Purdy cites Sharks’ TV deal as reason team could leave San Jose

It wasn’t that long ago that the Sharks were such a laggard in terms of TV ratings and revenue, they sold their own ads. With no competition to Fox Sports and its successor, Comcast Sportsnet, the Sharks always ended up the runt of the litter compared to the MLB and NFL teams, plus the Warriors. When CSN California was started in 2009, the Sharks gladly leaped to the fledgling network in hopes of better exposure and fewer time conflicts. While they got both of those goals realized, the actual contract terms severely favored Comcast, netting the Sharks only $7 million a year.

Mark Purdy mentions Sharks ownership’s exasperation with the deal, which was negotiated in 2010, years before Hasso Plattner assumed the throne at the Tank. The NHL hasn’t been affected as much by the TV rights bubble as the other three major sports, but there’s enough of a discrepancy that it’s problematic for the Sharks, who have the 4th highest payroll in the league. SoCal rivals, the Kings and Ducks, bring in $20+ million annually. Even the Florida Panthers rake in around $11 million per year. Toronto has the most lucrative deal at $41 million per year, which expires after next season. That said, Toronto’s deal is approximately the same as the middle-of-the-pack deal the A’s signed, ironically also with Comcast Sportsnet.

And it’s not like the A’s are a ratings powerhouse. Both the A’s and Sharks are in the 1.x ratings range on CSNCA. You’d think that would translate to similarly sized deals. Evidently not. Purdy speculates that former Sharks exec Greg Jamison lost his job after making the deal. Jamison had a long tenure dating back to George Gund’s time as the owner, so maybe Jamison was too fixated on how the deal compared in proportion to previous deals. Perhaps he didn’t see the bubble coming.

Current team CEO John Tortora is a former media lawyer, so renegotiating the contract should be right up his alley. Unfortunately, the team is locked in for another 14 years, and while Comcast may be accommodating to some degree, they’re not gonna give away the farm. I like the idea of NHL commissioner Gary Bettman getting involved and holding next winter’s Stadium Series game as a carrot, though I’m not convinced it’ll make that much of a difference. When Comcast files its annual financial statement, CSNBA and CSNCA are lumped with all of the other regional sports networks and non-sports properties like USA and Bravo. But it’s obvious that each network is its own unit and must perform up to par. Take CSN Houston, whose carriage situation outside its sister cable provider has been disastrous. CSN Houston is currently undergoing bankruptcy proceedings, and the two teams who have partnered to start the network, the Rockets and Astros, are feeling the pinch because of that mess. For Comcast, CSN Houston may be the canary in the coal mine that signals the end to the bubble.

Trapped for now with a poor TV contract, the Sharks could look elsewhere locally for revenue. Santa Clara has harbored ambitions of a huge Coliseum City-like entertainment complex, with Levi’s Stadium and Great America acting as anchors. An arena – presumably on the current Golf & Tennis Club – would complement the existing options, with a Santana Row-like development bridging the area between the arena and the stadium. Since the City is tapped out because of obligations for the stadium and redevelopment dead, the Sharks would be on their own the same way the Warriors can’t expect help from San Francisco for their Mission Bay arena. Even with free or cheap land, the arena’s price tag would be $600-700 million. Most franchises can attempt such a move if they have ballast in other areas like TV. The Sharks do not, so it’s hard to see how they’d take on such a huge debt obligation.

Attendance has been great for all 20 years the Sharks have been at the Tank, so the only motivation to reach for more is the premium seating segment. SAP Center has plenty of suites and club seats. The suites could be better situated, and the newer segments in between suites and club seats haven’t been addressed, whether you’re referring to 4-6 person loge boxes or outlandish accommodations like the “bridges” under the ceiling at MSG. Even standing room only seats have been turned into something of a premium experience in some arenas.

