Chargers elect to stay in San Diego through at least 2015

Late statement from San Diego Chargers special counsel Mark Fabiani:

On February 1st of every year since 2007, the Chargers have been eligible to terminate the team’s lease for Qualcomm Stadium. And each year since 2007, the Chargers have announced that the team will not exercise the termination clause and instead continue to work toward a permanent stadium solution in San Diego.

Today, the Chargers are making the same announcement that the team has made each year since 2007: The team will not be exercising the lease termination clause and will keep working to find a publicly acceptable way to build a Super Bowl-quality stadium in San Diego. Calendar year 2015 will constitute the team’s fourteenth year of work on a San Diego stadium solution.

The Chargers aren’t fundamentally closer to a stadium deal now than they were at this time last year. If they had chosen to terminate the lease, they would’ve had to pay $17.6 million to the City of San Diego to leave. Without clear short-term and long-term stadium solutions in LA, it makes some sense to wait especially if real money is at stake. That isn’t the case for the Rams and Raiders, who face no penalties if they leave their current homes.

On Monday, the New York Times reported that the chances of any team moving to LA were dimming. We’re still a couple months from the window officially opening, and if LA interests such as AEG are truly interested, I imagine they’ll take that time to work out a deal with the NFL (and perhaps Dodger Stadium).

What say you, Rams and Raiders?

For Davis it’s all about #1

Mark Davis explained where he stands vis-à-vis the A’s now and into the future during an interview with Tim Kawakami.

As I’ve said, I’m not against the A’s, I’m not for the A’s, I (sic) just for whatever’s best for our organization.

I don’t think anything else needs to be added here.

Kephart provides update on Coliseum City, AEG rumors fly

Two articles – one a blog post by Mark Purdy, the other a SFBT piece by Cory Weinberg – provide a tiny amount of news on Coliseum City. Citing confidentiality agreements, New City and Renaissance head Floyd Kephart provided few new details. He did take time to trumpet that the project’s progress, which is better than no progress, I guess. The other “big” takeaways:

  • Kephart threw Colony Capital and HayaH under the bus for getting its documentation wrong.
  • He’s optimistic, saying that New City is “probably between 60 and 70 percent there.” That last 30-40% is a major sticking point, since it involves convincing at least the Raiders to sign on and a master developer as well.
  • Wolff had a discussion with Kephart. Kephart didn’t offer details to Wolff. Wolff reiterated his “wait-and-see” stance.
  • According to Purdy, both Wolff and Mark Davis would prefer to keep surface parking instead of building garages for various reasons.
  • The financing model – and whether includes paying off the Coliseum’s existing debt – remains unknown, at least publicly.

Next week the 90-day “project” will hit its midway point. Kephart is to be commended for getting the meetings, talking to potential principals, and for ably playing catchup, cleaning up the mess left for him by Colony. That still doesn’t mean there’s a deal in place, and Kephart may have to pull a rabbit out of his hat to convince Davis to commit. Private interests would be fools to give Davis any kind of revenue guarantee – that’s how Oakland get into this mess to begin with – since it could add considerable risk for them.

Meanwhile, the LA options for Davis may be dwindling. LA sportscaster Jeanne Zelasko said yesterday that the Rose Bowl and LA Coliseum want nothing to do with the Raiders, leaving Davis with possibly Dodger Stadium in the short term and perhaps Farmers Field in the long term. AEG, which bought a piece of the Lakers when Staples Center was built, is offering a similar “Lakers deal” to a prospective NFL team. AEG was even reportedly hiring a PR person for the NFL stadium effort, which the company is denying. Of course, it was AEG that asked for and received a six month extension to attract a team to Farmers Field.

Anyone following this story knows that Davis will have to give up some percentage of the team in exchange for tenancy in a new stadium anywhere, whether it’s Oakland, LA, or even San Antonio if a new stadium is built there. Here’s how I assess the Oakland vs. LA:

  • Oakland: Steadier fanbase, limited market potential, difficult financing plan, greater civic/government support
  • Los Angeles: Less stable fanbase, greater market potential, known financing plan, less civic/government support

I honestly don’t know how to handicap that. There are no deal terms available.

