Category Archives: Athletics

06.10.11
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Gammons and Rosenthal weigh in on Beane, Oakland

Peter Gammons held court on KNBR’s morning show (MP3), talking about Billy Beane, the two managers named Bob, and the team’s economic predicament. Gammons has never been one to be particularly critical of Beane, so as expected he blamed Beane’s lack of success over the last five years on the A’s status as a low revenue, have-not franchise. When Brian Murphy challenged this by giving the Giants’ (and anti-Wolff/Fisher) narrative that the ownership should spend more because it is the 4th richest in baseball, Gammons replied:

Because nobody goes to the ballpark, there are no TV and radio rights. They’re not gonna lose their shirts. The Oakland A’s either have to move or be (contracted)… They can’t exist in a dump. There’s no chance of succeeding there. When Peter Magowan built PacBell he changed the market forever. Now, it was always a great baseball market. The Giants were always a really good franchise, but when they had those cold nights at Candlestick it wasn’t always a lot of fun. But they changed everything. I still think the Giants are one of the top five teams in the business.

San Francisco is a huge market. Oakland is not. The ballpark is in shambles and it’s in a bad neighborhood. People aren’t gonna go there. There’s no reason for wealthy people to give enough money so that they finish .500 and still lose money.

On this site we’ve occasionally discussed how AT&T Park has adversely affected the A’s. What surprises me is how Gammons so succinctly nailed that point when much of the local media have generally turned a blind eye to it. It’s not about hardcore fans. It’s casual fans. Regardless of how many seats are tarped over and what discounts are available, casual fans don’t come out to A’s games – at least not en masse. And when the A’s suck, there’s little hope for casual fans to show up. They know there’s a scene at China Basin and a buzz around the Giants.

Ken Rosenthal wrote a different take on Beane, wondering how long Beane will want to put up with his annual Sisyphean task. Unlike Gammons, Rosenthal doesn’t hold Beane above reproach. But he does point out the problem all low revenue teams have that we’ve gone over repeatedly:

All GMs swing and miss; it’s the nature of the beast (and not all of those deals appeared to be misses initially). The problem in Oakland — and Tampa Bay and other low-revenue markets, for that matter — is that big misses are almost catastrophic. Low-revenue clubs, unlike their big-money brethren, can’t spend their way out of mistakes.

It makes me wonder if the best way for the A’s to compete is to tank a few seasons to get high draft picks, as the Rays did unintentionally. Frankly, it’s depressing to think about. Rosenthal doesn’t offer any solutions, doesn’t mention San Jose once. I know this much. If the A’s don’t go on a big run towards the end of the season it’s gonna take the shine off Moneyball the movie. At least for me.

Updated 12:12 PM – Gammons also calls Wrigley Field “a dump” and similarly puts Tom Ricketts in a tough spot since he’ll have to go out of pocket to fund Fenway-style renovations to Wrigley.

06.09.11
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What about Bob?

Today’s one of those rare occasions when I will post on the team instead of economics. So here it goes:

Another backup catcher named Bob? At least this one has actually taken a team to the playoffs.

06.07.11
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The Cost of Indecision

It’s been a while since I have posted here. Not that ML needs any help, but I felt like it was time I stepped up and earned the fact that my name gets to appear with his on the side bar.

This desire to contribute didn’t come out of the blue. It actually took root in a recent meeting that I arranged, at my workplace and over lunch, with ML and one Doug Boxer. Many of you know that Doug is the driving force behind Let’s Go Oakland, a group of people who are passionate and committed to keeping the A’s in Oaktown.

While we didn’t really talk about anything that anyone that reads this site with regularity doesn’t already know, I was impressed with Boxer and his straight forward style in discussing both the advantages of Oakland as well as the challenges it faces. I wish many of the Pro Oakland folks that I know were equally as honest about the challenges that face the Town in their pursuit of having a stadium built. Challenges, that while real, are not impossible to overcome if accepted and addressed. Especially when you have smart people working on a realistic solution. In short, if there is a solution in Oakland, Boxer will be part of sorting it out… Even if he doesn’t have all the answers about funding the joint right now, something I think he would freely acknowledge.

