Category Archives: Athletics
As the hubbub and posturing over the Coliseum lease subsides, today we got some good news: the A’s spring training schedule has been released! It’s a momentous spring, too, since it’ll be the last at venerable Phoenix Municipal Stadium before the A’s move 10 miles east to Hohokam Stadium in Mesa. Hohokam is vacant in 2014 as crews make changes to accommodate the A’s after the departure of the Cubs.
Speaking of the Cubs, they’re set to open their Wrigleyville West, also in Mesa, in 2014. That’ll be worth checking out. The A’s play only one split-squad game at the Cubs’ yet-unnamed ballpark on March 5. Even if you miss that, don’t fret because the great thing about the Cactus League is that all of the parks are within a reasonable driving distance of each other. While there’s no neat sideshow like the World Baseball Classic in 2014, there’s still plenty to watch.
If you’re interested in visiting, remember that the A’s work out at the ballfields at Papago Park, which is nearly 2 miles north on the other side of the park from Muni. One thing I’ve never done is walk from Papago (where minor league camp games are held) to Muni, so I might do that this year.
Looking to check out several Cactus League ballparks? Consider that the 10 parks are set up in two clusters of five, to the west and east of downtown Phoenix. The east cluster, which Phoenix Muni is part of, is less spread out than the west cluster. Best to divide and conquer.
I’m targeting the 4-day weekend of March 13 through 16. The A’s play a rare night game at Muni. If I get there in the morning I can take in a game nearby in the afternoon before heading to Muni. There’s also a split-squad opportunity on Sunday the 16th, starting with a game in Muni and ending with the A’s taking on the Giants in Scottsdale.
There’s no league wide schedule available yet, as the teams are given the responsibility to arrange their schedules among themselves and publish when they’re ready. At this early stage, only a handful of teams such as the A’s and Giants have published theirs. Soon I’ll get all of them and put together a grid, the same way I did for the regular season.
One last note – keep in mind that Daylight Savings Time goes into effect on March 9, about two weeks into the schedule. That means all games before March 9 are an hour ahead of the Pacific time zone. From March 9 forward, games in Arizona are at the same time as California because Arizona doesn’t observe DST. The schedule shown is in Pacific time. If you’re planning to attend a game before March 9 and are traveling the same day, remember the time change.
Last week I received a flyer from the A’s urging me to get my season ticket plans wrapped up soon, as early as mid-November. Thanks to a Sunday report from Matier & Ross about MLB’s entree into the Coliseum lease discussions, I expect the A’s Ticket Services department to get a lot of angry, misdirected phone calls starting tomorrow morning. And I feel bad for them for having to deal with it.
The fact is that until recently, MLB has stayed out of the lease negotiations at Lew Wolff’s behest. As the lease comes closer to expiring with the two sides still far apart on the terms, baseball has decided to start playing the heavy. As we’ve seen in Miami and many other cities, MLB doesn’t play nice. That doesn’t mean that they’re going to start asking for hundreds of millions for a ballpark. Instead they’re playing the leverage game, threatening to move the A’s across the bay to AT&T Park if the Coliseum Authority won’t relent.
We’re told MLB is also demanding that the Coliseum give the A’s just a two-year lease extension – not the five- to eight-year deal the authority has been pushing.
The short-term lease would give the A’s more flexibility should the team’s owners swing a deal to move to San Jose – or beyond.
