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?

53 thoughts on “News for 8/20/11

  1. Clorox has deep roots for 100 years in SF and Oakland, and I hope stays that way. They were owned by P&G from 57-69, but was challenged by the FTC and again were independent.
    CEO Knauss is a founding member of Lets Go Oakland, and there’s rumours of naming rights I hope come true if they can still remain independent.
    My former Teamster big boss of all northern Calif. locals, Chuck Mack ( now retired, it’s been so long this whole ordeal) is a also a founding father of LGO. So I’m a founding father’s little son of this great cause.

  2. It would be great if somebody anybody came forward ready to spend $120 mill on naming rights for an Oakland ballpark. This would provide a huge chunk of $$ for a project that so far has lacked any and all funding. But I’m not seeing what kind of benefit this would give Clorox. They’re already a household name (I can’t name any of their competitors). Not sure baseball watchers are their target audience.

  3. Just my opinion (not hating or otherwise), but I think at this point in the game a Clorox naming rights rumor is completely irrelevant. Even if it came close to Cisco’s $120 million (which I’d doubt), that would still leave the massive costs of land acquisitions, infrastructure improvements, and remaining ballpark financing unanswered. Again, not hating on The O, just being realistic. Slam me if you must (some of you at least).

  4. @TonyD–no slam, but if a $120 million form Clorox, Safeway, Kaiser or Chevron was out there for VC, it would sure help things a lot for the O’s cause. $4 mill a year from these companies is really pocket change.

  5. …A grocer spend $4 mill a year on naming rights? Not likely. Peter Magowan ran Safeway and I don’t think they ever sponsored anything at PacBell Park. Slim profit margins at Safeway, if I recall correctly, and that was before WalMart, Target and Costco started invading their turf.

  6. Pjk,
    Just to be fair, I do believe Safeway had signage at the Coliseum and Pac Bell back in the day (of course it didn’t cost anywhere near $4 million per year). FWIW, I don’t see Safeway or Chevron as being strictly East Bay companies, let alone Oakland companies, especially with service stations and grocery stores throughout the Bay Area. I’m sure they’ll be at Cisco Field as well (along with Apple, Adobe, Brocade, Ebay, Google, HP, Facebook, Yahoo, Intel, Nvidia, …..etc).

  7. California has not shortage of railway money pits (tax subsidies to build and tax subsidies to operate). Turning AirBart into BRT would have cost 1/10 the cost of the Oakland Airport Connector and decreased current operating subsidies.

    However, compared to the Los Angeles to Modesto to San Jose to San Francisco “high speed” rail, the Oakland Airport Connector is quite a bargain.

  8. If HSR were $440M per 1/10 of a mile it would cost $1.7T to make a 350 mile run from LA to SF. That’s nearly 3x the current estimates.

  9. Sorry, I meant 30x, not 3x.

  10. I know a few people who work at Safeway Hdqtrs in Pleasanton, and they run a tight ship over there, having had wage freezes 3 of the last 4 years. Yes, very slim profit margins of less than 2% but cash flow is very strong. They’re in a very competitive biz, with Walmart and Target expanding their food sections and new comer Fresh and Easy invading the bay area and California. Their advertising budget is around 1.3% of their sales of 41 billion. So about $530 mill a year on advertising. $4 mill a year for a new A’s park in the O would be about 3/4th of 1% of their ad budget. The bay area is their 2nd biggest market after LA. So $4 mill a year I think isn’t too bad to have your name spread all over the sports pages, online sites/blogs, radio, TV, billboards, etc.. Look how much free press Cisco has gotten the last 5 year since the Fremont park idea. I wish it was Safeway all along for the VC site.

  11. OT: do we anything new about the potential ‘Astros to the al west’ realignment, creating two 15 team leagues?

    I remember we had speculated that the Astros ownership transfer would be the ideal time to make the new owner crane agree to such an arrangement.

