Notes from 10/30 Diridon Site Tour

gojohn10 was good enough to go on today’s Diridon site walking tour. He’s also shown up at some of the Fremont and San Jose functions. Here are his notes (edited ever so slightly) and some pictures, which include an update on how things are going in SJ.

SJRA Program Manager Dennis Korabiak (light shirt with jacket) leads the tour

  • Tour led by Dennis Korabiak again
  • Only about 10-15 people this time
  • We went to a room at HP Pavilion for a Q&A presentation
  • Korabiak said he met with baseball officials this week. Wouldn’t comment when someone asked if it was the BRC. He said it was a matter of public record and could be found on his boss’ (Harry Mavrogenes’ calender on the net). I checked and only saw a regular meeting with the two on Wed the 20th
  • No timetable for response but baseball seems impressed
  • If territorial rights are changed by December or early January, OK for March election
  • If ballot approved active negotiations begin with A’s to sell or lease the land [Ed.: City/Redev are on hold until that happens.]
  • Current estimate is $460 million for facility only
  • Officially need to have a vote, though theoretically not necessary if A’s buy land [Ed.: Only if holdouts are willing to sell, else eminent domain needed.]
  • Someone asked if SJ has $ for remaining parcels. He rambled a bit then said they are selling other assests and “getting good deals.” He thinks the answer is yes, they will have the money. As for Wolff buying the land he said “show me the $” [Ed.: Indeed. SJRA does have $140 million in assets, BTW.]
  • Substation is there to stay. Not required to move even for high speed rail. I asked if there would be any effort to make it look nicer. He said the A’s facility design should take care of that. [Ed.: I hope people like cinder blocks. Or freeway sound walls.]
  • Someone asked if MLB has approved park dimensions (right with ya, buddy). Korabiak said we’re not there yet.
  • Someone asked if the park will be at ground level. Korabiak said it might make sense to sink the field 10-25′ the the expensive seats on top are easier to get to (reaffirms ML’s take that the club seats are up high) [Ed.: Yep, figured as much]
  • If no vote on stadium the city will still buy land for BART and HSR
  • AT&T building eligible to be designated historical landmark (unfortunately I kinda missed this part). As for negotiations he says there is much more to it than AT&T being a Giants sponsor. Eminent Domain is on the table, but last resort and something they would like to avoid for tax reasons. [Ed.: AT&T can be designated a landmark, but it is still going to be demolished if the ballpark moves forward. Efforts will be made to document its history and value, including possible salvage. The same goes for the old KNTV studio next door, which has already been bought by City.]
  • I asked whether the Giants success has any effect. He said he didn’t know. [Ed.: I’ve given this some thought the last few days, and I think that if the Giants win the boost in ticket and merchandise sales could provide enough economic ballast to make arguments about economic hardship somewhat moot, at least for a few years.]

Korabiak answers questions about Diridon site plan at HP Pavilion

Much thanks to gojohn10 for taking the tour and reporting in. He’s also working with Jeffrey on another interesting feature we should have up soon. That and the usually post-World Series, post-election flurry of activity should make things interesting around here soon.

News for 2010 World Series Week

Here’s the rundown.

