Monthly Archives: July 2011
No, this is not the big reveal. That’s coming in a few hours. Relax. I’m only putting up this post to cover some news items of interest.
Lew Wolff is the first owner to publicly call for Frank McCourt’s ouster.
Wolff said he did not speak out as a way to curry favor with Selig, his fraternity brother at the University of Wisconsin, who has kept the A’s waiting more than two years for a decision on a proposed move to San Jose. Wolff said no one — including Selig — had asked him to speak out and said he had no interest in buying the Dodgers.
I don’t get the sense that Wolff wants to deal with the mess that is the Dodgers. At this point, he’s a lot more like Murtaugh than Riggs. Added – At Biz of Baseball, Maury Brown traced back the chronology of McCourt buying the Dodgers. As always, the truth is more complicated than convenient.
The San Diego Chargers released an “update” on how their stadium campaign is going. For now, they continue to focus on a downtown SD site near the Convention Center and PETCO Park. They also have a very interesting response to a question about the death of redevelopment.
You’ve stated that recently-passed California redevelopment law changes may still undergo a legal process before they’re set in stone. If the legislation remains unchanged, how does it affect your efforts?
Assuming that the California Supreme Court does not invalidate the new redevelopment laws, the changes will impact our efforts in the following ways:
(1) The City of San Diego will not have available redevelopment money until sometime into the next decade – perhaps as late as 2024 or 2025. So we can no longer count on any immediate redevelopment funding for our project.
(2) Therefore, we now need to find alternative sources of funding. One idea that is getting some traction is the creation of a new Sports and Entertainment District that would tie closely into the existing Convention Center – and perhaps become part of the proposed Convention Center expansion. This sort of District could give us access to funding sources that are now not available for a simple stand-alone pro football stadium.
(3) Finally, we are exploring ways to bridge the gap between when stadium funding would be necessary and the time when redevelopment funding would be available in the next decade. It may be possible, with the cooperation of other government entities in the region, to bond against the future redevelopment revenues so that stadium construction can begin before the actual redevelopment dollars are available. This option increases the cost of the project, but such cost increases may be unavoidable in light of the recent state law changes.
Sounds a lot they’re using the 49ers sales pitch, though the ability to use the Q site as financial backing for the new stadium seems questionable at best.
Montreal interests want MLB back in town. They’ll need a comprehensive ballpark plan before anyone pays attention, unless they want to be used as a stalking horse. BTW – a $60 million payroll could be supported? Any team nowadays should be able to support $60-70 million without blinking an eye thanks to revenue sharing.
We may have been incredulous at the prospect of building two ballparks in Omaha – one for AAA ball and one for the CWS. Now it appears that a valid reason has surfaced for the separation of teams: one of the ballparks just had to have circus rides for kids and a big bar for the adults.
95.7 Sports Radio relaunches Monday at 6 AM as 95.7 The Game. The hosts are:
- 6-10 AM – The Rise Guys (Whitey Gleason, Mark Kreidler, Dan Dibley) come from Sacramento
- 10 AM-2 PM – The Wheelhouse with John Lund (Lund is from Portland)
- 2 PM-6 PM – The Drive with Brandon Tierney and Eric Davis (Tierney was on NY’s ESPN 1050, Davis was the All-Pro ex-49er cornerback)
- 6-10 PM – The Chris Townsend Show (coincides with baseball during the season, includes his pre/postgame duties on weekdays)
- Weekends – Rick Tittle will be handling pre/postgame for the A’s on weekends.
According to Darren Rovell, the Versus network will be re-branded NBC Sports next January. Yawn.
Thanks for your patience on the big reveal. I’m still finding things that need tweaking so I’ve needed every hour.
While the mad scramble to cut, sign, and trade players happens this week, a clearer picture of stadium financing has also emerged. Last week, Tim Kawakami wrote about so-called stadium credits that would be available for cities that embarked on building new venues. Now, thanks to further digging by the Chronicle’s Kevin Lynch and by Niners Nation, the mechanism makes a lot more sense.
In the previous CBA, owners took $1 billion off the top for stadium expenses. This time, the players wanted a piece of the whole pie. To make that happen, they had to agree to share the burden of stadium construction costs. That means cutting their share of the new revenue pie from 50% to 47-48%. Up to 1.5% of total revenue will be set aside as a credit for new stadia. If the total revenue for the 2011 season were $9 billion, the credit would be worth around $135 million per year.
The credit is much like a tax credit a person would get for buying an electric car. It’s only available once the vehicle is purchased. Along those lines, the stadium credit would only be available once a stadium broke ground.
It’s important to note that the credit is league-wide. It’s also meant to cover loans much like the G-3 program did under the past CBAs. For the 49ers, the credit reflects basically the expected amount they’d get from a league loan. A similar amount would also be available to the Raiders. While it’s a big, reassuring step for the 49ers, all it really does is erase the uncertainty surrounding stadium financing going into the CBA negotiations. There’s still a big gap that needs to be covered, and I don’t think it gets covered without the Raiders being as committed to Santa Clara as they can possibly be.
Update 12:39 PM – Tim Kawakami has more from a discussion with Jed York.
While the media has been vigilant in its reporting of the NFL collective bargaining travails (sometimes to its detriment), reporting on the NBA has been scarce for the first month of the hoops lockout. And unless you asked around, you’d have every right to think that MLB’s own CBA was not expiring after this season ends.
