Category Archives: Hockey
News for 8/30/12
Here we go. We’ll start off with some minor league news.
- The Santa Cruz Warriors continue to work with the City of Santa Cruz to get their tent arena built in time for the 2012-13 D-League season. Final approval hasn’t happened yet, let alone construction, so the D-League put the Surf W’s on a loooo-o-ng road trip before the team’s first home game around Christmas. That gives the two parties 16 weeks to get the arena approved, built, and buttoned up. No pressure. The Surf W’s could play on the road for additional games until the project is completed, or if there are extensive delays or the project isn’t approved, hopefully there’s a backup plan like the San Jose Civic Auditorium. Cost for the downtown arena have already ballooned from $4 million to $5 million because of foundation issues that were identified. Ticket prices have also been released. [Santa Cruz Warriors; Santa Cruz Sentinel/J.M. Brown]
- Head north on Highway 1 and you’ll eventually get near the Cow Palace, where the San Francisco Bulls are quietly fixing up the old arena. $2 million of updates will be paid for by the team, including a center-hung scoreboard, a first for the Cow Palace. A schedule and ticket prices have also been announced. I may have to ring up the Bulls to see if I can get a sneak peek of the place. [CSN Bay Area; SF Bulls]
- The first debate for the at-large seat on the Oakland City Council happened last night, and the two main candidates, incumbent Rebecca Kaplan and challenger (and current D5 council member) Ignacio De La Fuente both had something to say about the tenant teams at the Coliseum complex. [East Bay Citizen; Steven Tavares]
On the issue of the city’s professional sports teams, Kaplan and De La Fuente differed, if not, in terms of their priorities for retaining the A’s, Raiders and Warriors in Oakland, with Kaplan being more optimistic. “Let’s face it, the A’s don’t know the way to San Jose,” said Kaplan, and adding the current Coliseum City proposal will bring shop owners, bars and restaurants to the city along with fans and conventioneers to the area, said Kaplan, while also creating jobs.
De La Fuente was less sanguine saying he would only turn his attention to the Coliseum once crime in Oakland is sufficiently quelled. “I learned from my mistakes,” he said, referring to the botched return of the Raiders in 1995. “They are in the business of making money,” De La Fuente said, believing the public sector should no longer have a role in financing stadiums.
- The Earthquakes announced their general seat pricing and posted a seating chart. The big ticket item is the establishment of a 1,400-person supporters section in the closed end, which will have its own bar and storage area for the flags and banners they use during the game. Interestingly, the language is “1,400-person”, not “1,400-seat”, which leads me to believe that this area will be a standing terrace. That’s fine since fans in the supporters sections are expected to stand anyway. I’m pretty sure it’s the only to fit 1,400 people in what looks like a pretty small space between the elevated seating bowl and the pitch. [SJ Earthquakes]
- The Quakes also announced today that they are negotiating with three Fortune 100 companies on naming rights for their 18,000-seat stadium. Fortune 100, eh? Club president said that some of these companies are tech or Silicon Valley firms. Recently, new MLS stadia have netted $2-3 million per year in naming rights, which if matched by the Quakes would go a long way towards paying off the stadium. FWIW, I don’t think any local tech company should be ruled out, including Cisco (and no, that doesn’t mean Cisco is dumping the A’s). [SJ Mercury News/Elliott Almond]
- On Saturday I’ll be in Berkeley for the first Cal football game at the rebuilt Memorial Stadium. I’ll be sure to get there early to take lots of pictures and document the experience. Somehow I was able to buy one of the last available $19.32 tickets for the opening game. I’ll be in the south end zone, a mere 5 rows up. As an aside, I was somewhat surprised at how many tickets remained for the game. I expected a sell out long ago. One thing to consider is that we’re the only market with three FBS (D-I) college football teams. Combine that with small or not-terribly-fervent fanbases and two NFL teams, and it’s easy to see why our general reaction to college ball is a collective “Meh.” [UC Berkeley]
- On a related note, the Pac-12 Network launched two weeks ago and is still negotiating carriage deals. Comcast is not an issue since the cable provider is a partner. The issue is working out a deal with DirecTV, which is not only the provider with the most regional sports and college networks, but also the provider of choice in most bars throughout the country thanks to NFL Sunday Ticket. DirecTV purportedly rejected a deal of $0.80 per subscriber/month, leaving many fans up and down the left coast without many opening week games. Dish Network, Verizon FiOS, and AT&T U-Verse customers are also affected. [SF Business Times/Eric Young]
- The State Controller reversed a slew of land transfers between the cities of Milpitas, Morgan Hill, and their respective (and now defunct) redevelopment agencies. That doesn’t bode well for the Diridon ballpark land transfer, though it has to be pointed out that the Controller has already ruled once in San Jose’s favor, saying that Santa Clara County went to far in holding tax increment funds that were due to the City. [Merc /Tracy Seipel]
Finally, I have to thank a reader out there for giving me four prime tickets behind the A’s dugout for Wednesday’s day game against the Angels. I’m only going to use one, so if anyone’s interested in joining me and talking baseball and ballparks or economics, reply with a comment or send me a tweet.
