The other day Wendy Thurm asked me if there was a page of links and material related to Coliseum City that she could check out. There wasn’t, so I took some time to create one. The result is a curated, reverse chronologically-ordered list of posts, with a brief overview of the project. The link is simple enough:
There’s a new link in the sidebar as well, so you can reference it after this post disappears. Eventually I’ll do the same for other sites, but it will take awhile.
It’s been awhile. Today’s unusual joint meeting of the Oakland City Council and the Alameda County Board of Supervisors was the first such joint session in several years. It’s also been more than a couple of years since I wrote a post titled The adult conversation, which implored Oakland (and Alameda County) to start talking about what it will truly take to keep the pro sports franchises in town, and what it might mean to lose one or more of them. After watching today’s proceedings, I can say that we’ve had our first session, one of many to come.
If you were an unabashed supporter of Coliseum City, things didn’t get off on the right foot as AlCo District 5 Supervisor and Board President Keith Carson demanded to know the state of the Coliseum’s outstanding debt. Oakland City Council President Pat Kernighan tried to reel the discussion back in, but Carson insisted, and eventually he got what he wanted – a plain telling of debt for both the stadium ($113,790,000) and arena ($90,290,000) by County Auditor Pat O’Connell, who also happens to be the JPA’s auditor. That’s $200 million combined for the complex, though that figure goes down every year thanks to a $20 million annual debt and operating subsidy paid by City and County. Carson emphasized that there will be no future project if debt isn’t addressed first. The debt may prove to be a structural problem, since whatever public borrowing has to be made for infrastructure or other uses will be on top of or consolidated with the existing debt. The City and County want the teams or the private development group, BayIG, to cover that debt as part of the plan. Incidentally, Carson’s district covers Berkeley, Albany, and much of Oakland.
The debt talk lingered for 10 minutes, then Kernighan got the discussion back on the rails. Assistant City Administrator Fred Blackwell gave an overview of the current situation, with the renewed leases for the Raiders and A’s, their desires, and the Warriors’ plans. Blackwell said that the funding gap for the Raiders stadium, which he called a “sunken cost,” was $400-500 million after the Raiders’ contribution. AlCo Supe Scott Haggerty cast doubt on the viability of the three venue configuration of Coliseum City, noting that so far only the Raiders have been willing to listen. Haggerty suggested that the most effort should be put towards the Raiders’ venue because of that reality, and that the A’s, who don’t even have a set date for their Phase III ballpark, could easily show that information to MLB and say, “we’re not even on the radar.” CM Desley Brooks, a previous JPA Board member, expressed doubt in a different way, citing the need for multi-use venues instead of single-sport venues. Brooks was also concerned that the project wouldn’t pencil out, asking for a pro forma for that configuration (and others, presumably).
Next up in the presentation were two members of Oakland’s Office of Neighborhood Investment, Larry Gallegos and Gregory Hunter. Gallegos gave more detail about the project’s phases and master plan. Due to the photocopied quality of the images, I skipped over this slide initially. Upon closer inspection, something needs to be explained further.
View of Coliseum City development phases
The top image, Phase I, shows an outdoor football stadium, some ancillary development, and outlines for the “spine” of the project and the ballpark. The next image shows a dome on top of the stadium and the spine in place. Hold the phone – is the dome part of Phase II? There’s no other mention of a dome anywhere else in the presentation, nor was it brought up during today’s session. That dome, assuming that it is part of Phase II, is no trivial matter at $300 million to construct. Oakland Mayor Jean Quan has been pushing for a dome, and while the interest in holding conventions and other types of events is understandable, it seems like this rather important detail was merely snuck into the preso with no explanation whatsoever.
Discussion then centered on the phases and once again, the venue configuration. Blackwell admitted that if only the Raiders’ stadium were built, ancillary development potential may be limited as few examples of such a plan were found. The limited number of football game dates contributes to this problem. CM Rebecca Kaplan, a staunch supporter of Coliseum City, talked up the need for more density within the project as that’s where the payoff is. Of course, that brings to mind the question of whether Coliseum City is even feasible if it never goes past Phase I. In addition, how dependent is the project on Phases II and III to provide enough funding for everything? Those questions won’t be answered until the spring.
Mayor Quan repeated her usual hackneyed sports metaphor and pushed for more information. If that’s the case, why did this meeting occur because of a letter from Carson to the City of Oakland? Quan, who hastily made her remarks before heading to the airport, is supposed to be the champion of this project. Yet Kaplan is clearly the more informed, more passionate advocate. Someone desperately needs to grab this thing by the reins and control it, as it’s considerably late for all this confusion given the very tight timeline imposed on the City and County. CM Libby Schaaf was silent during the session, just hours after she filed papers to run against Quan for mayor in 2014.
