New CBA approved including possible revenue sharing rollbacks for A’s

MLB and MLBPA burned the midnight oil the last couple of days to get a CBA approved before tonight’s midnight deadline. Though the talk did not include the same kinds of contentious items other leagues normally argue over (salary cap, players’ percentage of revenue), the sides still worked hard to avoid any kind of work stoppage. As of this post, both sides are touting a tentative agreement with much of the fine print to be worked out over the coming weeks. Like the last CBA, the new one will run for five years through the 2021 season. Major items that were up for grabs, such as the international draft and 26-man rosters were left by the wayside in order to get the deal done. What did apparently get through was a tweaking – if not an overhaul – of baseball’s revenue sharing system.

That news got started by Jeff Passan:

And was built upon by Ken Rosenthal:

Okay, let’s start with the Rosenthal scoop. As a way to “motivate” the A’s to build a new ballpark, they will be phased out of revenue sharing. This was the plan under the last agreement too, except that the A’s were given an exemption as long as they continued to play at the Coliseum. Since that didn’t net a change in the A’s venue, the owners (with the union’s help?) may have decided to light a fire under A’s ownership to build that. Nevermind that the A’s would already be in a new home in San Jose if MLB actually supported the A’s plans in 2012, that’s water under the bridge. Now John Fisher has the reins of the efforts to build in Oakland. And by phasing out the A’s revenue sharing check over the life of the CBA, the A’s won’t realize up to $90 million over the five years. That’s just as well for many A’s fans and rival owners who believe ownership has been pocketing those checks for years. The A’s weren’t spending it on payroll anyway.

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As you can see from the table above, the previous CBA called for revenue sharing to be phased out for all of the Top 15 “Big Market” teams. The A’s are in a big market, but they are a relatively low-revenue franchise thanks to the dilapidated Coliseum. MLB carried over the last agreement while it also more-or-less imposed a deadline to complete the ballpark of 2021 or 2022. There’s always another side to the story, which makes me wonder what MLB will offer to the A’s to make the stadium project worth Fisher’s while. After all, if Fisher’s going to take all the risk while not getting monetary help from either MLB or the City of Oakland, what’s in it for him? The A’s aren’t guaranteed to get a

Rob Manfred called for the A’s to be more proactive in the stadium pursuit. The recent ownership change and other moves indicate that the A’s are serious. Still, the Raiders are the biggest obstacle to getting the Coliseum site as well as a competitor for scarce infrastructural funding should both teams get Oakland projects going. MLB’s pitch to Fisher may be “Once the Raiders and Warriors leave you’ll have the East Bay all to yourself. We’ll throw our weight behind your plans when that happens.” Will MLB provide funding to the A’s to get through lean years? Will Manfred finally play the heavy when it comes time to negotiate with the City?

Now about that performance factor. Performance factor is a key feature of the revenue sharing scheme. There are two parts of the scheme, the 34% straight pool Base Plan and the (14%) Supplemental Plan.  The Base Pool plan is simple: every team contributes 34% of their local revenue after deductions regardless of how little/much that is. All teams above the average (mean) amount lose the difference between the mean and their contribution. Those below the fold receive the difference between their respective contributions and the mean.The Supplemental Plan takes the aggregate of 14% of local revenue for all teams, pulls from the Top 15 teams based on each team’s Performance Factor and sends that to the Bottom 15 based on their PF’s. It’s unclear whether MLB got rid of the Supplemental Pool altogether or calibrated revenue sharing by folding the Supplemental Plan into the Base Plan. That would make the whole plan a 48% straight pool Base Plan, one that would penalize rich teams for being rich less than before. Elements of the new plan may be released in the coming days. Eventually we’ll know what it is and what the A’s have to deal with.

A’s brass were hoping revenue sharing would stay intact, but the writing’s on the wall. The business model should stay intact, in that they plan their payroll limits and roster makeup based on regularly-sourced revenue (stadium, TV/radio, streaming) not including the revenue sharing receipt, which is received in December after the usual rash of free agent signings. I always figured that if the A’s needed that last piece for a championship roster, they’d dig into that receipt. Now Fisher will have to make a cash call to himself. The dynamic of trying to field a more competitive team to hopefully help sell a new ballpark vs. the need to save pennies for the ballpark by reducing costs is plenty fascinating on its own. Which way Fisher will turn will show us what his priorities are.

