Category Archives: News
Just in: the NBA’s relocation committee voted unanimously to reject a relocation of the Sacramento Kings to Seattle. This preliminary vote is meant to be a recommendation to the greater Board of Governors. Given that it was a 12-0 vote, the decision effectively kills any chance of the sale and relocation being approved. It’s possible that Seattle’s Hansen-Ballmer group could launch a lawsuit against the NBA, but that would interfere with any future consideration for either an expansion franchise or another potentially relocated franchise such as the Milwaukee Bucks.
Now it’s up to Sacramento Mayor Kevin Johnson and the “local” ownership group headed by Vivek Ranadive and Mark Mastrov to pull through with the money parts of the deal. KJ and the City Council have to get an EIR passed, put up $250 million in arena bonds, and work out the financial details, which aren’t yet finalized. As for the “whales”, they have to put up their half of the arena through realized pledges from the community. After years of Maloof-caused turmoil, Kings fans can for once breathe easily. The Capitol will keep its team. I can practically hear the cowbells from 90 miles away.
The Raiders and A’s share a stadium. Now they’ll also share a radio station. It took a couple years, but the Silver and Black will finally start having their games broadcast on 95.7 The Game starting with the upcoming 2013 NFL season. It’s a move that has been speculated since the station launched as the A’s flagship.
While the Raiders’ coverage will decrease in comparison to former home KSFO on the AM side, the sports radio station’s programming is far and away more compatible, especially because play-by-play man Greg Papa is already a fixture in The Wheelhouse’s noon timeslot. Non-game coverage will expand, with the Raiders displacing the 49ers in the Monday themed day, good for armchair QB-ing and GM-ing. Previously the Raiders’ day was Friday.
In the event of a conflict with the A’s, Raiders broadcasts will be on 102.1/98.5 KFOX, home of the Sharks and Entercom stablemate. KFOX has a better coverage footprint than KGMZ (The Game), which leads me to think that the Raiders actually negotiated this provision knowing that it was available via Entercom.
Potential for some conflict is high, though not so much in head-to-head timeslot situations. Mostly it’s a case of an A’s game finishing just before the start of a Raiders game during preseason or early during the regular season.
Since the Raiders are expected to have full pre and postgame coverage for each game, it’s likely that all of the weeks above will be on KFOX, with the exception of the 8/29 game against the Seahawks.
Eventually, fans may clamor for more games on KFOX due to the better distributed signal. Of course, that will run into further conflicts with the Sharks, whose season starts in October as the baseball season ends. The 2013-14 NHL schedule, which will be the first under the new realignment scheme, has not yet been released.
Conflicts or not, it’s good that the Raiders are back on a sports station, which they haven’t been since they left 1050 years ago. Whether this will turn The Game into a proper East Bay-focused station is up to Entercom, whose station management has been careful to cater to all Bay Area fans much to the dismay of A’s and Raiders fans. In turn, the Raiders may have to beef up their affiliate network to compensate for The Game’s less signal.
To kick off the new relationship, Raiders draft day coverage is being held today on The Game.
The City of San Jose and the A’s received another legal setback this week, as their Motion to Disqualify Counsel, namely Pillsbury Winthrop Shaw Pittman, was denied by Judge Joseph Huber.
I’m out of town right now, so I don’t have the ability to view the judge’s order. When I get back I’ll take a look at it, but honestly, it was easy to read the way the judge was leaning with this ruling and the one from September. Now the City/A’s and Stand for San Jose can move forward with the trial. Lawyers for both sides are in the process of preparing briefs. We’ll be following this one closely. I expect that MLB will too.
A pair of Oakland A’s fans and longtime readers of this site have started a site called Oakland Fan Pledge. The purpose is to gauge interest in tickets and different seating options at a hypothetical Oakland ballpark, either at the Coliseum complex or Howard Terminal. Results of this survey may be shared with MLB, public officials, and the A’s if the team ever decides to stay in Oakland.