All of the leagues and players unions like to think they have the best deals for their constituents, and are generally immune to effects from the deals struck by rival leagues. However, it’s clear now that the NHL CBA, struck in 2005 after the loss of an entire season, has shifted the landscape for the NFL and will do so in even an greater fashion to the NBA. Salary rollbacks and harder salary caps are the rule of the day now, with the economic downturn providing significant ammunition to the leagues. The pendulum has swung back, though it’s thought that when the NHL redoes its CBA after next season, a market correction towards labor will be due.
MLB remains on a different plane due to its lack of a salary cap and extensive revenue sharing. The “guaranteed share” measuring stick used by the other three leagues to determine what is fair for the players doesn’t exist in baseball, and it’s safe to say that it won’t for a long time. As long as the biggest stars keep getting nine-figure deals in free agency, MLBPA is perfectly content with the cost controls currently in place (service time + arbitration for young players).
That brings the comparison between the NFL and MLB down to one key item: the length of the agreement. MLB has usually done 4-6 year deals to allow for economic shifts – especially among individual teams. The NFL just blazed a trail by putting together a 10-year deal with no early opt-out by either signatory. Will Selig or the owners push for a longer deal? MLB is not as dependent on national TV money as the other leagues. Yet all of the network deals (Fox, ESPN, TBS) expire after the 2013 season. With networks pushing for more “sure things” in terms of programming, it’s not hard to see MLB trying to get up to 10 years out of each contract if they can.
Generally, leagues try to have some amount of overlap among the agreements with players, networks, merchandisers, etc. That way they don’t have to follow up one length negotiation with another. If MLB/Selig are influenced to push things out a little, it could mean that the next CBA could end anywhere from 2018 to 2021. If not, the CBA will probably expire in 2016 or 2017. Either way, there should be some kind of resolution to the A’s and Rays’ stadium situations. If not, well, I give up.
Brian Clark, the former Virgin America exec who is seeking to bring a North American League franchise to San Rafael, is about to embark on a quest to bring a franchise to Dublin. According to the CoCo Times’ Robert Jordan, Clark is working at adding four NAL franchises to the Bay Area, though he hasn’t identified the other two cities.
Independent leagues tend to be more volatile than affiliated minor leagues under the MLB umbrella. However, going Clark’s route may be the only way to sidestep the effect of territorial rights on the Bay Area. As Chris Lee found out in his efforts in Windsor, nothing is happening in the North Bay without the Giants’ approval – even if Lee were interested in a franchise not affiliated with the Giants (which he is).
One effect of this movement is that if Clark got four franchises going in the Bay Area, the appetite for minor league baseball could be somewhat depressed due to a similar product at a similar price point being in place. By this I don’t mean the Giants, per se, I mean the appetite for moving the Giants to another community if the cost is too high or if someone like Lee wanted to bring in a second Cal League team. I think the Bay Area’s small enough that pro baseball as a whole could be oversaturated in the Bay Area. Obviously we have no data to prove this given the historically low number of minor league and independent league franchises in the Bay Area, but it’s something to think about. For many games on the schedule, NAL teams could compete with the A’s on price alone. And really, if the quality of the product matters less than the family experience, the A’s might have to look over their shoulder.
If Clark were to try to find a place for a franchise on the Peninsula, it could get even more interesting. The biggest hindrance there is the lack of available land. It’s not beyond the realm of possibility, and if they can pull it off, more baseball is better than less. The Giants are too much of a premium product to be materially affected, but there is room on the Peninsula for a value-oriented product. I’m all for it, Mr. Clark. Let’s see what you can come up with.
A judgment in a Delaware bankruptcy court will force Frank McCourt to accept a $150 million loan from MLB instead of hedge fund Highbridge. The judge may have been swayed by the revelation that McCourt would have to pay $5.25 million to Highbridge if that loan wasn’t approved, creating an apparent conflict of interest. The loan will not allow MLB to assume control of the team. Next up: a ruling on whether future TV rights can be auctioned off now instead of 2013, when the current local TV deal with Fox expires. (More from ESPN LA/Dodger Divorce and Biz of Baseball.) On a related note, you can criticize Bud Selig for many things, but his letter rejecting McCourt’s rushed TV deal (PDF) with Fox is pretty well argued.
How out of whack is baseball economics? The Yankees are paying Kei Igawa millions to commute from Manhattan to Trenton (AA) and Scranton/Wilkes-Barre (AAA).
The NFL and players continue to go back and forth, though the media thinks a CBA will be done very soon, perhaps by next week. Sure. A major sticking point is the length of the deal. The league wants it locked in for 10 years, whereas the players may want an opt-out after 7.
The NBA and NBPA released results of an audit on the 2010-11 season. BRI (Basketball Related Income) was up 4.8% year-over-year. Salaries, which are tied to BRI via a 57% guarantee, are up the same percentage. Both sides can point to the numbers as supporting their arguments during CBA negotiations.
Turns out that AEG is not interested in building a downtown LA ballpark.
Just as in Minnesota, watching a ballpark being built in Miami is starting to turn locals away from the fact that the public financing was not a good deal.
As usual, no news on an A’s ballpark or the cities. Redevelopment awaits the California Supreme Court. I’m off to a pool party!