Dominoes are falling

One by one, the various ownership crises facing baseball and Commissioner Bud Selig are being resolved. Yesterday, the Mets settled with a trustee in the ongoing Madoff suit for at most $162 million, probably less when the final bill comes due. Compared to the threat of a $1 billion judgement against the team, it’s a bargain. They’ll get even more of a reprieve by not having to make any payments for four years.

The Mets managed to pay off $65 million in short-term debt, thanks to a $240 million selloff of minority shares in the team (8 x $30 million). While Sandy Alderson will have to run the team on the lean side for at least this season, prospects for a rebound are decent.

On the other coast, MLB and Frank McCourt have narrowed down the lister of bidders for the Dodgers to four groups. MLB’s favorite appears to be the group headed by Magic Johnson and former Nats president Stan Kasten, largely because the bid is local. McCourt’s favorite may be the bid by New York hedge fund magnate Steven Cohen. The Cohen bid boost may have gotten a boost thanks to Patrick Soon-Shiong, an LA billionaire whose sudden presence as a minority partner gives Cohen some local bonafides. Unlike the Johnson-Kasten syndicate bid, Cohen was going solo (until Soon-Shiong) and is ready to post an incredible $900 million cash as part of his $1.4 billion (not highest) bid. Ironically, Soon-Shiong picked up Magic’s minority share of the Lakers last year. Magic vacated that share and his executive position within the organization to get his ducks lined up for the Dodgers bid.

The other two bids are by Rams owner Stan Kroenke and a joint bid by possibly outgoing Grizzlies owner Michael Heisley and LA financier Tony Ressler, who initially headed separate bids. By the terms of McCourt’s divorce settlement, he must pick a winning bidder and close the sale by April 30 so that he can make a massive $131 million payment to his ex-wife, Jamie McCourt.

All of this movement should put the A’s situation truly on the front burner, press release wars and gossip aside. That doesn’t mean that Selig will be able to come to a mutually beneficial agreement for the A’s and Giants – for some time my argument has been that this is the obstacle, not gathering votes or self-serving agendas. With the next owners meetings coming in mid-May, perhaps this is the chance to truly address the issue once and for all. Selig deserves as much blame for allowing the Mets and Dodgers to fester as he gets credit for saving them from the financial disaster, but from both quantitative and qualitative measure both teams are worth more (and deserve more attention) than the A’s and Giants’ squabble. Let’s hope, then, that he’ll be able to muster enough resources to resolve the A’s problems once and for all, instead of playing the perennial game of kick-the-can with the green and gold. Seven years is long enough.

120 Responses to Dominoes are falling

  1. Ted says:

    I would bet the A’s make enough money to pay the players they traded away this past offseason and then some.
    You think the Forbes numbers are off?

  2. pjk says:

    Do you go to A’s games and see the entire sections of empty seats? Dozens of empty luxury suites? “Keep the A’s in Oakland” banners flying alongside thousands of empty seats? Didn’t think so. Forbes traditionally has guessed its numbers based on what it thinks the figures are, rather than having any access to actual books. So no, their team income numbers at least are not reliable.

  3. plrraz says:

    Sure Ted,

    But as you know, its all about being able to retain those players after they’ve become established stars, something that A’s fans are all to familiar with…but you already knew that.

  4. bartleby says:

