Notes from Wolff-Guardino interview 10/4/11

SVLG President Carl Guardino hosted Lew Wolff on KLIV’s The CEO Show (MP3) again, and it wasn’t some fluff piece. For brevity’s sake I didn’t transcribe all of the interview, only a select few quotes. Listen to the rest and decide for yourself.

Guardino asked about the A’s relationship with Cisco Systems, which seemingly hasn’t budged one bit since the Fremont unveiling in 2006.

GUARDINO: Cisco Systems, of course, is San Jose’s largest employer. They’ve been enthusiastic from the start about partnering with you on a ballpark in downtown San Jose. Are they still involved?

WOLFF: Well absolutely. John Chambers always says to me that we’re partners for life. I hope it’s even longer than that. They’ve been standing up with us. We haven’t really imposed on them too much the last couple of years because it’s up to us to deliver, not them.

Guardino went on to ask about the response to the SVLG 75 CEO letter written a year ago. No response from MLB or Commissioner Selig yet. Then Guardino asked how moving to San Jose would shift the future prospects for the ballclub:

Without question the demographics of San Jose per the number of corporations, which you know, the number of sponsorships, and the fact that we’d have a brand new, really creative venue, will probably almost double our revenues. And that’s on the conservative side. And normally baseball is pretty simple. Depending on your revenues, if your salaries are 40% or 50% of your revenues, you can compete. So if our revenues get up to $230-240 million that totally changes our focus in terms of what we can do.

Stop. At no point in any of my previous projections did I ever have the A’s revenue going past $200 million when Cisco Field opens. If Wolff is thinking $230-240 million, the A’s are suddenly in Giants-Angels territory. That’s a huge development. And it’s one Wolff could regret making as fans may hold him to that.

Wolff also talked about the some of the features in the ballpark we’ve talked about here, such as minisuites and personal signage and advertising. Asked about other features of the ballpark, Wolff describes “that thing in right field”:

Because of the size of the site we have – it’s rather compact – we will have a high wall in right field area. Which will have interesting seating which I won’t get into because I can’t describe it properly… We’re not trying to copy either the retro parks like the Giants have, nor are we trying to copy Wrigley Field or Fenway. We’re trying to do what Silicon Valley and all your members of (SVLG) do. Do something that hasn’t been done before, and not worry about where it hits because it doesn’t have an identical twin somewhere.

Wolff makes the case for sharing the Bay Area again. County Assessor Larry Stone (who had called in during a previous interview) asked to clarify Billy Beane’s statement there may be window for MLB to decide after the end of the World Series. Wolff’s response:

No, he’s not misspoken. Part of what Billy said, and I agree with, I may have even prompted Billy to say it, is that we need an answer, frankly now. While you’re not supposed to make announcements in October… we don’t feel bound that baseball will have to wait until after the World Series.

We’ve reached a point now where being in limbo, like we have been for so long, is not fair to Oakland. It’s not fair to San Jose. It’s not fair to our staff of about 130 people. It’s just not fair to anybody. Even a “No” answer, or “You can’t move to San Jose,” we need to know that. We can no longer – if we have any power – dance around this question.

It’s worth listening to the rest of the interview (MP3). They talk about the Giants and their ownership change, the future A’s roster and payroll, and several other topics.

39 thoughts on “Notes from Wolff-Guardino interview 10/4/11

  1. “We’re not trying to copy either the retro parks like the Giants have”

    Ha! Nice not-so-subtle jab!

  2. Looks like something big is ready to happen with the A’s. Check out this ESPN/AP quote from the Tampa Bay owner, in an article about the Rays’ own lousy attendance despite making the playoffs 3 out of the last 4 years: “You can look at us and potentially Oakland as the only teams in that respect,” Sternberg said, referring to the only team who drew fewer fans than Tampa this season, the Oakland A’s. “And Oakland by hook and crook will have a situation clearer well before we will, and we will be the last man standing. Or in this case, lying down.”

  3. A’s Revenue has held pretty steady the past four years at $155-$160 million. In 2009, the A’s revenue sharing cut was $32 million. That puts revenues at ~$125 million without revenue sharing. Lew’s numbers of $230-$240 are “almost double” of that $125 average from the past few years. The crazy thing is he’s saying these numbers are conservative. Where is all this money going to come from?
    .
    @ML Can you provide the link from your (or Jeffrey’s) post a while back that was predicting revenues & payroll at a SJ ballpark. I couldn’t find it and I’d like to read it again. Thanks.

    • @gojohn10 – My post from 2007. Jeffrey’s from a year ago.

      @cuppingmaster – I don’t see Wolff forcing a vote. Not his style. It’ll just “happen”.