After having this more than an hour discussion, I can say a few things with absolute certitude. The City of Oakland has had an opportunity to put forward it’s best ideas. The ideas they have chosen as the best have been listened to. The people of Oakland are fortunate to have a guy like Doug Boxer in their corner. If he can’t help find a way to make it work in Oakland, I am confident saying that no one can, or will.

One of the topics of discussion, something I hoped to glean but didn’t, was what the heck this two year delay has been all about. ML, Doug and I all had our own thoughts, though none of us really know for certain. The reality is that it doesn’t matter, Bud Selig’s lack of foresight has already been extremely costly to our favorite franchise and should offend the sensibilities of all of us A’s fans in the Bay Area. After all, we live in a region with a long history of successful companies that grow from flashes of imagination to household names in the time it has taken for Bud’s panel to do absolutely nothing but “study” an already pretty clear situation.

From Pandora to Facebook, companies in the Bay Area prove all the time that chasing a perfect solution to any problem is a waste of time and detrimental to getting something done. So is sitting on one’s own hands and waiting for a solution to appear. It seems that one of these two scenarios is playing out before our very eyes. Either Bud is waiting for Oakland, or San Jose, to give up so he doesn’t have to force the issue, or he is expecting years of research to come up with a magic bullet to slay the Beast of Where an A’s Stadium Should Reside. Both are foolish.

A brief interlude… As you can probably already tell, I am kind of cranky. That isn’t really anything new for us A’s fans. Really, it’s like we are all building blocks in the 9th Wonder of the World: The Frustrated Pyramid of Oakland. Think about it for a minute, we are the bottom few rows of humongous sandy blocks. We make up the first few layers of frustration as we sit helplessly watching the players flail away. Those same players make up the next few rows of the great pyramid. As they struggle to figure out how a promising season devolved in one week’s time. Decimated pitching staff? check! Underperforming veterans? Check! But most importantly, clearly incapable of carrying out the most important parts of his duties manager? Double check!

I’d throw Bob Geren in as the next level of frustration, but I am not sure how long he is going to be around. Color me skeptical, but when was the last time an owner went on record in support of his Manager only to change his mind not so long after? Maybe, if Bob Geren gets crushed between the pressure of Billy Beane’s frustration at not being able to get a premier bat to come to Oakland and all the grumpy players (players who are grumpy because Bob Geren, himself, can’t communicate or manage a bullpen) it will provide some stress relief for all of us?

And on top of Beane’s frustration we have Uncle Lew. Now, some of you who read here regularly are going to have real trouble trying to sympathize with Lew Wolff, but just imagine the conspiracy angle is true. Imagine Bud invited Lew to buy the A’s so that he could move the team out of Oakland. Imagine Lew playing his part perfectly… Nope no land in Oakland. Nope, $30M later, Fremont won’t work. Hey Bud, time to pull the trigger on that San Jose thing you asked me to get done… Oh, wait.

Now pretend the conspiracy isn’t real (or accept that it isn’t, depending on your view)… Imagine spending a few years reaching out to different people in Oakland, as Lew did. Imagine amassing the magic “binder” of letter’s rejecting the use of places like Howard Terminal, researching how a river of crap flowing beneath the old HomeBase site impacts potential development, and so on and so forth. Imagine having a solution and walking into Bud’s office and being told… “Hold on a minute while we redo everything you have done and let the local press savage you for the next 2 years and take no action to help you move forward either way… Oh, and please keep holding the line for now. Afterall, we are ‘working’ on it.”

Man alive that is a whole lot of frustration from top to bottom! But how about our two fair cities of consideration? Where do they fit in this Great Pyramid of Teeth Grindage? Has Bud’s indecision cost them anything?