This new effort follows similar campaigns in Sacramento and Seattle to build interest in a new arenas in those cities. Sacramento’s Here We Buy has received more than 11,000 season ticket pledges so far. A similar drive in Seattle claimed more than 44,000 season ticket pledges and 268 suites. Obviously a pledge is not the same as a binding contract to purchase tickets, but as long as people are being honest about their levels of commitment, the information gathered from these kinds of campaigns can be useful. Interestingly, because Seattle and Sacramento were so public about their efforts, it’s likely that Oakland Fan Pledge may be compared to the cities fighting over the Kings/Sonics, however unfair that may seem. Here’s the press release from the group.
FOR IMMEDIATE RELEASE
April 22, 2013
Oakland Baseball Fans Launch Campaign for New Stadium
April 22, 2013
Oakland, CA – Baseball fans who want the A’s to stay in the East Bay have a new way to show their support: pledging to buy ticket plans at a potential new baseball-only stadium in Oakland. Oakland Fan Pledge (www.OaklandFanPledge.com) is a new independent website created by A’s fans to show Major League Baseball, A’s ownership, and Oakland city officials that local fans will support a new ballpark in Oakland by pledging their dollars to buy tickets.
On the website fans can choose from various ticket plans and pricing levels at a hypothetical ballpark. While no monetary transaction takes place, those who pledge are asked to be realistic about what they could afford if a new stadium were to be built. Ticket prices are based on averages of other recently-opened stadiums throughout Major League Baseball (MLB). Premium seats include a separate fee for ‘seat rights,’ similar to what was done for the Giants’ opening of Pacific Bell Park in 2000, a standard for a privately-financed stadium. The full list of tickets and money pledged will be continuously updated on the site and shared with MLB, city officials in Oakland, and the A’s. If the time comes that the current, or future, A’s owners commit to a stadium in Oakland, the site’s owners plan to share their list of pledges.
Oakland city officials have identified two possible sites for a new baseball stadium within city limits: one at the existing Coliseum complex and another on port-owned land near Jack London Square in downtown Oakland. Oakland Fan Pledge provides a clear way for A’s supporters in the region to weigh in. By committing to buy ticket plans at a new Oakland baseball stadium, fans can rally around keeping their team in town by sending a clear message. “The A’s owners have told the team’s fans for years that the A’s are as good as gone from Oakland, and it’s frustrating,” says John Jackson, a lifelong fan who is helping to organize Oakland Fan Pledge. “There are tens of thousands of fans that would open their wallets and buy ticket plans if a long term commitment to Oakland was made and a new stadium was built.”
Oakland Fan Pledge began as a grassroots response to frustration around the team’s uncertain future in Oakland and lack of progress in building a new stadium for the team. Major League Baseball has spent over four years reviewing potential Bay Area stadium sites without making a decision. Meanwhile, the A’s ownership has alienated much of the team’s local fan base by repeatedly expressing their desire to abandon the East Bay for Santa Clara County, which is currently under the control of the San Francisco Giants through MLB territorial rights.
“Oakland Fan Pledge is more than a way for A’s fans to show a financial commitment to their team and to Oakland,” says John Hansen, another organizer of the site. “It gives fans a way to move beyond being told their team is done in Oakland, and visualize a new hometown stadium the team’s current owners have tried to convince them isn’t possible. We believe not only is a new stadium in Oakland possible, but that local fans are ready by the thousands to fill it up. Through Oakland Fan Pledge, we look forward to sending this message loud and clear to Major League Baseball and the team’s owners, and dispelling the myth that Oakland is anything but an extremely viable home for the A’s for decades to come.”
I’ll be sure to fill out my survey ASAP.
The Chronicle’s John Shea confirmed something I had heard about the reasoning for the Giants’ AT&T Park debt refinancing.
The Giants’ plan to pay off their stadium debt by 2017? No longer in the works, we hear. There have been steps to refinance the $170 million loan to help fund their proposed development on parking lot A across from McCovey Cove. There was a time the Giants said they had to limit their payroll because of the $20 million annual mortgage.