  • MLB and MLBPA are investigating two playoff format changes. One would make the Divisional Series all seven games instead of five. The other, arguably more controversial concept, would add an additional round. The former makes sense, and can be done in conjunction with the new scheduling format taking place in 2011, when Opening Day falls on Thursday or Friday instead of Monday or Tuesday. The latter would require reducing the regular season to 154 games, or some other concession to keep the calendar from running into mid-November. The tradeoff involves four home dates worth of revenue for enhanced playoff dollars, which could be shared to an extent. Doing some rough math, I figure that each team would leave an average of $3.5 million on the table from in-stadium sources alone by eliminating those four home dates. Can’t see it happening.
  • CNBC Sports Business reporter Darren Rovell interviewed the Giants’ Larry Baer yesterday (video). They discussed having 40,000 seats as an ideal ballpark size, plus the benefits of dynamic ticket pricing.
  • ESPN NY columnist Ian O’Connor thinks new Mets GM Sandy Alderson should apologize to baseball for the steroids era. Really?
  • The media is surprised at all the weed wafting through the South Beach air this week. Again, really?
  • After Wolff/Fisher gave Don Perata $25k for his mayoral campaign, Rebecca Kaplan just got $214k from a Hollywood producer and the California Nurses Association. Tuesday may be very interesting, indeed.
  • State legislators are wondering about the impact to California and San Diego-area schools after approving a bill that eliminated SD’s $2.9 billion cap on redevelopment investment. An analysis shows that to get a downtown Chargers stadium and enhancements to downtown streets, parks, and the convention center would cost $9 billion. Wow.
  • Just to the north in Escondido, the City Council will decide by the end of November whether or not to invest $50 million of its own redevelopment funds in a AAA ballpark for the Padres. The project could stretch the city’s RDA budget, leaving nothing behind for other projects all the way until 2020.
  • If you want to see the new arena standard is for the NBA, watch an Orlando Magic game at Amway Center. Or if you can’t, download a copy of the arena’s promoter guide (PDF).
  • Another tour of the Diridon ballpark site was rescheduled for Saturday, October 30 at 10 AM, outside the train station. I will not be there, as I will be checking out something else.

Okay, I’m gonna call it. Congratulations to the 2010 World Champion San Francisco Giants. It’s been a long time coming.

Slow steady wins the race

If I were a man who frequently donned a tinfoil hat and blurted out unintelligible nonsense in public on a regular basis, I might be led to believe that the Rangers and Giants getting into the World Series was all some elaborate plan to buttress the two teams financially. After all, the Greenberg-Ryan group paid $100 million more than they expected for the Rangers, and a World Series appearance or win for the Giants could certainly salve any wounds related to having to relinquish the South Bay. (Note: Rangers pitching coach Mike Maddux jokingly agrees with some of this.)

Thankfully, I am not such a conspiracy theorist. Thing is, it’s that kind of thinking that is only slightly less crazy than “OMG! If the Giants do well the A’s will loose the South Bay forever!!!!!” talk I’ve been hearing.

Calm down. Relax. As eternal douchebag Jeff Kent once said, “Enjoy the game more!”

The Giants are going on an all-out marketing push in the South Bay. Part of it surely has to do with strengthening ties to the area, but it mostly has to do with trying to capitalize on the Giants’ on-field exploits. Going into this season, the Giants’ season ticket roll stood at 21,000, down from the 25,000 peak of the Bonds era. According to Matier and Ross, the team has already sold 3,500 new season tickets, thanks to the Giants’ recent success. Sales of full plans have cascading effects on the team’s business model, such as:

  • Better positioning for higher-priced sponsorships, because more people are guaranteed to be in the park
  • Higher baseline prices for dynamically-priced seats due to lower inventory
  • The upfront cash and ability to project a higher payroll for the 2011 season

There’s always a need to strike while the iron’s hot, and if we’re being honest, I wouldn’t do anything different from what the Giants are doing this year business-wise. While the Giants may feel that they are fundamentally entitled to T-rights to San Jose, the best way to give a team higher revenues is to ensure that the team is competitive, which the Giants haven’t done the previous seven years.

Of course, it’s hard enough to get to the playoffs, let alone get to and win the World Series. Success is often painfully fleeting. That’s why the Giants’ run and the accompanying media hype can’t be construed as more than a blip. Maybe the blip last for several years, but it’s still a blip. On a related note, that’s what the Bash Brothers era was for the A’s: another memorable blip.

