Moving forward: NYC, Minny, and Sac?

While the threat of franchise relocation may be cooling, some cities looking to keep their teams haven’t shown an aversion to throwing tons of public money a team’s way.

Take the Yanks and Mets deals. Both will rely on the issuance of public, tax-free bonds to finance both ballparks. No taxes are being raised to pay for either project, but both teams will pay off the debt using PILOTs, or “Payments-In-Lieu-Of-Taxes.” In this case, the taxes would be property taxes that would be levied on the land improvements. The use of government-issued bonds may be illegal, so the IRS is going to take a look at it.

The Twins are using the typical playbook in bypassing a referendum for their sales tax hike. Yesterday the Minnesota House passed the Twins’ stadium bill. The state Senate is expected to be more baseball-friendly than the House. All signs point to the Twins staying put.

Closer to home, Sacramento pols are trying to put together a public financing plan for a new Kings arena. To accomplish this, they’re attempting to circumvent the 2/3 voter approval required for a specific-use sales tax hike. If this sounds familiar, Santa Clara County is doing the same thing with their Measure A “BART tax.” If you’re wondering, there’s no mention of the A’s anywhere in that article, which should be a clear indicator of where Sac’s focus is – not on the A’s.

Tonight is the last San Jose ballpark EIR outreach meeting (City Hall, 14th floor, Room 1446, 6 p.m.). Thank you, SJRA, for scheduling it earlier – preventing a conflict with Sharks-Preds Game 4. I attended Tuesday night’s game, and the Tank really did hit 113 dB after the first Marleau goal. Marc Morris’s traffic-related comments document is available if you’re interested. I didn’t come away from the previous meetings overly convinced that the expanded traffic study (area and time) would take place. Hopefully the continually applied pressure will make it happen.

Election time

The June election is less than 6 weeks away, and some major things will be decided that could have an impact (direct or indirect) on the A’s future in the Bay Area. Among the issues:

  • Oakland’s mayoral race could extinguish or revive any hope of retaining the A’s within city limits. Frontrunner Ron Dellums appears to be convinced that the A’s already have one foot out the door, while Ignacio De La Fuente has said he’s willing to fight to keep the team.
  • San Jose’s mayoral race is wide open, and that means it’s getting ugly. Yesterday, a Merc report linked Vice Mayor/mayoral candidate Cindy Chavez to the 11th hour, backroom deal for the Grand Prix race. Opponents Chuck Reed, Dave Cortese, and Michael Mulcahy seized upon the story, with Mulcahy calling for the Santa Clara County DA to investigate the matter further.
  • Santa Clara County Measure A proposes a 1/2-cent sales tax hike that would fund hospitals, emergency services, and transportation – chiefly BART. At 8.75%, the County would tie Alameda County for the highest sales tax in the Bay Area. This tax is expected to be the deciding factor in the push for BART to San Jose, as its revenue stream is designed to make up for a federal funding component that hasn’t materialized. Should BART not come to San Jose, the Warm Springs extension could be delayed indefinitely, even though they are technically “de-coupled.”

I haven’t been able to attend any Oakland forums/debates so far, but I’m going to try to make May 15th’s forum sponsored by Oakland Community Organizations (location TBD). For Oakland residents I have a request: If you have the opportunity to pose A’s or ballpark-related questions at any of the house parties or other events, please send me any feedback you get. I’ll be happy to devote a new post (and attribute you) on the subject matter. As a San Jose resident, I’ll be attending Saturday’s Public Policy Forum (at City Hall Council Chambers, no mayoral candidates expected), the Monday and May 13 debates (also at City Hall Council Chambers). Living in downtown SJ makes it quite easy to attend such SJ-related events, Oakland’s another story.

Wake me when a good offer comes

Over at The Hardball Times, Maury Brown provided an assessment of the three teams that are most often targeted for a possible move (Twins, A’s, Marlins), along with potential target cities (San Antonio, Charlotte, Portland, Las Vegas, Norfolk). In his judgment, we shouldn’t expect the A’s to find greener pastures outside the Bay Area. I’ve felt the same way for some time, and I’ll continue to concur until details about a knock-Lew’s-socks-off deal from outside California are revealed.

For those that think a big, free stadium is just around the corner anywhere in North America – think again. Those days are over. You can point to the DC deal and how the public has been swindled, but that took an extreme amount of coordinated (some would say collusive) effort by MLB and the owners, and the payoff had to be huge (which it will be). That payoff is not happening anywhere else.

News: Keep the A’s in Oakland blog, Twins move forward, Fremont

drummer510 has started up a blog called “Keep the A’s in Oakland.” It’s an outreach-type blog that encourages like-minded folks to call and write Oakland pols and educate the public on what’s possible in Oakland. I’ve given the author a few pieces of info to get him going, including my mock-up of the Broadway Auto Row site.

The Twins appear to be in the home stretch of their political process to get a new open air ballpark approved. About three-fourths of the funding would come from a 0.15% sales tax hike in Hennepin County (Minneapolis, not St. Paul).

A new article in the East Bay Business Times covers Fremont’s vision for transformation, including the ballpark village concept and a new “downtown” area.

$54 million? Not bad for one year

Forbes finally released their annual team valuation list today. The usual suspects are at the top of the food chain, with the Yankees being the first team to surpass the $1 billion mark. The Washington Nationals had the biggest gain, jumping all the way to #6 with its $440 million value. That figure is in line with the expected sales price of still-ownerless franchise. Other low-revenue teams got a big boost as well, including the A’s, who jumped from $180 million to $234 million in the calendar year the Wolff/Fisher group has owned the team. This rapid appreciation is due to the continuance of lucrative national TV deals and revenue sharing.