More tomorrow.
Sharks ownership speaks out
Two great pieces on Sharks ownership by the Merc’s David Pollak. Regarding the team, lead owner execs Kevin Compton and Stratton Sclavos remain committed to keeping payroll near salary cap levels ($70 million in 2013) despite the ownership group losing money on an annual basis. We don’t have access to their books so we can’t validate ownership’s claims, but they are saying that they regularly make cash calls of the ownership group. If that’s the case then there is something to what they’re saying.
The second piece is a wide-ranging Q&A covering multiple off-field topics such as the possibility of competition in the form of a Warriors arena in San Francisco, a looming lockout, and a reaction to the A’s heading 35 miles south.
On the possibility of the A’s moving to San Jose:
Sclavos: “You can always look at these things as a problem or an opportunity. In our discussions, we’re led to believe there’s probably opportunity there for us. We do a lot of things really well in sports marketing and ticket sales and sponsorship sales. We think those assets could be leveraged other places.”
Compton: “Our big concern would be to see that the fan experience doesn’t change as far as parking and traffic and things like that. We’re not going to compromise on that.”
You have to think that the two ownership groups have been talking a good deal about how to share the sandbox that is downtown San Jose. It’s good to hear, and a stark contrast from the bile spewing from the Giants. Compton also had an honest take on the impact of a SF arena. It hadn’t occurred to me that HP Pavilion is now the 6th oldest arena in the league. It makes me wonder what could done to improve the arena in order to raise revenues. More clubby stuff in the rafters like MSG? Changes to the seating bowl?
Compton’s concerns about parking were partly addressed when the Sharks struck a deal with the City for a garage north of the arena. The approved Diridon ballpark EIR calls for no new parking to be built at the ballpark aside for a small amount dedicated for team use. I’m more interested in what could happen with the old San Jose Water property, since that contains the largest lot in the immediate area aside from the arena lots.
This really makes me hope that there isn’t a lengthy work stoppage in the NHL this season. It would be a shame if the only hockey we had to watch this fall were at the Cow Palace.
There’s also a sidebar listing all members of the Sharks ownership group.
News for 8/10/12
We’re overdue for a news roundup. Now seems like a good time for one.
From BANG’s Joe Stiglich:
A’s managing partner Lew Wolff says, to his knowledge, the team’s stadium issue is not on agenda for next week’s owners meetings.
#Athletics— Joe Stiglich (@joestiglich) August 10, 2012
Last week’s visit to Oakland and San Jose by Bud Selig’s three-man panel foreshadowed this.
Update 1:04 PM – Stiglich has a writeup with quotes from Wolff, such as:
“It’s up to the commissioner’s office,” Wolff said. “… This is a process that unfortunately is taking longer than I hoped, but it’s a fair process.”
Other news:
- Janet Marie Smith, who oversaw the construction of Camden Yards and the renovation of Fenway Park, is moving out west to Los Angeles to take a similar role with the Dodgers. If her previous work is any indication, she will keep it classy all the way. [Dodgers press release]
- NHL Commissioner Gary Bettman has set a deadline of September 15 to wrap up labor negotiations before the league imposes a lockout. The NHL and NHLPA are always playing catchup with the other leagues in terms of CBAs. They imposed a 57% player share in the last agreement as other leagues were dropping towards the 50% mark. Now the NHL wants to drop it to 46%. It’s going to be a long winter. [AP]
- A developer is proposing a ballpark for the Tampa Bay Rays in the Gateway area of St. Petersburg, just over the bridge from Tampa. St. Pete’s stance has been to not allow the Rays to get out of their lease at Tropicana Field unless a new stadium were conceived in St. Pete, not Tampa. No financial details were available. [Tampa Tribune/Michael Sasso]
- The 49ers and the City of Santa Clara settled a lawsuit with a County oversight board. $30 million in redevelopment money was at stake. In order to keep local school budgets balanced, the 49ers won’t get the $30 million for several years. Seems fair. [SJ Mercury News/Mike Rosenberg]
- Get used to metal detectors at NFL games starting this season. [Oakland Raiders]
- Speaking of the Raiders, they are using the league’s new 85% measure to determine sellouts this season. The way it works, a team has to sell out 85% of its non-premium seats by the usual deadline (normally Thursday for a Sunday game) in order for a game not to be subject to a blackout. The catch is that any tickets sold between the 85% and 100% marks are subject to higher revenue sharing. Teams like the Raiders and Bucs chose to use the new standard, the Bills and Jags went with the old standard, which required all non-premium seats to be sold by the deadline.