The cheapest solution would be to make improvements to SAP Center to match what’s being offered. There are only two concourses, main and club. The upper suite level above the seating bowl is too narrow to serve anything besides the suites and penthouse area. The ceiling is among the lowest in the NHL, which limits expansion to an extent but also contributes to making the arena very loud (compared to Staples Center and Honda Center it’s no contest).

tank-seatingchart

Recent Sharks seating chart

Knowing the Tank’s limitations, I have a short list of improvements that could be made to keep the place competitive:

  • Install 40 loge boxes - As you can see from the chart above, the club seats begin where the club level vomitories (tunnels) provide access to the seats (near the 100-level numbers). The seats immediately next to the vomitories are non-club seats. If the Sharks want to add loge boxes, they can do so in those 4 rows. Doing so would displace a bunch of season ticket holders. Hopefully they can be relocated to comparable area.
  • Replace the wire/metal railings at the front of the upper deck – Currently the Sharks sell Ledge seats at a premium, as most teams do. If they remove the wires and replace them with glass, the views from the 2nd and 3rd rows won’t be as compromised, allowing the Sharks to sell those seats for more.
  • Redo the lower half seating bowl with dual-rise seating at the ends – Doing so will make the arena configuration more flexible and efficient. See this post for more.
  • Install rafters seats – Like the MSG bridges, these seats would be in the ceiling and would practically overlook the rink. The elaborate truss framework in the ceiling is designed to make various parts up there easily serviceable and accessible. Look up during a game and you’ll often see people scurrying along the catwalks. If the Sharks can figure out a way to properly provide fan access, there’s an obvious opportunity. The only question is whether the trusswork causes obstructed views.
SAP Center ceiling

SAP Center ceiling

All of this costs money. SJAA, the authority that manages the arena over the top of the Sharks, has a capital improvements budget that it negotiates with the City and the Sharks. Over time they’ve funded replacement scoreboards, the addition of new suites, and other changes. It’s through SJAA that future improvements will be funded, though the Sharks will have to pony up a lot of their own money to get it done. For the rights to operate the Tank and get a cut of concessions, parking and other revenues for all events at the arena (not just hockey), the Sharks pay San Jose $7-8 million a year – mostly for debt service. The Sharks have claimed paper losses for several years now, partly owing to that rent payment, the TV shortfall, and the team’s high payroll. Perhaps the Sharks will offer to make the improvements in exchange for lease concessions. Also, there’s still the deal struck in 2010 to build a garage north of the arena in case the A’s come to San Jose. The lease is up in a few short years, so both sides better get prepared.

Finally, there’s a much simpler market-related question to ask: Can the Bay Area support 4 arenas? With the W’s building their own in SF, Oracle Arena and SAP Center probably still standing for some time to come, how does a 4th arena (2nd in the South Bay) make any sense? Touring acts will play the 4 off each other, killing the arenas’ profitability in the process. LA and NY support 3 up-to-date major arenas, mostly because all the arenas have sports franchise tenants (the Forum is an outlier). In the Bay Area’s case, only 2 arenas would have sports franchises. Each arena would be specced out for their respective team, multipurpose being synonymous with compromise. From a demand standpoint it makes little sense. Plattner, Tortora, and their staff probably realize this and know how to move forward with the venue. But consider for a moment that the Bay Area could have 4 very nice arenas yet only 1 modern NFL stadium and 1 modern ballpark. Frankly, that looks more than a little skewed.

SF Bulls minor league hockey team could fold, move to Oakland or Fresno

The costs of operating a minor league team in San Francisco have caught up to the San Francisco Bulls, according to the Chronicle’s Susan Slusser (yes, our Susan Slusser). The Sharks ECHL affiliate Bulls, who have called the Cow Palace home for the last 1 1/2 seasons, may have a deal to sell the team to a new ownership group by next week. In turn, the team would move its home games to either Oracle Arena or Save Mart Center in Fresno.

The Bulls were always going to be an interesting test of viability in arguably the most expensive place to live and work in the nation. Sure, the Cow Palace is much closer to Visitacion Valley than Pacific Heights, but given the very low salaries for players and the high cost of living around SF, making the team work was going to be a struggle. Coach/GM/Owner Pat Curcio also cited the out-of-pocket improvements the team made at the arena, the big ticket item being a very nice center-hung scoreboard.

Seats near ice level are not well pitched, creating some bad viewing angles

Seats near ice level are not well pitched at the Cow Palace, creating some bad viewing angles. These seats have been replaced by a beer garden.