Hunter talked about the goals and key elements of the project, one of which is the property transfer element. It’s unclear what that means. City has indicated in the past that it’s not willing to give away land, and may not even be interested in selling land. Unfortunately for them, the only valuable resource the JPA has at its disposal is land. Discussion of this topic was deferred to the DDA, though it will clearly become a hot topic before then.
Members of the public spoke, followed by questions and remarks by members of the City Council and Board of Supervisors. General bewilderment gave way to soapbox speeches. CM Larry Reid, already on the outs with the JPA, claimed that Quan took credit for his concept while calling Coliseum City “insane.” Supe and JPA board president Nate Miley asked if there had been an appraisal on land the JPA owns. Hunter said it wasn’t. Miley expressed frustration that developer BayIG hasn’t put down earnest money to kickstart some of these studies. Blackwell said that only recently the agreement was finalized in which BayIG (Colony Capital & HayaH Holdings) replaced Forest City as the investor group. Miley then dropped a mini bombshell when he asked if the City could buy out the County’s half of the JPA. Blackwell laughed it off, replying that the City didn’t have the resources to pull off such a move. Nevertheless, it’s quite telling that Miley could even suggest that the Coliseum is such an albatross that the County would be fine divesting its share. There’s also a situation in which the County could buy the City’s half. Judging from the across-the-board sentiments from the Supes, that seems even less likely.
Other notes:
As the first substantive meeting of this kind for Coliseum City, it was bound to be at times painful and awkward, and it sure delivered. That’s part of the process and a welcome one, because there’s no way in hell this thing moves forward without much greater detail. Everyone on the dais was keenly aware of the political fallout that could occur with a bad deal. The Board of Supervisors felt that Oakland was leading and dragging them into the deal, which brought about Carson’s letter and this session. There was a general consensus that communication about the project has been poor. Right now there’s a lot of skepticism to go around, most of it healthy. Project proponents have every opportunity to whip up sentiment and numbers to back their claims of renaissance and jobs. As long as the numbers are there, Coliseum City has a fighting chance. If it doesn’t pencil out, that information and the new short-term leases will conspire to make MLB’s and NFL’s decisions easy. And they’ll make today’s recriminations look like a civil dinner party.
Update 11/25 9:10 AM – Resolutions passed nearly unanimously, with one vote against.
@Athletics extension includes passage prohibiting “unfactual” statements about @OdotCoCOLISEUM. #oaccamtg
— Steven Tavares (@eastbaycitizen) November 25, 2013
#Oakland CM Larry Reid tells Coliseum City lead investor to “show me the money.” #oaccamtg
— Steven Tavares (@eastbaycitizen) November 25, 2013
Commish Goodwin says Coliseum Authority members labeled both deals less than satisfactory. “I don’t vote for bad deals.” @Athletics @RAIDERS
— Steven Tavares (@eastbaycitizen) November 25, 2013
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Original post from Saturday:
In your typical Friday disclosure before a hastily called meeting, the Coliseum Authority (JPA) released its agenda for a Monday board meeting in which it will vote on short-term lease extensions for both the Athletics and Raiders. It’s funny to see how the negotiations have progressed. The A’s offered up a 5-year deal last year which the JPA ignored because it thought it had leverage, only to be that perceived leverage taken away by MLB two weeks ago. The Raiders have talked up a long-term deal, but only if it came with a serious plan for a new stadium. The resolutions that the JPA board is looking to pass will undoubtedly amplify the uncertainty surrounding the two franchises. Highlights:
It’s good to see that the parking issue will be resolved soon. Apparently the A’s are raising parking prices for 2014, which makes the actions seem linked. The big takeaway is that the JPA caved on concessions. Under the new terms, the A’s have the right to choose a new concessionaire, whose contract may long extend past the A’s stay in the Coliseum. However, you have to think that any concessions contract has to factor in the significantly lower value of the Coliseum should the A’s and/or Raiders leave. Yes, this could mean Aramark is replaced by someone else.
Also wrapped up in the Raiders’ extension language is something that I’d like to call the Santa Clara clause.
7.5 Additional Payments for Use of Permanent Training Facility and Training Site. If the Raiders announce a relocation or sign a lease to play football games outside of the City of Oakland or Alameda County for the 2015 season prior to March 1, 2015, then, commencing on March 1, 2015, Raiders shall have the option of continuing to use the Permanent Training Facility and Training Site for up to twenty-four (24) months, up to and including February 28, 2017 as determined in Raiders’ discretion and Raiders shall make an additional payment to Licensor each month for continued use of the Permanent Training Facility and Training Site in an amount equal to the fair market rental value of the Permanent Training Facility and Training Site on a monthly basis, as determined by a mutually agreeable licensed commercial real estate broker based on comparable rental space. Raiders and Licensor agree that the fair market rental value shall not exceed $525,000 per year. In the event the Raiders are engaged in good faith discussions concerning an extension of the Operating License or other arrangement for the Raiders to play future Football Events in the OACC Stadium as of March 1, 2015, any obligation to make payments shall not commence while such discussions are continuing and the twenty-four (24) month period and obligation to make additional payments shall begin when Raiders agrees to play football games at a location other than OACC Stadium for the 2015 seasonal provided, however, that if Raiders agrees to play football at such other location, Raiders shall pay such rental payments retroactively from March 1, 2015.