First, an election will need to happen in San Jose should that locale be chosen. He had voter support to make it happen. Who knows what he has now? This is the cost of indecision.

Second, he had some momentum in Oakland… A grass roots group of supporters that are willing to make the case for a new stadium doesn’t exactly fall out of trees. How long does a Facebook group and clicking a link to send a form letter keep people’s attention? This is the cost of indecision.

These are just two, of many examples, of the cost of indecision. Bud didn’t capitalize on either. Instead he says “this is a complex situation” and insults our intelligence. That isn’t how you build the most successful internet radio platform. This isn’t how you build a social network with hundreds of millions of users. This isn’t how you should run Major League Baseball.

At Facebook, there are signs posted all around the place that say “Done is Better Than Perfect.” I think Bud needs to visit and catch a glimpse of how business is done these days. At Pandora, I am sure that copyright law policy and advertising sales campaigns and boosting subscription service account holders are all issues worked in unison. No, the “Dodgers and Mets have really screwed up… everything else is on hold” sort of dalliances don’t usually hold muster at companies that own the future.

Having a consensus builder at the helm isn’t exactly like having a visionary running the show. Having a man who can’t make a decision without the approval of those he “leads” is cutting into our fan base. And by our, I mean we. Me and you and all of us who should be preparing for a new yard instead of bickering about where that home should be.

Some other things that are currently cutting into the A’s fandom? Monte Poole’s monthly “Lew Wolff and John Fisher are characters from an Austin Powers film” column. By now, Poole should have been able to write off the A’s as the 30 mile moving carpet baggers or embraced Wolff for getting something done in the East Bay. Instead I have to argue with my friends, who support the same team I do, once a month about how Lew Wolff isn’t Emperor Palpatine and that, no, me pointing that out doesn’t make me an apologist. I will be really happy when I don’t have to read those columns anymore.

By now, our focus could be on how we band together to get Bob Geren the heck out of Dodge. Instead we argue, here and other places, about what Oakland could have done 15 years ago. As if that matters.

By now, some of us could have moved on to not being A’s fans if we so chose. Instead we drone on and on about what Lew Wolff’s intentions were when he bought the team. As if that has any bearing on MLB’s committee.

By now, some of us could be driving down to check out progress on the new yard every other week. Instead we fight about funding models for an imaginary stadium.

By now, we could all be looking at 3D illustrations and picking a seat for our season ticket package. Instead we are nitpicking “projections” of how many thousands of people would be sitting in the tarped off section of the O.co Coliseum.

By now, we could all be celebrating the signing of some free agent with a power bat. Instead we take sides in a debate over whether Scott Boras was telling the truth about why Adrian Beltre didn’t sign in Oakland.

By now, we could be talking about things that are relevant to the future of our favorite baseball franchise. Instead we are in a perpetual discussion over things that are irrelevant.

This is the cost of indecision. Something tells me a bad decision couldn’t be any worse.

06.06.11
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U2 to destroy O.co field

Like the A’s, blades of grass at the Coliseum are often second-class citizens. If you’re planted in the infield you get the most meticulous maintenance and aside from occasional spikes and cleats, and you are likely to last an entire year. On the other hand, if you’re an outfield blade of grass you’re pretty much screwed. You might get until August when preseason football begins, but this year you won’t even get that thanks to this:

Construction for U2's elaborate stage setup over the weekend. Credit: SBNation (Ron Brasil)

I’m sure that the big U2 show will be entertaining, though personally I’ve never been a fan of huge stadium shows (I would pay $1k to see them at the Fillmore or Fox Oakland). Depending on what happens the rest of the A’s current homestand (and the ramifications of it), it’ll be just a tiny bit more depressing to plant my fat ass in my value deck seat next week only to see new, slightly off-colored sod in the outfield. Sometimes the best thing about going to the Coliseum is the expansive grass in both fair and foul territories, the symmetry and postmodern concentric circles. It was One Perfect Green Blanket.