- The City of Industry approved a deal to buy 600 acres within city limits for up to $26.7 million. The land is where the somewhat-forgotten Ed Roski/Majestic Realty stadium would be located. The parties still have to scramble to find a proper replacement for now-evaporated redevelopment funding. [Inland Valley Daily Bulletin/Ben Baeder]
- MLB’s postseason schedule has been released (knock on wood). [Biz of Baseball/Maury Brown]
More if it comes.
News for 6/21/12
Good stuff in this edition.
- Save Oakland Sports is having one of its regular meetings next Monday, June 25 @ 6 PM, at the Red Lion Hotel, 150 Hegenberger, Oakland.
- CBS Radio and Cumulus (parent of KNBR) announced a new sports radio network that will launch in January. The network is expected to feature talent currently on CBS Sports and CBS Sports Network. A key talent on the latter is Jim Rome, whose daily TV show launched in April. Rome’s radio show is syndicated by Premiere Radio Networks (a News Corp. subsidiary), so there’s some natural friction there. I have to think that Rome came to CBS-SN with the idea that he might jump to this new radio network too at some point, though at some $30 million per year, his radio persona doesn’t come cheap. Both of the KNBR stations were identified as future network affiliates for the CBS Sports Radio, which creates a bit of a juggling situation for Cumulus. Will Cumulus continue to pay decent money to be an ESPN Radio affiliate and carry some Fox Sports Radio programming on the side? If not, does that free up ESPN Radio to move to The Game? And how does an ESPN Radio relationship conform with The Game’s cozy relationship with Comcast Sportsnet? Fantasy radio operators, start your typewriters.
- Oakland’s City Council approved a $1 billion plan to finally remake the Oakland Army Base. Unlike some of the more glamorous or controversial plans that have been proposed (movie studio, casino, big box retail, auto row), this one will stay true to the base’s largest neighbor: the Port of Oakland. The plan will include new infrastructure, warehousing by ProLogis, and a logistics center. Every so often the base has come up in discussion here as a potential stadium site, but it’s an idea that’s never had legs within City Hall.
- Greg Jamison’s quest to purchase the Phoenix Coyotes has hit a big roadblock in the form of a lawsuit by the Goldwater Institute. Now there are questions as to whether Jamison, who is not a billionaire, can pull off the acquisition without the sweetheart deal approved by the City of Glendale that would subsidize the team’s continued operation at Jobing.com Arena. The franchise, which is owned by the NHL at the moment, is being forced to lawyer up to complete the sale. If that can’t happen…
- The City of Seattle and Chris Hansen are getting ready to finalize their new SoDo arena plan. Hansen would pay around 60%, with the remaining 40% coming from public sources. The political minefield is being negotiated right now, as the City Council doesn’t want the plan to come to a public vote, and the Port of Seattle is objecting because it fears that the arena will adversely impact port operations. Any team (NHL, NBA) that relocates to Seattle would play temporarily at Key Arena while the new arena is being built.
- This week’s cautionary tale about public stadium financing comes from Chester, PA, where not only has a MLS stadium not been a development catalyst, the stadium tenant Philadelphia Union missed a $500k PILOT payment in 2010.
- The BCS will have a four-team playoff starting in 2014. Semifinal games would rotate among the four current BCS sites, with the championship game going to the highest bidder among them.
- Jim Caple has another one of his ballpark column series, this time an elimination tournament of all 30 MLB parks. In the tournament, fans can vote online for their favorite ballpark in each matchup. We’re at the semifinal stage, with Fenway Park (seeded #2) facing off against AT&T Park (#3) and Camden Yards (#4) vs. tourney Cinderella Miller Park (#24). The Coliseum was seeded #28 and lost in the first round to Target Field (#5) by a whopping 91% to 9% with over 60,000 votes, which is about right. Don’t feel bad though. New Yankee Stadium also lost in a landslide. The Coli’s Mt. Davis was also awarded Worst View. Finally, Caple gets a shoutout to Shibe Park, which ended up #8 in his list of places he wishes were still around.