The view above comes from a free seat offer I received at an A’s game in 2012. Back then the Bulls were just launching, offering a cheaper hockey alternative to the Sharks. The seating bowl was practically the same as when the Sharks played their first two seasons in the NHL, or the short-lived SF Spiders. Ever the utilitarian venue, the Cow Palace was compact for hockey and prone to get fairly loud. Oddly enough, it’s perhaps too large for minor league hockey, which realistically is best served by a 5,000-7,000 seat venue in the Bay Area. The Bulls even removed at least a third of the Cow Palace’s seats by taking the “floor” seats shown above and converting them to a beer garden, right behind the two team benches. The beer garden had previously been located at one end of the rink.

Should the franchise move to Oakland or Fresno, they would be moving into even larger arenas. Save Mart Center seats 14,000 for hockey or ice shows, though it’s likely that the upper deck would be curtained off for hockey games. The same could be said for Oracle Arena, which due to its basketball-centric seating bowl layout, has thousands of obstructed view seats for hockey.

oraclearena-rinkoutline

Panorama of Oracle Arena during FanFest, showing the outline of the ice rink

Last year’s A’s FanFest had the arena laid out in the way you’d expect a hockey game to be staged. At one end, retractable seats would be folded back to accommodate the rink’s 200′ x 85′ dimensions. Seats above the retracted sections would have obstructed views. This is a similar arrangement to what the NY Islanders will have when they move into Barclays Center. If the Bulls move to Oakland, it’ll be interesting to see what pricing the team will offer and the turnout in response. The last minor league team to call the arena home was the Oakland Skates, a roller hockey team that ceased operations when the arena renovation project started in 1996.

The Warriors would have to sign off on the Bulls’ move, and the Bulls would have to reschedule some home dates to defer to the Warriors. There’s also the matter of laying the basketball court on top of an ice sheet, which would have to be done on occasion. Typically, the Warriors’ schedule has avoided any conflicts. For instance, this year a six-game road trip coincides with a Disney ice show in late February. Condensation on hardwood basketball floors can be an issue even in the newest arenas, and Oracle doesn’t have a ton of experience doing these types of switchovers.

Fresno could end up being the best place in the long run, because of the lower cost of living for players and Save Mart Center’s hockey-friendly layout. In Fresno, the team would have instant Central Valley rivalries with the Stockton Thunder and Bakersfield Condors, both teams that play in smaller, newer arenas. Friend of the blog @wacchampions also noted that the team could play at Selland Arena, which underwent an AEG-funded renovation to better support ice shows and ice hockey.

cowpalace-history

Ice hockey history on display at the Cow Palace

If this is the end for the Bulls, it’ll be another brief stay for minor league team at the Cow Palace. The venue is run not by a city or county, but rather the State Department of Food and Agriculture, which also operates Cal Expo. There’s little local sentimentality to how they run the Cow Palace, making the arena fully a bottom-line-first affair. For the sake of NorCal hockey fans, I hope the team doesn’t shut down, and that it will resurface either in Oakland or Fresno, providing them an opportunity to thrive.

Happy Anniversary Shark Tank!

Saturday, September 7 was a fairly ho-hum day at the newly-renamed SAP Center, formerly HP Pavilion, Compaq Center, and San Jose Arena. There was an event, a mariachi festival called Vivafest. Preseason hockey wasn’t scheduled to start for two weeks, the regular season for a month.  It seemed like there wasn’t much to celebrate.

Shortly after the first puck drop on Saturday night at SAP Center

Shortly after the first puck drop on Saturday night vs. Ottawa at SAP Center

Oh, but there was. September 7, 2013 marked the 20th anniversary of the opening of the arena, affectionally known as the Shark Tank (the Sharks would play their first home game on 9/30/93). Though it’s 20 years old, the place still looks nearly new and spiffy, with Sharks ownership and the San Jose Arena Authority committed to maintaining the venue to ensure its place as a premier sports and concert venue, and to keep up with rival franchises. Even though the structure is mostly precast, poured and block concrete, the glass entries and color highlights make the place feel more friendly and inviting than a largely concrete structure should. The steel cladded façade proved to be an aesthetic mistake, though it shimmers nicely at night. I joked shortly after the arena opened to some friends that the City needed to figure out a way to keep the arena in the dark all the time.