Well, the outfield grass may get some good karma if the NFL labor stoppage lasts throughout the summer. I’m pulling for you, grass. And I’m definitely pulling for groundskeeper Clay Wood and his staff, who may have the toughest job in pro sports dealing with this stuff.

06.03.11
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The debt is too damn high

LA Times baseball writer Bill Shaikin reported today that as many as nine teams throughout MLB may be in violation of the league’s debt rules. Those teams are (reason for debt in parentheses):

  • LA Dodgers (McCourt divorce)
  • NY Mets (new stadium, Madoff scandal)
  • Chicago Cubs (recent sale)
  • Texas (recent sale, high assumed debt)
  • Washington (new stadium highly leveraged team purchase)
  • Florida (new stadium)
  • Detroit (extremely high payroll compared to revenue)
  • Baltimore (new regional sports network startup costs)

If the A’s build a ballpark somewhere they’ll join these teams. The A’s current debt load is reasonably low according to Forbes’ figures. It will surely rise when it comes time to finance a venue, though I would expect additional partners to be brought in to help soften the blow. At the end of last season I wrote about what the debt rule’s effects on the A’s are now and into the future. Then the post was about payroll. Now it’s about debt service on a new ballpark.

30-year financing of a $450 million ballpark at 6% will cost $27 million per year. For the sake of this discussion, let’s assume there are some cost overruns assumed by the A’s, plus additional soft costs and insurance, bringing debt service to a round $30 million per year. That’s 25x the lease payment they’re making this season, so the revenue streams they’re getting from a new ballpark better be worth it. Lew Wolff has maintained for some time that seat licenses aren’t part of the equation, so no upfront payments are included.

At the same time, it’s no fun having a new ballpark if all you’re going to do is pay a mortgage. Stadium revenue needs to be well above and beyond the debt service amount to make it worthwhile. The Giants and Cardinals have proved it’s possible to make it work, but the amount the A’s will have to shoulder will be unprecedented for a team that’s not in one of the big three markets. To understand the team’s challenge, I’ve broken down how the $30 million can be addressed using multiple revenue sources.

The table above assumes attendance 30,000+ per game, with a complete sellout of premium seating options. In-stadium sponsorships also play a big role, one-third of the debt. Having improved amenities such as rental facilities, a large video board, and ribbon boards will make a huge difference. That makes revenue from every attendee above the 30,000 mark pure gravy. The Giants have operated in this manner since their ballpark opened.

Pretty pie chart

It all seems hunky dory when the fans are filling the place. What happens when they don’t? Let’s look at a scenario in which the A’s only pull in 22,500 per game, or 1.8 million per season.

Lower demand of 25% all around affects all sales, regular and premium. It also puts the team at risk of coming up short, which may force them to cut costs such as payroll.

A drop of $5 million per year is nothing compared to what the Mets and Dodgers are experiencing. However it has broad effects for the A’s because it limits their flexibility. Less money is available upfront for payroll, and they may have to pull from non-stadium sources (TV/Radio) to make ends meet. At the end of the season, they may even find themselves back on revenue sharing welfare (ex.: Pittsburgh). They’ll still have the benefit of the stadium expenses writeoff to help ease the pain, but it’s not a situation anyone wants to be in long term.

Bud Selig and the owners have to be keenly aware of the risk, which may be a legitimate reason why they’re moving so slothlike regarding the A’s. For Oakland, where corporate support isn’t the strongest and attendance has historically been weak, they’ll be looking to keep the A’s from being a bad leverage case like the Dodgers. For San Jose, the question of territorial rights may effectively push the true cost of the ballpark up, though it’s not known how much. Neither is an easy issue to address. Most previous ballparks had huge public financing components to take care of debt service with only a nominal lease payment required of the team tenant. The Giants continue to claim that revenue the South Bay is absolutely necessary to guarantee payments at AT&T Park. Despite the large debt the A’s could accrue, the potential for an extra $30-50 million or more per year after debt service makes it worthwhile, compared to languishing at the Coliseum with no real hope for significant revenue. I’d like to see a $90 million payroll at some point, even if I have to pay more out of pocket to make it happen.

