Bloomberg profile on Wolff

Update 12:50 PM – Several items have been added to the end of the post.

Last, Bloomberg’s Nadja Brandt put up a profile of Lew Wolff in which he indicates that his LA-based real estate firm, Maritz Wolff, is looking to sell up to $1.8 Billion in various luxury hotel properties by 2015. There’s one interesting takeway.

  • Wolff helped keep the St. Louis Blues in town when they threatened to move in the late 80’s. He and partner Philip Maritz were part of a large business consortium that built a new arena, now known as Scottrade Center, which kept the Blues in St. Louis.

That doesn’t mean the comparisons to Wally Haas should start. But it does show that Wolff has had crucial experience in this realm that stretches way back. Coincidentally, that consortium, Clark Enterprises, ran the Blues and arena at a significant loss for several years before eventually selling the team to Bill Laurie.

Both San Jose and Oakland partisans will be fixated on a couple other takeaways. Chief among them is this easily misinterpreted quote:

“I have no emotional ties to any property,” Wolff said. “They are inanimate objects. That’s the only way we can be fair to our long-term investors who trust us to do what’s best.”

In the ongoing effort to demonize Wolff, his detractors will seize upon that as a sign that Wolff is a cold, emotionless moneygrubber. The Blues experience would seem to belie that. Wolff is neither saint nor devil. He’s laying out his vision for what he thinks is the best path forward for the A’s. Unless someone steps in to buy the team from Wolff and Fisher with a mindblowing offer, that vision is going to be seen through. Which leads me to this:

“Where it may make sense to sell is if you’re in a gateway city with a trophy hotel that doesn’t need significant capital expenditures,” he said. “Bidding for those has been crazy.”

Extend Wolff’s contrarian real estate investment philosophy to owning a team, and it would appear that Wolff intends to hold on until his vision, a new ballpark, is achieved. There’s no bigger capital investment for a sports franchise than building your own stadium. After that, who knows?

Also, it’s a bit much to think that these hotel sales will suddenly mean hundreds of millions will get plowed into a ballpark. That’s not how it works. A ballpark will be financed just like every other ballpark because no one invests cash in a stadium these days and it’s crazy not to take advantage of low interest rates.

.

In other news, Evan Weiner has a good overview of the history of territorial rights and franchise moves.

The SNY (Mets) and YES (Yankees) networks are under pressure to renew carriage deals with satellite providers Dish and DirecTV.

A vigil will be held tonight in LA for Bryan Stow, the Giants fan who was beaten outside Dodger Stadium after last Thursday’s Opening Day game. The Giants will dedicate their Friday opener to Stow. The reward for his assailants’ arrest has been upped to $100,000. Stow is a 42-year old Santa Cruz paramedic and father of two.

If you haven’t read it yet, read Josh Koehn’s feature for Metro from last week. It’s about San Jose’s efforts thus far, and when coupled with Robert Gammon’s 2006 Fremont-oriented piece for the East Bay Express, should bring anyone with a passing interest up-to-date.

Oakland City Attorney John Russo appears to be on his way to becoming the next Alameda City Manager.

Cuts to Caltrain service will not be as bad as once feared, though the Giants and some secondary stations are getting the brunt of it.

  • Weekday service will be slashed from 88 daily trains to 76.
  • Special service, such as Giants pre and postgame trains, will be cut.
  • Four lightly used stations will be closed on the weekdays, several more will be closed on the weekends.
  • Fares will rise 25 cents.

It could have been much worse.

18 thoughts on “Bloomberg profile on Wolff

  1. I wouldn’t see it as a stretch if Wolfe retains ownership of the A’s after a new stadium is built. He’s not as young as he used to be, and you got to figure at some point he switches to a ‘retirement’ stage where he doesn’t do quite as much business as he does now. A baseball team would be a nice toy at that point.

  2. @LS – I think there’s a line of succession being planned. It’s just premature to say anything at this point.