      @SierraSpartan – On the contrary, I think if anything, the delay was in deference to the Giants. The Giants were able to rake in a lot of dough at China Basin, even during that 5-year losing spell. World Series win, higher season ticket rolls, >$200 million revenue franchise – the Giants were able to milk it for all its worth. Now the pendulum may finally swing back.

      The revenue remark is an aggressive move. Think of it this way: Let’s say that there was a group of owners or people within MLB who felt that the A’s would be better off if they moved or were contracted. If you combined Wolff’s projection and what the Giants are getting, you’d be approaching $500 million combined for the two teams in 2015. There is absolutely no way the Giants could get that on their own if the A’s were gone, not even the Yankees get that kind of revenue.

      One last thing: the Cisco/John Chambers remark is important. Over the weekend CNBC reporter Darren Rovell posted a series of tweets about naming rights, in response to Mercedes Benz’s deal with the Superdome. This one I found very interesting:

      For the record, I think most naming rights deals have been horrible failures. Mostly done for executive ego trips.

      I think Chambers is THE driving force for this. In Oakland that support is not there.

  4. @pjk you got a link for that Sternberg article, man?

  5. @pjk – thanks. Makes me wonder, are they pushing truly because they need a decision and don’t know one way or another? Or, do they already know and just want Selig to announce it so they can get on with their business? My experience in the working world informs me that they probably already know, but after 2.63 years… who knows.

  6. Call me a cynic, but the “decision” was made 2-1/2 years ago, and that decision is to do nothing, zero, zip, nada. Why? Because the status quo harms nobody. Well, except for of course the A’s fans, a rather puzzling but extremely loyal tribe who have been the collective crash test dummies of the AL going back before the A’s moved to Kansas City.

    The franchise itself can make oodles money should the ownership choose to do so by becoming a welfare case (see “Marlins, Florida” for an example of how to do this), except Mr. Wolff doesn’t have that greasy used-car-salesman gumption that Jeff Loria has, nor is he willing to run the RiverCats out there night in and night out at the Coliseum.

    It sucks, to be sure. And as a Giants fan, I can tell you that I know exacty how you guys are feeling right now, with a mediocre team stuck in a crappy stadium, with the ever-present threat of the team’s departure hanging over your heads. The good news is, it does get better – but sometimes extreme events have to take place, as we saw in 1992 when the NL ownership nixed the move of the Giants to St. Petersburg. It was the shockwave from the Lurie agreement to move the team that the Magowan group stepped up in SF and rescued the Giants; I believe a similar individual exists in the Bay Area (*cough*Larryellison*cough*) with the financial resources to rescue the A’s once Wolff and his crew have had enough of Bud Selig and his indecisiveness.

  7. It is starting to look like we’ll finally get an answer one way or another by new year’s day. Players from all over not just the A’s are starting to let slip as much. Whatever the answer is it will be nice to just get one finally so the team can either move forward with Cisco Field in San Jose, move forward with finding that elusive “east bay” owner, or move forward leaving the Bay Area.

  8. Moving forward with San Jose means we have a site,an approved EIR, a willing owner and a $120 mill naming rights deal. Moving forward with Oakland means we have none of those things.

  9. Last day in paradise:(. I don’t think Wolff forces a vote, but I do think they could cause some “problems” for Baer’s confirmation as the new Giants owner. Kind of related to the leverage thread RM did a few weeks back. As for the rest of the interview? Need to get some champagne on ice when I get home ;). Aloha!

  10. ML- You are incorrect on your #s just like the 49ers.

    You vastly underestimate ticket sales, concessions, parking, sponsorships, luxury/mini suite sales and a few other areas….Still estimating the A’s getting revenue sharing after a new ballpark almost made me fall out of my chair.

    Now I know your #s were based for a Fremont stadium in 2007 but that was pre-recession. Even so these #s are way low considering how close Fremont is to Silicon Valley.

    With these #s you estimate Wolff may as well sell the team and get out of dodge. MLB will never subsidize a team via revenue sharing for a privately financed ballpark.

    If they were willing to do that why not build a private ballpark in East Bay? Your #s are why MLB will not build in the East Bay privately. It is not an accurate of what a San Jose ballpark would be.

    Wolff is correct his revenues will be $230M or so. That was the # I estimated based on the San Jose EIR and the Marlins/Angels financials. Jeffrey challenged me on a blog post here that for the life of me I cannot find. I did all sorts of math showing the A’s revenue would be 220M or so.

    I estimated their payroll at 110M, Jeffrey countered with 90M, after I did the math I got 100M with the A’s still turning a $10M-$20M profit…Debt service factored in.

    The Giants revenue will go up too believe it or not. They will now have their metro area cornered and no longer will there be a cheap alternative 12 miles away.