Let’s be clear about one thing: this is not MLB’s preferred option. They’d rather have the A’s and Giants play in their own ballparks, because getting them to share is messy when it comes to logistics, scheduling, and revenue sharing. While sharing has happened in the past, it hasn’t happened in almost 40 years. Plus the last thing MLB would want is to have a situation where the experiment goes so well that the Bay Area populace is convinced that there’s no need for two parks, or that the A’s seriously eat into the Giants’ revenue. Just as in other stadium negotiations, MLB has never been afraid to rattle sabers when it feels it can work to the benefit of one of its franchises. From this point forward, don’t expect anything less. Chances are that the JPA will buckle, because they know that the A’s tentatively playing away from Oakland can easily transform into the A’s permanently playing away from Oakland. From MLB’s standpoint, this is a question of loyalty. Oakland and Alameda County shown repeatedly that they’re willing to spend money and make things work for the Raiders. They have also demonstrated that they’ve been willing to move the A’s (and MLB) to the back burner at the most inopportune times. If the JPA doesn’t make concessions for the A’s, that’s just more proof that they aren’t truly willing to make the A’s a priority, which would make MLB less motivated to back Oakland’s efforts to forge a long-term deal. Raiders owner Mark Davis seems to prefer that they start working on a replacement Coliseum on the site of a demolished Coliseum, which if granted would leave the A’s without a place to play. Without a lease extension tied to a well-developed stadium plan, the Raiders would prefer to go year-to-year. The A’s would like to do a five-year deal with early termination if they’re impacted by construction of a new Raiders stadium. The challenge for the JPA is to put together a deal that caters to MLB’s needs while not jeopardizing their relationship with the Raiders and the NFL.
For the time being, Giants chief Larry Baer has stayed silent, probably at Bud Selig’s request. To say they wouldn’t accommodate the A’s would torpedo baseball’s plans and leverage, the same way Wally Haas and then-AL President Bobby Brown rejected Bob Lurie’s plans to share the Coliseum while SF figured out a downtown ballpark plan. That occurred in 1985. Now that MLB is a singular governing body with less stated conflict between the two constituent leagues, the Commissioner has the ability and power to influence the Giants. However, Selig’s track record has been to stall regarding the A’s for nearly five years. Now that a “manufactured” crisis may arise, could Selig be more inclined to come up a with a solution? I’m not holding my breath.
Logistically, sharing the stadium could be difficult for the teams. Naturally there are only two clubhouses at AT&T Park, unlike the more flexible setups at many arenas and new football stadia. The visiting clubhouse would have to be converted into the A’s temporary home while the Giants’ clubhouse would be used for A’s home opponents. There are also 10 potential date conflicts (not 9 as M&R reported): May 12-14, May 26-28, June 13-15, and July 3. That last date is the end of a Giants homestand and the beginning of an A’s homestand. Offloading those conflicts to Raley Field would be difficult because the River Cats already have the first two series and July 3 already booked at home. Day/night doubleheaders would be difficult to make work because of game days can easily stretch beyond eight hours for players and personnel because of warmup/reporting times.
Then there’s also the appeal for AT&T and the various other sponsors in China Basin. AT&T would undoubtedly love double the home dates and exposure. So would Virgin America, Intel, and ironically, GAP competitor Levi Strauss. That and many more subjects (concessions shares, non-game event revenue, ticket pricing) would be up for debate. In the end, the A’s would pay a handsome rent payment and surrender a big chunk of non-ticket revenues. Both teams would deduct stadium expenses against their revenue sharing payments. One way to look at is that the A’s rent would effectively be a rebate against the Giants’ revenue sharing payment – assuming it was structured to fit within the CBA appropriately. Selig doesn’t seem inclined to force the Giants to share, but he can work with the rest of the owners to make it worth the Giants’ while.
Already I’ve seen a lot of anger from fans swearing that they’d never see an A’s home game in SF, or that they’ll cancel their season tickets posthaste. There’s another angle to consider if the A’s were given this two-year window at AT&T Park. The A’s have never called a modern ballpark home, so any serious revenue-generating potential at a new ballpark remains theoretical at best. What if the window was MLB’s opportunity to prove (or disprove) the A’s viability as the second team in the Bay Area? It’s not the same as having a new ballpark to themselves, but the better amenities and location should be attractive to many fans and companies that normally don’t attend A’s games en masse. After all, the city with the most ticket-buying A’s fans (number, not percentage) is San Francisco, not Oakland or San Jose. If the two-year window fails to positively affect the A’s bottom line, The Lodge may be more inclined to allow the team to move out of the Bay Area. While M&R hinted at a move as a product of failed stadium plans, I think this could be a bigger reason.
