Quakes introduce suites at SJ stadium

When the San Jose Earthquakes announced their plans for a stadium near SJC, observers noted the capacity (15,000), shape (horseshoe), and the seeming lack of luxury suites. Now the team has remedied that last flaw, unveiling a package of luxury suites to be located on both the field level and the rim of the stadium.

The stadium’s original design had a very short first deck and a large second deck, which made it easy for the Quakes to add suites if the economy was friendly enough to do so. In going this route, some other premium seating will be displaced, but the 12 field suites alone should boost the team’s bottom line significantly.

View from behind a suite at field level

What may be more interesting is how the suites are being pitched to potential buyers. The suites have NanaWall-esque moving glass walls instead of a typical door-and-fixed window setup. It’s expected that a number of high school and college events will be held there, which is a smart move given the lack of modern facilities in the South Bay. Concerts are not in the sales brochure, which indicates how sensitive the Quakes are about noise and the venue’s potential as competition for HP Pavilion. Field level suites are $350,000 for a 5-year contract.

Suite seating arrangement. Note non-suite seats to the right.

You might remember how the Fremont ballpark concept would’ve had a level of suites only 10-15 rows from the field. It looks like that amenity will go to the soccer stadium instead, with the ballpark getting the traditional level of suites cantilevered over the lower deck.

Just as the ballpark may grow in capacity as a late game tweak, changes such as the addition of luxury suites can be made for the Quakes’ stadium. We can look forward to more such changes as these projects move from paper to concrete.

A’s plan spring training move to Mesa

In April the A’s and the City of Phoenix were set to extend a lease at Municipal Stadium and Papago Park, assuming that the parties could figure out a way to pay for around $10 million in improvements. Unfortunately the deal fell through, which led to discussions with neighboring Mesa, where the Cubs are building a new, $99 million facility on the west side of town to replace HoHoKam Stadium (ballpark) and Fitch Park (training facility). The A’s would move into HoHoKam/Fitch after the Cubs leave in 2014.

It’s terribly unfortunate that the A’s and Phoenix couldn’t come to some kind of agreement. Muni is the most transit-accessible Cactus League facility and it has a ton of parking around it. The Phoenix Zoo is within walking distance, and the views of Papago Park beyond the outfield are excellent. HoHoKam’s best attribute is its size, with a capacity of 12,623 (nearly 4,000 more than Muni). It also has a berm in the outfield, a feature never built into Muni.

By 2016, Valley Metro will extend its light rail line to downtown Mesa, putting it roughly 1.5 miles from HoHoKam. It’s unclear what improvements would be needed or requested by the A’s to move to HoHoKam/Fitch. With the A’s leaving Muni for good, only one Cactus League team will remain within Phoenix city limits, the Milwaukee Brewers (at Maryvale). The Brewers may leave Maryvale at some point because the neighborhood is a bit sketchy. That would leave Phoenix with zero Cactus League sites, which is strange considering how big the city is.

It’s gouging season

Hello everyone, I hope you’re having a splendid Thanksgiving weekend.

I have another CBA article coming tomorrow. For now, there’s an item in the Merc’s Internal Affairs column today. Apparently, AT&T is holding out on their land for a a whopping $150 per square foot, or $6.5 million per acre. That’s roughly the market price in 2005, when the ballpark process started in earnest and the real estate market was still bubblicious.

Real estate professionals familiar with the industrial area chuckled heartily, saying that the AT&T land is worth closer to $25 to $35 a square foot.

AT&T and the other holdout landowner have every right to ask for as much as possible. It’s fair business for them, and there will be some displacement that needs to be addressed. The threat of eminent domain, coupled with MLB’s blessing, should bring the price down since those two factors will reduce the landowners’ leverage. As I’ve written before, the most likely outcome will be that the Wolff/Fisher group will make one offer once they get MLB’s approval and let the chips fall where they may. If the landowners want to get as much as possible they’ll want to avoid the possibility of eminent domain, since there’s always a chance a judge will give a minimal land valuation. Legal fees will only make the whole ordeal more wasteful. That said, the holdouts may have a threshold that they’re not willing to drop below, so it could very well go into eminent domain proceedings. There is no given at this point. We’ll just have to see how it plays out.