MLB can’t be run on blips, not for a single team at least. It’s run on a collection of blips over time, with the hope that each team can get its blip to germinate into serious baseball culture, or maintain what already exists. Over time, the league gets better national TV deals, better ballparks, greater merchandise sales – all things to create a rising tide to lift all boats. At the local level, who knows? Tim Lincecum may become the next Sandy Koufax. Then again, he may bolt for Seattle or New York, or like Koufax, retire early because of health issues. MLB can’t really afford to determine long-term planning and strategy on blips. It has to go on whatever the team’s financial fundamentals are. It puts mechanisms in place to help teams that help themselves, such as the stadium expenses deduction. It provides examples of teams diversifying to supplement income. Beyond that, you’re getting into the area of playing favorites. While Bud Selig can be criticized for many, many things, playing favorites is not one of them. Witness the low-revenue WS matchup (ratings down 25% from 2009). Or the lack of playoff appearances by his beloved Brewers. Or Lew Wolff’s continued frustration that his frat buddy has been stalling on a decision to allow him to move the team.

So to suddenly undo 19 months of “study” just because the Giants are doing well would most certainly be playing favorites. And it would run counter to how business is done within MLB, which is a slothlike, conservative structure to say the least. The Giants can and will certainly make a claim that the South Bay is valuable because of what happens when the team is good, but that only means that in bottom line terms the Giants have a lot of bandwagon fans, and a lot of them live in the South Bay. And the East Bay. And the North Bay. Sure, the Giants could get greater compensation in the end, it may even be likely. If you’re expecting some life-altering, earth-shattering, 180-degree change, you don’t really know MLB that well.

Strange bedfellows

After Dave Newhouse’s A’s/Warriors panel with Oakland mayoral candidates at the beginning of the month, it wasn’t clear if anything would come of their responses. According to East Bay Express scribe Robert Gammon, it appears that something happened, as Lew Wolff and John Fisher gave a combined $25,000 to Don Perata’s campaign two weeks ago, perhaps a reward for his “candor.” Just to refresh your memory, here’s what Perata said about keeping the A’s in Oakland:

“I probably know a little more about this stuff than most people. I was part of two Raider deals that both failed. We got held up; we really did — by both (the A’s and Raiders). We got rid of the Coliseum board and then politicized it. … In retrospect, it was a disaster. I don’t think the A’s are going to stay here. We can’t play in this game, putting up the money. We haven’t been smart with our franchises.”

Gammon also got some follow-up from candidate and current City Council member Rebecca Kaplan.

Perata appeared uninterested in talking about keeping the A’s in town, according to several attendees. “He was very evasive,” said Kaplan, who was at the meeting with Quan, Perata, and fellow mayoral candidate Joe Tuman. “He basically conveyed that keeping the A’s is not very important.”

So, is it simply a matter of A’s ownership supporting Perata after the position was made public? Or was there a sort of quid pro quo there? Of course, Wolff denies any sort of link between the donation and the stance. Was the donation made because they truly feel that Perata is the best candidate? R-i-i-i-i-i-g-h-t. Though it should be mentioned that many longtime Perata friends, those who’d support a JLS ballpark, also donated serious money to Perata’s campaign affiliated, police union-funded political group. FWIW, San Jose Mayor Chuck Reed was reelected in June and virtually no one noticed.

The rather prolific (at least recently) White Elephant Parade looked up contributions by both teams, and found that the Giants donated nearly double the amount of the A’s during the same 2009-10 state legislative session.

For Wolff and Fisher, $25,000 is a trifle, especially compared to the land bill they’ll face as San Jose’s Redevelopment Agency checks the couch cushions for change needed to buy the rest of the Diridon ballpark site.

What A New Stadium Means for Payroll

I read here, and in other places like the Drumbeat Blog, opinions on what would happen if the A’s suddenly had a Target Field like infusion of revenue. Opinions vary from “Lew Wolff is cheap and won’t spend anymore” to “The A’s will spend more money than the Angels!” The real answer, they will spend more but won’t be a West Coast version of the Yankees or Red Sox, is much more interesting. While I will never be a GM for any self-respecting MLB franchise, I have stayed at a Holiday Inn Express. Which means, I have ideas for what a future A’s roster/dynasty might look like.