Since its opening, the Tank has hosted multiple NCAA basketball men’s regionals, the women’s Final Four, the US Gymnastics and Figure Skating Championships, pro wrestling, boxing, and MMA, and countless concerts. While in my relative youth I had reservations about the publicly-funded nature of the arena, the fact that Sharks ownership (led by the late George Gund at the time) spent a good sum of money upfront to ensure the arena would an industry leader, and the venue has held its place as a highly competitive, well-run NHL arena ever since. Unlike most other arenas, the team ran the venue themselves, parlaying that experience into the acquisition and operation of other venues in the area.

Circulation was always simpler at the Tank than at Oracle Arena thanks to wider concourses.

Circulation was always simpler at the Tank than at Oracle Arena thanks to wider concourses and a simplified layout.

SAP Center didn’t mention the moment on either its Facebook page or Twitter timeline. There was no special event. Maybe this was because the Sharks franchise celebrated its own 20-year anniversary in 2011, which would’ve made this celebration a bit much. Perhaps it’s a mark of the Hasso Plattner’s ownership. Whatever the case, San Jose should’ve celebrated the anniversary. It’s the best thing San Jose’s now shuttered Redevelopment Agency has accomplished. It’s worthy of praise, so I’ll do it here, admittedly in belated manner.

Happy Anniversary, Shark Tank! Here’s to 20 more years of great events at the arena. San Jose wouldn’t be the same without you. Take a bow.

The new SAP Center sign, installed Friday, replaced the HP Pavilion moniker.

The new SAP Center sign, installed Friday, replaced the HP Pavilion moniker.

The Kid

I know we’re all hurting from Game 4. Let’s just take a minute to appreciate this.

Tomas Hertl is 19 years old from the Czech Republic. He scored 4 goals against the Rangers. He’s the youngest to score four goals since 1988. He’s already a Calder Trophy (rookie of the year) candidate. Once in a while we’re blessed to see truly transcendent talents like Joe Montana, Rickey Henderson, or Barry Bonds. Like Yoenis Cespedes, Hertl speaks little English. Like the aforementioned legends, this kid can carry a team, sell tickets, do the unthinkable. He’s that good. Just drink it in, and know that he’s probably going to be a Shark for a long, long time.

News for 7/24/13

A lot of smaller items this week that I felt should go into a single post.

  • Added 7/25 1:48 PM – Cowboys Stadium will now be known as AT&T Stadium, at a rate of $17-19 million per year (length unknown). For reference, Levi’s bought the naming rights at the 49ers stadium for $11 million/year, while AT&T Park’s deal was for roughly $2 million/year through 2024. Oracle Arena and SAP Center have deals worth $3 million/year.
  • Added 7/25 1:40 PMReally good interview on Athletics Nation with A’s Sales & Marketing veep Jim Leahey about how hard it is to sell tickets for the A’s at the Coliseum.
  • Added 8:40 PM – Completely forgot that the A’s have changed the gate opening schedule on Fridays to 4:30. Normally the gates open 90 minutes before first pitch on weekdays, 2 hours before first pitch on weekends. This is to accommodate a request by many fans (including me) to observe home team batting practice, featuring Derby winner Yoenis Cespedes. Home BP is usually held a little over 2 hours before first pitch in most ballparks. For now the time change is only for Fridays. It could change, but remember that for day-after-night games many teams choose to cancel BP. As luck would have it, I’m flying into OAK from Salt Lake City at 3 on Friday, so I’ll have a chance to watch Cespy do his thing.
  • The Chicago City Council approved a controversial $500 million renovation of Wrigley Field, which will include a big electronic scoreboard, increased signage and advertising, and the development of a hotel and office complex across Clark St from the ballpark.
  • The Port of Oakland’s settlement with SSA was approved and accompanied by a celebratory press release by the terminal operator. Though there’s an interesting bit at the end:

The settlement agreement “has nothing to do with the baseball park,” (Port Board President Ces) Butner said. “We have not determined what we are going to do with Howard Terminal yet. We are going to have to figure out what it will be.”