    Both teams revenues will go up, Giants around 250M and the A’s around 220M-230M with room to grow.

    The Bay Area is the wealthiest region in the US, with the teams spread out it will allow for each to maximize revenues in the market itself as each team will have a metro area to themselves.

    If the A’s leave the Bay Area, the Giants revenue would jump to 300M+. They would truly be Red Sox West, only the Yankees would have higher revenue in MLB.

  11. Just like what RM alluded to earlier: would you rather have one team in the Bay Area making $300-350 million per year in revenue? Or have two successful teams making a combined $450-500 million per year? Heck, I’d take the A’s making $200 million per year with $100 million payroll any day over the status quo. Anyhow, the answer to my question is now perhaps MLB’s answer as well, in the form of another question…do you know the way to San Jose?

  12. @Sid – My numbers were always conservative and based on 2006-7 figures. They were bound to go up based on inflation and other market factors such as rapidly rising TV contracts. Your general misunderstanding of how baseball’s revenue sharing system works has been displayed on more than one occasion, which makes me skeptical of your claims. If you still want to go there, point me to a spreadsheet showing your math. Post it on Google Docs and make it public.

  13. Another doomsday quote from Rays owner Stuart Sternberg (via LA Times’ Bill Shaikin):

    It won’t be my decision, or solely my decision. But eventually, major-league baseball is going to vaporize this team. It could go on nine, 10, 12 more years. But between now and then, it’s going to vaporize this team. Maybe a check gets written locally, maybe someone writes me a check (to buy the team). But it’s going to get vaporized.

    Sternberg also said that even with a tiny $42 million payroll, the Rays didn’t make money this year. I find that hard to believe considering the Rays’ revenue sharing check would almost pay for the 2011 payroll.

  14. I don’t think vaporized in this case is what comes to most people’s mind as the doomsday scenario (ie: contraction). Reading what he’s saying about either MLB or another person buying the team it seems he’s just as likely if not more likely talking about the “vaporization” of the Tampa Bay Rays via a move by a new ownership group similar to what happened to Montreal. Which is not shocking given their pitiful attendances during their epic run to the post season and ALDS coupled with the lousy stadium.

  15. Listening to the interview now, Wolff says “the [SVLG] letter is being used in one more report, or, request that I’m making to Baseball as we speak.” Interesting…

  16. I say move the Rays to Portland (how do you like dem apples Maury!). The Portland “River Rays” could then transfer to the NL West as a regional rival to the Mariners, perhaps Rockies moved to another division.

  17. look forward to listening to the interview later—traveling so missed it—LW’s comment that cuppingmaster cited sounds like LW may be leaning on MLB pretty heavy at this point—sure a key element of that letter is that these 75 companies not only endorse a move to SJ but that they would also continue to support the giants–need this to offset the giants claim of significant loss if TR rights are changed–

  18. Tampa Bay Metro has about 2.7 million people, which puts it somewhere at the low end of the middle of the pack as far a MLB teams go. Like the A’s, there simply is nowhere else to for them to go right now, so I think they’ll stay put. Their park is in the wrong location for sure- should be accross the bay in Tampa- and it is kins of ridiculous with those cat walks- but at least it’s not decrepit and they don’t have to share it.

  19. @ML–i find it hard to believe too that with the Rays tiny $42 mill payroll, they just broke even. They all say that. The Giants said that last year and so did the A’s, where in fact, they both made at least $20 mill profit according to Forbes.I wish the Lodge would open their books so we can see what the lying bastards really make.

  20. Key word: according to Forbes. Forbes has no access to official books and merely guesses profits/losses. Anybody want to pay taxes based on what some third party guesses that you make instead of the actual figures?

  21. MLB won’t open the books, so they have to deal with speculation in the absence of facts. I don’t believe anything, any of the owners have to say about “profit margins”.

  22. When an owner says things like “I don’t even know if a WS win would have increased attendance,” I just shake my head. I get the reason why he has to goad people into action but it’s unseemly. The Lightning enjoyed a very substantial bump in attendance after winning the Stanley Cup and that was with a season-ending strike in-between the two.
    ML, I thought the whole intention of the stadium was to compete at the level of the Giants and Angels? Unless the idea was always just to generate revenue at the same level.

  23. What if MLB did open the books? Would there be some kind of correlation between opening the books and mandating that owners that build a privately funded ballpark in Oakland?

  24. With this revenue sharing, no team is really losing money like they use to years ago, and in fact are making more profit than ever like FLA is, pocketing all the welfare checks and some. Detroit is overspending like Haas was and is losing money the last few years, according to Forbes and almost everyone else.

  25. I have to repeat what I mentioned before; merge the A’s and Rays and move them to the new Cisco Field in San Jose. Deal done.