  3. The Evan Weiner article is not bad, but it seems like it was cut and pasted out of separate articles. I think it’s not chronological enough and jumps back and forth a little in the paragraphs. I could see a few places where it might confuse someone who knows nothing about the problems the A’s face.

    It also wrongly compares the Nationals/Orioles situation to the A’s/Tampa Bay. Media rights are not the same as the territorial rights.

  4. @ML – Yea, I could see that. I was thinking more along the lines of a sale to a third party, but I would consider Keith and/or whomever taking over being part of the ‘retirement’ stage where he still gets to come to the park with his grandkids and be a presence.

  5. I continue to hope that Wolff is able to recreate his St. Louis success and build a new venue for the A’s, thus keeping them here. But it’s hard to maintain optimism when years go by and nothing seems to happen (with emphasis on “seems”). I guess that’s one good thing about this rocky start: it’s taken my mind off the stadium for a bit.

  6. The Weiner piece is one of the better articles on the whole thing, albeit a little schizophrenic. I honestly wonder if Wolff has it in him to sue or if he would try something like just moving to San Jose anyway and paying whatever fine was to be levied.

    @LS Wolff has publicly joked about his daughter wheeling him into a new place while he’s drooling and senile. I tend to think he’s in it for a long haul; after all, as ML alluded to, the team re-sale value is hugely higher with a stadium

  7. RM,
    I could see Wolff “plowing” $100 million of this cash into Cisco Field, perhaps another $40 million for the entire Diridon South plot (I know, its not my money).
    The rest of the money for financing coming from naming rights, MLB loan, sponsorships, PSL’s.
    Again, Wolff mentioned “equity” playing a part in Cisco Field financing; this is it!

  8. @LoneStranger: Yes, the Weiner piece does read like a cut and paste job. It’s mostly confused gibberish. As you point out, the Nationals/Orioles situation had nothing to do with Territorial Rights. Media rights and territorial rights are completely separate concepts. Under the Constitutions of MLB, media rights can be changed by a simple vote of the Executive Committee, for any reason. They are strictly provisional. Even so, Peter Angelos raised such a stink about the Washington situation that MLB decided to pay him off for taking away his exclusive media rights. That set a precedent that will certainly make future relocations to new markets such as San Antonio, Charlotte, or Portland much more complicated.

    Territorial rights have a higher level of protection, since they are spelled out for each team precisely in the MLB Constitutions and cannot be changed without an Amendment. No team has EVER had any part of its exclusive MLB territorial rights taken away, which is what makes the San Jose issue so radioactive.

    That’s NOT to say that the Giants won’t eventually lose their exclusive territorial rights to San Jose. There is a price for everything, and if Selig believes the deal is lucrative enough for the Giants and the rest of MLB, it will certainly happen. But it’s not some minor hurdle either. There will be a payoff, and it will be a substantial one, or else Bud will keep negotiating with Oakland.

  9. “No team has EVER had any part of its exclusive MLB territorial rights taken away.” On the surface, this is true. BUT…territories have changed in the past when deemed in the best interest of baseball. From the Giants moving to SF and then Boston Red Sox territory (Red Sox minor league affiliation with the defunct SF Seals of old PCL) to the expansion of Giants territory to accomodate their move to Santa Clara County. Also to take into consideration is MLB expansion, which formed new teams in existing territories (i.e. NY, Chicago and LA). So no, MLB will never take away an exclusive territory by force, but it will work out a deal to alter territories in the best interest of baseball. The A’s moving to San Jose will be just that.

  10. @Tony D. Mostly agree, but Chicago was never part of MLB expansion, the White Sox just started up in 1901 before there was an MLB structure.