Remember how, in 2009, SF City Attorney Dennis Herrera threatened to sue baseball over the perceived financial threat posed to the City if the A’s were granted territorial rights to the South Bay? Well, I’m glad for everyone’s sake that the Giants feel it’s safe enough to take on even greater debt to grow their empire. I was so worried for a while there.
Meanwhile, a group of East Bay mayors including Oakland’s Jean Quan and Berkeley’s Tom Bates are trying to upend legislation introduced by SF assemblyman Phil Ting that would help smooth (or bypass) some of the environmental review and approval process for the Warriors’ arena. It’s not strange that they would pursue this route, since it is local politics at work. The irony is that whatever new law helps the W’s arena could provide a blueprint and pave the way for an A’s ballpark at Howard Terminal, which makes sense because both are on waterfront sites and face the same restrictions.
Of course, if Howard Terminal never gets past the talking points stage no one ever has to find out how expensive it’ll be to build there.
San Jose Mayor Chuck Reed’s attempt to get an in-person meeting with MLB Commissioner Bud Selig was rejected this week. Selig preferred that the City continue to work with and make inquiries through his committee, now in its fourth unproductive year.
Reed expressed frustration at Selig’s rejection, vaguely hinting at a ratcheted up legal threat. It’s definitely a defeat on Reed’s part. If Selig’s decision effectively called Reed’s bluff, it’s to Reed to make good on the bluff. Reed’s termed out in 18 months, so if he wanted to bare some teeth, now would be a good time to do so.
Speaking of lawsuits, the Stand for San Jose suit had its Motion to Disqualify Counsel hearing today. Judge Joseph Huber had difficulty understanding the reasoning for the motion, explaining that the privileged documents that are at the center of the debate were already returned by Pillsbury are not part of the record, and will have no bearing on the case. Judge Huber asked Perkins Coie attorney Geoffrey Robinson if he was supposed to guess if and what privileged details made into the S4SJ’s case. Robinson said that the documents could shape the case even if the documents are not part of the record. (Judge Huber took over the case for Judge Patricia Lucas, who was appointed to the 6th District Court of Appeals by Governor Jerry Brown last fall.)
Switching to the other side, Judge Huber quite severely admonished Pillsbury for its previous behavior in the case, Pillsbury’s Ronald Van Buskirk argued that the firm was merely doing its job to make the best case for its client, and that the attorneys were only “exposed” to the documents and shouldn’t be disqualified just for exposure. Of course, they previously made a motion to augment the case using those documents, so that argument may fall on deaf ears.
The big takeaway is that both sides recently agreed upon a schedule for briefs, which means that a trial date is coming soon. The attorneys will have a few weeks to prepare their briefs. A trial date should be set shortly. Van Buskirk indicated that the plaintiff’s case would be solid thanks to questions about airport impacts, which to me sounds flimsy based on what I’ve read and the fact that taller or similar height structures already exist closer to the flight path, such as HP Pavilion.
Judge Huber will make his decision on the motion to disqualify early next week. If Pillsbury is thrown off the case so close to trial, it would be huge blow and force a delay to bring in new counsel and get them up to speed. If Huber throws out the motion, at least we’ll finally get to see this trial move forward, which would clear up at least one major issue that’s probably causing MLB to delay any decision regarding San Jose and territorial rights. I’ve been of the opinion for some time that MLB will not grant San Jose anything until the land deal is locked in and secured. The Giants know this, which explains why they’ve aggressively gone after San Jose in the courts and through the State Controller’s redevelopment clawback efforts. It’s the new Moneyball.
When Oakland Mayor Jean Quan revealed plans to take advantage of the federal government’s EB-5 visa/foreign investment program, I called it creative and a good potential source of funds to replace redevelopment. What was missing prior to this year was a healthy, rebounding real estate market to encourage investment. That moment has come, culminating with Governor Jerry Brown’s announcement in Beijing of the Brooklyn Basin development, formerly Oak-to-Ninth (or “O29″). I don’t know for certain that Chinese firm Zarsion Holdings Group Ltd. is a pool of EB-5 investors, but considering the lack of information about the company and the City’s push to get EB-5 investment in China, it seems quite likely. The first phase of the project will include 1,300 of the planned 3,100 housing units.