Got that? The Raiders won’t be charged to use the Alameda headquarters as long as they’re in talks about Coliseum City, even if they’re playing somewhere other than the Coliseum for 2015 and 2016. If the Raiders play elsewhere while using HQ and aren’t in talks over Coliseum City, they pay $525,000 annually. Obviously, the only place where they could play in this scenario (and while the Coliseum is demolished, presumably) is Santa Clara. UC Berkeley is forbidden by legal settlement from hosting NFL games, and Palo Alto would sue Stanford to high heaven for even considering it.
Both extensions should be easily passed, unless one or more of the commissioners complain that the terms are too favorable to the teams. The teams are effectively trading rent payments, and the JPA’s incoming revenues will not make much of a dent in ongoing debt service. At least the JPA will get the parking revenue they’ve clamoring for, which at the very least should help pay for additional Coliseum City studies or minimal prep work. As for scoreboards – you weren’t banking on that, were you?
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P.S. – The resolutions would have to be passed by Oakland’s City Council and Alameda’s Board of Supervisors shortly after JPA approval.
The late 60’s was a tumultuous time in American history, as we all know. Baseball, a notoriously conservative game, was starting to make its own moves in concert with the times. Two decades after baseball became integrated, a influx of talent prompted MLB to think expansion. The A’s and Braves’ moves to Kansas City and Milwaukee, respectively, were considered half-measures because they could be accommodated by train travel. When the Dodgers and Giants moved to the West Coast, planes became a necessity. That opened the door to the rest of the frontier, with numerous growing cities selling Midwestern and East Coast owners on the virtues of moving to new ballparks and wide open spaces.
Charlie Finley was brilliantly chronicled doing his part to hasten this change in his biography, which was published in 2010 and I’ve been rereading for the last week. Finley was considered the first owner to truly play the ransom game with a municipality, as he did in the mid-late 60’s. Even as he talked long-term leases with Kansas City pols and civic leaders, he had his eye on anywhere that could’ve hosted a team. Candidates included the South (Atlanta, New Orleans), Dallas-Fort Worth, and the West Coast (Oakland, Seattle).
It was Finley who pushed Kansas City Chiefs owner Lamar Hunt to agree that the new sports complex southeast of downtown KC should have separate baseball and football stadia, an against-the-grain move for the era. Finley, who long felt the A’s were being cast aside for the new football team, saw this as an equal measure. Yet Finley gave little support to the stadium plan, even though area voters passed it during the summer of 1967. By the end of the season the stage was set for a bidding war over the A’s that served nothing other than Finley’s ego.
Local interests tried to get Finley to sell, but he wasn’t interested. Finley had spent a bunch of insurance profits on bonus babies, so there was an interest in seeing his team through. That eventually occurred with the threepeat World Series wins in 1972-74. Finley also named a price that no one local could match: $25 million. He felt he had been previously mistreated by Kansas City – which he was based on previous KC Muni lease discussions – and set forth to burn all the bridges. As the offseason neared, KC interests turned their attention towards an expansion team. Finley prepared a presentation for AL President Joe Cronin and the other team owners that favored Oakland over Seattle and KC. The AL powers approved the Oakland move, in turn granting expansion franchises for KC and Seattle for 1971.
However, Missouri Senator Stuart Symington was furious over the three-year gap between the A’s leaving and the expansion team starting up. He took a meeting with Cronin and threatened to open hearings on baseball’s antitrust exemption. Taking the threat seriously, Cronin promised a 1969 expansion date, leaving a year gap. That meant that the team would have to play at Muni for a few years. It also meant that Seattle’s club would have to play at Sicks’ Stadium for an indeterminate period. Sicks’ Stadium was already deemed inadequate and whose condition was considered a major factor in Seattle losing the Pilots to Milwaukee (and Bud Selig) after only one season.
What if Finley had been magnanimous and relented? He couldn’t admit that having a future stadium all to himself in KC was better than having to share in Oakland, but that had to be part of his calculus. What intrigued Finley about Oakland was the promise of greater radio and TV revenues, which is ironic considering the A’s difficulties in that realm the past 20 years. If Finley kept the team in KC, KC would’ve gotten the World Series champs of the 70’s, and Finley probably would have sold to local interests in the late 70’s once he saw that baseball’s economics were surpassing his ability to compete.