06.02.11
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Poole accuses Wolff/Fisher of being “slumlords”

Cue the weekly flamefest in the comments. In the Trib, Monte Poole writes:

They have become a wealthy guy (Wolff) and an obscenely wealthy guy (Fisher) who acquired a valuable property, neglected it outright and continue to reap profits. It’s the slumlord model.

At this point in the Wolff/Fisher tenure, perception tends to be reality. Local perception is that the team is neglected by ownership. National perception is that the team is stuck thanks to a bad stadium. Both are equally true. As much as Lew Wolff will point out the need for revenues, fans in general don’t care. They want marquee players. They want Billy Beane to swindle another GM before the non-waiver trade deadline every year. Fans also don’t care that the A’s payroll is $67 million and should’ve been close to $80 million if they had signed Adrian Beltre as desired. It’s about results. It’s about scoreboard.

The inconvenient truth is that the revenue problem does matter. Wolff/Fisher may be the 4th richest ownership in baseball, but if team revenues are near the bottom every year even when a handsome revenue sharing check is included, they can’t do anything other than operate the team within its means. That means the payroll will rarely be higher than $70 million and never beyond $90 million as long as this economic state lingers. When you’re getting swept by the 3X payroll Yankees, it’s not comforting. The worst part is that even if the tarps were ripped off the third deck and attendance rose to 2.5 million, the A’s would still need some $5-10 million in revenue sharing every year.

In the past we’ve discussed contention windows and how brief and sensitive they are for low revenue teams. Beane gambled on Eric Chavez and lost, and we suffered as a result. No position player in the organization has that franchise cornerstone look or appeal. The other poor, bad stadium team is Tampa Bay, and they have a franchise player in Evan Longoria who, fortunately for the Rays and Rays fans, did not break his back in the playoffs. They’ve had time to figure out whether a previous phenom like B.J. Upton is worth a big future contract (so far, no), and while they’re at it they might throw money at Matt Joyce instead when the time comes.

A's and Rays financials for the past dozen years. Data from Forbes.

In the chart above, the percentage of player expenses as part of revenue only rises above 60% once. That was the 2005 Athletics, another example of when a clearly overpaid journeyman lineup repeatedly failed to support a brilliant young pitching staff. The Rays shed so much payroll during the recent offseason that (unlike Forbes’ numbers above) they have a lower payroll than the A’s. They can do that because Longoria isn’t hamstringing the team fiscally as Chavez did and they didn’t lock up Upton, giving them flexibility. They’ve been able to play the rent-a-slugger game effectively, the same way the A’s did 5-10 years ago. Even with their recent success, the Rays aren’t taking any major risks, and have put themselves in the position to delay those kinds of decisions for at least another couple of years. Same risk-averse money strategy, different results, thanks to whomever is on the team.

Unfortunately, history is repeating itself regarding the A’s hitters. The notable exception is free agent-to-be Josh Willingham, who is, as I pointed out to Jeffrey the other day, 2nd on the West Coast in home runs. (In this era that has to be an achievement of sorts.) As long as the A’s have that severe pitching-hitting imbalance on the roster, and none of the pitchers is a 200 K/year flamethrower, there’ll be little to provide buzz for the media or casual fans.

There is a Cahill Street outside Diridon Station that ends at what would be the third base gate for Cisco Field. It’s not like Wolff and his marketing people don’t see the great marketing opportunity that awaits if they can get a ballpark in San Jose. Curiously, Trevor Cahill was signed through the 2015 season, with reasonable options for 2016 and 2017. Cisco Field can’t open before 2015. Beyond the value of a good young pitcher with cost controls in place, there is a definite effort to cultivate a star, and a uniquely Californian one at that. The thing is that ground balls aren’t sexy.

