News for 8/20/11
Though this August may be unseasonably cool, there’s no doubt that it’s the dog days – for a team mired in third place and those of us looking for ballpark news. Nevertheless, there is plenty to discuss that happened this week.
First up is a very good assessment of where various football stadium efforts stand, courtesy of the Merc and Trib (BANG). Naturally, Santa Clara has emerged in the race due to its diligence in getting a deal done, despite the highly questionable finances of the plan. Oakland lags well behind, and potential funding sources has been identified in the process: $105 million in county transit funding, a Chinese investment group. Transit funding for the Raiders? Yikes.
You may have noticed some upheaval around Hegenberger Road this week when going to/from an A’s game. That’s because the infamous Oakland Airport Connector project started construction this week! The $484 million people mover will shuttle riders between the Coliseum/Airport BART station and Oakland International Airport, all for a more-than-reasonable $6 each way. That’s more expensive than it costs to ride from Coliseum/Airport to Millbrae. (To be fair, the enormous cost of the SFO BART extension has caused Millbrae-to-SFO to cost $4 each way thanks to a surcharge.) And it appears that the only reasons the project kept going all this time are that $95 million has already been spent and up to $250 million has already been committed, making it nearly as much of a boondoggle even if it were cancelled. Initially, the only two stations on the OAC will be the terminals at the airport and BART station. A third station could be built at Doolittle and Hegenberger if the funding surfaces. Double yikes.
Former Rangers owner Tom Hicks is being sued over allegations that he took tens of millions from the team to acquire parking lots around Rangers Ballpark. The lawsuit foreshadows future legal wrangling between MLB and Frank McCourt, who reorganized the Dodgers into so many holding companies and dummy corporations that it’s impossible to say how Dodger Stadium and its land could be extricated from McCourt at this point.
A preliminary report on Kings arena funding indicates that much of the burden will be addressed by user fees on everything from tickets to hot dogs. These fees could generate anywhere from $5 million to $20 million per year. While not fan-friendly, it is more general taxpayer-friendly than sales or parcel taxes. A more fleshed out proposal is due September 8.
Silicon Valley Sports & Entertainment, the parent company of the Sharks, announced 19 layoffs from the business side of the company. Included in the layoffs was longtime director of communications Ken Arnold. Executive VP of business ops Malcolm Bordelon characterized this as “pruning for future growth”. He can’t just be talking about the parking garage the team will construct north of the arena as growth. There’s something else to this. That something may be related to former CEO Greg Jamison, who left a year ago and was never formally replaced, perhaps going after the Phoenix Coyotes as early as next week. Should Jamison pursue the Coyotes, he will have to sell his share of the Sharks. It’s not difficult to see Jamison bringing with him trusted lieutenants such as Arnold and sales/marketing head Kent Russell. It would also provide an opening for the A’s, if they were to be extended the opportunity. Lew Wolff (or a surrogate) could potentially get a stake in SVSE and reciprocate by providing a stake in the A’s/Quakes, making the two ownership groups virtually joined at the hip – and more importantly, fully aligned. That would be important in planning for the next 20-30 years around Diridon, as the two parties would be expected to have a major influence on how the area is planned and developed even if those plans are well down the road.
In tangentially related news, HP announced on Thursday that it will cease development of webOS devices such as the recently launched TouchPad tablet line and Pre smartphones. It may also spin off its Personal Systems Group, which includes webOS (Palm) and its industry market share leading computers operation. Should HP spin off PSG or divest it, there would be an interesting sports-related ripple effect down the line: what would happen to HP Pavilion at San Jose? The naming rights deal at the former San Jose Arena expires in 2016, and not coincidentally, the name reflects a line of personal computers HP makes. In between those two names, the name for a year or so was Compaq Center at San Jose. That deal was done by the final Compaq CEO, Michael Capellas, prior to the HP-Compaq merger (done by Carly Fiorina). It’s possible that HP will keep the name, given that enterprise competitor Oracle has the name on Oakland Arena. Then again, Oracle has a similar choice to make that same year because its naming rights deal ran only a decade. Chances are that both companies will drop the naming rights deals for different reasons: HP because it will no longer have the consumer focus to justify the deal, and Oracle because Larry Ellison lost out on owning the Warriors. Often naming rights deals are reflections of companies’ CEOs, and this is no different.
Capping off corporate talk is billionaire Carl Icahn threatening to perform a coup at Clorox (again). Icahn, who is worth $12.5 billion and has his tentacles seemingly everywhere, is the largest shareholder of CLX stock with a 9.4% stake in the company. Earlier in the summer, Icahn attempted a $10.2 billion buyout of Clorox, all in the name of achieving greater shareholder value (his M.O. for everything). Rebuffed in that attempt, Icahn is now trying to replace the company’s entire board of directors with himself and 11 of his own hand-picked people. Something on this front may happen in November, when the annual shareholders meeting will be held. Icahn doesn’t always win, but it is thought in some corners that his power influenced the sale of Motorola to Google for $12.5 billion (coincidence), which was reported on Monday. Why is this important? If Icahn gets his way, it’s likely that Clorox will eventually be sold to the highest bidder, perhaps one of its competitors such as Proctor and Gamble. P&G would be interesting in that they were forced to divest Clorox due to antitrust concerns around the time the A’s moved to Oakland. And if Clorox is bought and/or sold, CEO Donald Knauss, the former Coca-Cola exec who has shown interest in East Bay/Oakland sports to the extent that there are rumors of a possible naming rights deal, is also not long for Clorox either. If Knauss goes, so does that deal. Naming rights deals often reflect companies’ CEOs, remember?