Tim Kawakami also tweeted this:

Kawakami went on to talk about different uses and configurations for the land. Oakland wanted two downtowns with Coliseum City. I guess they can also explore two Coliseums (Colisea?). It’s all fun to think about until somebody has to pay the bill.

  • According to an annual Harris Poll, the A’s are tied for last (27th) in terms of team popularity in MLB. The poll was conducted in mid-June with 2,210 American fans. Predictably, the Yankees and Red Sox are at the top. The Giants rank 10th in the survey, though they’ve moved around a lot over the years.
  • The Giants played a rare doubleheader at AT&T Park, which occurred thanks to a prior rainout in Cincinnati. While the first game was played as a regularly scheduled home game, the second game had the Reds playing as the home team and batting last. A different type of doubleheader is scheduled for this weekend, with the A’s playing the Angels at 12:05 (national Fox TV game) and the Giants hosting the Cubs at 6:05. I’m seriously considering going to both as I’ve done this doubleheader the past two years.
  • SF State professor and longtime Oakland political scenester Joe Tuman is expected to announce that he is running for Mayor today. An announcement is coming at Oakland City Hall at noon. Earlier today I had said something about San Jose’s antitrust lawsuit and MLB’s leverage, which aroused this response from Tuman:
  • Not to be forgotten, Oakland City Councilman Larry Reid has been waiting for a “sign from God” to put him in the race, though his increasingly snarky commentary at public meetings suggests that this is a mere formality. Having both Reid and Tuman in there could make the race entertaining, to say the least.
  • Sacramento arena proponents have accused anti-arena petition gatherers of lies and dirty pool in making claims about the ESC plan. Neither side looks great, as the anti-arena group may have out-of-town support and the “facts” that the pro-arena group are citing are projections, not facts. Yeesh.
  • Despite the City of Detroit officially filing for bankruptcy, it’s likely that $283 million in TIF-based funding for a new downtown Red Wings arena will go through. All sorts of wrong with that.

More if it comes.

News for 7/3/13

There’s a lot of news during this holiday week. I figured it would be best to drop it all in here. First up, A’s news.

MLB announced today that it has retained John Keker of SF firm Keker & Van Nest to represent baseball in the San Jose antitrust lawsuit. Keker has a long and colorful history as one of the country’s top trial lawyers, and would be a formidable opponent for Joe Cotchett if the suit ever went to trial. Or, as a former partner at KVN, Wendy Thurm (@hangingsliders), put it:

Keker’s first statement about the case description of himself as a frequent defense lawyer is also colorful:

Keker also has his hands full defending Standard & Poor’s in the federal government’s lawsuit over allegedly fraudulent practices. Let the games begin, I say.

Besides MLB announcement, if you were worried that the lawsuit would leave the news cycle, there are new articles from the LA Times and Forbes covering the matter. In other news:

  • Members of the ILWU (Longeshoremen’s Union) are opposing the SSA settlement, which would close Howard Terminal and potentially convert it to a ballpark site. The union’s complaint is that the net effect of the settlement and consolidation is the loss of union jobs. This contention has evidently forced the Port of Oakland to again delay voting on the settlement to July 11.
  • BART’s still on strike. Last night’s announced attendance was 17,273, the smallest crowd since the end of May. Tonight’s a fireworks game with the 4th tomorrow, so crowds should be hefty despite the lack of BART.

—–

Away from the A’s…

  • The City of Glendale, Arizona, approved a 15-year lease deal to further subsidize the Coyotes NHL club, keeping them in town until at least 2018. The team has an out clause after only five years if they demonstrate they’ve lost $50 million over those first five years. In return, the team will be renamed the Arizona Coyotes. While the NHL continues to own the team in the interim until a purchase is finalized by Renaissance Sports & Entertainment, a new arena operator has been found in titan Global Spectrum.
  • Folks in Seattle were following the happenings in Glendale closely and were ready to pounce if no agreement could be made. Now the Emerald City and Chris Hansen are officially 0-for-2 in attempts to lure franchises to Puget Sound.
  • The City of Anaheim and the Angels are jointly funding a study to determine the cost to keep Angel Stadium up-to-date. Initial estimates have the cost to renovate Angel Stadium at $120-150 million. After the Dodgers spent $100 million to renovate clubhouses and scoreboards, I’d be surprised if the Angel Stadium tab was only $150 million.
  • As the cost to build a AAA ballpark in El Paso rises, the new owners of the franchise backed away from giving $12 million in personal guarantees towards the project.
  • Curbed has a neat pictorial retrospective on the various ballparks that have called New York home over the decades.

