Category Archives: Baseball

04.05.12
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Early reviews on Marlins Park: It’s big

No home runs were hit in last night’s inaugural regular season game at Marlins Park in Miami, which despite the sample size has many thinking the place plays too large. Giancarlo (Mike) Stanton hit two blasts that would’ve been out at some parks (including former Marlins home Sun Life Stadium), yet ended up as warning track outs in the new stadium. Kyle Lohse threw a no-hitter through six. The roof was open, which may have helped knock down fly balls. The Marlins don’t play another home game until April 13th against the Astros. Against Houston pitching and with a closed roof, we’ll probably see different results, including the proper debut of the park’s controversial home run feature.

Comparison of dimensions between the new Marlins Park and the team's old home, multipurpose Sun Life Stadium

Lance Berkman hit one of the few extra base hits, a double, before saving a blast for his postgame interview (sorry, no option to embed).

It’s the biggest ballpark in the game. People keep trying this big ballpark deal and it never works. I mean, Detroit moved the fences in, (the Mets) moved the fences in. There’s a reason why it’s 330-375-400. That’s a fair baseball game. You try to get too outrageous and you get something that I think’s gonna be detrimental to (the Marlins).

Berkman, who laid on a bit of his usual snark, went on to talk about what baseball fans look for when taking in a game. Though he liked the architecture, Berkman didn’t much care for the Marlins’ game presentation.

One of the things about baseball that people gravitate towards is nostalgia. That’s why they love Wrigley Field, they love Fenway Park, because you can kind of step back in time. What they’ve tried to do here is step forward in time because (of) a lot of the things you don’t normally associate with baseball. You don’t see cheerleaders at games, they were there tonight. You don’t see flamenco dancers, they were there tonight. You don’t see DJ’s and bands and stuff during the game, you saw that tonight. A lot of things that they’re trying to advance the game – I’m not sure that baseball fans embrace that kind of change.

We’ve had this nostalgia-vs.-progress/modernism debate here on the blog several times and as recently as earlier in the week. It doesn’t manifest itself solely in architecture or design, it’s also a matter of packaging the game. While Berkman’s statement may be a bit presumptuous, it touches on the not exactly black-and-white debate that’s raged on about the need for a “true” or “pure” baseball experience versus something that is more accessible for casual fans and younger generations. Personally, I want a modern form and a simple, uncluttered game presentation. What do you think?

Also, take a look at the blog’s Twitter feed for my initial reactions to Marlins Park. I expect to visit later in the year as I make an East Coast sweep, so I hope to have a review shortly afterward.

Added 4/6 11:37 AM – The New Yorker has a brief article about Marlins Park called “The End of the Retro Ballpark“.

03.30.12
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News for 3/30/12

For the end of the week:

  • The NBA is stepping in to pay $3.25 million in predevelopment costs on the Sacramento ESC project after the Maloofs refused, saying that they shouldn’t have to pay since they’re tenants. It sure sounds like the Maloofs don’t see themselves as stakeholders in the arena, which is a bad sign. Everyone should be rowing in one direction. A group has organized to force the plan to a vote.
  • AEG’s downtown LA stadium plan seems to be stalled, as the company and the NFL can’t agree on terms for what AEG’s contribution and minority share should be. Now that the Dodgers ownership saga is ending, there are renewed calls for a stadium in Chavez Ravine, either to sit next to or replace Dodger Stadium.
  • The Giants unveiled several improvements to AT&T Park. The big changes are the new sponsor for the mezzanine club level, Virgin America, and the transformation of one of the field boxes down the first base line into the “Corona Beach Bar”, complete with sand. The narrow bridge on the promenade level next to the Fan Lot will finally be expanded. In addition, concession carts on the promenade level will be moved to the back walls, which will open up views of the field from the concourse.
  • Peter Guber, Warriors co-owner, may end up partnering with the Giants on an arena in SF, while the Giants compete with Guber’s Dodgers.
  • Rangers Ballpark will be serving a $26 hot dog this year. No, it is not made of unicorn meat.
  • Ray Ratto gives his thoughts on what the Dodgers sale might mean for the Giants and A’s.
  • The Atlantic compares two cities, Denver and Phoenix, and how building ballparks has impacted their respective downtowns. (thanks hecanfoos)
  • Defying convention, the Census Bureau lists the three most densely populated areas in the U.S. as #1 Los Angeles, #2 San Francisco/Oakland, and #3 San Jose. There are flaws in the methodology, in that #5 New York City includes all of the suburbs in New Jersey and Connecticut, but SF/OAK doesn’t include the 680 corridor or any of the North Bay besides parts of Marin County. History and trends have largely defined the specific urbanized areas the Census uses in its surveys.
  • Memphis Grizzlies owner Michael Heisley will not sell the team to Larry Ellison because of Ellison’s continued interest in moving the team to San Jose. From the article:

Heisley is asking $350 million for the Grizzlies and says he makes it clear with potential buyers that the team’s arena lease with the city and county is rigid. There are several clauses and financial penalties that make it a daunting task to move the Grizzlies before 2021.

  • The NY Post’s Peter Vecsey reports that David Stern was in SF “inspecting building plans and the site” for an arena across from AT&T Park. He also notes that Larry Ellison was not daunted by the cost to break the FedEx Forum lease, though that’s not exactly easy to prove or disprove.

More as it comes. Probably no new posts until Monday at the earliest unless big news breaks.

03.28.12
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The bubble effect

While my team was coming up short in bar trivia last night, news came over the wire that the group headed by Magic Johnson, Stan Kasten, and Peter Guber (yes, that Peter Guber) won the extremely competitive bidding for the Dodgers with a $2.15 billion offer. As recently as last week, the Dodgers were going to be sold for $1.4-1.6 billion, and New York hedge fund magnate Stephen Cohen seemed to have taken the lead thanks to having more cash in the bid compared to the Johnson-Kasten’s larger overall offer. The facts of the sale have been trickling out throughout the morning, and the details couldn’t have been more surprising.

  • The $2.15 billion bid is in two parts: $2 billion for the team and stadium, and $150 million for the parking lots through a joint venture with outgoing owner Frank McCourt.
  • Despite McCourt’s bankruptcy foibles, he’ll end up clearing around $1 billion in profit after dealing with creditors, including his ex-wife. In 2004, McCourt bought the Dodgers from Fox for $430 million, not putting up any cash to do so. Plus he gets the parking vig.
  • The bid appears to be ALL CASH. If so that’s incredibly impressive and has major implications down the road.
  • Johnson and Kasten had six private investment firms come in to bid for the right to claim the majority share. The winner was Guggenheim Partners, a Chicago/New York firm that manages $127 billion in assets. As part of the deal, the control person or managing partner will be Guggenheim CEO Mark Walter. The new entity that owns the team will be called Guggenheim Baseball Partners.
  • For now it appears that nothing will change day-to-day in the Dodger front office. That means that Ned Colletti stays put as GM, though Stan Kasten will slide in above him as President and Magic Johnson will probably have an Executive VP role, similar to the one he had with the Lakers. Keep in mind that while Kasten oversaw much of the Atlanta Braves’ successful run throughout the 90’s and early 00’s, he had John Schuerholz run the baseball side of the house.
  • There is potential in developing the parking lots, though everyone in the joint venture would have to sign off on any plans.

Local and national writers have run the gamut speculating what this new ownership group will do going forward. The first obvious step is to get some kind of new TV deal done, which McCourt tried to do under the gun but was blocked from doing by a bankruptcy court judge. The Dodgers could continue with Fox Sports for $200 million or start their own network. A Dodger network may be the best call, though ownership will most certainly run into some hard negotiations with Time Warner, LA’s predominant cable operator. Time Warner will operate the Lakers’ upcoming dual-channel, dual-language sports network, so there is built-in competition.