  12. @A’s fan – I was comparing the Oakland Airport Connector (estimated cost $484 million – $550 million) to an alternative called BRT (Bus rapid Transit). For more information see the following URL http://urbanhabitat.org/tj/campaigns/OAC

    However, the Oakland Aiport Connector is a bargain compared to the California HSR (High Speed Rail) project (estimated cost $65.2 billion – $81.4 billion). When completed, passengers will have the option of taking a 6.5 hour car drive, a 3.5 hour train trip to LA, or a 1 hour plane ride to LA. For more information see the following URL http://reason.org/files/1b544eba6f1d5f9e8012a8c36676ea7e.pdf

  13. Dan A,when was the last time a one hour flight actually took only one hour? And for the record, Atlas Shurgged is fiction.

  14. If travel time from the Bay to LA really took “one hour” via plane, then those Southwest 737′s must be traveling at the speed of light. Jeffrey is right on; no way in hell does it just take one hour total travel time via plane. By the way Dan A., citing the Reason Foundation are we? Enough said about that.

  15. Interesting take on the SVSE layoff connection to the Jamison/Phoenix news. Could be something there, but even if not you’re right that there are bound to be some defections. Let’s keep in mind though that the majority of those layoffs were simply SVSE jettisoning a specialty advertising group they probably never should have had in the first place. They could simply be killing off that unneeded part of the business to free up resources for potential future needs without having anything specific in mind at the moment.

  16. @Jeffrey and TonyD

    Be careful about ad hominem attacks (Ad hominem is the attempt to impugn an argument by attacking the arguer’s character, motives, personality, intentions, or qualifications.) I cited two sources; Urban Habitat would be considered a liberal organization and the Reason foundation would be considered a conservative/libertarian organization. Both organizations are less than thrilled with fixed rail. Both organizations present strong arguments. On policy issues (as opposed to the selection of an elected representative), I’ve found it to be more beneficial to address the arugment than the arguer’s character.

    By the way, I have found Southwest Airlines to be more on time than Amtrak. However, I might be making the error of anecdotal evidence. I’d be interested to see the ontime statistics for both SWA and Amtrak.

    • @all – If you want to debate the merits of the OAC project on its own, that’s fine. HSR is not comparable in terms of scale or scope, and to compare that to air travel fully runs us off-topic. I’d stop now.

  17. Back in the day it didn’t take much more than an hour to fly from the BA to LA. Now, since 911 with all the security stuff, you can easily double it.

  18. Sorry RM for going off-topic political. Back on topic: any chance user fees will be used to help finance Cisco Field ala a Kings arena in Sac? I know naming rights, corporate sponsorships and private equity will go a long way towards financing the yard, but I wouldn’t mind paying a little extra for our ballpark (just my opinion of course).

  19. @Dan A “By the way, I have found Southwest Airlines to be more on time than Amtrak. However, I might be making the error of anecdotal evidence. I’d be interested to see the ontime statistics for both SWA and Amtrak.”
    .
    It’s not a question of flight times or on time statistics; it’s a question of point-to-point travel time to destination. Airports are congested, and consume travel time in getting there, parking, checking in, getting through security, and waiting for your flight (up to ninety minutes, if you follow recommendations). Then there’s a lot of the same crap on the other end: waiting to deplane, waiting for your bags, probably renting a car (since airports tend to be in the middle of nowhere, and often poorly served by transit.

    Trains, on the other hand, stop in many more places, making the transfer in quicker. You can jump on about five minutes before your departure, and don’t have to hassle with security or baggage check. On the other end, they bring you right to actual destinations (e.g. downtown areas) which are well served by transit.
    .
    I travel to SoCal A LOT and can say without equivocation, if HSR gets you down there in 3 1/2 hours, the actual point-to-point travel time will be very competitive with air travel. Though I fly a lot, I also drive a lot because when you add in all the ancillary/dead time consumed with air travel, driving isn’t as much more time as it might seem. When you consider the relative comfort and convenience of train vs. air travel, if the fares are anywhere close to airfares it will be extremely competitive with air travel overall.

  20. I’m not sure Amtrak v Southwest Airlines on time statistics are particularly relevant for HSR anyway. Amtrak is pretty well hosed when it comes to on time performance because they must use UP tracks and constantly get bumped for freight trains. As I understand, this will not be the case for HSR.