Happy reading.
News for 6/10/12
We’re overdue for one of these.
- Matier and Ross reported on the contents of the Wolff-Knauss summit two weeks ago. Wolff laid out his 1 hour, 45 minutes case, Knauss and other East Bay execs made their case to work in Oakland – or sell the team. When the latter came up, things apparently got a little testy.
The only flare-up came when Knauss suggested that the business execs had deep-pocketed investors who would buy the A’s if Wolff and his ever-silent co-owner, John Fisher, weren’t interested in keeping them in Oakland.
“You can’t buy what’s not for sale,” Wolff told the group, according to Knauss. “I’m surprised you brought that up.”
- In the same article, contractors at the Cal Memorial Stadium retrofit indicated that the project may not be ready in time for this fall’s football opener. Not that big a deal, same thing happened at Stanford.
- Prices for the non-premium seats at the 49ers stadium have been revealed. The per-ticket prices aren’t bad, but some fans may bristle at the required seat license fee (which can be financed). The pricing structure looks very similar to that employed at Cowboys Stadium, which makes sense considering that the firm marketing the seats is partly owned by the Cowboys.
- If Farmers Field begins construction next year, it’s likely that the E3 convention, held last week, would have to be moved out of the LA Convention Center. San Diego, anyone?
- Chelsea F.C., which has seemingly won everything this season in the Premier League other than the outright league championship, lost out to other developers in its bid to redevelop the hulking Battersea Power Station into a new, 60,000-seat stadium.
- KNBR’s Damon Bruce tweeted on Friday that the Warriors’ Piers 30-32 deal was dead. So far the story hasn’t been corroborated, and other sources indicate it’s incorrect. Seems odd to say something’s dead when it the process hasn’t yet started.
- The Arena Football League suffered its first ever forfeited game when players on the Cleveland Gladiators went on strike before the scheduled Friday game against the Pittsburgh Power. The strike is part of an ongoing CBA negotiations.
- Marlins manager Ozzie Guillen joked that he’d contribute “a couple million” towards a new Tampa Bay Rays ballpark.
- Keeping the Astrodome running and up-to-date could cost $270 million or more, even though the dome wouldn’t have a tenant team.
- The Glendale, Arizona City Council approved a deal that would bail out incoming Phoenix Coyotes owner (and former Sharks exec) Greg Jamison to the tune of $325 million over 20 years to stay in the desert suburb. Jamison has not yet been fully approved to take over the Coyotes by the NHL’s Board of Governors, pending a review of the Jamison group’s finances. The conservative Goldwater Institute wants a temporary restraining order to see if the deal violates the state Constitution.
- In another cautionary tale about public dollars being spent for sports facilities, the Chicago suburb of Bridgeview is in debt up to $250 million for its MLS stadium. What’s paying for the shortfall? Property taxes.
- Update 6/11 12:19 PM – Numerous sources are reporting that (near) billionaire and Ubiquiti Networks founder/CEO Robert Pera is buying the Memphis Grizzlies. The sale price has not been disclosed. Pera is only 34 years old and is partly based out of San Jose. Update 4:00 PM – The price is in the $350-375 million range. The buyout for the FedEx Forum lease is $105 million as of next year.
Happy reading.
AEG looks to add NorCal to its empire
A very clever strategy is emanating from facility operator Anschutz Entertainment Group. It’s a two-pronged affair based in Sacramento and Oakland. The movement draws upon what can be considered serious deficiencies in both markets in their inability to attract certain types of events and visitors. Most importantly, it offers hope to both cities, which are both in danger of losing their respective pro sports franchises.
For San Jose Earthquakes fans, AEG may as well be a four-letter word. The company owned the Quakes franchise as part of its initial MLS holdings. When AEG was unable to forge a new stadium deal in San Jose, the team was abruptly moved to Houston in 2006, making the parent company persona non grata in the South Bay. AEG came back in 2008 with a small move, taking over for Live Nation as the operator of The Warfield in SF.
In Sacramento, AEG is seen as the facilitator for the Railyards Entertainment and Sports Complex. The backing out by the Maloof family has for now killed the plan, though it’s possible that AEG could resurface as a key driver with or without the basketball Kings. Should Sacramento lose the Kings, they’d have the option of building an on-spec arena, similar to former Kings home Kansas City when it built the Sprint Center. That’s a far different scope from Oakland, which is looking to keep three franchises at home via at least two new venues plus a convention center and hotel. Oakland’s model is the AEG-run LA Live complex and LA Convention Center.