  26. @Vince–now that would leave 13 teams in the AL. You’d have to play interleague games every day for it to work out, and that would be horrible with a super unbalanced schedule. Not gonna happen, but it’s so out there, it may possibly be MLB’s plan. I’m just hoping they can work out new yards in the A’s and Rays respected cities.

  27. There’s been some low-level noise lately about Montreal and I think the next step for baseball will be expansion.

  28. Since the comments are off on Steve Jobs’ death (??), I will post on this thread.

    Such a great innovator and visionary that changed the world for the better. He will be sorely missed and never be forgotten. Thoughts and prayers for his family, friends and colleagues­.

  29. @ all – im thinking an announcment will be made before the free agency period starts, which is exactly 5 days after the WS ends. So i think worst case we would see 11/1! Can’t wait!
    @jk-usa : to me Jobs lasting legacy is his no compromise attitude towards Apple’s product development. He’s not an innovator as earlier on as the engineers do the work, but without his vision as you pointed out, they’d be stuck in the imac clone days. also, im surprised you’re so enamoured about him, since in real life, buddies have told me is is a downright a**hole to work for and not the charismatic person most people would think he is. /RIP Salute to a SV legend!

  30. @bartleby–lmao. Good one, thanks.

  31. On the Cisco thing: I recall that the naming rights deal was part of Cisco’s strategy of launching more consumer products, and that the ballpark would be wired with Cisco gear designed to improve the game experience and showcase Cisco’s products.
    .
    Given Cisco’s scuttling the Flip video cam and it’s general pullback from a consumer focus, I thought they might be reconsidering the naming rights deal. But maybe that’s not the case.
    .
    Still kinda funny that the park would be named “Cisco” with the logo of the Golden Gate bridge. I’m sure the Giants would much rather have Cisco than ATT as a sponsor. And from SJ’s perspective, when your goal is to say “we’re big time now, and not just in SF’s shadow,” this doesn’t really send that message.

  32. @steve- So, you’re saying that companies don’t ever rebrand and relogo themselves? Sticking your name on a ballpark is a good time to change a logo, considering the increased news coverage and eyes that will be quick to associate the new logo image with the name.
    .
    Not saying that Cisco is going to do this, but they certainly have an excellent chance to do so.

  33. Sorry- I couldn’t tell you what Cisco’s or ATT”s logo’s are- but I know what each company does- logo’s are irrelevant to naming rights exposure- tell me one logo that is prominently displayed on a ballpark

  34. If LW says that he and (Cisco’s)Chambers are partners for life, why can’t that apply to a new ballpark in Oakland if SJ gets shot down next month? Fremont was okay, but Oakland isn’t? So the employees have to drive a lttle further to the games. That’s what the hardcore eastbay 10k will have to do if, heaven forbid, it’s SJ.

    @GoA’s–off hand, I can’t think of too many logos at MLB parks. Target Field in Minn. has a medium target in between Target and Field, but almost others are just the name.
    On the proposed Fremont park that died, Cisco Field had their little bridge logo on top, but not sure if it would of been incorporated on signage all over the park.

  35. @jk Your post really answers itself, but here goes:
    .
    “If LW says that he and (Cisco’s)Chambers are partners for life, why can’t that apply to a new ballpark in Oakland if SJ gets shot down next month?”
    .
    Because the name sponsorship is tied to a lot of suites, club seats, and ballpark events. In Cisco’s case in particular, it’s also a chance to take business clients to a ballpark specifically designed to show off Cisco products. Diridon is about 15 minutes from Cisco on a weeknight; VC a painful 90 minutes or more through traffic. Time is money for big-time execs; an Oakland yard just doesn’t serve the business objective.
    .
    “Fremont was okay, but Oakland isn’t?”
    .
    Exactly. All you have to do is look on a map to understand why.
    .
    “So the employees have to drive a lttle further to the games. That’s what the hardcore eastbay 10k will have to do if, heaven forbid, it’s SJ.”
    .
    And that’s the difference between hardcore fans and corporate customers. The fans actually care about the team and the game, and will crawl over broken glass to get there. The corporate premium seat buyers who drive modern baseball economics mostly could care less about the game; they’re there for other reasons. They’re just not gonna drive to Oakland.
    .
    I was on distribution for my company’s Field Club Giants tickets for many years. Many of my co-workers would go have lunch at MoMos (on the company dime) and not actually appear in their seats until the fifth inning or so. If you make it that much more painful for them to attend, they wouldn’t show at all.
    .
    Oakland would be a tough sell for the Silicon Corporate market even if AT&T Park didn’t exist. But it does exist, and it takes half as long to get to as Oakland for a weekday game from most of the South Bay.

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