As for the parking issue, if you really want to read into this it’s quite possible that the Coliseum City alternative that Wolff is putting together is a low-density development like the original Fremont Pacific Commons plan. No high-rises, few parking garages. If true, that’s a huge departure from Coliseum City, though the infrastructure buildout would project to be much less intense, and therefore less expensive for Oakland/Alameda County since the public sector is expected to fund that part. Assuming that Wolff gets a chance to pitch his plan, it’ll be up to City/County to determine whether that’s good enough.

Home Field Disadvantage

After yesterday’s games, the 49ers are 3-3 at their new home. The Cowboys are 3-4 at JerryWorld this season. The Jets and Giants are each 2-4 in the swamp, though granted both teams are terrible. Much has been said and written about how Levi’s, MetLife, and AT&T Stadium lack the kind of 12th man atmosphere considered a major part of home field advantage. Why is this? Jerry Jones gave a partial explanation in an interview with Colin Cowherd on Wednesday.

COWHERD: (AT&T Stadium has) become such a national attraction, that there’s been a debate about whether road fans are taking over the stadium. Are you concerned about that?

JONES: No I’m not. We had that wonderful game against the Giants… boy there were a ton of Cowboy fans at that thing. We do know we’ve got a lot of support. Other teams have the same issue, in that visiting teams can buy these tickets… Anyone can pick up a ticket. Our tickets have gone as high as 4 times face value for people that want to travel. And one of the reasons they give is, ‘We just wanted to use this game and come see the stadium.’ That’s part of the price we’re paying for that kind of interest.

Now don’t get me wrong, I want every edge we can have to win a football game. On the other hand, it’s a lot of pride that I have and we have as an organization to have that kind of interest in our stadium. We did overdo, I say overdo I mean in a good way. If you’re as passionate about this stuff as I am… they oughta pass a law against it. We just emptied our bucket.

AT&T Stadium

It’s big. It’s surely impressive. Is it good? That’s debatable.

The tendency to overbuild, as is this case with the newest three (aforementioned) stadia, has made the venue as much the attraction as the game. That should fade over time, as this kind of interest in football stadia – as opposed to ballparks – is a relatively new phenomenon. Football stadia are typically seen as utilitarian affairs, and while some recent iterations have become flashy, typically there aren’t scenic vistas or idiosyncracies to appeal to general football fans the same way ballparks do. Cowboys Stadium is the first truly palatial venue in the NFL, while Levi’s Stadium is the only new, swanky venue in California. If you’re a fan and you can spend a few hundred or a thousand dollars on a weekend in San Francisco (cough*Santa Clara*cough) or not snowy Dallas, it’s not a bad weekend in the least.

A few teams have a large enough national fanbase that they can be expected to travel well, namely the Cowboys, Steelers, and Packers. Big markets usually have good representation on the road too. So while the media noted the number of 49er fans in Arlington for Week 1, they also mentioned the invasion of Cowboys fans in New Jersey last weekend.

If you have a 10-year seat license to go with your seats, chances are you’re going to plan your attendance with care. That may mean attending every game as a die-hard, or selectively selling seats on a per-game basis. As internet-based secondary market resellers have gained popularity over the past decade, the process of buying and reselling tickets has become practically frictionless. And if you play your cards right, you can earn a decent amount of your money back.

A big concourse is good for accommodating fans in the concession lines. It also serves to take fans further away from the action.

A big concourse is good for accommodating fans in the concession lines. It also serves to take fans further away from the action.

Then there are traditionalist types. I know a Bears fan in Chicago who trades his annual Packers game seats at Soldier Field with a friend in Wisconsin, so that he can attend an away rematch at always-sold out Lambeau Field. As fans become more mobile and more empowered to get tickets away from normal home schedule, this phenomenon will continue to grow. Some factors such as ticket scarcity or lower capacity can help reduce the impact of road invasions. But disaffected fans have more options now, so they can be expected to exercise those options. Jones gets that.

If I’m Mark Davis, I fight the urge to make a stadium opulent, whether in Oakland or LA. Focus on the basics, spend money where it should be spent (locker rooms, suite/club level) and otherwise focus on fan atmosphere, not amenities. Bring fans as close to the action as possible. Wherever the Raiders go, if they can’t ably recreate the Black Hole or recapture much of the Coliseum’s intimacy, they’ve already lost. It is possible to make a stadium too good, at least in the short term. Every team in every sport can learn the lessons the 49ers, Cowboys, and the New York teams are learning.