Ticket prices will also go up at some point, commensurate with rising payroll. For 2012 the active roster payroll is only $90 million, plus $11 million in deferments to Manny Ramirez and Andruw Jones. The Dodgers had been dropping ticket prices precipitously over the past year or two, allowing for a great amount of headroom for hikes when the time comes. That time may be next year, when the team has to make decisions on Andre Ethier and James Loney, while deciding what kind of extension to give Clayton Kershaw. Those three alone could translate to some $40 million per year in additional salaries. Even so, that only brings payroll to $130 million. The Dodgers could make one or two additional huge free agent splashes in the next 48 months, which is why the Giants have to be absolutely frightened.

From a macro perspective, every owner now has to be wondering what this clearly overpriced sale will mean for them. Sale prices have already been trending some 20% higher than Forbes valuations, so this only extends the bubble that’s been forming over the past five years. The bubble was created by great increases in media revenues, chiefly from new and often team-owned regional sports networks like YES and MASN. In response, several incumbent RSNs have overpaid to keep teams on their channels, such as the Fox Sports regionals in Dallas (Rangers) and Los Angeles (Angels). The table below shows franchise valuations and sale prices, in conjunction with relative values to generated revenue and the aggregate value of all franchises. Most franchises are in the 2.5-3 range. The Yankees sport a 4+ multiple, whereas the Dodgers nearly reach 9 – an artifact of how the Dodgers have been run lean while in bankruptcy. Have-not and small market teams have a multiple in the low 2 range.

Right-hand column shows franchise values as a function of revenue. If the Dodgers got a $200 million/year TV deal, their multiple would be in line with the Yankees'.

Higher valuations or potential sale prices doesn’t mean that there’s going to be a bunch of franchises for sale. For one, Commissioner Selig doesn’t want to have a “glut” of teams available since that will only decrease competition and deflate if not pop the bubble. We know that Padres and Orioles are  available, even if they’re not being actively shopped at the moment. Maybe that will change now, with both current owners looking for $500+ million paydays. MLB can also draw out the sales process to unbearable lengths (see: Astros, Padres) while it completes its “due diligence” on any buyer. And if higher sales prices are being propelled by new media deals, teams in small markets aren’t necessarily going to receive huge valuation bumps if their TV deals aren’t bumped in accordance.

The A’s could see something of a bump, but how much is very unclear. They’re locked into CSN California for at least another decade. Since the terms aren’t public, we don’t know if moving to San Jose would provide a bump, but I have to think that it does simply from the much larger, healthier pool of available advertisers in the South Bay. When prospective buyers look at the books, they’ll know this going in or find out soon enough. Wolff and John Fisher aren’t going bankrupt anytime soon, so if they wanted to sell they could hold out for as high an offer as they wanted. In any case, Selig would probably dissuade Lew Wolff from even considering a sale, stalling while he “figures out” a solution. On the flip side, the Giants could actually harden their stance on territorial rights, saying that it’s their only way to compete with a soon-to-be mega money Dodger franchise. At the very least, the news should force the Giants to make a commitment to Matt Cain, since the Dodgers would be well-positioned in six months to blow the Giants out of the water with an offer. To that I have to say, Welcome to the club, Giants. Enjoy your stay.

…

OT Note: The second game of the season vs. the Mariners will be shown live on MLB Network, as MLB has been so magnanimous as to lift its blackout. Oh thank you, capricious TV gods. /s

03.27.12
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The Coliseum that never was

What’s the pic? It’s a ramp leading to an underground service tunnel for the abandoned stadium next to ARCO Arena/Power Balance Pavilion. Overgrown with grass and trees, the foundation is practically invisible except for unfinished rebar columns sticking up from the concrete foundation.

Exposed rebar from the stadium's foundation is camouflaged by the environment. View from north, arena in background.

The arena and its stillborn brother would never have come to fruition without the vision of Gregg Lukenbill, a developer who lured the NBA’s Kansas City Kings from the Midwest in 1985 with promises of a new arena and a growing community. The Kings played in a converted office building (ARCO Arena I) for three seasons before moving to their “permanent” home in the largely undeveloped Natomas area north of downtown along I-5. Even as the money game of owning a franchise passed Lukenbill by, he remained a cheerleader of the city, as well as a critic of both Sacramento politics and the Maloofs.