It gets more interesting when looking at how these numbers break down. Forbes usually gets the figures pretty close since franchise sale prices tend to come very close to Forbes’ appraisals, so it should be pretty easy to accept these values even with the limited information MLB and the teams make available. Take a look at how the A’s and Giants compare:

  • Franchise value: A’s – $234 million (+26% change), Giants – $410 million (+8% change)
  • Debt-to-value ratio (less than 40% preferred): A’s – 38%, Giants – 37%
  • Wins-to-player cost ratio (% relative to per average wins-per-dollar of salary): A’s – 116, Giants – 76
  • Market value: A’s – $73 million, Giants – $155 million
  • Brand management: A’s – $21 million, Giants – $50 million
  • Season ticket rolls: A’s – 8,000, Giants – 28,000

What do these numbers mean to you, the baseball consuming public? Not much if you’re looking for huge future payroll increases. These are not liquid or cash figures. And don’t be fooled by the Giants’ debt-to-value ratio. Other teams with higher debt have ancillary assets they can sell off to reduce the load, the Giants don’t unless Magowan and Co. are willing to dig deep into their own portfolios.

On the other hand, the market value and brand management numbers are telling. In both cases, the Giants more than double the A’s. The Giants have 350% more season ticket holders, though that could change drastically for the worse next season. This raises more than a few questions, such as:

  • How much are the A’s and Giants tapping into their relative markets, and the Bay Area as a whole?
  • Are the A’s low values due more to the stadium, ineffective marketing, or other factors?
  • How much of a difference will a new ballpark for the A’s really make in the grand scheme of things?

Should the A’s get a ballpark built soon and ink better media deals, they could see a surge similar to what the *ahem* Anaheim Angels experienced.

San Jose news

This installment comes from San Jose City Hall’s Council Chambers, where the third ballpark EIR outreach meeting is being held. There are less than twenty people in the gallery this time, due in part to Soccer Silicon Valley calling off the dogs for now. As new items come up during the session, I’ll post them here.

Update (22:15): The Q&A was focused on perceived inadequacies in the Draft EIR. They ranged from expanding the traffic study to cover a larger area and the 6-7 p.m. timeframe, to questions about mitigation costs (not currently covered).

That brings up a source of consternation. While there have been recent updates to the Diridon/Arena and Midtown plans to cover new projects, there’s a lack of clarity on how the ballpark will affect more than just the study area. The EIR aims to cover some of this, but there’s a general feeling that there’s no overall vision. Impacts from individual projects are narrowly studied and focused, so there’s no sense of how they are woven into the fabric of the whole community. Whatever happens with the EIR, there will be some heated debate when the Planning Commission holds its hearing on July 12. The first mayoral election will have taken place and the results should at the very least thin the herd for a November runoff.

On the blog San Jose Inside, contributor “Single Gal” started a serious discussion over the ballpark, mayoral candidates, and the city’s vision. She brought up candidate Michael Mulcahy and the notion that he may get votes simply because he’s so close to the situation. Not to be lost in all of this is candidate David Pandori’s swipe at Mulcahy over the weekend.

Yesterday, word came that Adobe is going forward with plans to acquire the 5.5-acre SJWC east parcel. There goes one major piece of a ballpark village, at least a viable piece for commercial use. As for the residentially zoned west parcel, nothing’s been announced yet.

One bit of non-San Jose news that can apply universally: Phoenix is losing $3 million per year on a 2,800-space garage built north of Chase Field (formerly Bank One Ballpark). Promises of 90% capacity as a multi-use parking facility never came to fruition. The garage only gets significant use during the Snakes’ home games.

Ticket price comparison

The start of the baseball season is usually accompanied by two neat statistical news releases. Forbes Magazine’s 2006 team valuation figures are not available, but Team Marketing Report‘s newest MLB Fan Cost Index is. It shouldn’t come as a surprise that the elimination of the Coliseum’s third deck led to a 25% increase in the average price of a seat. What is surprising is the fact that many teams with new stadiums are towards the bottom of the list. Granted, most of those teams (Detroit, Pittsburgh, Milwaukee) have been perennial cellar-dwellers in medium-to-small markets, but there appears to be a clear correlation between on-field success and ticket price. Baltimore and Seattle charged a hefty premium when their teams were more successful and their stadia were newer. As both went into the tank in the last few years, price hikes have been fewer.

To put things into perspective, here are a few more bullet points that you might find interesting:

  1. In 1999, the A’s average ticket price was $10.10. That means that in seven years, ticket prices have gone up 118%.
  2. 1999 payroll was only $26 million. The current payroll is $62 million, a 138% increase. Pay-to-play is the name of the game.
  3. There’s no better indicator of MLB clubs’ revenue disparity than ticket prices. Ten years ago, Boston had the highest ticket price – $15.43. Cincinnati had the lowest – $7.95. Boston still holds the mantle of as ticket price champ, with its average price at $46.46. Kansas City now has the lowest – $13.71. There’s also a multiplier effect because teams like the Red Sox, Yankees, and Cubs routinely sell their seasons out, as opposed to the oft-lackluster attendance records of the lower-revenue teams.

The Fan Cost Index is frequently cited by analysts and economists, but it tends to paint the fan experience with too broad a brush. Before his untimely passing, Doug Pappas wrote an article for Baseball Prospectus that deconstructed the FCI and sought to obtain more granular, circumstance-based data.

Now that the A’s have raised ticket prices 25% over last season, what’s in store for the remaining years on the Coliseum lease? And what can we expect when a new ballpark is opened? Will it have a China Basin-like pricing structure, or will it look like PNC Park’s tiering system?