Seattle, which had rejected previous votes on a domed stadium to attract a baseball team, was forced to approve one once they were granted the expansion franchise. Because they had no choice but to accelerate their efforts, Pilots ownership lost their shirts during the 1969 season, filed for bankruptcy, and sold to Selig when no local ownership groups stepped up. The Pilots relocated, which brought forth a lawsuit from Seattle against MLB, which led to the expansion Mariners in 1976. If the team had been given more time, it’s possible that needed improvements for Sicks’ would have been made to keep ownership and fans happy. Even though the domed stadium had faced stern opposition, it eventually was approved and opened in time for the 1976 season. That opening would’ve been earlier had the team already been in place. Milwaukee would’ve gotten an expansion team to go with Toronto in 1976 – unless the team was awarded to Denver or New Orleans.
As for Oakland, under this alternate scenario they would’ve had the team in 1971. Perhaps it would’ve been called the Oakland Oaks, or the Oakland “Baseball” Raiders (doubt it due to Al Davis’s desires). It definitely wouldn’t have been called the Oakland Athletics. The burgeoning talent that Finley stockpiled would’ve won titles in KC, and Oakland would be building from expansion castoffs. Another thing to consider is that the expansion draft in 1968 was for four teams (Montreal & San Diego were planned, Kansas City & Seattle were rushed) which created an enormous dilution of talent. A draft in 1970 would’ve been less painful for the expansion teams. Perhaps A’s ownership would’ve been more stable over time. Maybe not. The Coliseum still would’ve been relatively new and modern, and without Finley’s constant moving threats, the fan base could’ve grown more naturally – though during the 1968 season ticket sales were not exactly impressive.
After studying all of this for a while, it’s easy to understand the hierarchy of who has the power when it comes to franchise moves and stadium negotiations:
That structure has remained throughout the eons, and is unlikely to change anytime soon.
Lost in all the owners’ meetings, MVP awards and other sports news was a little story out of Sacramento. It involves a stadium for a second-tier soccer team – that will be built in five months.
That’s right, five months. And it was only announced today. The stadium will have a capacity of 8,000 and be constructed on a parking lot at Cal Expo for the Sacramento Republic soccer club. The Republic is aiming to become a future expansion team in MLS. By building this 8,000-seat facility (nearly the size of Buck Shaw Stadium), the hope is that MLS will be impressed enough to grant the franchise’s “promotion”, leading to a deal for a larger MLS stadium in a few years. The neat trick to the deal is that the club is partnering with Cal Expo’s concessionaire to build the stadium, a potential win-win for both parties.
8,000-seat soccer-specific stadium concept at Cal Expo
How could all of this come together in only five months? The stadium is considered temporary. When we envision stadium projects, we usually see the dark side of environmental review because these structures are meant to last for 30-40 years or longer. However, if you build a temporary facility, you can largely sidestep CEQA law. After all, the point of CEQA is to understand and mitigate against long-term environmental impacts, so if you can prove that your project won’t have a huge impact, you may be able to get a CEQA exception. One of those exceptions is for temporary or seasonal structures. They’re planning to put in the stadium, which will only be used 15-20 times per year during a 6-7 month window, and take it apart when the new stadium is ready. Project proponents can argue that there’s little impact since the stadium site is already a parking lot. Stretching the definition of temporary to nine years in this case is a little suspect, but there isn’t a hard and fast definition to use. Here’s what the law says:
15304. Minor Alterations to Land
(e) Minor temporary use of land having negligible or no permanent effects on the environment, including carnivals, sales of Christmas trees, etc;
Similar exceptions are available for additions to existing structures, such as the musical chairs situation I described last month. It would involve temporary additions to Raley Field and San Jose Municipal Stadium. A tougher case could even be made for a larger, 20,000-seat ballpark in San Jose. Let’s say that there’s some currently undeveloped or underutilized but properly entitled land somewhere within San Jose city limits. It could be publicly or privately owned. If the A’s struck a deal with the landowner, they could get permitted to build a temporary ballpark on that land. Sites could include the Airport West site near the Earthquakes stadium (though we’ve seen the difficulty building there), the County Fairgrounds, or other privately owned land. There are even sites near downtown.
That said, we’re at a late enough stage that it’s practically impossible to pull off a temporary new ballpark in time for the 2014 season. Expanding Raley would make more sense in that timeframe. As transient the whole thing sounds, it’s definitely a path of relatively little bureaucratic resistance as long as you get willing partners. Since it wouldn’t involve public money, a referendum wouldn’t be required.