Big market, low budget

In February I wrote about a potential revenue sharing rollback in the new MLB collective bargaining agreement. While today’s joint announcement didn’t produce a percentage rollback (or contraction for that matter), there is a sort of rollback coming for revenue sharing. And the way it’s constructed, it’s targeted at one team in particular – the Oakland Athletics. Here’s the relevant text (courtesy of The Biz of Baseball):


a. The net transfer value of the Revenue Sharing Plan will be the same as the current plan. Net transfer amounts will continue to grow with revenue and changes in disparity.

b. The fifteen Clubs in the largest markets will be disqualified from receiving revenue sharing by 2016. The revenue sharing funds that would have been distributed to the disqualified Clubs will be refunded to the payor Clubs, except that payor Clubs that have exceeded the CBT threshold two or more consecutive times will forfeit some or all of their refund.

c. The Commissioner’s Discretionary Fund will increase from $10 to $15 million per year.

Again, no percentage rollback (A). It’s item B that has enormous implications for big market teams. The revised revenue sharing system effectively shuts the big market teams out of the program by the end of the CBA, gradually losing 25% of any revenue sharing receipt annually until 2016 when it’s eliminated entirely. The Bay Area is the #4 media market and is #6 in population, so neither Bay Area team would be eligible for revenue sharing in the future. Sounds like a deadline and a decision for the A’s, right?

Not so fast. SI is reporting that a provision in the new CBA allows the A’s continue on revenue sharing past 2016 if there is no resolution. So what does this all mean?

The A’s are in a unique and unenviable position among the 30 MLB franchises. They are both a big market team and a low budget team. In the long run, they can’t be both. No other big market team operates on revenue sharing, year after year. When Lew Wolff and I talked two years ago, I mentioned that the A’s were the only two team market where one franchise pays into revenue sharing while the other receives it. He replied that he hadn’t heard the Giants-A’s dynamic phrased in such a manner. I joked that he could take that up to the league office if he wanted at no charge.

MLB appears to be taking the steps to ensure that the A’s are positioned to become a full-fledged big market team. Getting a stadium deal in place is only the first step. Vastly improved media and sponsorship deals are just as important. That doesn’t mean the A’s will reach the Red Sox or even the Giants in terms of revenue, but if they can achieve the medium revenue levels of the Nationals or White Sox, they’d be considered self-sufficient. Both Wolff and Billy Beane are aware of this.

One explanation for the provision may be that the A’s might not be able to open a new ballpark in San Jose until after 2016, though there has been no indication that this is the case. If Wolff isn’t given the go-ahead to move to San Jose, there’s no telling what will happen down the road. It should set up the A’s for a sale at some point. The problem with this is that we know that an Oakland-based buyer with knowledge of the area’s low revenue generation would have to buy the team at a discount, whereas other buyers looking to move the team elsewhere would be willing to pay full price. Hopefully it never gets to that point. MLB is not going to approve Oakland’s continued stay on welfare. They’ll move the team out of the area instead.

Summing it up (with Slusser update)

Mark Purdy takes all of the stuff we’ve learned over the past couple of weeks and neatly summarizes it, with a few more tidbits thrown in for good measure.

  • The January owners meetings will by January 11-12.
  • Lew Wolff says that he has not been any discussions about selling the team.
  • San Jose Mayor Chuck Reed craps all over Oakland’s plans (such as they are).

I get the feeling that a lot of San Jose boosters are very excited this holiday season. Their gift will have to wait until after the New Year.