MLB has entered the fray, and they’re getting ready to lay down the hammer. For that we can thank A’s and Giants ownership for their stubbornness, Oakland and Alameda County politicians for their lack of urgency, and Bud Selig for not resolving this sooner when he had all the time to do so. Unless a Coliseum lease gets struck in the next month, this is only going to get uglier. A “silly” idea like sharing AT&T Park may turn into something quite sensible. The big issue looming is the endgame, which as Ray Ratto points out, is the can that gets kicked down the road for two years.
In what will probably become an annual study, Bloomberg released MLB franchise valuations today. The timing, prior to the first World Series game, stands in contrast to Forbes’ release, which is usually on Opening Day. While there will continue to be heavy debate as to the veracity of the valuations (MLB financials are not public data), having a second set of numbers released is good at least for discussion purposes. Besides, the bubble effect we’ve seen with valuations the past several years has allowed Forbes to set a baseline for franchise sales, whether teams and leagues want to acknowledge the data or not.
There’s also a very useful, colorful, interactive info graphic that breaks down both franchise valuations and revenue sources. The former includes $110 million for each club’s 1/30th share of MLB Advanced Media, the league’s digital media arm. The latter indicates which teams have shares in regional sports networks, along with revenue sharing payers and receivers.
The A’s ended up 26th in the rankings with a $590 million valuation. That’s 26% higher than Forbes’ spring figure. Methodology is rather murky, but the two outlets seem to be using similar types of data (if not datasets). Bloomberg also has the A’s tied for 1st (with the Royals) among revenue sharing recipients with $36 million. That’s more than the $33 million the A’s brought in via ticket sales. The Giants, who were valued at $1.23 billion, paid in $21 million to the $480 million revenue sharing pool. The Giants may be worth more than twice the A’s value, but the media revenues aren’t as big a gap as you might think. Bloomberg has the Giants at $88 million via their evergreen deals with CSN Bay Area and KNBR, whereas the A’s pulled in $65 million thanks to new deals with CSN California and Entercom’s KGMZ over the last few years.
Curiously, quotes from A’s PR man Bob Rose and Giants control person Larry Baer provide some owner insight. While in the past Lew Wolff may have argued against the numbers due to perceived discrepancies in local revenue (Wolff thought they were overstated), Rose offers up the notion that the valuation may be low. If revenue is $175 million, Rose argues, then the team is worth 4x that amount, or $700 million. Previously I had multiples at 3x for low-revenue teams and 2x for high-revenue teams. Perhaps a rethinking is in order.
If Rose is correct, the cost to buy the A’s and build a stadium would cost upwards of $1.2 billion, not including land and infrastructure. Chances are they could get it, considering the attractiveness of MLB revenue streams. Of course, future value of the A’s would be heavily tied to whatever ballpark deal is made. If the A’s stay in a ballpark they largely have to pay for themselves, that would limit revenue potential. A publicly subsidized venue would make things easier on the A’s balance sheet.
All in all, it’s more reason for Lew Wolff and John Fisher to hold onto the club despite the ballpark territory stalemate. Then again, without a lease we may see that coming to a head soon enough.
Two weeks after a potential investor group headed by Colony Capital and Rashid Al Malik’s HayaH Holdings was revealed, that same group was formally approved as part of the master developer team. With that approval comes a 12-month extension on the ENA (exclusive negotiating agreement) to figure out all most of the details, plus a 6-month administrative extension if needed.
That’s the news. Now let’s try to understand what has to happen next.
The City of Oakland has about $250,000 remaining in money it assigned towards Coliseum City studies. Bay Investment Group (BayIG), the Colony/HayaH partnership, will put in $500,000 towards a market study to determine the viability of Coliseum City. This is important since BayIG is expected to push that study to its own individual investors, who as a group will decide if/how to move forward. The forthcoming study is not to be confused with AECOM’s feasibility study, which was made available during the summer.
Over the next 12 months, the public and private sides have to make good on a set of deliverables. Some within the City, especially CM Larry Reid, wanted a shorter 6-month + 6 month extension instead of the 12 + 6 deal that was approved. Reid’s concerns, aired last week in a committee meetings, were that 12 + 6 was too long a period and didn’t show the necessary urgency to the NFL and the Raiders. Raiders owner Mark Davis has indicated that he wants a lease/stadium deal in place shortly after the NFL season ends.