As the hubbub and posturing over the Coliseum lease subsides, today we got some good news: the A’s spring training schedule has been released! It’s a momentous spring, too, since it’ll be the last at venerable Phoenix Municipal Stadium before the A’s move 10 miles east to Hohokam Stadium in Mesa. Hohokam is vacant in 2014 as crews make changes to accommodate the A’s after the departure of the Cubs.
Speaking of the Cubs, they’re set to open their Wrigleyville West, also in Mesa, in 2014. That’ll be worth checking out. The A’s play only one split-squad game at the Cubs’ yet-unnamed ballpark on March 5. Even if you miss that, don’t fret because the great thing about the Cactus League is that all of the parks are within a reasonable driving distance of each other. While there’s no neat sideshow like the World Baseball Classic in 2014, there’s still plenty to watch.
If you’re interested in visiting, remember that the A’s work out at the ballfields at Papago Park, which is nearly 2 miles north on the other side of the park from Muni. One thing I’ve never done is walk from Papago (where minor league camp games are held) to Muni, so I might do that this year.
Oakland Athletics 2014 Cactus League Schedule (last 3 games are Bay Bridge series). All times Pacific.
Looking to check out several Cactus League ballparks? Consider that the 10 parks are set up in two clusters of five, to the west and east of downtown Phoenix. The east cluster, which Phoenix Muni is part of, is less spread out than the west cluster. Best to divide and conquer.
I’m targeting the 4-day weekend of March 13 through 16. The A’s play a rare night game at Muni. If I get there in the morning I can take in a game nearby in the afternoon before heading to Muni. There’s also a split-squad opportunity on Sunday the 16th, starting with a game in Muni and ending with the A’s taking on the Giants in Scottsdale.
There’s no league wide schedule available yet, as the teams are given the responsibility to arrange their schedules among themselves and publish when they’re ready. At this early stage, only a handful of teams such as the A’s and Giants have published theirs. Soon I’ll get all of them and put together a grid, the same way I did for the regular season.
One last note – keep in mind that Daylight Savings Time goes into effect on March 9, about two weeks into the schedule. That means all games before March 9 are an hour ahead of the Pacific time zone. From March 9 forward, games in Arizona are at the same time as California because Arizona doesn’t observe DST. The schedule shown is in Pacific time. If you’re planning to attend a game before March 9 and are traveling the same day, remember the time change.
Last week I received a flyer from the A’s urging me to get my season ticket plans wrapped up soon, as early as mid-November. Thanks to a Sunday report from Matier & Ross about MLB’s entree into the Coliseum lease discussions, I expect the A’s Ticket Services department to get a lot of angry, misdirected phone calls starting tomorrow morning. And I feel bad for them for having to deal with it.
The fact is that until recently, MLB has stayed out of the lease negotiations at Lew Wolff’s behest. As the lease comes closer to expiring with the two sides still far apart on the terms, baseball has decided to start playing the heavy. As we’ve seen in Miami and many other cities, MLB doesn’t play nice. That doesn’t mean that they’re going to start asking for hundreds of millions for a ballpark. Instead they’re playing the leverage game, threatening to move the A’s across the bay to AT&T Park if the Coliseum Authority won’t relent.
We’re told MLB is also demanding that the Coliseum give the A’s just a two-year lease extension – not the five- to eight-year deal the authority has been pushing.
The short-term lease would give the A’s more flexibility should the team’s owners swing a deal to move to San Jose – or beyond.
Let’s be clear about one thing: this is not MLB’s preferred option. They’d rather have the A’s and Giants play in their own ballparks, because getting them to share is messy when it comes to logistics, scheduling, and revenue sharing. While sharing has happened in the past, it hasn’t happened in almost 40 years. Plus the last thing MLB would want is to have a situation where the experiment goes so well that the Bay Area populace is convinced that there’s no need for two parks, or that the A’s seriously eat into the Giants’ revenue. Just as in other stadium negotiations, MLB has never been afraid to rattle sabers when it feels it can work to the benefit of one of its franchises. From this point forward, don’t expect anything less. Chances are that the JPA will buckle, because they know that the A’s tentatively playing away from Oakland can easily transform into the A’s permanently playing away from Oakland. From MLB’s standpoint, this is a question of loyalty. Oakland and Alameda County shown repeatedly that they’re willing to spend money and make things work for the Raiders. They have also demonstrated that they’ve been willing to move the A’s (and MLB) to the back burner at the most inopportune times. If the JPA doesn’t make concessions for the A’s, that’s just more proof that they aren’t truly willing to make the A’s a priority, which would make MLB less motivated to back Oakland’s efforts to forge a long-term deal. Raiders owner Mark Davis seems to prefer that they start working on a replacement Coliseum on the site of a demolished Coliseum, which if granted would leave the A’s without a place to play. Without a lease extension tied to a well-developed stadium plan, the Raiders would prefer to go year-to-year. The A’s would like to do a five-year deal with early termination if they’re impacted by construction of a new Raiders stadium. The challenge for the JPA is to put together a deal that caters to MLB’s needs while not jeopardizing their relationship with the Raiders and the NFL.