Updated 11/22 1:30 AM – Susan Slusser also adds to the story, describing Wolff’s trip to Scottsdale to meet with Selig two weeks ago. This time, Billy Beane was reportedly on board. Here’s the sure-to-be-controversial bit:

Oakland lost money last season for the first time this century, with an expected shortfall of several million dollars, according to Beane. The team is consistently a recipient of $20 million or more in revenue sharing, and Oakland’s attendance actually went up in 2011, but the payroll also went up $15 million, from $52 million to $67 million.

In past years, when the A’s were clearly out of contention close to the non-waiver trade deadline, the team’s modus operandi was often to sell off players. Part of the reasoning was to get young players (probably with little-to-no service time), part of it was to dump salary. 2011 was different in that despite the team was mired near the cellar for much of the second half, yet Beane and David Forst did not sell off Josh Willingham, Coco Crisp, or any of the starting staff. The only notable trades were of Brad Ziegler and Mark Ellis, and in Ellis’s situation the A’s actually sent the Rockies a little cash to make the deal work. While it would make sense to hold onto Willingham if they weren’t receiving anything they wanted in trade, if they held on they’d potentially get a first round or sandwich pick as compensation when some other team signed Willingham.

By not trading any of the veteran free-agent-to-be outfielders (Willingham, Crisp, Matsui), the A’s kept $3-6 million on the payroll. That’s probably the difference between breaking even and losing money in 2011, if Beane is to be believed. Keep in mind how this works from an accounting standpoint: unlike moneymaking teams who get virtually all of their revenues either in advance or throughout the course of the season, the A’s revenue sharing check only comes in December, well after the season is over. They and the other have-not teams don’t consider the revenue sharing receipt as part of their P&L because it’s not there when it can make a big impact. (No, the check is not going to impress Scott Boras if Beane calls about Prince Fielder.) On the other hand, it has a short-term turbo-boost effect on teams that recently opened or are about to open new ballparks, since those teams can get both the receipt for the past season and higher projected revenues for the first season in the new park.

Did Beane and Wolff hold onto to the outfielders in order to prove a point to Selig and MLB? That the M.O. of the past decade(s) was untenable in the long run, while bucking the trend doesn’t work in the short term? Surely they must have realized that Type B compensation was going away – it was talked about throughout the season – so why keep David DeJesus? It wouldn’t surprise me in the least if this was planned, given the current spending freeze until a resolution to the stadium problem is found. It reminds me of that silly fake-to-third-throw/fake-to-first play. It’s plainly obvious what’s happening and it elicits a chorus of boos. Once in a while it actually works.

Tony LaRussa is a reasonable man

The Chronicle’s John Shea caught up with retired skipper Tony LaRussa a few weeks after the afterglow of winning yet another World Series. TLR said this about the A’s future:

Q: Your A’s teams often packed the Coliseum. What’s your take on A’s ownership’s desire to move to San Jose?

A: “The A’s should stay in the Bay Area with a legitimate shot to compete economically, and there are some real doubts it can happen in Oakland. The Giants got the (territorial) rights (to San Jose in the early ’90s) because (former A’s owner) Walter Haas just said ‘here.’ There was no reason other than to be real nice and fair and give them to the Giants. I don’t know what the grounds would be for the Giants to say it’s ours and not the A’s.”

Couldn’t have said it better myself. TLR clearly knows of what he speaks. He and his family have maintained their East Bay home all this time and run ARF out of Walnut Creek, so he’s still very much plugged into the Bay Area.

Later in the interview, TLR talks about having a role with one of the Bay Area teams, though he thinks there may not be room for him in either organization. There’s always room for TLR as an advisor, if I have anything to say about it.

Is Moneyball a major reason for the delay?

As of this writing, the film adaptation of Moneyball has accrued $72.6 million in domestic box office revenues through nine weeks (plus $7+ million internationally). Though its run is winding down, Moneyball is still playing on over 400 screens in the United States and is on a highly staggered release schedule. Even now there are articles about Moneyball, Billy Beane and Michael Lewis, especially because the UK release is this week. The DVD release date is January 10.