AEG is the premier arena operator in the country, with Staples Center as its crown jewel. It has the experience to make cities listen when they come calling, and the weight to make cities cower when threatening to attract a team, as evidenced by AEG’s NFL pursuits. While dangling its own success in front of potential suitors, it forges ahead with its plans to expand its SoCal empire by working on a football stadium-cum-convention hall. While not a short-term likelihood, the threat and possibility remains into the future, and would hugely benefit AEG in two key ways: it would make LACC more competitive with San Diego and Las Vegas for conventions, and it would create the ultimate flexibility for all of its LA venues, which happen to be within blocks of each other.
AEG's Downtown LA operations provide great flexibility and huge traffic
To understand what make LA Live unique, it’s important to look beyond Staples Center. LA Live has two venues of its own: the 7,100-seat Nokia Theatre and 2,500-person Club Nokia, both of which are essentially auditoriums. They slot in below Staples Center for booking concerts, which is necessary because Staples is home to three pro teams and at least 126 home dates per year. In most other cities an arena operator would use a curtain system to reduce capacity at a large arena. AEG doesn’t need to do this sort of “half house” setup with Staples much, instead it can push a show to the Nokia Theatre. Staples famously hosts the Grammys every year, while Nokia hosts the Primtetime Emmys, MTV VMAs, and the finale of American Idol. Club Nokia mostly serves as a venue for up-and-coming and smaller acts. The Convention Center churns plenty of day business and drives demand to local hotels. Both convention and entertainment visitors benefit local restaurants and bars, some of which are in LA Live. It boils down to the equivalent of the population of the Bay Area visiting downtown LA every year, spread out among 2.5 events per day.
Oakland wants this kind of traffic, so they’re looking to drop SMG like a bad habit then partner up with AEG now and into the future. It’s going to be difficult to pull off. A third of AEG’s visitors come from the convention center. To build a competitive center in Oakland, the facility would have to surpass Moscone, San Jose, and Santa Clara in terms of space. It would require at least one, probably two anchor hotels attached to the convention center. A thriving commercial and retail district wouldn’t hurt attracting people and conventions. Oracle Arena is a good, modern arena thanks to the 1996 renovation, and AEG is promising to maximize utilization of the arena to its full potential and provide consulting for the Coliseum City concept.
The inherent risks are timing and cost. AEG built Staples Center prior to the 1999-2000 NBA and NHL seasons. The Nokia Theatre didn’t open until 2007, after Staples as AEG responded to market conditions. Club Nokia opened the following year. For AEG to be that involved and willing to invest in Oakland, it would have to recognize similar market potential and a chance to dominate the market the same way it does in LA. The arena part will be difficult to pull off as Sharks Entertainment will always be competitive with HP Pavilion. The Warriors could build an arena in SF, relegating Oracle Arena in the process. Another Planet Entertainment controls several smaller theaters throughout SF and the East Bay, providing natural competition in the process. There is no proper 7,000-seat auditorium in the Bay Area, pushing shows of that size to the arenas unless AEG sees fit to build one (the Bill Graham Civic, as historic as it is, is really a gym). Plus there is no shortage of 2,500-seat venues in the Bay Area: Fox Oakland, Paramount, Warfield, SF Masonic Auditorium, and the San Jose Center for the Performing Arts. AEG isn’t going to bring a fully-formed Coliseum City on Day 1. It would have to be phased in over many years, with no guarantee that much of what’s being promised will be built.
For AEG, the best part is that in making these deals, it’s getting exclusivity for usually a year or more for a very small price while making a little money to boot. AEG has been willing to invest in venues to some degree as it did with Sprint Center. However, Phil Anschutz is not about giving away the farm, as witnessed by his hardball dealings with the NFL and the contribution cap AEG paid for Sprint Center. Maybe something will happen, maybe not. Either way AEG is the first one in and keeps competition out, while getting a better understanding of how to exploit a particular market. As great as LA Live is, it shouldn’t be considered easily repeatable. Sprint Center is a more realistic and perhaps cautionary example. The arena is the second busiest in America according to Pollstar and is highly profitable by AEG’s standards, though it’s a $13 million annual drain on the city’s coffers. Sprint Center is well integrated with KC’s $850 million Power and Light District development. There remains no major pro team. AEG appears to be happy with whatever business model works best for it whether it’s three teams or none, civic pride not being a great priority.