  21. @jk-usa – For Safeway a naming rights deal seems out of character. Historically they’ve looked at smaller, more targeted deals. They sponsored the Golden Baseball League for a few years. Their deal with a Portland LPGA event, the Safeway Classic, expires this year. They pulled out of another tourney a few years ago. Their sponsorships of the Giants and A’s have usually been radio/signage/merchandise and not much more. Maybe they do a deal here to rise above all of the new encroaching chains. It’s still out of character.

  22. @ML: FYI, regarding the OAC one-way fare, you may find this of interest:
    “A $6 fare has been discussed as a conservative estimate projected if the region continues to face an economic crisis. The calculation assumed in a worst-case scenario a minimum number of riders would use the system. BART does not expect this scenario to occur as the economy recovers. The actual fare will be determined prior to the start of service.”

    http://www.bart.gov/about/projects/oac/faq.aspx

    (see FARES)
    As for BRT being an alternative, as someone else posted, I can’t imagine that working out, because it hasn’t been approved anywhere else in the east bay, as an alternative.

  23. @ML–I think Safeway would be an awesome naming rights pick. I remember those Safeway BBQ’s in the 80′s and 90′s on Saturday’s. Pretty good promotion.
    Sac’s Raley Field is paying $15 million over 20 years-the most lucrative in Minor League Baseball by a good distance.
    Doesn’t Farmers naming rights for a new LA stadium seem way high? 30-year agreement for $700 million. Wow!
    O.co’s 6 years at $7.2 mill is pretty weak, but better than nothing I guess, and they’re getting a great deal for 100 events a year there.. They can’t find a sponsor for Cowboy stadium yet. It will be huge probably when it happens.

  24. No sponsor for the Jets/Giants stadium, either. And who’s sponsoring the 49ers new stadium? Zip. Companies are not jumping all over these naming rights deals like they used to.

  25. Actually the Jets/Giants stadium just got a sponsor last week. Metlife if sponsoring them for 20 years at 20 million a year. This comes a week after Sports Authority takes over sponsorship of the former “Invesco Field” in Denver. The sports naming rights deals appear to be back.

  26. @Dan,
    Naming rights may indeed be back, but they’re definitely happening for REAL venues that either currently exist or will prove to be real money makers (see Farmers Field and Cisco Field). Naming rights for a “ballpark” that only exists as a dotted line on a map? Especially one in a “depressed area” with very little corporate base? That would be a tough sell. (I’m sure the Niners and Cowboys are looking for the big deal along the lines of Farmers Field, not Overstock stuff).

  27. Something that flew under the radar on August 1st: Sporting News Radio was renamed Yahoo Sports Radio. I don’t believe Yahoo actually bought them. I think it’s just a branding and content thing.
    .

    http://www.yahoosportsradio.com/about/

  28. On the same topic of sponsorship, i was very surprised that my new company is an official sponsor of the bosox even though we are a global fortune 50 company but headquartered in Mass. As mentioned by ML previously, locality does play a significant role.

  29. With all the violence at the Stick the other night, can these two teams co-exist at a new venue together? I’d say yes, as long as they don’t play each other. Ever since the Raiders came back to the O, they brought that LA thugginess with them and I’ve been turned off, even though I’ve seen a fair share of games. I miss my Raiders of the late 70′s with Stabler, Casper, Biletnikoff. Great football atmosphere, good fans, no thugs, and no Halloween at the stadium every Sunday.

  30. Dan A, I understand what an ad hominem attack is. The crack about Atlas Shrugged was a joke… lighten up, Francis.
    .
    Bartleby and Tony both got the gist… I too travel to LA frequently and due to airport hassles, I sometimes just drive… Because a 1 hour flight is a 4 hour ordeal. I’d definitely consider HSR to Disneyland (or actually right behind Angels Stadium) rather than a fight from Oakland/San Jose to some So Cal airport, a car rental, etc.