When planning a football stadium, the following criteria should be considered:

  1. Constrain cost, if only to limit the need for seat licenses and other lengthy contractual ticket arrangements.
  2. With the technology available, make in-seat ordering the most attractive option for concessions – to keep fans in their seats. This may mean severely or completely eliminating convenience fees in order to gain traction and fan confidence in the system.
  3. Resist the urge to participate in the club swank-out armament wars. Provide a reasonable level of accommodation and focus on service.
  4. If possible, keep as many suite levels above the seating bowl as possible.
  5. Consider a partial roof over the seating bowl to keep noise in and reduce summer sun/heat.

None of these considerations will change the secondary ticket market in any appreciable way, but if there are incentives to keep fans cheering in their seats for every game, every effort should be made to work towards that goal.

Wolff to meet with New City’s Kephart over Coliseum City on Monday

An early reason for Thanksgiving? Well, let’s not get ahead of ourselves yet. Floyd Kephart, the point man for the rejuvenated Coliseum City effort, has a meeting with Lew Wolff scheduled for Monday.

The encouraging news is that Kephart may have put together a plan to keep either the A’s and/or Raiders while paying off the outstanding Mt. Davis debt. That previously was not on the table, at least under the Raiders-centric plan.

birdseye-view_north

As of this writing, there are 58 days left in the recently-extended Coliseum City ENA. Kephart has to deliver at least one team and a master developer to sign on, otherwise CC is toast.

Or is it? Is there anything stopping yet another 3 or 6 months? Presumably the Raiders will have to decide whether to make a run for LA in January or February, when the NFL’s relocation window opens. Mark Davis, Stan Kroenke, and Dean Spanos will all be tempted to be first movers, if only to stake the first claim to LA despite the lack of concrete new stadium plans. What would happen if the relocation window and the ENA both expired with no action by Davis? Davis would be forced to work on a lease extension somewhere, whether at the Coliseum, Levi’s, AT&T Park, wherever. The JPA and the City of Oakland would prefer to keep the Raiders locked into a multiyear lease, which would buy them additional time while they waited for Coliseum City to magically pencil out. Naturally, Davis would be most comfortable with a year-to-year agreement. Inevitably, it all comes down to Davis being the first domino. Little else substantive can happen without his involvement, at least if Oakland wants to keep the Raiders within city limits.

A hidden issue for all three potential relocation candidates is the need for a practice facility and headquarters. The Chargers might be able to get away with keeping theirs temporarily in San Diego. The Raiders could also keep theirs in Alameda via a lease extension while flying down to LA for games, though the JPA may choose to slam the door in Davis’s face if he brings in the moving vans. Kroenke has vast land holdings, including that Hollywood Park purchase from earlier in the year, so if he wanted to build a facility in conjunction with the move, there’s little to stop him. However, that would take at least a year to complete with no temporary facility in place, and the NFL would prefer that these teams not use a local JC or high school in the interim.

Going back to Wolff, there’s little reason to think he’ll be significantly swayed by Kephart. Wolff already has his own designs on the Coliseum complex, so a third party would add needless complication. Kephart might have a third way that suits Wolff and New City’s investors, though it’s hard to see what that is. Perhaps if Wolff gets the complex to develop, while New City takes the area between the complex and the BART station and the “Area B” west of 880, all parties may be satisfied. It was always assumed that the $500-600 million funding gap made using all 800 acres necessary. Since the A’s would probably need only a fraction of that for the ballpark, there stands to be more wiggle room for all parties. For a project as large as this it’s not unusual to have several developers handling different sections and phases. Getting them all on the same page, making their respective contributions, and not getting too greedy – that’s the hard part.

 

Interview on Swingin’ A’s Podcast

Yesterday I did lengthy interview with Tony Frye (@GreenCollarBB) of Swingin’ A’s about all manner of stadium stuff. Since it came on the heels of the election, we talked a lot about that and the Raiders. We talked a good deal about the A’s too, and I tried to show how the two are interrelated and how the teams’ fates are intertwined as long as they’re in Oakland.

Swingin’ A’s Podcast Episode 4

My part of the interview comes about 36 minutes in and runs a whopping 50 minutes.