What does that have to do with Wolff and Fisher being slumlords? Nothing, because it’s a bad comparison. It’s not like Beane and David Forst aren’t trying to draft, trade for, and develop great hitters the same way a slumlord won’t fix the heating or plumbing in an apartment building. People often point to the Carlos Gonzalez trade debacle, but we’re nearly three years removed from that and we still don’t know who the real CarGo is, or if he can really hit a breaking pitch at sea level (kind of important at the Coliseum). Now we can point to what appears to be a systemic failure to develop hitters over the last several years, and that goes straight to the top. That may be incompetent, but not necessarily negligent. Does anyone honestly think that a guy of Billy’s reputation and ego doesn’t want to go out there and compete? Come on now. And I’ll go out on a limb and guess that no one within the organization was counting on the amount of regression shown by the A’s hitters collectively this season.

Are Wolff and Beane doing everything possible to win? Of course not. Are they doing everything within their means? I’d say so, for better or worse. For Sunday’s game, none of the concession stands on the plaza level other than the club area were open. It felt like a ghost town. Yet the stands elsewhere else weren’t busy enough to warrant staffing another stand. Just because the landlord isn’t gifting a granite and maple kitchen with stainless steel appliances to his tenants doesn’t mean he’s a slumlord. He’s working within his limitations. It’s not his fault the location sucks. Oh, and if you want those amenities, guess what? You’ll need to move into another building. He’s got one of those if you’re interested…

05.31.11
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FiveThirtyEight and Yelp’s Stadium Survey: Coliseum ranks 29th

Nate Silver’s plenty busy writing about politics year round, but occasionally he’s able to write about baseball in some capacity. In a blog post at FiveThirtyEight, Silver ranks all 30 MLB ballparks and 4 other previous ballparks via Yelp’s ratings system. The Coliseum ranks next-to-last among active venues with a 3.13 rating. Upon reading several pages of “reviews”, I had to conclude that at least for the Coliseum the rating is flawed. Numerous people based their review on the stadium as a football venue. Others rated based on attending both Raiders and A’s games. More than a few mistakenly rated Oracle Arena next door, instead of the stadium. I’d go through the trouble of parsing the reviews to get a better contextual sample, but not even I’m that patient with Yelp.

That’s not to say that the methodology is flawed for all venues. Most ballparks are getting reviews for being single-purpose baseball facilities, so there’s no contamination with most ratings as there is with the Coliseum. No, this is not a particularly scientific study, but as Silver notes, it’s more comprehensive than a single writer’s opinion as he takes an all-expenses paid trip all over North America to review venues. Silver also lists the standard deviation, which for the Coliseum is among the highest (1.21). All that means in laymen’s terms is that the ratings for the Coli were all over the place, whereas the ratings for PNC Park (st. dev.: 0.49) were uniformly excellent.

05.27.11
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News for 5/27/11

Sacramento has the feasibility study for its new arena at the its website, along with additional renderings. Besides the lack of financing plan that would have to be determined by the end of the “100 Day Plan,” I noticed one other thing. As part of the effort to cut costs, there is no separate club level. Instead, the club seats are largely confined to one side of the arena and courtside sidelines, with the club lounge taking up part of the main concourse.

Angle view of ICON Taylor arena interior. Club seats are colored blue-violet. Arena is designed to host a hockey team as well as the Kings.

While the Maloofs continue to maintain that the Kings are not for sale, as many as three groups have surfaced that could buy the franchise if it were available. Ron Burkle continues to be the popular choice, with the “mystery Nevada businessman” being second. Now a group fronted by former King Chris Webber has surfaced, and its chief moneyman is a Filipino businessman named Manny V. Pangilinan, or as he’s known in Manila, “MVP.” With frequent talk of Chinese interests getting a controlling piece of a NBA franchise, it would be somewhat poetic to have a Filipino be the first Asian to do so. FWIW, there are three national sports in The Philippines: basketball, boxing, and cockfighting. It’s not going to make me anymore a Kings fan than Erik Spoelstra (who is half-Filipino) being the head coach of the Miami Heat makes me a Heat fan, but it’s something to be proud of.