    @Ted “Bartleby, as I have said before, I drove 880 south from Decoto to Hamilton at about 5:00 PM daily for virtually all of 2009 and it was usually a 45 minute drive and sometimes took an hour or more.”
    .
    And I commuted to the East Bay for three months last year. The route you’re describing gets a little slow between downtown and 101, but mostly isn’t too bad in the countercommute direction. You could also avoid the slowdown by taking 280 to 680 then cutting over at Mission.
    .
    Anyway, I never said there was zero traffic going in that direction, just that it’s far worse going in the other direction.
    .
    “Also, the A’s fanbase is in the East Bay moreso than San Jose.”
    .
    As of today, because they play in the East Bay. If and when they play in San Jose, the bulk of their fans will come from the South Bay.
    .
    “You keep arguing about how businesses that usually go to Giants games now do so because it is easier than going to A’s games and that a San Jose stadium would make it easier for them to go to A’s games instead of Giants games.”
    .
    You are misreading what I said. I said South Bay businesses who buy baseball tickets will choose SF over Oakland, if those are the choices, because it’s much quicker and easier to get there. But I also pointed out the vast majority choose not to buy baseball tickets at all because neither location is particularly close.
    .
    If the A’s move to San Jose, they will bring in a large number of companies currently doing business with neither team. The Giants may lose some existing customers, but they may well be able to replace them with new customers from the East and North Bay. Regardless, the overall MLB pie will be bigger.
    .
    I actually think it’s fairly likely that the A’s will persistently sell out that product, and cease to be much of a factor for the Giants corporate sales.
    .
    “You seem to be arguing out of both sides of your mouth about South Bay business.”
    .
    Not at all. It should be obvious that either team’s penetration of any given market will bear some inverse relationship to distance. Currently, we’ve been told the Giants do business with about 15% of Silicon Valley corporations.
    .
    Making up some numbers just to illustrate the point: Let’s say the South Bay corporate market is three times as big as the East Bay corporate market. Let’s also say South Bay corporations are, on average, an hour from AT&T Park, and East Bay corporations are, on average, thirty minutes from AT&T Park.
    .
    If you plotted a graph of the relationship between distance and market penetration, it would probably bend sharply the closer you got. Lets say for argument’s sake that cutting the difference in half multiplies market penetration by three. Thus:
    .
    South Bay: 300 x 15% = 45
    East Bay: 100 x 45% = 45
    .
    My numbers are make up, but my basic point is the overall effect could easily be minimal.
    .
    “The way you make it sound the Giants are crazy for not jumping at a chance to increase their revenue and franchise value greatly by surrendering SV to the A’s.”
    .
    Once again, I never said that. I said I thought the overall impact on the Giants’ business is likely to be minor. I did not say there was no risk, or that there would be no negative impact.
    .
    Let’s assume you are an extremely selfish and greedy organization. By standing on your territorial rights, one of the following outcomes occurs:
    .
    1. The A’s are allowed to move to SJ, but pay you a big settlement.
    2. The A’s are not allowed to move to SJ, and are forced to move out of the area.
    3. The A’s are not allowed to move to SJ, and continue to rot at the Coliseum indefinitely, living off subsidies
    4. The A’s are allowed to move to SJ, and pay you nothing.
    5. The A’s build a new ballpark in Fremont.
    .
    As you can see, the first three possibilities have major upside for the Giants, while the latter two leave them no worse off than if they just allowed the move. While letting the A’s move to SJ has little downside for the Giants, it also has little upside and does entail some risk.
    .
    The Giants may be evil, but they’re not irrational.

    “Are the Giants owners just bad business people?”
    .
    Well, we can’t rule this possibility out entirely. After all, this is the organization that signed that Zito contract.

  5. bartleby says:

    Because of MLB subsidies, the A’s do generate some profit they could spend on players. However, it’s been pretty convincingly demonstrated by Haas and subsequent owners that making that investment does not have any return. You spend more money, you just pinch your margins. You do not generate enough additional revenue to get back the spend.
    .
    So what is the rationale for doing it? I’d much rather have them save that money for a new ballpark. Until their venue situation is resolved, I’m quite willing to give them a pass on that. The money is going to have to come from somewhere.
    .
    The Giants, on the other hand, have little excuse.

  6. bartleby says:

    @ Ted Of course the numbers are off. These are private companies; Forbes does not have access to their books. These figures are guesses with questionable value, but like the U.S. News college rankings, they sell. So they get published.