And a quick announcement: I plan to be in New York for a few days around August 24-25 Labor Day weekend. I’m still locking down the plans. The Yankees are in town that weekend and the Mets prior to that. I’m working to take in games at both ballparks, and some US Open tennis action if I can fit it in. If you’re there at that time, drop me a line (email, Twitter) and we can have a chat and/or take in a game.

Millionaires need not apply

In 1960, Arnold Johnson sold the A’s to Charlie Finley for $4 million ($31 million today).

In 1981, Finley sold the team to Wally Haas for $12.4 million (also about $31 million today).

Steve Schott and Ken Hofmann bought the A’s from Haas in 1995 for $95 million ($140 million in 2013), followed by Lew Wolff and John Fisher buying the franchise in 2005 for $180 million ($210 million today). If you’re looking for hockey-stick style growth, owning a pro sports franchise is a good bet.

That makes the big news this week out of Sharks camp rather eye-opening. Partners Kevin Compton and Stratton Sciavos are selling their stakes to Hasso Plattner, who has until now been the silent money in the ownership group. A reason cited was ongoing losses sustained by Sharks Sports and Entertainment, totaling $15 million during the 2011-12 season. Assuming that they’re not engaged in accounting hijinks, Compton’s and Sciavos’s individual losses (or cash calls) were probably in the $1-2 million range. While I can’t find a published net worth of either, it’s clear that neither approaches the wealth of Plattner, the SAP head (and Larry Ellison foil) who is worth $7.2 billion, more than the Giants’ Charles Johnson and Fisher combined. For Compton and Sciavos, $1 million is nothing to take lightly.

Plattner even admitted today that hockey teams don’t make money. A man of his wealth can truly own a team like the Sharks and absorb a loss without batting an eyelash. He also owns CordeValle golf course in South County (San Martin), several other golf courses in Africa and other hotels. That doesn’t mean he’ll start going crazy with free agent signings in the future, but he can afford to be less concerned about having to make cash calls when the time comes. The Sharks aren’t hurt by turnout at HP Pavilion. They’re hurt by lagging national and local TV revenues. Both of those can improve over time, but they’re definitely playing a long game, not one where a millionaire coming in might look for 8-10% annual returns. The Sharks’ lease is on the second of three five-year options, the last of which ends in a decade.

It’s that return-poor situation that probably doomed Greg Jamison, the former Sharks CEO who missed today’s deadline to assemble a group to save the Coyotes in Phoenix. That’s despite Glendale, AZ promising an eight-figure subsidy for each of the next 20 years to offset the team’s operating losses. Now that a new City Council has promised to not give away the farm for another Coyotes ownership group, speculation is rampant that the team will once again relocate. Prime candidates include the Toronto suburb of Markham, Ontario, where the City Council approved an arena last night. The favorite may well be Seattle, where an arena deal is in place and an ownership group has deep pockets, especially in the form of Microsoft CEO Steve Ballmer.

If you want to be taken seriously in the business, it’s best to have at least one multi-billionaire on your team to cover the occasional lean times and cash calls. Especially in hockey.

George Gund III: 1937-2013

I never met George Gund. I’ve heard quite a few stories about him. He was a character, an iconoclast, a real fan who just happened to be rich. He lived the kind of lifestyle many sports fans would’ve liked to live, jetting off to tournaments and film festivals and pretty much doing whatever he wanted. To appreciate the man, read these four articles about Gund:

What I’d like to do is tie his career into the fabric of the Bay Area sports world. First, we have to start in Cleveland. Gund was what we’d now call a trust fund baby. He loved sports, film, and classical music. In keeping with those passions, he bought two hockey franchises, married a filmmaker, and sat on the board of an orchestra. He partnered with his brother, Gordon Gund, to buy the Cleveland Cavaliers. George was always the hockey fanatic while Gordon was the basketball junkie. It worked out pretty well for both in the end.