First things first, how do we set a projected payroll? First, we have to have an idea of what revenues might look like (thanks ML). Second we have to have an understanding of how revenues impact Major League payrolls. Forbes has an answer:

Data Provided by Forbes

A few interesting factoids from this table. First, if we are to believe Forbes, only two MLB teams took a loss in order to fund their on the field product this season. Only one of those teams took a “significant” loss. Neither of those teams factored much into the playoff picture. Do you smell what I am cooking? As much as you can’t blame the Yankees for their $200M payroll, you can’t harp on A’s ownership for their smallish payroll. The days of teams spending way more than they have, in order to be competitive, are history. Revenue matters.

The second factoid, that MLB teams spend an average of 55% of their revenue on payroll, sets the stage for what could be. In ML’s piece, he split the difference between Wolff’s number and that of Forbes. Here, I am just gonna run with the numbers provided by Forbes to keep it simple. So, a new stadium should provide, roughly, a 14% increase (that was ML’s number, $149M plus 14% is $170M) for this article we will assume that number is $177M ($155M*1.14). That SWAG number puts the A’s in the neighborhood of the Rangers and their $95M payroll. Heck, if the A’s wanted to “go for it” they could actually have a payroll of $106M and be within the range of Operating Income makers on the Forbes chart ($177*.6).

That gives us a range of $95M to $106M…. Oh, how I salivate. What’s better? As ML pointed out, the A’s have huge payroll flexibility in the coming seasons, if we assume they have this new revenue stream. To keep the core together, the A’s would need to have an $80M payroll in 2013. If they are in limbo, forget about it. If they are in construction… $80M is great… That would give them up to $26M to spend on players in the first year (assuming a 2014 opening). So who could they add?

Assuming the A’s have locked up the new Big Three, Anderson, Cahill and Gonzalez.  Max Stassi has taken over for Suzuki and is a second year player. Grant Green is manning Short Stop and in his second year at the big league level. Adrian Cardenas, or Eric Sogard, is Green’s double play partner and relatively cost controlled. Daric Barton, Chris Carter and Michael Taylor are rocking 1B, LF and RF collectively. Bullpen roles are what they are. That leaves the A’s with a definite need for a Center Fielder, a 3B and a couple of starting pitchers.

Zack Grienke anyone? Tim Lincecum anyone? Certainly not both, but would the A’s really need both? The new Big Three, the New Jack Bash Brothers and the developed youngsters make it so that only one would be required.

Or, Ian Krol and Clay Mortenson have developed into a fine back of the rotation. Matt Kemp in center?

The more I think about it, the more I realize the possibilities are infinite. I am just highlighting shock and awe type moves. Silver bullets, if you will. Reality, if Billy Beane’s past is an indication of his future, is that the money would be spread around and the sum of multiple parts would be greater than the any single player. The point is that Wolff could keep payroll right in alignment with what is normal now, add in the new revenue, and we would all be really happy with the result. Here is my wishful glance at a 2014 roster/payroll with a lot of crystal ball gazing (and rose colored performance projecting) mixed in:

Congrats to the 2010 AL Champs Rangers, NL Champs Giants

I know the A’s played these guys tough throughout the year. Whatever happens in the World Series, and whatever form the Rangers take next season, our team will have something to shoot for. These Rangers are talented and are good stories individually and as a team. Wash may be the best story of all. Collectively, they have proven themselves every step of their journey. Good luck to them the rest of the way, and we’ll see them next year.

Congrats are also in order for the NL Champion Giants. They may be baseball’s version of the Island of Misfit Toys, and that’s just how Giants fans love them. Somehow this playoff run feels more special than 2002, at least to this outsider. Good luck to them, and while I can’t exactly root in a full-throated manner for the G-men, I can at least support them just so that my long suffering uncle Larry can be happy.