  7. Ted says:

    Bartleby, the crawl south from Fremont to San Jose starts north of 237 and continues to 280 and the other direction really isn’t really relative IMO we aren’t talking about changing anything that affects that direction.
    15% seems like a pretty large percentage of corporations.
    The A’s and the Giants are extremely selfish and greedy organizations, that is the way the business works. Why did you leave out the option of the A’s staying put in their city and building a new yard there?
    Touche on the Zito deal, that was a huge mistake that thankfully did not cost the Giants a chance to win the WS.
    What excuse do the Giants need? They made less money over the last 5 years than the A’s and are in the top 1/3 of the league for payroll.

  8. bartleby says:

    @Ted “Bartleby, the crawl south from Fremont to San Jose starts north of 237 and continues to 280″
    .
    In my experience – which is recent, and quite substantial – that simply isn’t true. I did that commute for three months, and never hit traffic north of 237.
    .
    Anyway, as I’ve pointed out multiple times, you can largely avoid the slowdown by taking 280 to 680.
    .
    “and the other direction really isn’t really relative IMO we aren’t talking about changing anything that affects that direction.”
    .
    Of course we are. Right now, stadium traffic from the South Bay to Oakland goes north. If there’s a downtown SJ park, stadium traffic from the East Bay to SJ will go south. The volume of stadium traffic will be similar, especially over the long haul. Good traffic planning suggests you want the stadium traffic going in the countercommute direction if possible.
    .
    “15% seems like a pretty large percentage of corporations.”
    .
    If I recall correctly, that is a figure cited by either ML or Jeffrey.
    .
    “The A’s and the Giants are extremely selfish and greedy organizations, that is the way the business works.”
    .
    Not necessarily, and the two are not remotely comparable. When the Giants needed help getting a new venue, their partner, the A’s, gave it for nothing. When it came around the other way, the Giants basically said “bend over.”
    .
    “Why did you leave out the option of the A’s staying put in their city and building a new yard there?”
    .
    Because, as I’ve explained about 100,000 times before, a privately-financed ballpark for the A’s simply is not viable. There just isn’t enough corporate base nearby to support it with the Giants at China Basin; the A’s would never get their investment back. You know this too; otherwise, with your stated concern for protecting the Giants’ “war chest,” you would not be stating a preference for a new SOTA ballpark 12 miles from AT&T Park over one 45 miles from AT&T Park.
    .
    But if you want to include this as a fantasy option, it’s roughly equivalent to #3, where the A’s basically struggle on, crippled, in Oakland, with a giant mortgage they can’t pay and no longer having a subsidy.
    .
    “What excuse do the Giants need? They made less money over the last 5 years than the A’s and are in the top 1/3 of the league for payroll.”
    .
    Again, you don’t know that, the Forbes numbers are guesses. The excuse they need is that they are in position to invest in a few bats and make a real run at another title. They won’t, however, because they’re selling out anyway and they know they won’t get that much return. The A’s excuse is that they (hopefully) have a $500 million bill coming up soon to save up for.

  9. Ted says:

    Bartleny, we are going to have to disagree on the traffic thing. I still drive up to Union City for work on occasion and the slowdown after 5 starts before 237.
    The A’s have relatively few fans in San Jose driving up to games in Oakland because they draw primarily from the East Bay and the A’s are already in Oakland whereas in San Jose they would be creating new traffic problems.
    15% seems like a substantial % of corporations doing business with MLB. How much should we expect that % to rise if the A’s move to San Jose?
    The A’s ownership group that owned the team multiple ownership changes ago is irrelevant but I will say that I have no reason to believe that Haas did anything to help the Giants. Haas wanted the Giants out of San Francisco to make the A’s stronger.
    I have seen no proof that there is not enough corporate support to make a stadium work in Oakland. I’d prefer that the A’s wouldn’t take SV dollars out of the Giants’ pockets.
    What makes you think that the Giants are in position to add a lot more payroll than they already have while the A’s are not?
    You know what the Giants did in preparation for Pac Bell Park? They increased payroll year after year at Candlestick building their brand, fanbase and team.