The journey, however, was long and at times quite difficult for the Gunds. After George Gund permanently moved out to San Francisco, he took a minority stake in the California Golden Seals NHL franchise. The Golden Seals were sold by Charlie Finley, who tried and failed to establish his “branding” on the hockey club (green and gold colors, white skates). Gund partnered with Mel Swig, who owned the Fairmont in SF (like someone we know). For various reasons, running the Seals wasn’t working out at the Coliseum Arena. Swig tried to put together an arena deal in SF, but that fell through. The Gund brothers bought the team from Swig and relocated it to their childhood home of Cleveland.

Except that the team, now named the Cleveland Barons, played out in the sticks at the Richfield Coliseum, about halfway between Cleveland and Akron. The idea was to leverage the fanbase from both markets, and it failed miserably. With the Barons and the Minnesota North Stars in danger of folding and the NHL still struggling against the rival WHA, the league decided to merge the two teams. The franchise remained the Minnesota North Stars and would have a good deal of stability for the next decade, including a Stanley Cup Finals appearance in 1981 (a loss to the juggernaut NY Islanders). The Cavs stuck it out in Richfield for over a decade before moving back to downtown Cleveland. The new home was named Gund Arena.

In 1991, George saw his opportunity to bring a team to the Bay Area. The NHL was starting its Sun Belt expansion phase, and it seemed a good time to put a team in the Bay Area. Howard Baldwin, who was already known as a sort of serial franchise owner, was pushing hard for the franchise to be in San Jose. George Gund stepped in to swap the North Stars for the rights to the expansion franchise, which eventually became known as the San Jose Sharks.

The Sharks played its first two seasons at the aging Cow Palace, an arena that was already outdated for both the Warriors and Golden Seals by the mid-70′s. A new, hockey-focused arena deal was in the works in San Jose, with recent transplant and future Sharks play-by-play man Randy Hahn playing a key organizing role. Gund had the opportunity to try the Oakland experiment again even though the Coliseum was small and poorly set up for hockey, or try to get an arena built in SF. He found willing partners in San Jose in Mayor Tom McEnery and numerous business leaders, all of whom were willing to do what it took to put San Jose “on the map”.

With two major franchise moves under his belt, George Gund could’ve been considered a carpetbagger. He didn’t live in San Jose, choosing to stay in SF and build an apartment inside San Jose Arena. (Frankly, I’d do it if I was asked to contribute.) Yet his legacy stands as a key figure who made San Jose major league and cultivated a great, appreciative fanbase – even though the Sharks mostly sucked during the Gund era.

Gund’s story as an owner is similar to that of Wally Haas, Jr. Both were scions of very wealthy families. Both were revered by their respective team’s fans. Both made great efforts to make their teams successful, business of the game running secondary to winning. Both were well known as philanthropists. Both bought teams from Charlie Finley. The biggest difference between the two was the state of their leagues – while MLB was still clearly the national pastime during the 80′s, the NHL had major competition, growing pains, and difficulty carving out a niche as the fourth major North American pro sports league. Haas was 20 years older than Gund and part of the established SF gentry, so I can’t imagine they ran in the same circles. But I imagine that when Gund took the elevator upstairs over the weekend, he was greeted by Haas and Franklin Mieuli. Mieuli handed Gund a cigar and the beverage of his choice, while Haas showed him the way to the lounge. They could talk about how the Warriors and A’s are resurgent, and that Gund got there just in time to watch his beloved Sharks start their new season. You’re home now, George. Relax and enjoy the game.

Comparison of current (2013) CBAs

A few years ago I did a comparison of CBAs. Now that the NHL deal framework is in place, it’s time to update the table. Here’s what we have now.

MLB remains the only major pro sports league in the US/Canada that has no salary cap.

MLB remains the only major pro sports league in the US/Canada that has no salary cap. NHL cap and NBA salary floor figures are for 2013-14 season.