View north from ramp outside arena's northwest entrance. More of the foundation is visible.

Lukenbill almost managed to lure teams from elsewhere in California as well. He lobbied hard to pull the Raiders from Los Angeles, as Al Davis entertained offers from numerous cities and played all of them off each other. The Sacramento Raiders plan would be based on a $120 million, 53,000-seat stadium next to ARCO Arena. Though it would’ve looked a lot like Anaheim Stadium in its football era, the stadium would’ve been different from either The Big A or Candlestick Park in that it would’ve been built first for football, and later baseball (43,000 capacity) if everything came together. The rising costs of competing in the major sports space eventually caught up with Lukenbill, who was not nearly as rich as many others entering the game, and tried to construct venues on the cheap – a practice that would become unsuitable once Camden Yards opened.

Model of a finished multipurpose stadium north of ARCO Arena

The big coup, though, would’ve been if Lukenbill had brought the Giants up I-80 to the Capitol. Bob Lurie’s ongoing dissatisfaction with The ‘Stick was well known, and Lukenbill was well poised to pounce on the opportunity. Just as the Giants are politically involved in the A’s stadium situation now, Lukenbill thrust himself into what the Giants were doing then by funding a mailer against Proposition P, the original China Basin ballpark plan championed by then-SF Mayor Art Agnos. Proposition P was defeated in 1989 in the wake of Loma Prieta, causing serious turmoil for the Giants over the next few years, while allowing San Jose and Santa Clara to enter the picture. Lukenbill was subpoenaed after the election, but nothing came of it.

Plans to bring the Giants (or any other baseball team) never gained much traction, and Davis turned his attention back to LA in short order. Still, it’s interesting to think about Sacramento having three major sports franchises in its midst: Kings, Raiders, Giants. Would Lurie or Davis have been satisfied with the stadium in the long run? Probably not. As the Kings, Giants, and others chose not to go to Sacramento, Lukenbill ran out of money and sold the arena to one of his co-owners and the Kings to Jim Thomas.

The greatest legacy of the failed stadium is a closed-off tunnel which leads north from the arena and connects the two. It’s only accessible from the bowels of the arena and has gotten some interesting uses over the years. It doesn’t quite have the flexibility of the Exhibit Hall setup at the Coliseum, yet it’s emblematic of Lukenbill’s vision: bold, big, and ultimately, unfinished.

Tomorrow: A (probably) final visit to ARCO.

03.25.12
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Moorad stepping down means Padres are for sale

Remember those groups that were rumored to be interested in buying the A’s, even though the A’s aren’t actually for sale? They may have a more realistic target now that Jeff Moorad has stepped down from his Padres CEO post. Although Moorad will stay on as a Vice Chairman, the new role appears to be little more than a placeholder as still-majority owner John Moores figures out what to do next.

The circumstances for Moorad’s departure are shrouded in mystery. It’s possible that, after all this time, enough owners had a grudge against the former agent that there was no way he’d get the gig. If so, that’s a cruel joke to play on the man, considering they and Commissioner Selig set in motion the “layaway” plan in 2009 that allowed Moorad to believe he’d buy the team in the first place. Another reason for getting rid of Moorad may be the allegation that he was looking to use upfront from the new Fox Sports San Diego-Padres broadcast rights deal to pay down debt, Frank McCourt-style.

At Gaslamp Ball, there’s a post with the notion that Moorad wanted to accelerate the sale so that Moores couldn’t get a taste of the new TV money, and when Moores found out how much that was, he suddenly wasn’t in such a hurry to sell the team. The new revenue stream should help Moores net a higher sale price than the $530 million negotiated in 2009. $600 million, anyone?

For now it appears that Moores is not in a hurry to sell the team. He’s got a nice new revenue stream, better profitability for the team and for himself, and he’s clear of his ugly divorce. He’ll meet with the minority partners, including Bob Piccinini, and tell them what his plans are, whether it’s to encourage them to bring in a new managing partner candidate or to sell their stakes back to him so that he can resell the team whole later. It’s clear that he’s done running a team, so a sale can be expected sooner rather than later.

