Update 3/1 2:00 PM – Lew Wolff is keeping the campaign going. In a Bloomberg article, Wolff states that he is “aghast” at how the Giants could be so stubborn in guarding T-rights when the A’s are moving further away.
Thanks to jk-usa for getting hold of KCBS In Depth’s (Doug Sovern / Ed Cavagnaro) interview with Giants president Larry Baer. Nearly four minutes of the interview is spent talking about the A’s and territorial rights. Below is a transcription of the relevant section (starting at 17:30 of the interview).
KCBS: The other team in our market – the A’s – their owner still very much has his eye on San Jose. What is the Giants’ on this, has it changed at all as far as, is there something you would accept to give the A’s entry into San Jose?
Baer: No change. When we go back to 1992 and the team was acquired by this group, there was a territorial right that went with that purchase… the exclusive right to exhibit baseball in San Francisco, San Mateo, and Santa Clara counties… We understand the A’s situation. We believe that they need a new ballpark. There’s no doubt about that… but they need a new ballpark, not a new territory. Certainly in their exclusive areas, Alameda or Contra Costa County or anywhere else in this region whether it’s Sacramento or wherever, we wish the A’s luck and hope that they’re able – for the good of the sport – to get a stadium that’s to their liking.
KCBS: We know you have the right and that you’re opposed, but do you think that there’s any chance that the owners would allow the A’s to move to San Jose, and the odds that the San Jose people would be able to build a baseball stadium?
Baer: Well, there’s no precedent for stripping a team of its territory. People point to Baltimore-Washington. That’s a totally different situation because the Orioles did not have a territorial right to Washington. In fact, when Montreal moved to Washington there were reparations paid to the Orioles even though it wasn’t necessary. So in a way it argues our point that even when another team doesn’t own a territory, that it’s allowed to move close, there’s a chance for real destabilization of the existing team. So this has been kicked around forever. The commissioner has never indicated to us that he believes that the territorial right that we have is in doubt.
KCBS: How do you feel having the A’s in San Jose would harm the Giants?
Baer: Well if you look at the patterns, Ed, and you look at over the years what’s transpired… when the team was first acquired in ’92 or ’93 the team was in trouble. We were playing in Candlestick but the fans weren’t coming. We were thinking that it was franchise that maybe could not survive. We redoubled the marketing effort – San Francisco, San Mateo, and Santa Clara counties. That is our core. If you look at – even though Oakland may be closer to SF than San Jose – there’s a little thing that people forget called the San Francisco Bay. The path of travel in this region is really north-south. If you look at KCBS traffic reporters and where people are moving it’s a north-south grid. People are well versed and in the habit of coming up the train to San Francisco – we have to preserve Caltrain by the way – coming up the train to Giants games. They take buses, they take BART into parts of the South Bay. That is our fanbase. It’s a big part of who we are, it’s where our sponsors come from, and we’d be destabilized if the Giants had another team that was right there.
That part of the interview was sandwiched by talk about an arena in SF and CBA matters.
First off, I have to admit I admire the way Baer said that he hopes it works out for the A’s in Alameda/Contra Costa Counties and sneaks in a reference to Sacramento or other parts of “the region” in the same breath. The Giants certainly won’t be shedding any tears if the A’s moved to Sacramento. They’d probably pay for the Mayflower trucks. Of course, Sacramento is such a hamstrung market right now that any suggestion like this is clearly a straw man. Still – well played, Baer.