In the interview I discuss Walter Haas and Steve Schott, the latter a subject of a Frye blog post from earlier today. I focused on Haas, partly because of some renewed interest in what he did towards the end of his ownership tenure. Take a look at some of these articles:

A’s fight economics to build dynasty 

haas_1990-lodi

Athletics to move if Raiders return?

boca_raton-athletics_to_move

Athletics seek protection against return of Raiders

deseret-athletics_seek

While we remember Haas for his great generosity, winning teams, and partnership with Oakland, what has gotten lost was that when the winds started to swirl around the Raiders and their potential return to Oakland, Haas picked up on it early and voiced his worry about it. He soft-played it, didn’t want to make appear like he was threatening to move out of Oakland. He made it clear, however, that the team was losing money because of his family’s sacrifices. He was going to sell at some point if it got much worse, which it did. He ended up selling at a heavily discounted price because of the big debt load. Haas felt his business was threatened, so he reacted the way you’d expect a business owner to do – to try to protect his team. Some owners have taken this to unseemly extremes, and it’s unfortunate that Oakland has had to suffer the worst of that behavior from Al Davis and Charlie Finley.

I’ve mentioned this before and it bears repeating: it’s no coincidence that the A’s salad days occurred when the Raiders were gone. The three-peat A’s won the most, but turnout was not particular good and Finley whined about it frequently. With no competition from football on or off the field, Haas didn’t feel a threat. He allowed the Giants to explore the South Bay, in hindsight a strategic error on his part. Haas was as genial guy as ever existed in the Bay Area. But he was still a businessman who knew what was Priority #1 when backed into a corner.

Listen to the interview, rate it on iTunes, and give feedback here in the comments section. I had a good time talking to Tony, and I expect to do another one of these in February, after the Coliseum City ENA expires. Then we can talk next steps. For now, give this a listen.

P.S. – The day Frye asked me to do the interview, Mike Davie of Baseball Oakland wanted to be on too. He’ll have his own episode at some point with a lot of Oakland cheerleading and ownership bashing, I assume.

Davis, Raiders execs meet with San Antonio representatives in Alameda

Mark Davis is probably having a little more fun than Raiders fans these days, because even though their team started out the season 0-8 with 0-16 coming at them fast, at least Davis has a diversion. Davis took another trip to London a few weeks ago, he meets with LA boosters trying the lure the team back down near where he lives, he’s in the Bay Area for home games, and he met today with Henry Cisneros and his team from the Alamo city. Naturally, it’s all a matter of exchanging expensive lunch checks, so Davis is having a grand time while everyone else tries to get inside his head.

Prior to today’s meeting, a unnamed Raiders source indicated that the Alamodome, the last on-spec stadium in America, was considered “NFL-ready.” Clearly that means ready as an interim venue while a new one is built, which is sad considering that the Dome is barely 20 years old. Then again, the Georgia Dome is of similar vintage and that venue is considered outdated by the Falcons, so maybe it’s not that surprising after all.

The Alamodome was borne of a strategic mistake. The Spurs’ old home, the HemisFair Arena, had already been expanded once since its ABA days (by literally raising the roof). The time had come for a brand new arena. Instead of a purpose-built basketball venue, Cisneros led the charge to build a new domed stadium, which could have attracted an NFL team at some point. In the meantime, San Antonio became home to a new CFL expansion franchise during that league’s ill-fated venture in ‘Murica. When the CFL’s stateside project went bust the Alamodome was left without a tenant. A half-house configuration housed the Spurs in a manner that made a 20,000-strong crowd look sparse. The Pistons also did this at the Silverdome until they built their own arena. Eventually Spurs owner Peter Holt prevailed upon city fathers to build AT&T Center on the east side of town, leaving the Alamodome with only one tenant, a minor league football team. A few years ago, the University of Texas-San Antonio started up a new football program, so they moved in to the Dome. The only other permanent tenants is the Alamo Bowl.

Debates about the NFL-worthiness of the San Antonio market generally go nowhere. Yes, it would be one of the smallest markets in the NFL if the Raiders moved there. True, it lacks corporate strength. San Antonio is the eighth-largest city in the nation, but as a fast-growing new city it lacks the distinction of its biggest Texas rivals, let alone other major markets. Their one pro franchise, the Spurs, are the NBA’s shining example of how to run a team on a limited budget. In the market’s favor, it does know how to put on NCAA events with aplomb, and the Alamodome is perhaps the best temporary venue in the country. Good enough to be a real NFL market? Maybe, maybe not. Good enough to be a stalking horse? Definitely.