Wolff, Crowley step down for Fisher, Kaval to take over

To call today momentous would be an understatement. For now I’ll post a bunch of links, with commentary to follow.

The tenure of Lew Wolff (left) has come to an end, John Fisher (center) will replace him

The tenure of Lew Wolff (left) has come to an end; John Fisher (center) will replace him

Susan Slusser first broke the news that Lew Wolff would step down and sell most of his stake in the A’s. John Fisher is taking over as the control person (managing partner) of A’s ownership, a.k.a. the Athletics Investment Group, LLP. Fisher was approved to day as control person by MLB during the owners’ meetings in Chicago today. Wolff will maintain a small share of the team and a Chairman Emeritus title. Mike Crowley is also stepping down as team president, to be replaced by Earthquakes president Dave Kaval. Crowley will remain a senior advisor, while Kaval will continue to run both the A’s and Quakes. Now the links:

A’s shakeup: Wolff, Crowley out as team redoubles stadium efforts (Susan Slusser, Chronicle)

A’s: Wolff exits, more change coming; may bode well for future in Oakland (John Hickey, BANG)

Lew Wolff would not be stepping down if he was 20 years younger (Joe Stiglich, CSN)

Purdy: Wolff outlines reasons he stepped aside, predicts Fisher will decide on A’s ballpark site soon (Mark Purdy, BANG)

Earthquakes, A’s promotion increases profile of new soccer GM (Elliot Almond, BANG)

Will A’s ownership shift hit stadium plan out of the park? (Ron Leuty, SFBT)

New A’s president Dave Kaval focused on stadium, community (Susan Slusser, Chronicle)

New A’s man Kaval tasked with performing stadium-sized magic (Ray Ratto, CSN)

And the A’s press release:

This is not moving the deck chairs, as Bruce Jenkins would suggest. Nor is it clearing the decks, as Fisher is still the money man and majority partner in shifted ownership group. What matters is Fisher’s commitment to the ballpark effort and the presence of Kaval, a gifted salesman/marketer who was a key player in completing Avaya Stadium. Kaval is bringing over many of the tools he used during his Quakes tenure: social media, accessibility through regular office hours, and thinking outside the box. That said, the Quakes bear one very similar operational trait as the A’s: a resistance to big expensive player contracts. That’s despite a new stadium and a league salary cap designed to prevent profligate spending by teams. MLB’s a few levels up from MLS economically, so that could potentially be different for the A’s, but it will all depend on revenue in the short term, and projected boosts if the A’s get an Oakland ballpark deal done. Still, there is much greater hope for a ballpark than there has been in several years. Kaval is an engaging, smart guy who knows how to read a room. Just the fact that he’s much more approachable than Wolff, Crowley, and especially Fisher should help the A’s standing in Oakland. It can’t hurt. The A’s will need strong community support to build their ballpark. Maybe, just maybe, we’ll see a plan in the coming months. Wolff and Fisher have experienced success with Kaval running point. They’re hoping he can repeat that success with a much tougher project.

More tomorrow.

Manfred insists Oakland effort is progressing, hints at groundwork for deal

Months ago I pleaded with the A’s to start communicating more regularly with the public on the state of the ballpark effort, if only to give fans some confidence in the effort. With MLB Commissioner Rob Manfred’s answers to questions about Oakland during the current postseason, it appears that the A’s are relying on Manfred to be the credible source. Might as well, since Manfred isn’t (yet) reviled the way A’s ownership is among many locals.

Before I get too far into Manfred’s role, let’s reset the situation. The A’s and Raiders both positioned as preferring the Coliseum for their prospective Oakland stadia, which put the City of Oakland in a bind. The A’s pledged to look at other sites in Oakland in case a football stadium pushed them out. While the A’s are more-or-less bound to Oakland, the Raiders have put a lot of effort into a glitzy venue in Las Vegas. Raiders owner Mark Davis has also flirted with Los Angeles, San Antonio, even San Diego if the Chargers vacate for LA.