The untold story is league debt. The NFL is far and away the richest league, but it also has a massive amount of debt. In 2008 that figure was $9.5 billion and has only grown with the expensive new stadia in New Jersey, Arlington, and Santa Clara. MLB’s credit facility, which is meant as a short-term solution for teams, had $1 billion going into this summer and issued $300 million more since then. None of the leagues are in jeopardy because of their respective debt positions because in most cases, that debt is backed by long term TV deals. Individual teams are at greater risk due to the lack of revenue stability in weaker markets, which is frequently the case in the NHL.

Luxury tax structures implemented in MLB and the NBA have worked to reign in many free-spending teams. The NY Knicks are under the NBA’s luxury tax threshold for the first time in recent memory, and the Yankees are set to follow suit in baseball.

All of this goes to show that for all of the talk of economic parity in pro sports, there are instances of haves and have-nots everywhere. It’s unavoidable, and thanks to CBAs that will run for as long as a decade, it’s enshrined. Cheers!

NHL and NHLPA reach tentative deal to end lockout (Updated)

Update 12:30 PMMajor deal points from TSN and the NY Times:

  • The revenue share split is 50-50 of HRR (hockey related revenue)
  • While the salary cap remains at $64.3 million, the salary floor is $44 million.
  • An NBA-style amnesty provision has been inserted into the CBA to allow teams to drop salaries to get under the cap. Each team has two amnesty buyouts it can use to cut high salaries.
  • To keep teams from structuring deals that would circumvent the cap, no single player contract can have a year-to-year raise of more than 35%, and the highest salaried year can be no more than 50% above the lowest salaried year.
  • Revenue sharing from rich to poor teams will grow to $200 million. (I assume this is annual.)
  • The 50-game schedule would start January 15. The 48-game schedule would commence January 19.
  • Specifics regarding pro participation in the 2014 Winter Olympics in Sochi, Russia remain missing. Those are to be determined after the CBA is ratified. (My guess – owners will be very restrictive about allowing their players to go, perhaps not even allowing for a season carveout to accommodate the Games.)

Both sides heavily credited federal mediator Scott Beckenbaugh for pulling both sides away from the abyss. Until he guided the negotiations, talks were so acrimonious that it was common for one side to accuse the other of trying to screw them over or hide something whenever a deal point was brought up. It’s much akin to the recent federal fiscal cliff debate, which required both sides to come off hardline stances and let some level of common sense reign. Like the fiscal cliff talks, the actual deal came weeks, if not months later than it should have. Too bad that the people who really paid the price for the lockout are the fans. The hardcore fans will come back, somewhat begrudgingly. Will the casual fan?

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At 5:09 AM EST, reports started to emerge out of New York that a tentative deal to end the 113-day NHL lockout had been reached. It’s not a done deal yet as there are still issues to work out, but apparently the major deal points have been agreed upon. Here’s what we know so far:

  • The CBA will run 10 years, with either side able to opt out in year 8.
  • 2013 schedule will have 48-50 regular season games, all in-conference.
  • Season will start January 19.
  • Individual player contracts are limited to 7 years, 8 for re-signed players.
  • The initial salary cap for each team will be $64.3 million.

That last point is interesting, because that’s the same figure as the 2011-12 cap. That’s a pretty big concession on the players’ part. It’s not clear yet the revenue share percentages will be. Last summer, NHL commissioner Gary Bettman projected the cap to be $70 million or higher. During the most recent negotiations, the league was not budging from a $60 million cap.

If the NBA’s post-lockout schedule is any indicator, the upcoming 48-game schedule is going to be brutal. Expect lots of back-to-back games, maybe even some back-to-back-to-back scheduling. Starting on January 19, it’s extremely unlikely that 48 games can be fit into the remaining 12 weeks of the regular season (4 games a week!). Instead, the regular season should be extended 2 weeks to accommodate more rest, with the potential for a compressed or extended Stanley Cup Playoffs schedule on the back end.

This session was, like other fruitless sessions during the fall, handled by a federal mediator. It is unclear exactly how much influence mediator Scott Beckenbaugh had on the process as opposed to the desperation of the two sides, but Bettman made sure to thank Beckenbaugh during his press briefing after the 16-hour marathon session was over.

We’ll dig into the specifics later in the morning.