The Steven Soderbergh-helmed Moneyball project was set to start filming in 2009, so if you tack on the normal one year of production and post-production work, the movie would’ve come out in Fall 2010. By now you probably know that the film’s studio, Sony Pictures, disliked Soderbergh’s documentary take on the story and shelved it just before principal photography was to begin. Fortunately, Brad Pitt pushed the project through and out of development hell. The film resurfaced with Bennett Miller at the helm, Pitt has a shot at an Oscar, and the rest is enjoyably revisionist history.

Prior to the film’s premiere, when Billy Beane was interviewed everywhere about the film adaptation of Moneyball, I noticed something different about the way he was answering questions. There was a palpable sense of relief in his tone. He most assuredly enjoyed being feted once again for being the great iconoclastic general manager, and it seemed he bristled less at the notion. It’s that sense of relief that got my attention, and now we may be starting to see why.

The A’s and Rays weren’t on the recent owners meetings agenda, as attention was focused on the CBA, the sale of the Astros to Jim Crane, and the plight of the Dodgers. Before the meetings started, word spread that the A’s situation wouldn’t be addressed until January, when the next owners meetings are scheduled. By mid-December, Moneyball should be off the domestic screens completely as moviegoers will be looking at blockbusters, Christmas movies, and the rush of Oscar nominees. Moneyball will be – for the public at least – out of sight, out of mind. Like the film’s stablemate, The Social Network, there could be a short Oscar-related re-release early in 2012, but there’s no guarantee of that.

That makes mid-January a pretty good time for an announcement to be made regarding a move to San Jose. It’s a brief respite after the hectic holidays and the big news of the hot stove period, and before spring training and the Oscars at the end of February. I’ve thought for some time that it was very important from a public relations standpoint not to time such a decision too early, as it could pull the rug out from Oakland and the movie. Even at this fairly late stage, the A’s plight is mostly ignored by mainstream press and most of America. The premiere and the initial run were the best exposure the City of Oakland has gotten in a long time, so an epilogue of the team shuttling off to San Jose would seem rather incongruous. Now the movie has made its money, so that cow has been sufficiently milked by the studio and MLB. The international markets who haven’t gotten the release yet are so far removed from the situation that they probably care little for the film’s environs.

Moreover, there’s a parallel story to this situation, and it relates to Billy Beane, the man. I’ve thought for some time now that even though Lew and Keith Wolff are working the ballpark deal, it’s Beane who is the linchpin to franchise being in San Jose, or rather, the Valley. The Wolffs and John Fisher are from old school, old money backgrounds, whereas Beane is the hip, now-legendary iconoclast. As we who live and work here know, the Valley loves its iconoclasts. For the A’s to attract and retain a lot of fast-moving tech companies as customers, it’s important for the A’s to maintain an image. For all intents and purposes, that image right now is Beane. Beane’s image has an intangibility that, unlike any currently playing ballplayers, is not terribly dependent on pure performance. It could even be argued that Beane is somewhat immune to appraisals of performance, as long as the ownership group is in lockstep with him.

If Cisco Field doesn’t come to fruition, what incentive is there for Beane to stay? Peter Gammons put it out there. The team would be put up for sale and would seem to be on its way out of the Bay Area. For Beane, the challenge isn’t just getting an extra $20-50 million to put into payroll. The A’s are simply incapable of being run as most other teams are, with full control over their revenues and environments. You have to think Beane wants that opportunity every bit as much as the extra payroll. Then he can shuttle back-and-forth along Coleman Avenue between Cisco Field and the Earthquakes Stadium, indulging both of his sporting passions.

Many have and will continue to argue that Beane’s role is overstated and his performance overrated. Regardless, he remains in high standing by the baseball literati and the business community. For now that’s what counts the most. It’ll help sell Cisco Field to everyone from SVLG’s C-levels to the average voter in San Jose who will be renting the DVD from Netflix or a Redbox next spring. Without Billy Beane, not only is there no Cisco Field, there probably is no Athletics franchise in the long run. At least not anywhere around here.