In August A’s majority partner John Fisher brought staff with him on a tour of Howard Terminal, Oakland’s best hope for a waterfront downtown ballpark site. No findings have been released, with John Hickey’s article referencing how Howard Terminal remains a difficult proposition due to cleanup and infrastructure costs. There’s also a mention of Brooklyn Basin, but given how the developers for that project weren’t able to pick up a key piece of land that now effectively splits the project in two, it’s highly unlikely that something will magically open up for a ballpark there.

That brings us to Laney College, which sits between Howard Terminal and the Coliseum physically and perhaps also in terms of rank. I tweetstormed about Laney in April. The important thing to note about Laney is that it’s actually two sites separated by E. 8th Ave. The north site is familiar to most as the Laney College athletic fields The south site is the collection of Peralta (Laney’s district) administration buildings. Laney was studied as part of the 2001 HOK presentation, and at first glance it would seem to be a highly favorable location. The land is mostly fields with few structures and is publicly owned. It’s close to Lake Merritt BART and there is some – though not much – parking to the west.

Some of the Oakland sites under consideration. Peralta is below Laney.

Some of the Oakland sites under consideration. Peralta is below Laney.

Unlike the Port and City, who have public land reserves to draw upon, Laney/Peralta have their facilities concentrated among 50 acres straddling Lake Merritt Channel, and they have shown little interest in disposing of any of that land. A planning document published in 2011 showed that the college wants to expand, mostly into the undeveloped parking lot in the southwest corner. Coincidentally, this is where the Raiders’ pre-Coliseum home, Frank Youell Field, was located.

Making a ballpark work at Laney College would require a multi-phase approach because the facilities would continue to be in use for significant portions of the development cycle. If the Laney fields become the site, it’ll be up to the college to figure out how to accommodate practically the entire outdoor athletic program. There’s no obvious place to relocate them. Some might look to a land swap with the Coliseum, but that wouldn’t make sense since the fields would be five miles away, nearly as far from the campus as Merritt College. If the Peralta site is chosen, the administration offices and support for all four campuses in the district would have to be relocated. Perhaps a solution could include a large parking structure with offices atop. That could help serve parking needs for Laney, Peralta, and the A’s. It could also be crazy expensive on its own.

There will be more time to ruminate on sites known and unknown. For now let’s get back to the commish. There’s a lot there to support the notion that Manfred is pushing Lew Wolff and John Fisher towards a solution in Oakland and holding them to account. That’s good PR for baseball in Oakland. Then there was another quote from Manfred about Oakland Mayor Libby Schaaf that caught me off guard:

‘The Mayor in Oakland has made it clear to me that baseball is her first priority. She would like to keep both teams, but baseball is her first priority. And I think that’s a good spot for baseball to be in.’

Schaaf has gone to great pains to never express any outright favoritism between the A’s and Raiders, though she has admitted that the sheer number of games the A’s play (82 vs. 10 for the Raiders) is a better economic driver. And there have been whispers that she has backed the A’s privately, biding her time until the Raiders eventually leave. Of course, there’s no guarantee that “eventually” will ever happen, so she has to keep Oakland in play for a football stadium despite a funding gap that is no closer to resolution since the issue was raised during the Quan administration.

Now comes word that Manfred is walking back his assertion about Schaaf, though neither of their respective offices have made any statements to that effect yet (2 PM PT). Given the lack of such statements, it seems that Schaaf is not getting any serious blowback. It also confirms a certain journalistic truism:

Messaging is tough, though not as tough as getting a stadium privately built in California. Manfred wants to accelerate the process regardless of the restrictions placed on the A’s. His vague timeframe of “within the next year” follows similar statements made by Wolff and Oakland pols. It’s likely to slip. No one would be surprised if it did for myriad reasons. That said, Manfred’s desire to get a site picked is a tactic designed to inevitably put the ball in Oakland’s court. Oakland and the A’s have to this point skated on the dual-dilemma scenario with the Raiders. Manfred’s shaking the tree is meant to put some pressure on both team and City. He can do that directly with Wolff and Fisher. He can’t do that to Oakland, not until there is a site and some level of commitment. The key is Manfred’s admission that he’s not sending anyone to Oakland full time to work on the project. In the past that was either Manfred or Bob DuPuy acting on Bud Selig’s behalf, or Eric Grubman doing the same type of field work for Roger Goodell.