Next up – the path of travel is really north-south? That must explain the full Embarcadero BART platform before and after each Giants game. Or the record BART ridership the day of the championship parade. Or the fact that fans coming via Caltrain are 5% of a typical Giants gameday attendance. Or the 444,000 vehicles that take the three east-west bridges every day. Come on, let’s get real. We all know something that neither Larry Baer nor Bill Neukom are willing to say – that the Giants and AT&T Park have taken much of the East Bay fanbase, especially the casual fan. They have that and they want continued protection of their “core.” As much as fans may come from the South Bay, it still isn’t the most convenient kind of fandom. If a weeknight Giants game ends at 10 PM, fans aren’t leaving on the train until 10:30 and won’t arrive at their respective stations in Santa Clara County until at least 11-11:15. Add a drive home and it’s 11:30. That may be perfectly acceptable for diehard Giants fans (it is for me when going to A’s games) but it’s a tall task to get a truly significant number of fans from the South Bay. And the “BART into parts of the South Bay” business? That is truly rich.
The Giants frequently like to point out that 50% of their ticket sales come from south of the San Francisco City-County line. Roughly half of those come from Santa Clara County, and many of those are long-time Giants fans. Many are corporate interests who can’t or won’t buy into the A’s where they’re currently situated. Sometimes it’s both. If they’re that worried, why not measure it? Let’s set a baseline for how much revenue comes from the South Bay, and if the Giants see an attributable drop to the A’s move to San Jose, MLB can set compensation on a seasonal basis until the loans on AT&T Park are paid off. I’ve suggested in the past the the A’s simply shift part of their existing revenue sharing check – which basically is paid by the Giants anyway given the clubs’ relationship to the revenue sharing pool – and be done with it. Once the A’s move in, then use the baseline. The fact is that San Jose is too far from either San Francisco or Oakland to be even remotely optimized as a market. If MLB wants to maximize sales to the entire Bay Area, it needs to maximize the sales territory. Ever wonder why Oakland doesn’t have great retail shopping districts or a mall? It’s partly because long ago, retailers and developers decided they could get sales from Oakland without having to locate in Oakland by locating in Emeryville, San Leandro, and even SF for some major stores. At some point MLB will have to decide if it wants as much from the Bay Area as possible or not. The status quo will surely not provide that.
Finally, there’s this matter of the Giants getting the South Bay baked into the $100 million purchase price paid by Peter Magowan and company in 1993. That price was a hometown discount, well shy of the $115 million offered by Vincent Piazza when he tried to move the team to St. Petersburg. We’re familiar with the hometown discount since it allowed Steve Schott and Ken Hofmann to get the A’s from Wally Haas for a cut rate. However, that brings up the question of how much the T-rights for the South Bay were worth back then and now. Below is a table showing the purchase prices for eight teams that changed hands in the early 90’s.
So Magowan paid about the same for a bigger market, greater legacy team as Drayton McLane and Nintendo did? Barely more than the two National League expansion franchises, both of whom were in inferior markets compared to the Giants? Incidentally, Magowan initially offered $95 million but may have brought in additional outside money to bolster the bid (at the time Magowan was worth a “measly” $60 million, hardly billionaire status).
If $95 million could be considered the Value of a Replacement Franchise, that doesn’t say much for having additional value baked into the 1993 price paid for the Giants, whether that value comes from T-rights to the South Bay or not. In all of the resale cases, franchise values may have been artificially depressed to maintain that team in-market. That’s fine, better that than a free-for-all. Let’s not kid ourselves about how much Santa Clara County was worth back then. In fact, in 1993 the A’s franchise valuation was $114 million, well north of the Giants, close to Piazza’s bid, and more reflective of an open market valuation. Shortly after Magowan assumed control, he inked Barry Bonds and the franchise value took off. It’s hard to argue that the South Bay had so much value in that transition when Magowan such a huge discount in the process. There’s more meat to the story if the value is baked into the financing of the stadium. But that’s done in 2017, and the Giants want the South Bay in perpetuity.
The funny thing is that I’ve spent over 1,000 words on what is essentially no change in position on the part of the Giants from 2009, when Neukom took the helm. While the A’s and South Bay interests have shifted to an appeal to decency, the Giants haven’t budged one bit. It’s clear that one team is better at playing this particular game, and it’s not the one who has more World Series trophies.