One other curiosity about AEG: as interested it is in the NFL and as extensive as its holdings are in hockey (LA Kings), basketball (Anchutz’s minority share of the Lakers), and soccer (LA Galaxy, Houston Dynamo), there’s one glaring omission on its resume: baseball. Does AEG care about baseball at all? It doesn’t operate any ballparks, nor does it own a minor league team. It doesn’t seem to have any relevant experience with baseball. Its new AEG Sports division has no baseball interests at all. Judging from AEG’s track record, I have to think its priority list would look like this:
- Concerts
- Soccer
- Conventions
- Hockey
- Football
- Basketball
- Baseball?
Judging from that, maybe AEG would be more interested in bringing a MLS team to Oakland than in keeping the A’s there. In regards to the A’s, AEG’s presence is similar to Larry Ellison in that certain factions would love for either of them to be interested in the A’s, but neither has shown any sign of interest to date. A clause in the Coliseum management contract dictates that AEG can’t talk to teams about moving, which I suppose might have teeth if a team were bound to a long-term lease (only the Warriors are). It gives a new twist on the Coliseum City exercise being a feasibility study.
Sacramento, Seattle prep arena proposals
The March 1 deadline for the City of Sacramento to present a complete new arena proposal for the Kings and the NBA to consider has pushed at least one city to react in anticipation. Last year it was Anaheim, this year it’s Seattle. Seattle has been rumored for the last few weeks to have a big-money white knight getting ready to lure a team to the Emerald City. That white knight’s name is Chris Hansen, a Seattle native and SF hedge fund manager.
Seattle and King County held a joint press conference today to give details on the plan. Mayor Mike McGinn’s website has the presser and some backing info. The arena would cost up to $500 million, with $290 million by Hansen and his team(s). The big key to the plan is that unlike KeyArena on the other side of downtown, the new arena would be designed to house both NBA and NHL franchises. While there aren’t specifics about the financing, it’s clear that the arena deal would only work if teams from both leagues relocated there so that revenues would be high enough to cover debt service. Naturally, ensuring 82 regular season games, 3-4 preseason games, plus a good likelihood of at least one playoff series every year, would go a long way towards covering the loans that will be necessary. KeyArena would serve as a temporary home while the new arena was under construction.
Seattle and King County would partner up for $200 million in public financing, which would be backed by ticket and sales taxes. While they didn’t get specific, both City/County and Hansen and public financing as it relates to I-91, the 2006 ballot initiative that only allowed for such financing if the City could get a reasonable ROI (3.1% currently).
Hansen and associates have bought a three acre property south of Safeco Field in the city’s SoDo district. Three acres isn’t large enough for a new arena, so additional land will have to be acquired. The unacquired land includes Showbox SoDo, a warehouse concert venue. It would appear that Showbox SoDo, which was purchased by Showbox in 2007, would have to make way for the new arena.
Comparison of Seattle and Sacramento arena proposals
For its part, the City of Sacramento has put out some basics from its new arena term sheet, which is still in the works and to be presented to the City Council on February 28. The upshot from the $387 million proposal is that the Kings owners, Joe and Gavin Maloof, will have to put up $60 million in cash and donate $25 million in land to make the deal work. It’s unclear if the Maloofs, who already have sold off numerous assets and remain in debt to the City, have the resources to pull this off. The total cost of $387 million also feels rather low, at least by California standards. $200 million in public financing would come from the advance sale of downtown parking revenues.
Both plans have major questions attached. Besides the Maloofs’ outlay, there is a question of whether or not the NBA would sign off on such a deal, especially if the Kings’ low revenue position coupled with debt keeps the team at a competitive disadvantage. The Seattle plan’s dependence on having both NBA and NHL teams in-house sounds looks like a major potential stumbling block due to the complexity of catering to both. Both leagues currently have teams up for sale (NBA’s New Orleans Hornets, NHL’s Phoenix Coyotes), but both would prefer to keep them local if at all possible. Seattle’s plan makes the most sense if there’s only a single ownership group for both teams, as that would prevent competition between two ownership groups from derailing negotiations.
Chances are good that among the Hornets, Coyotes, and NBA Kings, at least one of them will move in the next few years, perhaps two or all three. When that happens it’ll be a tragic day for the adversely affected fans. The cycle of heartbreak continues.
