A way to Sacramento

A year ago, Giants CEO Larry Baer hinted that it would be good for the A’s to look somewhere outside the Bay Area for a new ballpark, if a deal for an East Bay park couldn’t be worked out. I wrote three years ago that an expansion to Raley Field would cost at least $250 million. It would be hard for the A’s to make a large contribution towards the expansion project because Sacramento’s government town status makes the corporate revenue pickings slim. If the A’s are going to pay for it, and MLB isn’t going to pay for it, who will?

The Giants, of course.

Now, I’m not actually suggesting that the Giants will pay for the stadium directly. They’re coming to the end of their own mortgage, so why would they saddle themselves with someone else’s? They wouldn’t. Yet if the A’s were forced to vacate the Bay Area, the Giants would likely pay the A’s to surrender the territorial rights to the East Bay. Such money which could be used to build or expand a stadium elsewhere. The Giants would end up indirectly funding the A’s stadium as a result.

Adding 25,000 seats to Raley Field is no small feat.

We’d start with the MLB standard compensation package: $75 million, half coming from the commissioner and half coming from the paying team. That’s too small of compensation for the 2.5 million-strong East Bay, especially when you consider that the Giants’ franchise valuation could get a 2-3x boost from the A’s leaving. $150 million is probably a fairer package with the same 50/50 terms.

By the time the A’s were able to consider such a move in 2016-17, the $250 million cost could easily balloon to $300 million. That puts the Giants/MLB contribution at half. The A’s might be able to contribute $75 million on their own (via a new lease and revenue share), meaning the rest would have to come from a public source. This is absolutely important so that the A’s don’t get relegated to being another small market team. If the A’s move to Sacramento and have to pay a fat mortgage, that’s not an improvement upon staying in Oakland. The A’s best chance to thrive in Sacramento is if their stadium costs are as minimal as possible.

For Sacramento’s part, the plan only makes sense if the Kings are gone. The A’s still need corporate support to sell out premium offerings, and it’s expected that the Railyards Arena will suck up all of those customers. Involvement of AEG will only enhance that. The controversial parking revenue play won’t work because the plan is to expand Raley Field in West Sacramento, which is out of the Capitol City’s jurisdiction. A joint powers agreement between Yolo and Sacramento Counties sounds like a possibility.

At the actual stadium, the hard work includes taking down the press box and suites, ripping up the concourse to put in new columns, and putting in new facilities under the concourse such as modern, MLB-standard team clubhouses and a kitchen/commissary. Then the A’s could focus on putting in a club level, new suites, an MLB-standard press box, and a third deck to bring in those extra needed seats. The scope of work reminds me of this:

Mount Davis added 10,000 seats in a three-deck grandstand, an expansive indoor club, and 96 suites. The scope of work is similar to what would be required at Raley Field (sans tarps).

Would $300 million be enough in the end? It’s hard to say. It would be easy to argue that MLB wouldn’t want to skimp on amenities, or else Raley Field could be viewed as a cheap, temporary solution. Terms published for Nationals Park showed that MLB wasn’t interested in cost effectiveness – except in terms of external finishings. Marlins Ballpark is a testament to excess with its bizarre center field sculpture and aquarium behind the plate. The “wedge” in the Railyards dedicated for the arena isn’t large enough for a ballpark, so if MLB weren’t satisfied with Raley and wanted to look in Downtown Sacramento, it would have to use another plot within the project area for a completely new stadium, and a $500+ million price tag to go with it. Unless MLB was really desperate (which they usually aren’t), it seems iffy for baseball go along with the expansion plan when Sacramento was willing to foot a large part of the bill for a brand new arena.

There’s also at least one inside baseball consideration. MLB is fully aware of what Sacramento’s market limitations are. If the Railyards arena deal falls through, it won’t look good to MLB that the City couldn’t put together either a cohesive local or regional plan to retain a team. Sacramento wouldn’t show up on the top of anyone’s “viability” list, even though the resources to support a baseball team alone are there. Yet if the arena deal were successful, the market is too limited to exploit for a second major sports franchise, especially one whose economic requirements are much greater than those for a basketball or hockey team. It’s definitely a strange paradox.