  10. Anon says:

    @ Ted – “I will say that I have no reason to believe that Haas did anything to help the Giants. Haas wanted the Giants out of San Francisco to make the A’s stronger.” This is the most ignorant thing you have said yet. Please research what transpired when Lurie wanted to move to SC/SJ and who he went to for permission thereof. Now in terms of proving Oakland has lack of corporate support, please research who has gone on record for the EB to even come close the $130million in naming rights deal Cisco has with the A’s. Gnats ownership has already gone on record about stashing away some of the profits realized after their WS win. In fact, one of the reasons Neukum was ousted was supposedly his disagreements with other owners how to utilize that money (he wanted to spend it now).

  11. bartleby says:

    @Ted “The A’s have relatively few fans in San Jose driving up to games in Oakland because they draw primarily from the East Bay and the A’s are already in Oakland whereas in San Jose they would be creating new traffic problems.”
    .
    Why do you persist in insisting that just because a situation exists today, it will always exist in the future. MLB teams – indeed, all entertainment venues – draw primarily from their immediate surroundings. The further out you go, the smaller the percentage of customers.
    .
    The A’s draw primarily from the East Bay today because they play in the East Bay. When the A’s play in the South Bay, they will draw primarily from the South Bay. And if the number of South Bay fans heading north on weeknights today is small, so too will be the number of East Bay fans heading south in the future. They’ll do the same things South Bay fans do today, and for the same reasons: Go to fewer games, and go mostly on the weekends.
    .
    “15% seems like a substantial % of corporations doing business with MLB. How much should we expect that % to rise if the A’s move to San Jose?”
    .
    You’re asking me to speculate. OK, I’ll bite: I think the number can more than double.
    .
    “I have seen no proof that there is not enough corporate support to make a stadium work in Oakland. I’d prefer that the A’s wouldn’t take SV dollars out of the Giants’ pockets.”
    .
    This is completely disingenuous. Dollars are dollars, it doesn’t matter where they come from. If you didn’t know this statement to be true, you (and the Giants) would be trembling at the prospect of an Oakland ballpark, and helping the A’s pack the moving vans.
    .
    “What makes you think that the Giants are in position to add a lot more payroll than they already have while the A’s are not?”
    .
    The A’s need to save up for a ballpark. The Giants do not. They have no excuses.
    .
    “You know what the Giants did in preparation for Pac Bell Park? They increased payroll year after year at Candlestick building their brand, fanbase and team.”
    .
    They did this knowing they had a new ballpark coming, or at least knowing they had no artificial obstacles to building one. Until the A’s get the green light on San Jose, increasing payroll is likely to be money down a rat hole. If any when they do get the green light, I fully expect they’ll proceed as the Giants did, preparing a winner to open the new yard.

  12. LoneStranger says:

    Having lived in Fremont for five years, and doing a bunch of weekday Sharks games every year, I usually left the house between 5:30 and 6:00. The question was always “Will the traffic start at Montague or Brokaw?” Occasionally it started earlier, and sometimes I breezed on through past 101, but for the most part, it was usually somewhere between the two exits.

  13. Ted says:

    Anon, why do you think Haas wanted the Giants to move to San Jose or Santa Clara?
    Bartleby, I have a hard time imagining 3 in 10 companies doing business with MLB. These are kinda ambiguous figures since I am not sure what qualifies as a South Bay corporation and what qualifies as business.
    The Giants payroll ranks in line with their revenue and franchise value like most other teams’ payroll. The A’s aren;t saving for a stadium they are taking profits from revenue sharing. The Giants increased payroll year after year in the late 90s rather than saving up for a stadium. Wolff is simply pocketing revenue sharing. Why would you expect Lew Wolff to ever spend money on payroll, what has he done to show you that he will?
    LR, getting on 880 from Decoto at 5:10 I would feel lucky if I made it to Montague at anything better than a stop and go pace. It was a rare occasion when that happened.