Nevertheless, Coliseum City will move forward on its own timeline because BayIG asked for 12 + 6 in order to get everything in order. A short list of deliverables looks like this:
- November – Estimate on cost of remaining pre-development work
- February – Assessment of new infrastructure costs
- April – Letter(s) of intent from team(s) who choose to sign on with plan
- May – BayIG market analysis
- Summer/Fall – EIR and Specific Plan
These items, along with additional smaller ones, should lead up to preliminary project approval in whatever form it takes, plus a DDA (disposition and development agreement), the contract fine print on how Coliseum City is built, including costs, financing, and timelines. Zennie Abraham caught up with Oakland Asst. City Administrator Fred Blackwell at the meeting to summarize what’s next.
Simply put, BayIG just bought the City of Oakland and Alameda County some time. However, it’s easy to see how the list of deliverables doesn’t exactly line up with the timeframe that Davis is trying to dictate. Moving forward, the issue is whether the dev team can show significant enough progress to get Davis to sign on and sign a separate lease at the Coliseum that would keep the Raiders in Oakland throughout the transition. Then again, that part’s a little confusing too. When Raiders uber-fan Dr. Death asked JRDV’s Ed McFarlan when the earliest groundbreaking could be he received this rather optimistic response.
He said ground breaking for coliseum city would happen in September if all goes as planned
— Dr.Death (@26DrDeath) October 14, 2013
That seems unlikely given the scope of the project and all the little details that need to figured out. Is that groundbreaking for a new stadium alongside the existing Coliseum? Certainly it couldn’t be demolishing the current Coliseum and building on the same site, since the demo itself would take months and would displace both the Raiders and A’s. While BayIG indicated that it will reach out to the A’s and Warriors to gauge their interest in Coliseum City, it’s extremely unlikely that either team will commit. Despite recent setbacks, both teams are focused on their San Jose and San Francisco plans, respectively. Plus they’d have to commit without all deliverables in place, especially that market analysis. If you think that Lew Wolff would sign a short-term lease without knowing the development’s impact on the A’s, you’re crazy.
For the next 12 months, BayIG has control over most of the process. They could press the deal if they see encouraging signs, or they could kill it if the market analysis looks bad. They’re in great shape considering that they’ve only committed $500,000 towards the project – chump change for billionaires. Just as important, they don’t have to adhere to a specific vision of Coliseum City, though they’re positioning themselves to have at least the football stadium in place. Consider last night’s report on the agenda item:
The Coliseum City Master Plan is providing the basis upon which the City is currently under a separate contract with a specialized planning consultant firm to complete a Specific Plan and CEQA/EIR analysis. The Specific Plan will also identify alternatives to the Master Plan and will consider different development scenarios that will envision zero up to three sports facilifies at the site. Pursuant to CEQA, the separate planning contract will prepare an EIR to address the potential physical environmental effects of the Coliseum City project.
There’s nothing new there, but BayIG is positioned to take advantage of it. There could be a single football stadium, a football stadium and a ballpark, even an arena. At this early stage, it looks like it’ll just be the Raiders stadium, though even that is far from a given. BayIG could find that the best thing to do is to minimize its investment in the stadium, or seek out revenue streams from the stadium or team that could help pay back their investment. The infrastructure cost, which will be borne by City/County, could also prove prohibitively high on top of the remaining debt to be carried at the Coliseum. BayIG could even go with zero venues at the Coliseum. Such a plan would probably not get approval from City since it would represent a white flag. Yet it remains a distinct possibility – if not now, within a few years.
The upside, regardless of your optimism or skepticism of Coliseum City, is that things are coming to a head. Coliseum was introduced more than 21 months ago, and has shown only the most tentative progress until a few weeks ago. Now’s the time to put up, to see what results Coliseum City can yield. No more stalling, and for that we can all be glad.
Note: The only local mainstream media coverage of yesterday’s news came from CSNBA’s Scott Bair. Seems like everyone else was preoccupied with transit strikes and some other multibillion dollar development in the South Bay which is a lot more than vapor.