90 Responses to A way to Sacramento

  1. dmoas says:

    Actually, thinking about your point #2 about collusion, but wouldn’t anything short of allowing the A’s to move the SJ be essentially the same thing? Saying you can’t go to SJ to the A’s, regardless of what they do or don’t do to fix the A’s stadium issues, is basically an act in and of itself, saying “we support the Giants’ ‘rights’ to SJ.” I don’t see how money changing hands in any way makes a difference. If anything, it may only help MLB’s case if the agreement isn’t about SJ, but more about the A’s staying put.

  2. Joel says:

    If the A’s don’t move to San Jose. Sacramento would be the perfect location. And night games would just be amazing with the weather… And I believe the Kings staying would only benefit Sacramento in there hunt for another sports team. You would literally be able to walk to both locations through downtown. And you guys don’t take into account how many more hotels, businesses, and offices wil be added to downtown in the railyards with the new arena.

    We would get many new businesses and money coming in that is not there already.. The same could be said once the current Natomas location is also constructed. Sacramento would grow tremendously and the surrounding cities are already growing at a rapid rate… If the A’s move to San Jose they would take away money from the giants… But if they moved to Sac it would all be new money.. Also kings and A’s don’t play many games around the same time. There separate. So business that put money into the Kings can also put money into the A’s… Just my opinion.

  3. Marine Layer says:

    @dmoas – Pretty much. Brokering a deal like the one you described is like painting a target on your back. Spin won’t help.

  4. Anon says:

    @JasonH – “…the first thing I thought when I saw the article about two mysterious suitors wanting to buy the A’s was that it was the Giants ownership.” That may not be too far from the truth. I strongly believe the supposed 2nd suitor who was a SV exec and MiLB owner was Dan Orum, who is part owner of the SJ Gnats and pres of some SV companies…
    @ DMOAS – The new CBA already spells out that if the A’s get a new stadium, they wouldn’t qualify for revenue sharing, so by that definition the Gnats automatically would not pay as much into the pot.

  5. Bill says:

    Here’s a thought. Move to Sacramento, keep Alameda, Contra Costa counties, and annex everything north and east. Secure the media rights for all of Northern California EXCEPT San Francisco, the peninsula, and San Jose. Keep your area Giants, and we get everything else north of the Grapevine.

  6. TW says:

    While I suspect the A’s moving to Sac is about as likely as the A’s building a new Stadium next to the Trans America building ……is Sac simply a victim of its geographical location? A quick look at other metro areas shows that Sac, considering its fairly sizable metro population, should be (but isn’t) in consideration for more pro sports teams. Is it simply Sac’s relative closeness to the Bay Area or are there other more compelling reasons?
    If the Sac Metro area and its 2.2 million were considerably further away from the Bay Area (maybe 2 hours further away from the Bay Area), would the A’s or other teams view Sac as viable possibility (which they seem not to do)?

  7. jon campbell says:

    its easy to say there is no chance for the a’s in sacramento and I may be crazy, but in light of recent news and commisioner seligs silence on the issue of late, I am quite sure theres a better chance to see the sacramento a’s than the san jose a’s

    I just want the a’s to have a new home, and will go to the park so long as its in nor cal, and am glad ML is researching all our green and golds viable options………

    this game has run its course and mlb is starting to disgust me!

  8. LoneStranger says:

    @Tarmas – The Block at Auto Mall is actually not the land where the ballpark was supposed to go. The Block is just an actual block between the existing retail developments, which made a U shape. This fills in the U. The ballpark location was on the other side of Bunche drive from that.

  9. Jeffrey says:

    Sac’s problem is only partially geography. It is also a very real lack of Corporations. Hotels and eateries in the old rail yards don’t address that. Not even slightly.

  10. LoneStranger says:

    jon campbell said: “but in light of recent news and commisioner seligs silence on the issue of late, I am quite sure theres a better chance to see the sacramento a’s than the san jose a’s”
    This is exactly what the Giants goal would be with prodding and pushing this stuff behind the scenes. Muddy the waters of public opinion, and then when MLB finally approves the territory and the vote is on, people will have a harder time learning the truth.
    I wouldn’t be surprised if the deal MLB reaches with the Giants and the A’s is contingent of the SJ vote. If they are getting close to a deal, maybe just arguing pennies at this point, the Giants could be moving onto the next phase, make that vote fail.