Brooklyn Basin, comprised of two small peninsulas jutting into the Estuary to the east of Jack London Square, has undergone a painful and grueling process to get to this point. Formally initiated in 2006, the mixed-use development plan went through multiple lawsuits, EIR challenges, and even required legislation to make the land transaction work. When the recession hit, any hope of the project breaking ground before the end of the decade was dashed. Former councilman Ignacio De La Fuente occasionally spoke out for a ballpark as a favor to his developer friends at Signature Properties, to no avail. The land was included in the 2001 HOK study, coming up short compared to Uptown and other sites. I visited community meetings in 2006 to gauge sentiment on a ballpark there, and it was not met with much support due to the infrastructure problems that exist along the Embarcadero. In addition, not all of the land was available, as Oakland landowner J.W. Silveira fired off lawsuits against Oakland to send a message that their slice was not up for sale or eminent domain.
So no, Brooklyn Basin has never been considered a serious ballpark site contender. Could it be a catalyst to complement a ballpark at Howard Terminal? Perhaps. The question at Howard Terminal, as ever, is how will any of it get paid for. The East Bay Express reported yesterday that the Port of Oakland, which controls Howard Terminal, is in debt up to its eyeballs. This is a problem, because the loss of funds from redevelopment could be backfilled by additional debt on the Port. If the Port is strapped for cash, it’ll be hard to build the proper infrastructure that would be required to support a ballpark. Even AT&T Park got help from San Francisco on the infrastructure front. Victory Court died partly because costs to prep the site far surpassed the $85 million that was originally budgeted for the site. The loss of redevelopment money was the final nail in the coffin. At this point there is no true cost estimate for Howard Terminal, and there won’t be unless an EIR is done there to ascertain the cost of cleaning up the site in advance of a ballpark’s foundation work.
Mayor Quan has talked about Coliseum City as a candidate for EB-5 funding, which I can see happening. While that’s promising, it’s important to keep EB-5′s impact in perspective. For the first phase of Brooklyn Basin, Zarsion is only putting in $28 million, or less than 2% of the entire project’s cost. With Coliseum City’s much larger price tag, developers and the City will have to either get foreign investors to bump up their share (which may be limited by how EB-5 works) or find other sources which don’t include redevelopment, state, and perhaps even sales tax money. In the end it all has to pencil out. It’s unclear how either site pencils out with the limitations set on the City and County.
When the A’s converted the all-you-can-eat sections in the upper deck to the Value Deck in 2010, it marked a major change in how tickets and concessions were priced at the Coliseum. Prior to 2010, both offerings were steadily increasing. Team Marketing’s Fan Cost Index, which tracks the cost of a game for a family of four, had the A’s above the middle of the pack even though the venue itself was no great shakes. Since the introduction of the Value Deck and Menu, prices have dropped and stayed remarkably flat as the newest MLB edition of FCI shows.
FCI considers the cost of four tickets plus soft drinks, beers for the adults, parking, programs, and caps. The caveat here is that such a package is not usually purchased by a family that goes to the park regularly. It also doesn’t take into account that many fans will eschew value menu fare and go for something a little more upmarket. In any case, it’s a fairly honest representation of pricing and spending at every stadium, and as you can see from the table above, a game at AT&T Park is considerably more expensive to attend than one at the Coliseum. As a matter of practice, Team Marketing surveys each team prior to the beginning of each season.
The A’s have chosen to keep prices steadily, remarkably stable for four straight years despite last year’s AL West crown. In 2010, FCI for the team was nearly 9% below MLB average. Now it’s almost 21% below the league. Instead of raising prices throughout, the team has chosen to charge more for premium items found in the Westside Club, Round Table pizzas or craft brews. It’s a reasonable philosophy to have, though for me personally I choose to drink my craft brews in the parking lot when I have the chance.
It’s normal for teams to raise prices in proportion to payroll increases. A’s payroll, like FCI, has remained steady over the last four years. Revenue has risen, though not dramatically. Revenue sharing fills in the gaps, so even if the A’s boosted prices that revenue increase would be partly offset by decreased revenue sharing.