All Davis said after the meeting was:

Henry Cisneros said their job was to present San Antonio’s assets in strongest light and they did that.

In the normal stadium extortion game, this is when the home city, Oakland, would start throwing public funds at Davis. Since Oakland is in no position to do that, Davis has to try a different tack. Davis’s actions make sense when you understand that he’s trying to play three markets off each other to get the best deal possible – one that allows him to divest as little of the team and his own resources as he can stomach.

What can Oakland provide, given the weird state Coliseum City is in? The only thing nearly as precious as money… time. When Davis talked publicly about demolishing the Coliseum ASAP, he wasn’t joking. He’d like to get the Raiders into a new stadium ASAP. The easiest and quickest way is not to build a stadium alongside the existing Coliseum, but rather to demolish the old one and build on top of the old footprint. Doing so would eliminate the need to reroute power transmission lines and other utilities. More important, no EIR would be needed. When it comes to the rest of the project whether a new venue such as a ballpark or ancillary development, those phases would need an EIR. Fred Kephart is projecting a 2019 opening for a Coliseum City stadium. Davis surely wants a stadium by 2018 or even 2017 if it can be managed. That can’t happen with Coliseum City’s current projected timeline. It’s unclear if an LA stadium can be delivered by 2019. San Antonio? Texas builds stadia faster than California, that’s certain.

What about the A’s new lease, you ask? Aren’t they locked in until 2018? Nope. There’s language that accommodates the possibility of the Raiders pushing the A’s out of the Coliseum.

7.2.2. By Licensor. Licensee acknowledges that a plan may develop for construction of a new football stadium for the Oakland Raiders. Licensor shall keep Licensee reasonably informed of any information related thereto. If Licensor presents Licensee with a Raiders Construction Plan, Licensor and Licensee shall, for a period of thirty (30) days thereafter, negotiate in good faith for an amendment to this License that will account for the financial, operational and other consequences that Licensee would suffer from the construction and operation of such planned football stadium. Such negotiations shall not be necessary if the Raiders Construction Plan includes substantial demolition of the Stadium. If such good faith negotiations are unsuccessful or unnecessary, Licensor may terminate this License upon written notice of intent to terminate to Licensee, such termination to take effect sixty (60) days after the conclusion of the second (2d) Baseball Season that commences after such notice.

44.32. “Raiders Construction Plan” means a bona fide plan for construction of a new football stadium for the Oakland Raiders on current Complex property, adjacent to the current Complex property, or otherwise located sufficiently near to the Stadium such that it will materially impact Licensee’s operations, which bona fide plan must include, as pertains to such stadium project, a fully executed development agreement with a third-party developer and the Licensor for development of a new Raiders stadium, supported by a non-refundable deposit from the developer and received by the Licensor of at least Ten Million Dollars ($10,000,000.00).

The A’s are bound to at least 2018 if they choose to leave. Oakland and the JPA are not. Davis’s currency are his 51% stake in the team and the ability to dictate terms. If he can get a year ahead of projected opening dates, he could end up +$50 million in revenue just for that one year compared to staying at the Coliseum. The city that can deliver the earliest start date will definitely influence his thinking to some degree. No one in the media is talking about time, yet it’s every bit as important as site or financing model, at least in the near term.

P.S. – Davis is also playing a game among the NFL owners. Cowboys owner is on the NFL stadium committee, while Texans owner Bob McNair is on the league’s finance committee. Both owners and their respective committees will have a lot to say about potential relocations before any deals are signed. Davis could be sending a message to the Texas owners to play ball with him, or else face a San Antonio threat. It sounds like a terrible hand to play, but Davis doesn’t have much else with football’s Lodge. If he can influence them and other owners that the Raiders should be first banana in LA (despite various misgivings) it’s a hand well-played. Davis doesn’t have much to lose, plus he could help his friend Cisneros prove San Antonio’s viability. If you’re Cisneros, you don’t opportunities like this all the time, so you might as well give it a shot.