  11. Jeffrey says:

    PS- I love Raley Field. I can’t wait for Manny to be on a warm up assignment in May. 6:05 on a Saturday night in the Capitol City (River City, City of Trees, City with Sunsets that Stretch to the End of Forever) is pretty damn awesome.
    I made up that whole sunsets name…

  12. Joel says:

    @ Jeffrey
    So do corporations in the rail yards solve it? Cause I see U left that out.

  13. jon campbell says:

    it sure is nice in the summer on the waterfront around raley field, unlike the bay area, where I need a sweatshirt in July…….nice tshirt weather (not trying to say anything bad about bay area weather, actually love it, particularly this winter, it can just be really cold at some of those night games for we hot weather loving eastern californians after we get used to our lovely 105 degree days)

  14. Tony D. says:

    @Jon Campbell,
    What “recent news”? Your post is exactly what I was talking about earlier. Because of Enquiring minds want to know bull shit, the A’s are headed to Sacramento now and not San Jose? Speechless!

  15. Tony D. says:

    Also, you obviously haven’t experienced San Jose during the Summer. Gorgeous is an understatement.

  16. Jeffrey says:

    Joel…Which corporations are moving to Sacramento again?

  17. Joel says:

    No one said they were… Doesn’t mean they won’t right?

  18. Jeffrey says:

    Yeah, it kind of does. A corporation isn’t pulling up stakes and heading to Sacramento because there is a new arena maybe being built. And it isn’t like they just pack up the Ryder truck and move…

  19. Joel says:

    By your theory I guess no city will be getting any new corporations… Nice to know… Anyway back to the subject.

  20. Jeffrey says:

    No, by my “theory” a new arena doesn’t attract new corporations (they generally care about things like tax incentives, free land, local talent pool, etc.). And we will know well in advance of a move that one is coming.

  21. jon campbell says:

    no I didnt say the a’s are moving to sacramento, but after the madden story, seligs silence, the sheer amount of time spent on this move (and closed door negotiations I am sure) without any results, and the giants fervent opposition to it, I no longer think this move to san jose will happen…..

    the a’s dont have til 2024 for slow deliberation, something has to happen soon before further irreparable damage is done to this franchise through wollf/fischer/ and beanes obvious refusal to field a winning team in oaklandwhich is causing an even greater loss of our ever shrinking fanbase….

    basically we dont have 5 more years to hope, if beanes winter actions of selling off anybody remotely marketable are going to be the way this franchise operates until they get what they want, then who knows how many a’s fans will be left in a few more years

  22. jon campbell says:

    and tony…..work with grapes and wine south of morgan hill…been to that part of the world many times in the summer…..yes it is nice

  23. Anon says:

    @jcampbell – “through wollf/fischer/ and beanes obvious refusal to field a winning team in” – i guess you slept through 2006 and didn’t know the a’s signed a $36 million dollar cuban fa. it’s so obvious…/rolleyes

  24. jon campbell says:

    wollf’s tenure had just begun for one

    for two, I think cespedes was a way to stave off the huge amount of anger emanating from the fanbase after those deals he made

  25. jon campbell says:

    bottom line- I’m not pro or anti san jose, pro or anti oakland, or pro or anti sacramento….

    I am pro A’s! I want them to put a winning product on the field and build a team where players can make it through a double header without being traded away….

    if that takes a stadium in san jose, oakland, redding, or timbuktoo, I dont care…….

    I am just tired of stadium (in) decision being ownerships excuse for trading away anyone remotely marketable for 19 year olds

  26. Tony D. says:

    You got one thing right jc: the Madden story was just that…a story. (Not news)

  27. Anon says:

    @ jc – we’re all tired of traading away our players, but that is the reality of our predicament these days. Read this interview of Beane to understand the realities of our situation (http://blogs.mercurynews.com/kawakami/2012/03/08/billy-beane-on-the-as-giants-escalation-cespedes-and-much-more/):

    “We’re going to be 30th in the league in revenues. And the consequence of that is that you have higher turnover.”