As we’ve seen during the first homestand, fans aren’t terribly responsive to price, or even success carried over from last year. Tuesday’s “free parking” crowd was identical in size to the BART $2 Wednesday crowd. “Inclement” morning weather scared away Thursday’s getaway game walkup crowd. A multitude of factors play into every fan’s and family’s decision making process when it comes to attending any one game. The numbers show that advance and season tickets have improved measurably, but it’s not enough to move the needle much in terms of revenue.
For now the A’s price things to what they think the market will support. There’s enough room for one or two extra salaries to come via trade at midseason or at the deadline. The system allows for that. If the A’s wanted to boost payroll to $80 million, revenue would have to be boosted at least another $20 million independent of revenue sharing. Would the fanbase support the increased prices and attendance that would be necessary to generate that extra revenue? I’d sure like to find out.
The Raiders released an online survey to select season ticket holders in an effort to determine interest in different pricing options at a future stadium. When teams start to consider developing a new venue, it’s not uncommon to see some kind of outreach as far as five years out. The New York Giants famously burned through their once impressive waiting list in the run-up to MetLife Stadium. Then there’s the Raiders, who have around 30,000 season ticket holders, don’t have the luxury of a waiting list. With the team struggling on the field, fans could be price-sensitive.
The diagram above doesn’t look exactly like any one stadium, perhaps on purpose. It’s there to illustrate specific seating locations and potential amenities for each tier. No assumption should be made about the stadium’s design based on the diagram. The team anticipates having multiple club levels which they call “Prime Seats”, and different types of suite and box options.
Lower Level Prime Seats (Sidelines):
- Blue highlighted areas in hypothetical seating map above
- Prime seats could be wider and have more legroom than typical stadium seating
- Excellent sightlines to the field
- Access to a VIP club lounge with upscale food and beverage options
Mezzanine Level Seats:
- Red highlighted areas in hypothetical seating map
- Same seat comforts, amenities and access as lower level Prime seats, but located further from the field
Loge Boxes (or Mini-Suites):
- Loge boxes are open-air boxes (similar to an opera box) that are typically located at the top of the lower seating bowl (or on the mezzanine level, also known as
the “Club Level” or “Suite Level” in many professional stadiums).
- Loge boxes seat approximately four (4) to eight (8) people and feature comfortable chairs and a counter for food/beverages.
- In the hypothetical map above, loge boxes could be located at the top of the blue sections and/or in the front of the red mezzanine level, with excellent sightlines
to the field.
- Three types of luxury suites could be available:
1) Traditional Luxury Suites located on the mezzanine level (area in red above);
2) Field Level Suites located on the field level with unique sightlines just feet from team benches and players; and,
3) Owner’s Club Suites located adjacent to the owner’s suite in the best suite locations in the stadium (at the top of the lower level, close to the 50-yard line) with
access to the owner’s private all-inclusive club area.
- Luxury suites would have the highest level of seat comforts, amenities and access of any seating option in the stadium.
Just because the survey shows all of these premium options doesn’t mean they’ll all be offered in the end. While we can count on the usual types of suites and at least one club level, the mini-suite concept (similar to what the Earthquakes are offering) isn’t commonplace. Field suites are popular where they’re deployed (Dallas, Seattle, New York, Indy) but they’ll only be offered if there’s a market for them.
The survey also presented respondents with different prices for tickets and seat licenses. That’s right, they may be offering seat licenses again, which makes sense simply because the stadium is going to be so expensive that every effort should be made to take care of debt as early as possible. Under consideration is a seat license plan that is paid off in three years, with the final payment due before the stadium opens. The survey uses the term “Stadium Builders License”, which combined with some of the imagery used in each page leads me to believe that the questions were put together by Legends, the Yankees/Cowboys-owned firm that marketed the 49ers stadium’s tickets and seat licenses. Legends has carved out a pretty good niche in a fairly short period, having built up a lot of experience since their maiden efforts for their owners’ 2009 venues.