  14. Anon says:

    @ Ted – please stop responding to question with more questions because you have anything to support your original assertions. Please support your conclusion that “Haas did anything to help the Giants” with some evidence. Regarding spending money, LW has gone on record saying that they’ve barely broken even last year, even after their revenue sharing check. Also, since you trust Forbes so much suddenly, notice how they mentioned that “Oakland averaged a wins-per-player-costs index of 134, meaning that Beane has delivered 34% more wins per dollar of payroll than the typical baseball team” while the Gnats were much lower than that mark for the past decade. Just the A’s spend wisely and not foolishly, doesn’t mean they don’t spend. A prime example would be in the ALCS run in 2006, they traded away Eithier to get bring on more salary and a vet in Bradley. They also did the same thing the a couple of years hoping that Holliday would bring them the same magic that Thomas did prior. I could go on about the FA pursuits they have, and even recent Cespedes signing, but you’re a krukow kool aid drinking Gnats fan, so i wouldn’t expect you to know….

  15. Ted says:

    Anon, Haas wanted the Giants to move to San Jose so that they would be out of San Francisco. I never thought his motivation was considered by many to be anything other than getting the Giants out of SF.
    I trust Forbes more than I trust Lew Wolff. Lew Wolff has no reason to tell the public that he made a profit.
    Good for the A’s and Billy Beane, he has done some good things with limited resources.

  16. Anon says:

    @ Ted – Have you ever read up on Wally Haas Jr. before today? Did you know that he owned the A’s as a philanthropic gesture to the Oakland community? Did you know that he lost millions during his tenure as owner as well? If he wanted the Gnats out of the area, he could of just as easily denied the South Bay altogether since Lurie was on his way to St. Petersburgh at the time anyway and SC was a last resort to stay in the Bay Area. Please get your facts straight and your head out of Neukom’s arse.

  17. Ted says:

    Anon, The A’s books were not open to the public but we do know that Haas sold the A’s for a lot more than he bought them for. It really doesn’t matter anyway.
    The Giants didn’t move to Santa Clara and they didn’t move to St Pete so Santa Clara was clearly not the last resort. Lurie sold The Giants to ownership that kept the team in Candlestick and committed to San Francisco.

    You keep mentioning Krukow and now you bring up Neukom. I have never heard Krukow talk about the A’s other than when the two teams are playing and he is providing commentary on the game and Neukom isn’t the managing partner of the Giants.

  18. Anon says:

    @ Ted – there you go again with your “we know” statements without a concrete facts backing it up. And it does matter, because it makes your original argument moot. And again, you’re either making up your own revisionist history or ignoring the entire facts surrounding how/why the TR’s are the way it is now. This is critical to the whole premise surrounding the validity of the TR’s themselves. Also, i find it interesting that as a Gnats fan, you dont’ realize that Krukow is the biggest Gnats homer bar none and that Neukum as the managing partner was the most defiant in terms of TR’s, especially compared to McGowan before him….But then again, we A’s fan seem to know a bit more about the Gnats then they do themselves it seems…

  19. Ted says:

    Anon, what does Krukow have to do with TR and the A’s? Neukom, Magowan and now Baer all have been adamant about keeping TR so SCC because they are responsible first and foremost for looking out for the Giants franchise.

  20. Anon says:

    @ Ted – I’ll connect the dots for you (again). Krukow is the biggest homer on the Gnats fanbase station. That station is a sounding board for the Gnats, since they’re part owners. Given the propaganda from the Halloween camp lately combined with their SFSJ front, it was to illustrate how you have been brainwashed to exactly mimic all the same arguments the Gnats make without any factual basis. Comprende?

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