  28. heywhynot says:

    “They wouldn’t. Yet if the A’s were forced to vacate the Bay Area, the Giants would likely pay the A’s to surrender the territorial rights to the East Bay. Such money which could be used to build or expand a stadium elsewhere. ”
    If the A’s left for Sacramento, why would the Giants pay for the East Bay? They can leave territorial rights to the A’s but gain the advantage of being the only baseball team in the Bay Area. Yes A’s games would be seen in the Bay Area but they would not be the draw that the SF Giants are. Also by vacating the Bay Area, would the A’s loose the East Bay? When teams move out of an area I don’t think they keep the territorial rights. Given the East Bay is not enough of a base to build a new stadium no other team is going to move into the area, especially with the A’s in Sacramento.

    The point is the Giants don’t need the territorial rights to the East Bay. By having San Francisco, San Mateo, and Santa Clara with Santa Cruz and Marin, the Giants effectively have the entire Bay Area if the A’s leave as they have the major corporate base. East Bay would be de facto SF Giant territory without having to pay for it.

  29. Marine Layer says:

    @heywhynot – Regardless of where the teams actually draw from, the simple fact of the matter is that if the A’s leave, territorial rights will have to be redrawn. The Giants will be losing competition, so there’s no way the A’s will leave without being compensated for vacating. There’s also the matter of whether the East Bay should have no assignment or a shared assignment. Neither team wants the possibility of a third team in NorCal, so my guess is it would at least be the latter. You’re right, however, on the Giants not formally needing the East Bay.

  30. Tony D. says:

    Don’t know if you meant it, but your post highlights the absurdity of the territorial situation in the Bay Area. For all intent purposes, the entire region is a DE FACTO territory of both the A’s and Giants. A’s fans and some sponsors currently come out of Santa Clara and even San Mateo counties. A’s TV and radio broadcasts into Santa Clara and San Mateo counties. And guess what: the same exact thing could be said of the Giants and Alameda/COCO counties. At this point in time the only thing the territorial rights prohibit is the A’s physically building a ballpark in SJ proper, and we all know why Santa Clara County isn’t currently shared by both clubs (Got AT&T Park in SJ? ). Knowing all this, I firmly believe that MLB is going to surprise a few folks on this blog in due time: “hey! Selig and MLB aren’t stupid after all!” Coming to a theater near you!

  31. heywhynot says:

    The Giants will be losing competition, so there’s no way the A’s will leave without being compensated for vacating.
    So what you are saying is that the A’s wouldn’t leave the Bay Area unless they are bought out by the Giants. Giants have no reason to do this unless San Jose is a strong possibility for the A’s and the A’s in San Jose being very costly to the revenue stream/worth of the Giants. Implicit in that would be the territorial rights to Santa Clara having significant value. If they are that valuable, then the A’s in order to move into San Jose would need to compensate the Giants. MLB would then have to weigh the value of the Giants being like the Phillies with the A’s in Sacramento vs. the A’s/Giants competing more equally in the Bay Area. City incentives I would assume would come into play into those calculations. If the greater value added is the former (Giants Bay Area, A’s Sacramento), I can see the rest of MLB chipping in to avoid opening various cans of worms.

    Without San Jose, the A’s have no real leverage against the Giants with regards to leaving the Bay Area. Giants of course know this. Keep the A’s out of San Jose, odds rise that the A’s will have to move out of the Bay Area without the Giants compensating the Athletics.

    @Tony- It is absurd but that is MLB. They created the situation and why the A’s will likely need to compensate the Giants for Santa Clara as they made the county have added value for the Giants. It is artificial but built into the structure of MLB & thus the values of the Bay Area franchises.