When that site is decided, Manfred will turn around and say to Schaaf,  Look at all I’ve done for you, I got the owners in line, there is a site and a plan,what are you going to give baseball? By give I mean the pledges of infrastructure, land, or whatever is needed to offset the enormous investment Wolff and Fisher will have to undertake to build a ballpark. That’s when messaging gives way to dealmaking. It’s a better tack than what the NFL is doing as it looks more generous. Will it ultimately be more successful? Hell if I know.

P.S. – Laney’s in the news, but remember, the A’s still consider the Coliseum the #1 for now. We’ll see if their study changes their assessment.

John Fisher to tour Howard Terminal with technical experts

After several months of keeping plans mum, A’s majority owner John Fisher will tour Howard Terminal Thursday. The Chronicle’s Matier & Ross report that Fisher will be accompanied by other team executives and Port officials and technical staff. City officials and Lew Wolff may not attend, but if Lew doesn’t there’s a decent chance that his son, Keith, will. The younger Wolff is the current VP of venue development, the same title Lew had when he was hired by Steve Schott and Ken Hofmann in 2003.

HowardTerminal2a

Howard Terminal ballpark site rendering (MANICA Architecture)

The tour is being characterized as “hush-hush,” so don’t expect much coming out of it in the way of a statement or anything else. The A’s environmental and legal team will have questions for Port staff about the state of the sealed asphalt cap that prevents toxic leaks. Relatedly they’ll discuss the soil and the water monitoring system embedded within. Most importantly, they’ll talk about requirements to get the site ready, including digging up and cleaning up the toxic dirt underneath the site.

It would take too long rehash all of the details, so I’ll provide links to previous posts instead.

Infrastructure will also come up, but much of that won’t be the responsibility of the Port. Any new transit modes that come to the HT area (BART, streetcar) will be the planning domain of the transportation agencies and the City more than the Port. The Port will be largely responsible for getting people efficiently in and out of Howard Terminal. To do this a system of vehicular and pedestrian bridges will need to be envisioned. This is of paramount importance because there will be some limited amount of parking at Howard Terminal that can’t be jeopardized by the presence of a freight train blocking the gate to the property. Additionally, pedestrian will be descending upon the ballpark from points north and east. Unlike the Coliseum BART bridge, which was designed to provide ingress for at most 10,000 fans for an event, the system in place at Howard Terminal will need to support 35-40,000 visitors smoothly.

The tour is part of the process described last year by Lew Wolff as a search for the best site for the A’s in Oakland. Only sites within Oakland city limits are under consideration. Wolff initially gave 6-8 months as the timeline, but chances are that the ongoing tenancy of the Raiders has complicated matters. Now the A’s are looking to the end of the year, though the A’s can’t fall into the trap of choosing first to wait for the Raiders and their Las Vegas plans. By taking steps to study Howard Terminal and perhaps other sites, A’s ownership is showing a more proactive effort than it had shown in Oakland previously. Nevertheless, it would’ve been nice if the folks who backed Howard Terminal for two years, OWB, published their (unfinished) work. Same goes for the A’s and their decade-old research. It would’ve given fans at least some insight into the process, which has been completely opaque from the start.

Manfred strengthens case for Oakland

As has become customary over the years, reporters asked the Commissioner about the state of new venue pursuits for the A’s and Rays. Since Rob Manfred took the mantle from Bud Selig, Manfred has taken a slightly more hopeful and defined stance than his predecessor. Taking that a step further, Manfred today said that he remains committed to Oakland, seemingly indefinitely.