  31. Another slight OT: From the Chron: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/08/21/SPUJ1KQ5DT.DTL#ixzz1VoC3npcN

    “Blue Jays manager John Farrell criticized the A’s for not providing on-site X-rays at the Coliseum, forcing Adam Lind to go to a local hospital after being hit in the wrist Saturday night. “I’d like to think every stadium is equipped with that type of machinery,” Farrell said.”

    As the MOneyball movie trailer goes….”Welcome to Oakland” :X

  32. @Anon–Wow! I’d figure it would be a no-brainer nowadays on having an on-site X-ray machine in the stadium.

  33. @jk – agree with you especially for a stadium that houses both baseball and football teams. =/

  34. Interesting little piece in Susan Slusser’s Chron column on BB’s future.

    “It’s no secret that the A’s higher-ups are frustrated about the glacial pace of Major League Baseball’s panel looking at a potential Oakland move. Within the A’s organization, there is concern that if the ownership group does not get approval to build a stadium in San Jose that the team might be sold and that Beane, who has a minority stake in the A’s, would head elsewhere.”

    http://www.sfgate.com/cgi-bin/article.cgi?f=%2Fc%2Fa%2F2011%2F08%2F24%2FSPPT1KRH6F.DTL

  35. Be careful what you wish for

  36. @gojohn–they got no real place to go outside the BA. They’d be put up for sale to locals, who will make it happen in the O. A group (or two like last time,) will come forward and buy them. BB can go on his merry way and spend all the Monopoly money he can in Chicago or wherever.
    Psst—he won’t get much more dough to play with if they go to SJ.

    • @jk-usa – You have a vivid imagination.

      Re: the Cubs’ GM position, it’s natural for Beane to be mentioned every time there’s a high profile opening. There’s no telling where Tom Ricketts will turn, but everything I’ve read doesn’t even have Beane among the top 3 candidates. The top 3 are the White Sox’ Rick Hahn, the Rays’ Andrew Friedman, and maybe the Marlins’ Larry Beinfest. The job should be Hahn’s to lose, since his price shouldn’t be too high and he’s a Chicago native/Cubs lifer to boot.

  37. @ML–well thank you. We shall see soon –or later, much later–on how this whole thing plays out.

  38. BB’s 2/12% of the A’s $300 mill worth is around $8 mill. I’d cash, move on out while his stock is still high. Next year’s team looks promising though, but we said that about this year.

  39. @jk-usa – This local group – are you referring to the one who sheepishly asked Wolff to sell on the grounds that “they could make it work” at the Coliseum? Why on earth would Selig and the owners approve the A’s indefinite stay on the welfare roll?

  40. @ML–hmm, i wonder how long Pitt and KC are going to stay on the welfare roll, and they have new/refurbished parks. And I can see FLA after their 2nd year in Little Havana park back on the welfare roll. If the fat cats like Yanks, Bosox and Phils want to stop forking out welfare , maybe a hard salary cap like the other sports to restore competitive balance is needed.

    • @jk-usa – Are there better revenue opportunities for PIT and KC just down the road from where they play? No. Is there one for the A’s? Yes.

      • @jk-usa – Are there better revenue opportunities for PIT and KC just down the road from where they play? No. Is there one for the A’s? Yes.

        I like this!

  41. @ML–not far down the road too, at a place called Victory Ct.

  42. Seriously? At this point, a professor would be asking you to show your work and list your sources.

  43. By the way, R.M said “down the road from where they play,” not on some map as a dotted line.

  44. @TonyD–”dotted line”..more LW talking points. And Oakland’s population is half what it was 20 years ago…lol. Surprise you don’t repeat that one.

  45. I believe Lew Wolff said, “It takes more than drawing a square around some lots,” which is completely true.
    .
    jk, when are the Oakland people going to demand Oakland steps up? The PR bullshit, the Blame Lew Wolff meme… It’s all just kicking the can down the road. The easiest way to end any speculation is to come forward with a plan, not a bunch of talking points (ironically).

  46. The day some of these Oakland-only folk ask the city of Oakland to step up and stop blaming Lew Wolff for everything is the day I win Super Lotto.

  47. It only takes a buck.

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