  11. C’mon, ML, you missed the most easily misinterpreted quote for partisans to fixate on of all:

    “We’re at a point where we feel, maybe let the next guy figure it out”

  12. Tony D., you’re certainly right that territories have changed, and that could very well happen here, but there isn’t any precedent for MLB taking away a team’s exclusive territory. There has always been a provision in the national agreement between major and minor league teams that a major league team can take over a minor league territory. The big league club has to pay the minor league team, but the minor league team doesn’t have the right to veto the move. Also, before the 1990s, there were two separate major leagues, which viewed each other as rivals and didn’t respect each other’s territories. So the A’s did not encroach on the Giants’ rights when they came to Oakland because the Giants only had the right to exclude minor league teams and other National League teams from the Bay Area. Likewise with the expansion Angels in LA. The two leagues agreed to cooperate a little bit in the 70s (you needed a simple majority vote of the other league to approve relocation), and coincidentally relocation pretty much stopped.
    .
    When Selig took over, he made the NL/AL merger a priority. He stated repeatedly that the merger was necessary so that the old business rivalry between the two leagues would end (and I don’t have a link, but I remember him citing the A’s original move to Oakland without consulting the Giants or the NL teams as an example of the bad business moves he was determined to end).
    .
    So the new league MLB is governed by the MLB Constitutions, which spell out a specific territory for each of the 30 teams. Since then new territories have been assigned to the Rays, DBacks, and Nationals, but no territory has been taken away from any team, and nobody has been forced to share a territory that used to be exclusive.
    .
    There’s a first for everything, but given the way MLB works it usually requires a hefty payoff.

  13. BC,
    Thanks for the clarification re: Chicago.

  14. Thanks Simon,
    But you must remember that the exclusive territory that is Santa Clara County has only been in existence since 1992, and was created for the sole purpose of allowing the Giants to relocate to SJ/SCCo. Also remember that the situation that exists in the Bay Area is unique among all MLB markets: a two-team market that is unfairly gerrymandered, not shared and that prohibits the largest city from currently obtaining its own franchise. I do agree that there’s a first for everything, and this will be the first time that MLB created a shared territory to allow one franchise to relocate within the same market. I don’t agree that it will be a “hefty payoff,” most likely a guaranteed franchise value for the Giants and revenue gaurantees through 2017. No precedent will be set because MLB will look at future relocations on a case by case basis. You will agree that the Bay Area is a very unique situation among MLB market that won’t present itself again in our lifetime.

  15. @Tony D. – I don’t really disagree with you about any of that. Except that I’d probably consider a guaranteed franchise value plus revenue guarantees for the Giants a pretty hefty payoff. The compensation to the Giants would likely come in some form like that, not a cash payment.
    .
    The trick is that Selig will want the compensation package to be substantial enough that the Giants can consider it a “win”, plus MLB will be looking for the A’s to fund 100% of it. The other 28 owners will not be chipping in, unless they are receiving something directly from the deal (not just the improved effects on revenue sharing).

  16. The A’s will move to San Jose only after a lenghty lawsuit from the city once MLB proposes contraction.

    Even if they don’t propose contraction and they make zero decision by the end of this season you can rest assured there will be an Anti-Trust lawsuit coming.

    MLB cannot keep playing by their own rules and some court will hear this case. MLB paid off Vince Piazza to shut his mouth when he sued MLB in an Anti-Trust case around relocation of the Giants in 1993. Piazza was part of the ownership group who was going to move the Giants to Tampa Bay.

    MLB tried having the case thrown out citing their Anti-Trust Exemption but the court refused. MLB paid Piazza 6M dollars and promised his group an expansion franchise that eventually became the Tampa Bay Rays.

    If San Jose does the same thing that Piazza did, rest assured MLB will fight tooth and nail to avoid an Anti-Trust lawsuit as we have seen in the NBA, NFL, and NHL the league always “loses”….

  17. This certainly is a unique situtation – and a first for professional sports. Here is a situtation where one team sharing a two-team fan-base (the A’s) is moving further away from the other team (giants) and the other team opposes the move because it intrudes into their territory – ridickulous. Also, 354 days since Selig appointed his “blue ribbon panel” to explore the A’s ballpark options and still no decision? Equally ridickulous – considering Selig has said the A’s need a new ballpark and the coliseum is unacceptable for MLB. And that San Jose is a perfectt city to host an MLB team, 10th largest city in the U.S. low crime rates, etc.

  18. 353 days? I think you mean 730 days. It’s been more than 2 years…

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