UPDATE 2:07 PM – I’ve uploaded a copy of the ruling. It’s worth a read.
Additionally, San Jose Mayor Reed’s office released a statement in reaction to the ruling:
I am pleased that the judge has allowed our case to move forward. Major League Baseball’s unfair and anti-competitive actions are costing San Jose residents millions of dollars in annual tax revenues that could go towards paying for more police officers, firefighters, libraries, road repairs and other critical services.
San Jose filed this lawsuit after waiting patiently for more than four years for a decision from Commissioner Selig. The court’s decision this brings us one step closer to paving the way for San Jose to host a major league ballclub.
Update from the Merc’s John Woolfolk on San Jose’s antitrust lawsuit against MLB:
judge mostly rules against San Jose in antitrust lawsuit against MLB, sides with city on state tort claims
— John Woolfolk (@JohnWoolfolk1) October 11, 2013
And other tweets:
— Raj Mathai (@rajmathai) October 11, 2013
BREAKING: Federal judge grants MLB's motion to dismiss San Jose's lawsuit IN PART. Federal antitrust claims dismissed; state claims survive
— Wendy Thurm (@hangingsliders) October 11, 2013
During the hearing last Friday, Judge Ronald Whyte gave indications that he would back MLB based on the standing issue, while allowing San Jose to rework its case and try it in a state court. MLB had pushed for Judge Whyte to dismiss all claims, including those that could be covered by California’s more stringent antitrust laws. San Jose hoped Judge Whyte would rule that the City had standing, which would move the case forward and start a potentially damaging discovery phase for MLB.
Assuming that the tweets above are correct, baseball’s antitrust exemption remains immune to a legal challenge. Instead the case will be about tortious interference, or MLB’s stalling that has prevented San Jose and the A’s from getting a ballpark built. San Jose claimed initially that this amounted to $1.5 million per year in tax revenue, and could be awarded treble damages as a result. Over 30 years that comes to $135 million, not adjusted for inflation.
If San Jose can force discovery into the dealings of its “Blue Ribbon Commission” and other activities related to San Jose and Oakland, it could also force MLB to make a deal since they’re against any kind of opening of their books. There’s a lot more to the TI argument than standing.
A press conference may be in the offing. If it happens I’ll see if I can head out to City Hall.
For now I’ll end with this Bill Shaikin tweet:
Judge in San Jose vs. MLB writes that baseball's antitrust exemption makes no sense but that he is bound by precedent.
— Bill Shaikin (@BillShaikin) October 11, 2013
Hooray for inertia!
Two weeks from today will mark the 10th anniversary of the last team to win a World Series with a payroll under $70 million. The winner in 2003 was the Florida Marlins, a team chock full of prodigious young talent (Miguel Cabrera, Josh Beckett, Dontrelle Willis) and wily veterans (Pudge Rodriguez, Jeff Conine, Mike Lowell) who shocked the world when they beat the Yankees in six games. In 2003 the Yankees’ payroll was nearly $153 million. The Marlins’ payroll was a shade over $45 million. This year the team the wins it all will have a payroll anywhere from double to more than triple that of the teams that were just eliminated.
Atlanta was the first to go, seemingly powerless against the Dodgers’ Puig-powered juggernaut. Next was Tampa Bay, who fought bravely before succumbing to a superior Red Sox squad. Wednesday night it was the Pirates, who did about as much against Adam Wainwright as the A’s did against Justin Verlander. The Opening Day payrolls for the eight postseason teams were as follows:
- Los Angeles – $216,753,286
- Boston – $154,555,500
- Detroit – $148,693,600
- St. Louis – $116,790,787
- Atlanta – $90,039,583
- Pittsburgh – $66,805,000
- Oakland – $61,964,500
- Tampa Bay – $61,928,975
Atlanta’s $90 million is somewhat deceptive. It includes $25 million for Dan Uggla and B.J. Upton. Uggla was left off the Braves’ NLDS roster, and Upton had a grand total of 3 pinch-hitting appearances during the series. Essentially they’re dead money, mistakes made by the Braves’ longtime braintrust. Those mistakes were possible because Atlanta has the revenues to make them. Take the ability to make those mistakes away and suddenly the makeup of the Braves is similar to the other eliminated teams, as is the payroll. The other three teams are small market/have not/50-feet-of-crap-then-us teams. When they make a free agent mistake, it affect everything else. The big market teams not only can afford to mistake those mistakes, they can keep filling their lineups with veterans who habitually have good at bats, and relievers who have tons of experience.