  32. dmoas says:

    It’s not quite that simple. Two issues with that:
    1) The A’s could simply say screw it, go bare bones, pay 25 guys minimum wage and continue collecting the revenue check from Giants. That opens a whole other can of worms because the MLBPA will want to get involved in the mess.
    2) Even if the Giants Bay Area/A’s Sac was determined to be the greater “overall” value and even if the A’s agreed to it, you still have the problem of moving a team from one weak market to another. MLB does NOT want to continue to subsidize any team. While the overall value my favor it, MLB may see the lower overall value of having to teams in the bay area with BOTH teams as revenue sharers as the better situation.

  33. Tony D. says:

    Well, its obvious your fairly new to all of this. A quick recap:
    1) it has never been proven that the Giants rely on SCCO for revenues or franchise value. The Giants like to throw that BS out, but they’ve never provided facts. In FACT, the Silicon Valley Leadership Group debunked the corporate support myth a few years back (only 15% of companies in SV support the Giants).
    2) if you made the Bay Area a shared market the Giants would not only retain their supposed value but would also add Alameda and CoCo Counties with about 2.5 million residents. Their value would increase!
    3) even if territory isn’t factored into franchise value MLB could always guarantee a value (possibly inflated) based on them loosing exclusivity to SCCO. This is what happened with the Orioles for the Expos moving to DC.
    4) I guarantee you that this isn’t about making the Giants the West Coast equivalent of the Phillies or Yankees. That line of thinking is absurd and would suggest favoritism in MLB. This is about what’s in the best interest of ALL of baseball, and that’s all about getting the A’s off of the welfare dole and ensuring two healthy franchises in the Bay Area.
    5) Lastly: Sacramento isn’t happening. (Nothing more to say about that)
    If you have any more questions just let me know. Nice chatting with yah..

  34. Tony D. says:

    Yes! Revenue of utmost importance to MLB, not individual team values. Besides, there are ways to ensure the Giants value will remain where its at (or even greater) when SCCO becomes shared with the A’s. Again, see Orioles/Expos/DC saga.

  35. jon campbell says:

    well tony- you are obviously a san jose homer and this blog has taken a markedly pro- san jose tone as of late- but I will reiterate….sacramento at this juncture has as good a chance of getting the a’s as san jose does…slim to none……….

  36. Joel says:

    @ Jon
    That’s exactly the truth… These San Jose folks can’t seem to comprehend that.

  37. heywhynot says:

    Of course Santa Clara rights have value. The A’s want something due to the craziness of MLB that the Giants have. The fact in all other ways the Bay Area is one market is in fact what makes the TR to SC so valuable. For a stadium you want to be relatively close to corporations to maximize your revenue stream. With a team in the SF with a nice park means a team in Oakland is going to struggle.

    The Giants don’t need the east bay territory rights. They have the major corporation corridor in the Bay Area in their territory. Shared territory adds nothing to the Giants. The one media market means they can already access the residents. With the SC rights there remains a small but decent chance the A’s will leave the market. The best case for the Giants is for the A’s to leave to somewhere where the A’s are off the dole.

    MLB owners care about value. They care about revenue as well. If the above means MLB is more profitable than keeping the A’s in the Bay Area it would happen. Selig doesn’t care about us in the Bay Area.

  38. Nathan says:

    San Jose has a completed EIR, most of the land purchased, a local government who wants the stadium, and an ownership group that wants to move there. Sacramento has none of these things.

  39. bartleby says:

    Comparing Sacramento’s chances to San Jose’s is absurd. As Nathan points out, San Jose has a nearly shovel-ready project ready to go. More importantly, San Jose is an actually an economically viable market for MLB, while Sacramento is not. The only obstacle San Jose faces is an artificial one, which MLB leadership is working to address even as we speak.

  40. Dan says:

    Bartleby, let’s not be unrealistic here. San Jose is NOT shovel ready. They still have to acquire about 40% of the site w/o any public assistance beyond maybe a long and drawn out eminent domain case. And there’s still going to be a crapload of local opposition from NIMBY’s, independent voters groups, and of course the Giants backed group. Also while San Jose is the better market on paper (and IMO IS the far better market), Sac is also a viable MLB market. Sac is bigger both TV market wise and population wise than a good half dozen existing MLB markets. And would have far less competition than many of those half dozen currently have seeing as the only team in town is the Kings up there.

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