, and cities further south along 101 are too spread out to yield sufficient population to support a team. Reno is having fun with its new AAA franchise and ballpark.
San Jose allows Giants’ lease to expire, forcing them to move elsewhere
The SJ Giants are signed to play at Muni through the 2013 season, which makes for interesting timing considering 2013/2014 is a likely start date for A’s. Could the City of San Jose, whose pols (some of them at least) have expressed displeasure at the SF Giants “investment” in the SJ team, simply allow the lease to expire and then leave the Giants to fend for themselves? While that would work from a legal standpoint, I’m pretty sure that it wouldn’t preclude the A’s from having to compensate the SJ Giants. The Giants would still be a legacy team and its business would be harmed by the move. The San Jose Arena Authority may be faced with conflicting interests, since it oversees Muni and would presumably do the same with an A’s ballpark.
Whatever ends up happening, it promises not to be clean or simple. However, it’s not big enough to derail the deal. Minor league franchises move with far greater frequency than we’re used to with MLB teams. As I write this post, Richmond, VA interests are looking to buy the SF Giants’ AA affiliate in Connecticut, with the intent to move them south to Richmond and a future ballpark. They’re doing this to replace the recently departed AAA Braves, who moved to Gwinnett County, GA to be closer to the parent club. (More trivia: Robert Bobb was recently involved in a Richmond ballpark plan.) Moving, at least in the minor league world, is very much the rule, not the exception.
Note: The poll was removed/revised to reflect an edit to the post. The “North Bay” option is now “North/East Bay.”
It’s been a quiet couple of weeks on the A’s ballpark front. That doesn’t mean there hasn’t been news elsewhere. The good news as that MLB’s economic status isn’t as bad as originally feared, and there’s even a chance of eclipsing the $6 billion revenue threshold (first done in 2007). Bad news? Owners tabled the long overdue broadcast territory discussion. Plenty more on this and other topics at The Biz of Baseball.
Bond ratings agencies have given the Marlins ballpark plan a proverbial thumbs up, assigning medium investment grade ratings of varying stripes to the different financing types that will cover the plan. Meanwhile, bonds for Citi Field are in danger of being downgraded to junk status. Both projects may still end up with similar respective interest rates despite the ratings gap.
The “Is Yankee Stadium a bandbox?” question has been tackled by more than just the sports media. The issue was front and center on NPR’s Talk of the Nation/Science Friday two weeks ago.
Matier & Ross report that erstwhile SF Mayor Gavin Newsom is sticking to his pledge of $100 million for a 49ers stadium at Hunters Point, and not a penny more. Personally, I’d love to be Carmen Policy at this point, getting paid by the City to do – what is it that he does?
Don Perata was officially cleared in his federal corruption investigation. There’s no better way to celebrate than to run for Mayor of Oakland, I suppose.
In case you’re wondering, I figure the MLB committee report (“blue ribbon” is a misnomer) will be released sometime around the All Star Break.
They worked well into the night, but they got the deal done. Terms are now defined for a stadium that could permanently bring the 49ers to Santa Clara.
Ah, but there’s a catch! The City isn’t going to release details of the deal until May 29, only 3 days in advance of the City Council’s June 2nd session during which they could vote to approve the deal. If approved, the deal would go to the voters, probably in March 2010.
Based on the limited information we have about the deal, here’s how it’s put together:
- $900 million total cost
- ~$90 million upfront contribution from Santa Clara (Redevelopment funds)
- ~$330 million from Stadium Authority (quasi-public, using naming rights, PSL’s, ticket taxes for revenue)
- ~$363 million from 49ers/NFL (G3-style fund covering premium seating)
- $62 million to relocate PG&E substation and build garage
Don’t bother adding up the numbers because they don’t add up yet. We’ll see in 2 weeks. Depending on who you interpret the contributions, Santa Clara’s outlay could be either $150 million or $550 million if the Stadium Authority’s loan/bonds are included.
One thing not mentioned in either the Merc or SFGate article is yet another important item to be addressed on June 9: Negotiations among the City, 49ers, and Cedar Fair over the fate of Great America. As far as we know, the stadium deal can get done with or without the 49ers acquiring Great America. Or can it?
If Cedar Fair isn’t satisfactorily placated, they’re likely to whine as long as they own Great America. They’re already bitching about lost parking and the football stadium threatening the theme park operator’s business. It could very well be that the 49ers and the City are dealing with two different scenarios: one in which the 49ers take over Cedar Fair’s lease, and one in which they don’t. If the 49ers or a related party take over Great America, they’d also be responsible for buying up the theme park’s rides, equipment, and intellectual property. Personally, I think it’s not a bad investment, especially if some NFL branding is tightly integrated. A football or sports-oriented theme park next to a stadium? Sounds like a good recipe for multiple Super Bowls, domeless stadium notwithstanding.
Regardless of what happens with Great America, there’s something fishy about allowing only 72 hours for the public to review the deal.
There’s a special election today, in case you haven’t heard.
Rosie Rios, who Robert Bobb hired to work on the Uptown Ballpark plan, may be the next U.S. Treasurer. Both Rios and Bobb were fired by Jerry Brown. Brown was termed out, Bobb became D.C.’s hired gun to get its ballpark deal done, and Rios went on to manage $11 billion in assets for an investment firm. Rios also did economic development work for Fremont, San Leandro, and Union City prior to her Oakland stint.
Santa Clara’s City Council is expected to vote on the 49ers stadium proposal today. A public vote could occur in next spring, not this November. When the full proposal is available, I’ll be here to pick it apart.
Comcast and the NFL Network have been able to come to a carriage agreement. At $0.45 per subscriber per month, it’s a major drop from the network’s requested $0.70.
Carl Pohlad the Pohlad family has agreed to up the team’s contribution for Target Field from $130 million to $185 million in order to fund design enhancements. How magnanimous.
The Phoenix Coyotes will have its bankruptcy case heard in court today. The team and the NHL will have the support of the other three major sports leagues, as they will put up a unified front in the face of antitrust threats. If you haven’t been following the case, start now. It’s by far the most fascinating sports business drama this year. It has competing ownership bids, possible accounting fraud, and bad intentions everywhere you look. I mean, how can you not love this?
While we completely respect the punk rock way (Jim) Balsillie’s tried to jam his foot in the door, he’s doing so with the warped objectives of a self-righteous comic book villain: He views his intentions as noble, so he’s willing to destroy worlds to achieve them.
Makes the A’s-Oakland-San Jose saga look like a suburban bridge night.
One last thing: Game 4 of the NBA’s Western Conference Finals faces a conflict with a WWE event booked 9 months ago. WWE CEO Vince McMahon has taken to playing the heel (as usual), talking trash about Nuggets and Pepsi Center owner Stan Kroenke. My guess? WWE gets compensated and the event is moved outdoors to Invesco Field at Mile High or a smaller indoor venue like the arena at the University of Denver.