Outreach efforts will be key for two reasons. There’s the obvious gauge of demand for certain pricing levels and potential for SBL commitment. This information is important to all parties, including the NFL and Oakland/Alameda County because there needs to be a solid determination of a new Raiders stadium’s feasibility based on advance revenues. If debt service runs $40-50 million per year, the Raiders will need to prove they can pull in $100 million per year in order to get approval from the NFL and loans from banks. If not, they may be advised to pursue other alternatives such as a Coliseum renovation (see: Buffalo).
No questions were posed about the site, the potential for a dome, or the size of the stadium. With such a narrow focus, it’d be foolish to infer anything from the survey besides the aforementioned questions about pricing. That said, these prices are certain to be much more expensive than the recently slashed Coliseum prices. The current Coliseum pricing structure has a single bargain basement, $25 per game price for the entire third deck. The survey had the price for upper deck, 20-yard-line seats at $60 per game. Mezzanine club seats were priced as high as $200 per game (for 10 games) plus a $4,500 or $7,500 SBL fee. Will the market bear higher prices and SBLs for a new Raiders stadium? We’ll find out fairly soon.
When the City of Oakland sold the Henry J. Kaiser Convention Center to the City’s dying redevelopment agency for $29 million last May, most observers saw through the shell game and figured that it would only be a matter of time before the state’s Department of Finance came looking for the money. Now we know that the raid is happening, thanks to Mayor Jean Quan’s warnings to the City Council this week. For more background on what got Oakland to this point, I’ll point you to two past blog posts.
- Quan takes it down to the wire (6/15/11)
- State bills Oakland $29 million for Henry J. Kaiser Center sale (5/29/12)
As Oakland scrambled to deal with the ramifications of redevelopment’s demise, the City sought creative ways to move money around to fund basic city services. Methods included using redevelopment money to pay for items that would have normally be covered by the general fund, and transfers like HJKCC. State Controller John Chiang warned cities doing such transfers that if they felt that assets would be at risk for seizure, those assets should be placed in a reserve, which Oakland did to the tune of $30 million. In 2012, the City received a large uptick in tax revenues, bringing its surplus to over $80 million including the reserve. Quan expressed confidence about the surplus.
Even under the worst-case scenario, we have $45 million in reserves. We can cover this.
That worst-case scenario is approaching soon, as the seizures will occur, short-term benefits deals cut with unions to help balance the budget are set to expire, major unfunded pension liabilities loom, and the City works to maintain and add to police staffing. During Tuesday’s City Council meeting, a large union contingent was in attendance to protest any notions of prolonged or additional concessions.
Oakland made a huge mistake in 2011 in assuming that a crippled form of redevelopment would be allowed if bills AB 1x 26 & 27 passed. The nightmare scenario came to fruition when AB 1X 27 was ruled unconstitutional, leaving no avenue for future RDA activities. In addition to the state coming down on the HJKCC deal, the DoF asked Oakland to return $18 million of RDA money in January. All told, Oakland could be dealing with a new $50+ million hole that will go straight to future budgets. Unlike some of the other illegal transfers such as the ballpark land in San Jose, Oakland’s problems are related to cash that was either allocated or spent. The City still has the reserve that can backfill most of the hole, but it will put other parts of the budget at risk and jeopardize other projects, including broad development initiatives such as Coliseum City. Land transfers are a different case in that they don’t have to be liquidated unless the DoF determines that a city has come up so short that a fire sale is needed. In many cases, it’s merely a matter of determining that a piece of land has to be taxed normally instead of being placed in a RDA-style tax increment scenario.
Howard Terminal is owned by the Port while the Coliseum is jointly owned by the City and Alameda County. Neither HT nor Coliseum City are at greater risk in terms of feasibility due to the coming raid. However, it’s possible that the budget crunch will cause additional funding for pre-dev work at HT or CC to be rerouted elsewhere as both fall down the priority list in favor of more pressing matters. That already happened once with Victory Court in 2011, and we all know what happened with that plan.
The full impact of the RDA seizure and clawback won’t be known until the DoF releases its final report on Oakland and the City bakes the impact into its next budget.