For the time being, Giants chief Larry Baer has stayed silent, probably at Bud Selig’s request. To say they wouldn’t accommodate the A’s would torpedo baseball’s plans and leverage, the same way Wally Haas and then-AL President Bobby Brown rejected Bob Lurie’s plans to share the Coliseum while SF figured out a downtown ballpark plan. That occurred in 1985. Now that MLB is a singular governing body with less stated conflict between the two constituent leagues, the Commissioner has the ability and power to influence the Giants. However, Selig’s track record has been to stall regarding the A’s for nearly five years. Now that a “manufactured” crisis may arise, could Selig be more inclined to come up a with a solution? I’m not holding my breath.
Logistically, sharing the stadium could be difficult for the teams. Naturally there are only two clubhouses at AT&T Park, unlike the more flexible setups at many arenas and new football stadia. The visiting clubhouse would have to be converted into the A’s temporary home while the Giants’ clubhouse would be used for A’s home opponents. There are also 10 potential date conflicts (not 9 as M&R reported): May 12-14, May 26-28, June 13-15, and July 3. That last date is the end of a Giants homestand and the beginning of an A’s homestand. Offloading those conflicts to Raley Field would be difficult because the River Cats already have the first two series and July 3 already booked at home. Day/night doubleheaders would be difficult to make work because of game days can easily stretch beyond eight hours for players and personnel because of warmup/reporting times.
Then there’s also the appeal for AT&T and the various other sponsors in China Basin. AT&T would undoubtedly love double the home dates and exposure. So would Virgin America, Intel, and ironically, GAP competitor Levi Strauss. That and many more subjects (concessions shares, non-game event revenue, ticket pricing) would be up for debate. In the end, the A’s would pay a handsome rent payment and surrender a big chunk of non-ticket revenues. Both teams would deduct stadium expenses against their revenue sharing payments. One way to look at is that the A’s rent would effectively be a rebate against the Giants’ revenue sharing payment – assuming it was structured to fit within the CBA appropriately. Selig doesn’t seem inclined to force the Giants to share, but he can work with the rest of the owners to make it worth the Giants’ while.
Already I’ve seen a lot of anger from fans swearing that they’d never see an A’s home game in SF, or that they’ll cancel their season tickets posthaste. There’s another angle to consider if the A’s were given this two-year window at AT&T Park. The A’s have never called a modern ballpark home, so any serious revenue-generating potential at a new ballpark remains theoretical at best. What if the window was MLB’s opportunity to prove (or disprove) the A’s viability as the second team in the Bay Area? It’s not the same as having a new ballpark to themselves, but the better amenities and location should be attractive to many fans and companies that normally don’t attend A’s games en masse. After all, the city with the most ticket-buying A’s fans (number, not percentage) is San Francisco, not Oakland or San Jose. If the two-year window fails to positively affect the A’s bottom line, The Lodge may be more inclined to allow the team to move out of the Bay Area. While M&R hinted at a move as a product of failed stadium plans, I think this could be a bigger reason.
MLB has entered the fray, and they’re getting ready to lay down the hammer. For that we can thank A’s and Giants ownership for their stubbornness, Oakland and Alameda County politicians for their lack of urgency, and Bud Selig for not resolving this sooner when he had all the time to do so. Unless a Coliseum lease gets struck in the next month, this is only going to get uglier. A “silly” idea like sharing AT&T Park may turn into something quite sensible. The big issue looming is the endgame, which as Ray Ratto points out, is the can that gets kicked down the road for two years.
In what will probably become an annual study, Bloomberg released MLB franchise valuations today. The timing, prior to the first World Series game, stands in contrast to Forbes’ release, which is usually on Opening Day. While there will continue to be heavy debate as to the veracity of the valuations (MLB financials are not public data), having a second set of numbers released is good at least for discussion purposes. Besides, the bubble effect we’ve seen with valuations the past several years has allowed Forbes to set a baseline for franchise sales, whether teams and leagues want to acknowledge the data or not.
There’s also a very useful, colorful, interactive info graphic that breaks down both franchise valuations and revenue sources. The former includes $110 million for each club’s 1/30th share of MLB Advanced Media, the league’s digital media arm. The latter indicates which teams have shares in regional sports networks, along with revenue sharing payers and receivers.