From the AP:

manfred-oakland1

And another Manfred comment from the Chronicle’s John Shea:

manfred-oakland2

Hear that? The commissioner is bullish on Oakland! That can’t be said for any other time since the A’s have been in the Town. Baseball was more concerned about Charlie Finley than Oakland in 1968. Throughout the Finley, Haas, Schott, and Wolff tenures, no one inside or outside baseball talked glowingly about Oakland’s economic prospects. Now Manfred is, and for good reason. By the numbers, Oakland is exploding in terms of real estate values and rents. It’s attracting tech companies and their employees. For the Lodge, Oakland has finally become more than a centrally-located fanbase, it is a healthy market unto itself. What’s more, Manfred likes Oakland’s prospects into the near future. If you’re wondering what took so long, consider the economic prospects of Oakland in 2009.

Manfred continued to push the notion that the A’s should pursue the stadium plan regardless of what happens with the Raiders. He hasn’t gone so far as to set a deadline or mention consequences (for either the A’s or Oakland), but if you’re paying attention, you know that this fall is the time for MLB to make hay with Lew Wolff and John Fisher.

The current CBA calls for the A’s to get off the revenue sharing dole once a new stadium opens. So far, Wolff has pledged to pay for the stadium without requiring Oakland to issue any new debt or raise taxes. But if Wolff and Fisher are going to pay full freight on the stadium, they’re going to need some relief from that debt service. The best arrangement within baseball would be to allow the A’s for the possibility to receive revenue sharing if they hit a shortfall. That shouldn’t be an issue for the first few “honeymoon period” years after the ballpark opens. There are some potentially lean years in the future, so allowing the A’s to stay within the revenue sharing pool could be an effective safety net, especially if the A’s start entertaining larger payrolls normally shouldered by a new stadium.

One other interesting quote came from Manfred:

Baseball is the best economic investment for a city because of the number of home dates it drives.

Unless you’re a Raider die-hard economic denier type (they exist), this is a basic truism – at least relative to football. However, buried in there is the term best economic investment for a city. That could mean infrastructure, or public funding, or a quasi-governmental agency like the JPA to get bonds or loans, or free land, any number of things. That’s an indicator that for Manfred’s belief in and protection of Oakland, he’s going to want Oakland to make its own investment. To what extent is unclear. Rest assured that Manfred will play the bulldog at some point in the future, and he won’t be a pushover. Look at how he’s treating the “threat” of a minimum wage or overtime vs. the economics of minor league baseball.

Wonder out loud threateningly about the future of the minors, an institution where no team pays its players? That’s the lawyer we all know and fear.

The A’s are NOT an obstacle to the Raiders

In the 2014 A’s Coliseum lease, the process for the A’s to vacate in compliance with a new Raiders stadium project was quite clear. Here’s how the stadium project was defined:

‘Raiders Construction Plan’ means a bona fide plan for construction of a new football stadium for the Oakland Raiders on current Complex property, adjacent to the current Complex property, or otherwise located sufficiently near to the Stadium such that it will materially impact Licensee’s operations, which bona fide plan must include, as pertains to such stadium project, a fully executed development agreement with a third-party developer and the Licensor for development of a new Raiders stadium, supported by a non-refundable deposit from the developer and received by the Licensor of at least Twenty Ten Million Dollars ($10,000,000.00).

And the terms for the A’s to leave:

Licensor may terminate this License upon written notice of intent to terminate to Licensee, such termination to take effect sixty (60) days after the conclusion of the second (2d) Baseball Season that commences after such notice. (By way of example, if Licensor provides Licensee with such termination notice on June 15, 2016, this License will terminate sixty (60) days after the conclusion of the 2018 Baseball Season.)

Basically, the Coliseum Authority has to give the A’s at least two full MLB seasons notice, so that they can plan for their next home. To build a stadium, the Raiders and their chosen developer partner would also have to provide a real plan, not just a couple drawings and some empty promises for studies. The point is to ensure that the Raiders and the developer are committed to the project, instead of wavering while pushing harder for alternatives outside the market (Las Vegas, Los Angeles, etc.).