NHL approves radical realignment
The NHL has been talking about realignment for some time now. The move of the Atlanta franchise to Winnipeg truly got the ball rolling this year, though there seemed to be a consensus that the changes would be minor, such as moving Detroit or Columbus from the Western to the Eastern Conference. Instead, the NHL is choosing to scrap its division and go with four regional conferences. Motivated by a chance to reduce travel costs, schedule formatting would be as follows:
- 5 or 6 games against teams in conference
- 2 games (home-and-home) against teams in the other three conferences
Here’s what we have now:
And starting next year:
Personally I would’ve preferred three conferences of ten teams each, but this should do. I hope this leads to seeding without regard to region/conference, even if it means five teams qualify out of one conference while only two or three come out of another conference.
News for 11/17/11 (Post Owners Meetings Edition)
Time for a recap of the owners meetings.
- The Astros will be in the American League West starting in 2013. Next up: Figuring out the details of the scheduling format. Despite the grousing from many about the change, a few columnists have written in favor of the move, including ESPN’s Jayson Stark and Danny Knobler of CBS Sports. Newly approved owner Jim Crane was required to accept the move to the AL as a condition of his approval. Crane was unanimously approved.
- Stark also considers how another change, the addition of two more wild-card teams, could affect the annual playoff chase and divisional races.
- MLB and the MLBPA have agreed to a five-year CBA. Ken Rosenthal reports that an announcement will occur on Monday.
- Larry Baer was approved as the “control person” representing the San Francisco Giants at future owners meetings. There may have been more recent instances of this, but one high-profile one I clearly remember is Paul Beeston when he became CEO of the Toronto Blue Jays. Howard Lincoln also performs a similar duty on behalf of Nintendo for the Seattle Mariners.
- The Los Angeles Dodgers saga continues, with pre-screening for prospective bidders scheduled to begin soon. That’s a good thing, because as Forbes’ Mike Ozanian reports, the Dodgers are saddled with a whopping $555 million in debt. Another lawsuit has been filed by Frank McCourt against Fox for allegedly trying to “interfere with the sale of the Dodgers and their assets in bankruptcy.”
- Nothing on the A’s front, though there are murmurs of something happening in January. Maybe. The wait continues.
In other news…
- The outlook for the NBA is not good. Dwyane Wade and most of the players rank-and-file believe the 2011-12 season can be saved (as they should since they’re losing paychecks from here on out). Meanwhile, former players union executive director Charles Grantham joined Kareem Abdul-Jabbar and Magic Johnson in voicing their opinion that the players should have taken the last “50%” deal.
- NHL players are looking at what’s happening in the NBA very carefully, since hockey’s CBA will end next September.
- Starting Friday, the Florida Marlins will no longer exist. They will be known forevermore as the Miami Marlins.
- I haven’t posted much on the Minnesota Vikings’ stadium push, simply because it doesn’t seem to have any real momentum or money behind it. The team remains focused on the Arden Hills munitions site in suburban Ramsey County, whereas the City of Minneapolis has sites within city limits.
- CSN Bay Area’s Nick Rosano has an update on the San Jose Earthquakes’ stadium plans. A permit hearing should be held soon. I’ll attend it if I can.
- Santa Clara approved the $10 million expenditure for pre-construction work at the 49ers stadium site. $6 million will actually be loaned by the team.
- MLB is commissioning a study on the economic impact of Miller Park now that the ballpark is well-established and past its honeymoon period. The study will be done by the University of Wisconsin-Milwaukee’s Institute for Survey and Policy Research. The same group did a study shortly after the opening of Miller Park which fell under heavy criticism. The study is due in the spring and could provide ammunition for either pro or anti-ballpark groups in San Jose (yes, I know that the anti-ballpark folks will trot out a Cato Institute study). Since the study is being commissioned by MLB, I expect it to be somewhat baseball-friendly, though not as much as the previous one.
- The Financial Times has a Moneyball article featuring both Billy Beane and Michael Lewis. It’s a good read and serves as a nice epilogue to the book and movie. There’s also a discussion of the article at AN.
- A new article by Carol Rosen of the Almaden Resident (a Silicon Valley Community Newspaper) examines the pro and anti San Jose ballpark factions and their stances.
That’s all for now.
CBA Talk: Cost certainty is a four-letter word
After another 8-hour marathon negotiating session, the NBA and NBPA again found themselves without any kind of agreement for a new CBA. This time, Commissioner David Stern also threw down the gauntlet, leaving the owners’ newest offer on the table for the players to stew over until the close of business Wednesday. If the players don’t accept the offer, the league will pull the deal and offer something measurably worse. First, let’s go over the basic tenets of the league’s offer.