Another week, another arena proposal. This time it’s in Baltimore, a city whose 50-year old arena hasn’t fielded a major franchise in nearly 40 years. 92-year-old construction magnate Willard Hackerman is willing to pay for the arena as part of an elaborate redevelopment plan along the Inner Harbor. Like Sprint Center in Kansas City, the arena would be built on spec, without a major pro tenant. Baltimore has been without an indoor sports franchise for so long that it’s hard to know if one would be successful there. It appears that Hackerman is willing to give it shot. Hackerman’s company, Whiting-Turner, built M&T Bank Stadium, home of the Baltimore Ravens.

ESPN’s Jim Caple came out with his “official” MLB owner’s rankings. Lew Wolff placed 17th, higher than I would’ve expected. Must be the national media bias.

Here on the blog, 980 Park concept originator Bryan Grunwald received word from the City of Oakland that his concept will in fact be part of the Victory Court EIR, hopefully as a full alternative. Unfortunately, Grunwald also was informed that there is no schedule for the release of the EIR. With MLB moving glacially and putting the A’s on the backburner, I suppose it affords the City time to be thorough. Weren’t they supposed to have the whole thing done (and certified) in around a year?

On the redevelopment tip, there are now three bills working more-or-less in conjunction to provide a less wasteful alternative to the current scheme, which is enshrined in the California Constitution. A fourth bill works against redevelopment, as wished by Governor Jerry Brown. Here’s the list:

  • SB 286 would restrict how projects are funded. Currently redevelopment dollars are a free-for-all as long as they can be applied to a “blighted” area. If this bill passes money for stadiums and arenas would require a public vote in the affected municipalities.
  • SB 450 seeks to rein in waste by capping administrative costs, while pushing the requirement that 20% of funds be spent on affordable housing, to the forefront.
  • SB 214 would allow the creation of new infrastructure districts whose purpose would be to finance infrastructure projects (roads, highways, sewers, etc.).
  • AB 101 is the aforementioned anti-redevelopment bill. Should any municipality’s RDA have any surpluses after obligations are met, those surpluses would vest with the municipality instead of being sandboxed for redevelopment purposes.

The University of Michigan wants to expand The Big House to 120,000 seats. Might want to fix the football program first.

If you wear a “Yankees Suck” T-shirt at the O.co Liseum next week, will you get thrown out as this lawyer did at the Trop last week?

Added 2:15 PM – The Minnesota legislative session ended with no action on stadiums for the Minnesota Vikings and St. Paul Saints. A deal would have to be done in a special session.

05.24.11
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Want a franchise? Empty your wallet

Just as the stock and housing markets have experienced bubbles, MLB appears to be in a bubble of its own when it comes to buying and selling franchises. Last week, Drayton McLane and Jim Crane came to a surprisingly high price of $680 million for the Astros. That follows up the auction-boosted $593 million paid by Nolan Ryan’s group for the Texas Rangers. In both cases the final sale prices were a combined $348 million more than Forbes’ valuations at the times of those sales. Prior to the two Texas teams, the Padres and Cubs pulled $100+ million premiums over Forbes.

* - Debt may not include all debt for related companies. ** - Astros sale is not yet final.