49ers stadium pushback, Sharks add Citrix

Hot from the Merc’s Howard Mintz is word that the 49ers stadium in Santa Clara may be pushed back a year or more, according team president Jed York. The #1 issue being cited is the uncertainty regarding the NFL’s labor situation (the CBA ends after this season).

York remains confident that the team will be able to secure financing for the project, which calls for a new 68,500-seat stadium to be built on a parking lot adjacent to Great America theme park. Santa Clara voters in June approved the stadium deal, which includes a package of $114 million in public contributions and hundreds of millions of dollars that would be secured through stadium revenues, from luxury boxes to naming rights.

But a large chunk of the nearly $1 billion cost has always been linked to obtaining financing, which some sports economists have said could be difficult in today’s economic climate. The 49ers have retained the investment firm Goldman Sachs to secure lenders willing to finance the project.

We’ve been sounding the horn on this since the beginning, so this is no surprise. In the end, it doesn’t really come down to the 49ers. It comes down to the Raiders. Are the Raiders willing to be tenants of the Niners? And if so, for how long? Those are the questions that need to be answered before anyone on the outside digs into their pockets.

Update 3:00 PM: A Q&A with SacBee’s Matt Barrows and York sheds a little more light on the situation.

(Matt Barrows): When you say, “lynchpin” are you talking about knowing that the 2011 season will occur uninterrupted or securing a loan from the NFL?

JY: Well, I think there’s a combination. Obviously, you have the G3 program of $150 million coming from the league. That fund has obviously been tapped, and there’s nothing there to replace it other than a club seat waiver, which is not as efficient as a G3 financing. Absent a new labor deal that addresses the economic realties of the NFL today, I think it’s going to be very difficult to get that piece.

MB: Do you have any better assurance today that a G3 program or similar program will be part of a new labor deal?

JY: That’s a goal for the NFL. That’s a goal for everyone involved – that we continue to invest in our stadiums, whether that’s building new stadiums or renovating stadiums that already exist. And that’s certainly something the NFL is working on, trying to make sure that’s part of the new labor deal. Obviously, a new stadium is vital to the 49ers and to this area. But without a CBA that adequately recognizes the costs of a new stadium, the capital expenses, it’s going to be very difficult for us to move forward and obtain that financing in the second and third quarter of 2011 absent a big piece of the puzzle.

This is a major issue for the NFL, as the league and the players’ association are far apart on this. The current CBA essentially provides 60% of revenue to players. However, that 60% does not include club seat revenue. The players want a piece of this, but the league is refusing because the G3 program and any future stadium lending initiative is expected to use club seat revenue as one stream to secure the loans. It’s unclear how the two sides can come to a reasonable compromise, since plenty of premium seat revenue for recently built stadiums will have to be grandfathered into the agreement. Yet it’s also hard to see the NFL going beyond the 60% high water mark for regular revenue distributions to players, and that may be the best concession the league can make. This has gotten even more complicated because in the past the union has pledged part of its 60% share to help fund G3. There’s also the matter of the rich franchises (Dallas, Washington, New England, both New York teams) wanting to keep more of their locally generated money. The two sides have historically been better partners (league owners as well) than their counterparts in the other three leagues, but there are limits to how accommodating either side will be.

On the other side of SJC, HP Pavilion have entered sponsorship deal with Citrix which will get the company’s name and logo on the outside of all of the arena’s luxury suites, concierge desks, and some arena walls. The deal is worth $150,000 a year, plus Citrix is ponying up for its own suite. The article (premium subscription required) by SJ/SV Business Journal’s Eli Segall, notes that

The deal, a first for the arena, is part of a growing trend of targeted sports marketing and an indication that athletic sponsorships may be on the rise this year, as analysts have predicted.

But Citrix is not aiming its logo at the masses. Instead, the company is targeting pockets of the arena where corporate entertainment is taking place, and where executives who might buy Citrix products might see its brand.

It makes sense for Citrix to do this, considering the number of different products it has and the local companies it often has to compete with (Cisco, VMWare to name two).