- League offers 49-51% “band” of BRI (defined league revenue) to players. This is essentially the same as the 50% offered to the players previously, but with a few wrinkles. The base offer is 50% to players, plus 1% annually set aside to fund retired player benefits. The 50% share would be dependent on the league reaching an unspecified BRI level, probably $4 billion. Any amount over that threshold would be split 57-43 in favor of the players, up to a total cumulative BRI split of 51% for the players. Running the numbers, for the players to reach 51% the league would have to beat the $4B revenue projection by $666 million, or 16.67%. That led NBPA president Derek Fisher to characterize the 51% figure as “impossible” to attain. In a move reminiscent of the NHL’s CBA, the players would be limited to 49% of BRI if BRI were significantly lower than the projection (also by an unspecified amount).
- Escalating Luxury Tax. The previous dollar-for-dollar tax would be transformed into a much more punitive tax, starting at $1.50 per dollar over the tax threshold for the first $5 million over, then $1.75 for the next $5 million, $2.50 for the next $5 million, and $3.25 for the next five million. In addition, a “double tax” would be assessed at either $1 (league) or $0.50 (union) for teams who pay the tax three out of five years.
- Variable Mid-level exception. There would actually be two definitions of the exception. For teams not over the luxury tax threshold, they’d be able to pay $3-4 million for 3-4 years. Teams over the threshold would only be able to pay $2.5 million for up to two years. There’s also some talk of having the maximum length of a MLE contract vary from season to season. This is clearly the most confusing part of the discussions and may be in flux, so expect some corrections in a few hours.
- Sign-and-trade modifications. Luxury taxpayers would no longer have the ability to do sign-and-trade deals. If a team is over the cap and tax threshold and wanted a marquee free agent, they could work out a trade with that player’s previous team by having the previous team sign him for a lengthy max deal, then trade him immediately to the desired team for a mix of other players and draft picks.
- Offer valid until close of business Wednesday (November 9).
Those five tenets were suggested by federal mediator George Cohen, and subsequently adopted by the league. A sixth item involving higher shared revenues for teams who don’t trigger the luxury taxes was not approved. For their part, the players aren’t backing off their request for 52.5% of BRI, though Fisher seemed to be somewhat amenable to 51% if it were a truly achievable number.
The Wednesday ultimatum sort of acts as a mini Doomsday, since the NBA will offer less if no deal is reached and it will probably cancel games in December. Any hopes of being able to play a full 82-game schedule in 2011-12 would be dashed. And there’s the growing possibility that the union will take a page out of the NFLPA’s playbook by calling for the union to decertify and an antitrust lawsuit against the NBA.
BRI for the 2010-11 season was $3.8 billion, which was up from 2009-10′s $3.65 billion, so it’s not hard to see the $4 B target as achievable. That’s where both sides are getting the “$40 million equals 1%” argument from. The players got 57% of BRI in the previous agreement, so a drop to 52.5% or 50% is a major concession. The problem for the players is that there’s a huge difference between the economy back when the last two CBAs were ratified and today’s economy. The NFL accomplished a major pullback in its negotiations with its players. The NHL is looking at the NBA talks with great interest, and is rumored to be pushing for a major pullback as well. MLB has no guaranteed payout to players as it has no salary cap or floor, but it regularly pays less than 50% to its players. The new trend for the four major North American sports is for the player-league split to drop to between 48% and 52%, depending on how revenue is defined. It’s quickly becoming a matter of bargaining against the other leagues, perhaps more than it is about preserving or changing existing agreements.
Every week lost in the 2011-12 NBA season translates to $100 million lost in game revenue, including tickets, other arena revenue, and broadcasting revenue. Over the span of ten years, which is the preferred CBA length for both NBA and NBPA, a few hundred million is not that much to lose compared to the impact of losing 2.5% of BRI over the course of ten years ($1+ billion). The league may see this as a test of the union’s collective will. Some want to play ASAP, others want to go the decertification route. It’s getting to the point that several weeks of games (and thus paychecks) will be lost and unsalvageable. There’s no guarantee that by holding out, the players will end up with a better deal. It didn’t work for the NHL players, and it didn’t work for the NFL players. MLB and the MLBPA must be laughing at their counterparts. Their biggest bone of contention is fixed slotting for first round draft picks, which the players union considers its own miniature form of salary cap. Somehow both sides have convinced the players that the lack of a salary cap/floor/guarantee is best for all concerned, despite the players getting less combined than their counterparts. But they get the biggest, longest individual contracts with most guaranteed years. While baseball’s business model does little for broad competitiveness among teams, it generally works for the players in terms of meritocracy and tenure. That’s hard to argue with when the other leagues have so much trouble arguing over details.