It’s not only MLB. Last year the Warriors were sold for a NBA record sale price of $450 million. Again, this was around $100 million more than expected for the team. Compare these recent sales to those of a few years ago in the table above. In those cases the disparities weren’t nearly as vast and could be easily explained. Nowadays it’s hard to say. The Astros reportedly fetched a higher price due to projected higher revenues from a new regional sports network. Yet the Rangers’ premium price didn’t even include all of the parking lots surrounding the stadium, and it’s possible that a future sale of the Dodgers will have similar limitations. I have a few hunches as to why this bubble is occurring:

  • Money has been sitting on the sidelines of the broader market for so long that interested buyers are willing to pay premiums for sports properties.
  • Local TV revenue is starting go through the roof for more than the big market teams, which is encouraging investors to buy into teams with long, locked-in TV contracts.
  • MLB’s CBA in particular looks attractive to investors because cost controls are inherent for each team and there’s little worry about labor strife.
  • Someone (who?) may be priming the pump on franchises.

That last bit is complete speculation with no basis in fact, but how else can you explain it?

The next franchise likely to be sold will be the Braves (again), who were sold in 2007 as part of tax-free, debt-free equity swap between Ted Turner and John Malone’s Liberty Media. Those tax breaks expire next year, which means the clock is ticking for the Braves. I’m curious to see what price they fetch – and whether having zero debt load makes any difference.

As long as franchises continue to be sold for premium prices, the market creates yet another obstacle for Oakland. Let’s say the Wolff gives up on the Bay Area and announces he wants to sell with Fisher. Bidding could easily grow to over $400 million with no guarantee of a hometown discount. The best hope for the pro-Oakland crowd would be if Fisher could be convinced to stay on as silent majority partner and another managing partner were brought in, much the same way Bill Neukom was brought into the Giants. But if you’re Fisher, how do you sign on without guarantees you’re getting real returns? By real returns, I mean a ballpark that more than pays for itself. If I knew the answer, perhaps I wouldn’t be so skeptical about Oakland’s chances.

05.23.11
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A’s change Twitter name from @OaklandAs to @Athletics

I’m not sure if I ever explained this before, so forgive me if I’m being repetitive. When I set about moving this blog from Blogger to a self-hosted WordPress installation, I looked far and wide for a unique, succinct domain name. The obvious choice, newballpark.com, was already registered to MLB. The reason? It was purchased well over a decade ago by the Red Sox, who at the time were run by John Harrington. Harrington was in the throes of a campaign to replace Fenway Park with a newer, more modern version of the yard next door. After the Montreal Expos were contracted and reborn as the Washington Nationals, Harrington and the Yawkey Trust were out and John Henry, who had until then owned the Florida Marlins, took over the Sox. Henry chose to renovate instead of replace Fenway, and the rest is history. Ironically, the domain newballpark.com remains with the Sox despite the 180-degree turn. I could have chosen newballpark.net (which is available to my knowledge) or newballpark.org. Since I wanted to run the blog as a clearly non-commercial entity, I chose the latter. And here we are. So it’s with some amusement that I found out that the A’s changed their official Twitter feed from @OaklandAs to @Athletics. Immediately there was some worry that this was yet another slight of Oakland, and that the change was an indicator that they were out the door. Athletics After Dark‘s Dale Tafoya got the word from straight from the A’s. twitter-tafoya-rose

It makes sense. The A’s were always going to be in this awkward situation regarding naming, especially on social media. Should they use OaklandAs, OaklandAthletics, Athletics, or OaklandAs? Isn’t “Athletics” synonymous with what Americans call “track and field?” Not having the apostrophe available on Twitter might lead to misinterpretation. In the end, when A’s fans posted on Twitter, they customarily used the hashtag #Athletics, so naturally the team might want to pursue the name. The baseball Giants weren’t first to claim either the domain name or Twitter account named “Giants” with both going to the New York Football Giants instead. The domain name athletics.com belongs to Selliquest, a purveyor of web-based sales and marketing tools for the pharmaceutical industry. The product in question is called Net Athletics, though the second word is emphasized. Selliquest owns both athletics.com and netathletics.com. Would they be willing to part with athletics.com for the right price? If it goes according to form, the company will probably ask too much for the domain if the A’s come calling. One more thing: #FIREGERENNOW