Big markets respond to mistakes or issues by buying depth. Victor Martinez injured for the year? Get Prince Fielder. Dodgers and Red Sox having clubhouse and performance problems among their stars? Bundle them up and trade them for each other. Even a mid market team like St. Louis has options. Don’t think Albert Pujols is worth a long-term deal anymore? Take that money and spend it on calculated risks like Carlos Beltrain and Chris Carpenter, while locking up Yadier Molina.
For have-nots it’s far more grim. David Price expects to be traded from the Rays in a month or two. The Pirates are fortunate to be in their second year of a six-year window, after which they’ll have to figure out how to afford to keep Andrew McCutchen, Gerrit Cole, and Starling Marte. The A’s are in a similar situation, with decisions forthcoming on extensions for Josh Donaldson and the young guys in the staff, including Brett Anderson perhaps as early as in a few weeks. Whether the future with Coco Crisp in green and gold is one more year or three, Billy Beane and David Forst eventually have to find his replacement. The have-nots’ options are more linked to their GMs’ resourcefulness than a smorgasbord of big money, franchise cornerstone players.
Whether you think the A’s postseason came down to one or two plays, the fact is that for the A’s to win any ALDS and then advance to the World Series, everything has to go right. They need error-free ball and a ton of luck. Effectively, all have-not teams have a puncher’s chance of winning it all. Depth-wise they are no match for the haves. Maybe that’ll make it taste sweeter when one of the have-nots eventually gets the baseball gods to shine on them all the way to winning the World Series. It also makes the situation feel more desperate when they get eliminated early.
Why is 2003 important? It’s the first year of the modern revenue sharing agreement among MLB’s 30 clubs. While it has been tweaked in the last two CBAs (2006 & 2011), the fundamentals remain the same. Teams take a third or so of their locally-generated revenues, pool it together, and split it equally. Teams that end up paying the luxury tax see that money redistributed among the have-nots. Teams in the 15 biggest markets are prohibited from receiving revenue sharing receipts (net payment from the pool if the share they paid is lower than expected). 2003′s also the first season after the publication of Moneyball. Since then local TV money has become a much bigger factor, far outpacing the small adjustments being made to the revenue sharing formula to compensate.
Technically, the A’s are one of those 15 big market teams. They get an exemption for now because they play in the Coliseum, a poor revenue generator as a ballpark. Should they move into a new ballpark somewhere in the Bay Area, they would immediately lose the exemption. That realization raises the stakes on the future for the A’s. Like the Giants, they’d have to pay for their own stadium and and can’t rely on revenue sharing. The owners, cognizant of this, purportedly have qualms about the A’s ability to avoid massive debt and manage the club in a sustainable way. Sure, they could dump payroll or make cash calls if things got tight, but that would run counter to the purpose of having the A’s in a new ballpark. MLB’s 2000 Blue Ribbon Panel (not the one working on the A’s) made recommendations that could have helped competitive balance, such as sharing of 50% of local revenue and the allowance of strategic franchise relocations. The owners decided to keep revenue sharing a limited affair.
Yet if MLB is destined to have its top 10-12 franchises in their own contention bucket, shutting out everyone else, then the only way the A’s can truly compete is to get into that group of top 10-12/13 payrolls. Even with a $100 million revenue boost for the A’s touted by Lew Wolff, the A’s would be at the bottom of that list. That might be fine, since the A’s would continue to have spend/rebuild cycles. They’d still have to rely on their resourcefulness. The A’s have a nice boost from CSNCA and they have more national TV money coming, but the biggest windfall would come from that new ballpark, even net of debt service. Without substantive progress made on that front, the A’s will forever remain a team with a puncher’s chance that loses by decision in the end. That’s baseball in the new millenium.