The A’s ended up 26th in the rankings with a $590 million valuation. That’s 26% higher than Forbes’ spring figure. Methodology is rather murky, but the two outlets seem to be using similar types of data (if not datasets). Bloomberg also has the A’s tied for 1st (with the Royals) among revenue sharing recipients with $36 million. That’s more than the $33 million the A’s brought in via ticket sales. The Giants, who were valued at $1.23 billion, paid in $21 million to the $480 million revenue sharing pool. The Giants may be worth more than twice the A’s value, but the media revenues aren’t as big a gap as you might think. Bloomberg has the Giants at $88 million via their evergreen deals with CSN Bay Area and KNBR, whereas the A’s pulled in $65 million thanks to new deals with CSN California and Entercom’s KGMZ over the last few years.
Curiously, quotes from A’s PR man Bob Rose and Giants control person Larry Baer provide some owner insight. While in the past Lew Wolff may have argued against the numbers due to perceived discrepancies in local revenue (Wolff thought they were overstated), Rose offers up the notion that the valuation may be low. If revenue is $175 million, Rose argues, then the team is worth 4x that amount, or $700 million. Previously I had multiples at 3x for low-revenue teams and 2x for high-revenue teams. Perhaps a rethinking is in order.
If Rose is correct, the cost to buy the A’s and build a stadium would cost upwards of $1.2 billion, not including land and infrastructure. Chances are they could get it, considering the attractiveness of MLB revenue streams. Of course, future value of the A’s would be heavily tied to whatever ballpark deal is made. If the A’s stay in a ballpark they largely have to pay for themselves, that would limit revenue potential. A publicly subsidized venue would make things easier on the A’s balance sheet.
All in all, it’s more reason for Lew Wolff and John Fisher to hold onto the club despite the ballpark territory stalemate. Then again, without a lease we may see that coming to a head soon enough.
Two weeks after a potential investor group headed by Colony Capital and Rashid Al Malik’s HayaH Holdings was revealed, that same group was formally approved as part of the master developer team. With that approval comes a 12-month extension on the ENA (exclusive negotiating agreement) to figure out all most of the details, plus a 6-month administrative extension if needed.
That’s the news. Now let’s try to understand what has to happen next.
The City of Oakland has about $250,000 remaining in money it assigned towards Coliseum City studies. Bay Investment Group (BayIG), the Colony/HayaH partnership, will put in $500,000 towards a market study to determine the viability of Coliseum City. This is important since BayIG is expected to push that study to its own individual investors, who as a group will decide if/how to move forward. The forthcoming study is not to be confused with AECOM’s feasibility study, which was made available during the summer.
Over the next 12 months, the public and private sides have to make good on a set of deliverables. Some within the City, especially CM Larry Reid, wanted a shorter 6-month + 6 month extension instead of the 12 + 6 deal that was approved. Reid’s concerns, aired last week in a committee meetings, were that 12 + 6 was too long a period and didn’t show the necessary urgency to the NFL and the Raiders. Raiders owner Mark Davis has indicated that he wants a lease/stadium deal in place shortly after the NFL season ends.
Nevertheless, Coliseum City will move forward on its own timeline because BayIG asked for 12 + 6 in order to get everything in order. A short list of deliverables looks like this:
These items, along with additional smaller ones, should lead up to preliminary project approval in whatever form it takes, plus a DDA (disposition and development agreement), the contract fine print on how Coliseum City is built, including costs, financing, and timelines. Zennie Abraham caught up with Oakland Asst. City Administrator Fred Blackwell at the meeting to summarize what’s next.
Simply put, BayIG just bought the City of Oakland and Alameda County some time. However, it’s easy to see how the list of deliverables doesn’t exactly line up with the timeframe that Davis is trying to dictate. Moving forward, the issue is whether the dev team can show significant enough progress to get Davis to sign on and sign a separate lease at the Coliseum that would keep the Raiders in Oakland throughout the transition. Then again, that part’s a little confusing too. When Raiders uber-fan Dr. Death asked JRDV’s Ed McFarlan when the earliest groundbreaking could be he received this rather optimistic response.
He said ground breaking for coliseum city would happen in September if all goes as planned
— Dr.Death (@26DrDeath) October 14, 2013
That seems unlikely given the scope of the project and all the little details that need to figured out. Is that groundbreaking for a new stadium alongside the existing Coliseum? Certainly it couldn’t be demolishing the current Coliseum and building on the same site, since the demo itself would take months and would displace both the Raiders and A’s. While BayIG indicated that it will reach out to the A’s and Warriors to gauge their interest in Coliseum City, it’s extremely unlikely that either team will commit. Despite recent setbacks, both teams are focused on their San Jose and San Francisco plans, respectively. Plus they’d have to commit without all deliverables in place, especially that market analysis. If you think that Lew Wolff would sign a short-term lease without knowing the development’s impact on the A’s, you’re crazy.