IMG_0359

That’s it. The A’s don’t have any rights or right-of-refusal to develop the Coliseum land, to dispose of the Coliseum debt, or anything else besides playing baseball games at the Coliseum. It is not up to the A’s to determine what land the Raiders can or should use. If the Raiders want to submit a plan to develop the entire complex, part of the complex, or even tear down and rebuild the Coliseum only, nothing is stopping them, especially their co-tenants the A’s. Anyone who say otherwise is lying.

Today, Oakland Mayor Libby Schaaf took steps to correct a report by Matier and Ross from the weekend. Here’s her statement:

‘Today’s San Francisco Chronicle contains inaccurate information I need to clarify. On May 23, I proactively contacted NFL Commissioner Roger Goodell to update him generally on what we’ve felt have been productive conversations with Raiders’ negotiator Larry MacNeil.’

‘Having learned from what I believe was a past mistake of awarding an exclusive negotiating agreement to a developer not approved by the Raiders, I wanted to assure the Commissioner of my commitment to keeping the Raiders and NFL at the center of our efforts.’

‘I did express to the Commissioner my interest in continuing discussions with the Ronnie Lott/Rodney Peete group and asked how the Commissioner would view my taking more meetings with them.’

‘The Commissioner encouraged me to explore all avenues for partnership that might result in a successful project for Oakland, the Raiders and the NFL, assuming we not give away any rights without clear Raiders’ support. That is my intention in resuming discussions with them.’

‘I continue to believe the Raiders can develop a new stadium in Oakland that is responsible to the team, its fans, the NFL and the taxpayers of Oakland. Oakland has worked hard to contribute the entitlements, development opportunities and infrastructure funding to our shared vision of a stadium-centered development at the Oakland Coliseum. I’m committed to continuing to work hard to realize this vision.’

Smart move by Schaaf not only to get ahead of the story, but to also control the messaging. This statement doesn’t waver from any previous public statements made by Schaaf since the demise of Coliseum City. Certainly there are other talks happening in private. The City and County still haven’t finished the the buyout plan for the Mt. Davis debt. She knocked down the characterizations in the M&R piece, instead positioning the talks as part of an ongoing process instead of a chess match.

A Raiders stadium is not going to proceed on a ridiculously fast track as we’ve seen in Cobb County for the Braves or in Vegas for the UNLV-Raiders stadium. There are too many details, too much complexity. That’s why the whole Raiders are stuck because of the A’s lease reeks of an exercise in blame assignment. It’s going to take a while. The process of untangling all of the agreements and leases while minimizing impact on current tenants will be messy. Besides, Davis doesn’t have the coin to accelerate a project the way the Yorks did in Santa Clara. Maybe, just maybe, that’s a good thing. We have seen what happens when a project is improperly rushed.

O.co tells it goodbye

After a five year run, internet retailer Overstock.com and the JPA are calling it quits on their naming rights deal at the Coliseum. The deal apparently was not terribly lucrative for either side. The JPA realized $2 million a year, making at best a slight dent in ongoing debt and operations costs. For Overstock, which more or less stopped using O.co in the US, the name was more a source of confusion and mild derision than revenue growth. Here’s how confusing the name situation was and still is:

Why is Overstock.com known as O.co internationally?

Over the last few years, Overstock.com has expanded to countries all over the world. However, we discovered that “overstock” doesn’t always translate well. To minimize the confusion created by translating the word “overstock” into other languages, we decided to use O.co for our international sites.

So many welps. At least Overstock has found some success partnering with the A’s, so their partnership will continue. As for the stadium, I and most everyone I knew called it the Coliseum. Just as we didn’t call it the Network Associates Coliseum or McAfee Coliseum (or even UMAX Coliseum), we didn’t use O.co and probably won’t use any future name either. I can’t blame the JPA for trying to get some revenue out of this, but they can’t blame the fans for holding on to the edifice’s rightful, classical name. Even the downright bureaucratic sounding “Oakland-Alameda County Coliseum” has its own air, or at least Chris Berman thinks so.

Frankly, when you go through so many names, it’s probably time for a new ballpark.