For the next 12 months, BayIG has control over most of the process. They could press the deal if they see encouraging signs, or they could kill it if the market analysis looks bad. They’re in great shape considering that they’ve only committed $500,000 towards the project – chump change for billionaires. Just as important, they don’t have to adhere to a specific vision of Coliseum City, though they’re positioning themselves to have at least the football stadium in place. Consider last night’s report on the agenda item:
The Coliseum City Master Plan is providing the basis upon which the City is currently under a separate contract with a specialized planning consultant firm to complete a Specific Plan and CEQA/EIR analysis. The Specific Plan will also identify alternatives to the Master Plan and will consider different development scenarios that will envision zero up to three sports facilifies at the site. Pursuant to CEQA, the separate planning contract will prepare an EIR to address the potential physical environmental effects of the Coliseum City project.
There’s nothing new there, but BayIG is positioned to take advantage of it. There could be a single football stadium, a football stadium and a ballpark, even an arena. At this early stage, it looks like it’ll just be the Raiders stadium, though even that is far from a given. BayIG could find that the best thing to do is to minimize its investment in the stadium, or seek out revenue streams from the stadium or team that could help pay back their investment. The infrastructure cost, which will be borne by City/County, could also prove prohibitively high on top of the remaining debt to be carried at the Coliseum. BayIG could even go with zero venues at the Coliseum. Such a plan would probably not get approval from City since it would represent a white flag. Yet it remains a distinct possibility – if not now, within a few years.
The upside, regardless of your optimism or skepticism of Coliseum City, is that things are coming to a head. Coliseum was introduced more than 21 months ago, and has shown only the most tentative progress until a few weeks ago. Now’s the time to put up, to see what results Coliseum City can yield. No more stalling, and for that we can all be glad.
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Note: The only local mainstream media coverage of yesterday’s news came from CSNBA’s Scott Bair. Seems like everyone else was preoccupied with transit strikes and some other multibillion dollar development in the South Bay which is a lot more than vapor.
UPDATE 2:07 PM – I’ve uploaded a copy of the ruling. It’s worth a read.
Additionally, San Jose Mayor Reed’s office released a statement in reaction to the ruling:
I am pleased that the judge has allowed our case to move forward. Major League Baseball’s unfair and anti-competitive actions are costing San Jose residents millions of dollars in annual tax revenues that could go towards paying for more police officers, firefighters, libraries, road repairs and other critical services.
San Jose filed this lawsuit after waiting patiently for more than four years for a decision from Commissioner Selig. The court’s decision this brings us one step closer to paving the way for San Jose to host a major league ballclub.
Carry on.
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Update from the Merc’s John Woolfolk on San Jose’s antitrust lawsuit against MLB:
judge mostly rules against San Jose in antitrust lawsuit against MLB, sides with city on state tort claims
— John Woolfolk (@JohnWoolfolk1) October 11, 2013
And other tweets:
#UPDATE: San Jose lawsuit against @MLB can move forward on grounds of 'Tortious Interference'. It cannot challenge MLB's anti-trust.
— Raj Mathai (@rajmathai) October 11, 2013
BREAKING: Federal judge grants MLB's motion to dismiss San Jose's lawsuit IN PART. Federal antitrust claims dismissed; state claims survive
— Wendy Thurm (@hangingsliders) October 11, 2013
During the hearing last Friday, Judge Ronald Whyte gave indications that he would back MLB based on the standing issue, while allowing San Jose to rework its case and try it in a state court. MLB had pushed for Judge Whyte to dismiss all claims, including those that could be covered by California’s more stringent antitrust laws. San Jose hoped Judge Whyte would rule that the City had standing, which would move the case forward and start a potentially damaging discovery phase for MLB.
Assuming that the tweets above are correct, baseball’s antitrust exemption remains immune to a legal challenge. Instead the case will be about tortious interference, or MLB’s stalling that has prevented San Jose and the A’s from getting a ballpark built. San Jose claimed initially that this amounted to $1.5 million per year in tax revenue, and could be awarded treble damages as a result. Over 30 years that comes to $135 million, not adjusted for inflation.
If San Jose can force discovery into the dealings of its “Blue Ribbon Commission” and other activities related to San Jose and Oakland, it could also force MLB to make a deal since they’re against any kind of opening of their books. There’s a lot more to the TI argument than standing.
A press conference may be in the offing. If it happens I’ll see if I can head out to City Hall.
For now I’ll end with this Bill Shaikin tweet:
Judge in San Jose vs. MLB writes that baseball's antitrust exemption makes no sense but that he is bound by precedent.
— Bill Shaikin (@BillShaikin) October 11, 2013
Hooray for inertia!
newballpark.org 