That provides an opening for the many bidders who’ve lost out out on the Dodgers. The bidding list in LA is down to three, with no bid lower than $1.4 billion. The Dodgers will be a $300+ million annual revenue team once their next TV deal is made, whereas the Padres should be a $200 million revenue team with their new deal. Even at $600 million, the Padres look like a far better deal than the Dodgers, unless a bidder absolutely has to have the Dodgers or the team’s brand cachet. One of the parties supposedly interested in the A’s was an LA financier involved in the Dodger bidding, so it seems natural for him to turn his attention two hours south instead. (If you’re wondering, I don’t know who the second interested party is – yet.)

The Padres aren’t the only team up for sale. A rumor emerged last month that Peter Angelos was looking to offload the Orioles. Angelos is in the catbird seat there, as he has the $360 million guaranteed sale price for the franchise and ownership of MASN, the area’s regional sports network that carries both the O’s and Nats. He can sell either or both. If he sells only the team he should get $500 million. If he sells both he could get up to $1 billion. The team has denied the rumor.

Anything is potentially for sale for the right price, including any baseball team. It’s easy to say you’re interested in a team or to enter bidding. Getting a sale consummated? With the incredible amounts of money at stake, it’s a lot easier said than done.

03.24.12
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Rosenthal calls “stAy” crowd flat-earthers

Another week, another media morsel. If it’s not the Giants leaking information out or Larry Baer defending the Giants’ territorial rights claims, it’s a national sports writer pleading Lew Wolff’s case or Lew himself answering questions. To me, it feels more like slow-motion tennis than baseball, and while I like tennis, this has gotten repetitive and tiresome.

This time it’s Fox Sports’ Ken Rosenthal again with a plan to resolve the A’s-Giants impasse. Rosenthal thinks that the Giants should be guaranteed a minimum revenue amount against potential losses incurred from an A’s-to-San Jose move. He cites the O’s-Nats deal as an example. However, while Peter Angelos got a $360 million sale price guarantee and $75 million to start up MASN, I don’t believe that he got an annual revenue guarantee ($130 million) as Rosenthal suggests. There’s a good deal of conflicting information on this. It’s sort of a moot point because the O’s cleared the supposed minimum in the first year of the agreement, 2005, and haven’t looked back. Forbes’ estimated revenue for 2011 was $179 million.

Guaranteeing revenue for the Giants is a different matter. According to Forbes, the Giants haven’t been below the $200 million revenue mark in three years. Last year the Giants were in the top ten at $230 million, whereas the average revenue was $211 million (median: $201 million). I have to think that MLB, in its desperation to get some kind of deal done, has floated a revenue guarantee number to the Giants, to which Baer has balked. I’ve argued frequently for some kind of compensation plan that includes revenue, but a revenue guarantee of $230 million gives me pause, so I imagine it gives Bud Selig and the other owners pause as well. Then again, Wolff is projecting a bump from $150-160 million to $230 million for the A’s, so for baseball the result should be a net positive.

Rosenthal also talked to Tulane law professor Gabe Feldman about the prospects of an offensive antitrust lawsuit against baseball. Feldman characterized such a suit’s chances as very slim, a “real longshot”. Also ready with a quote was San Jose City Councilman and future mayoral hopeful Sam Liccardo, who may see all of this baseball posturing end up as part of his election platform if the saga continues at its current pace.

The sucker punch is saved for the end:

Only a few hardy souls — a latter-day version of the flat-earth society — believe the Athletics still can make it in Oakland. San Jose is the largest city in the Bay Area. A new ballpark in the city not only would transform the Athletics’ business model, but baseball’s as well.

There will be some Oakland defenders who say things like, “If you tell a lie long enough people believe it”. No, that’s not it. Sometimes a spade is a spade. If it wasn’t the case, Oakland wouldn’t be pinning its urban revival hopes on a pie-in-the-sky plan like Coliseum City. If it wasn’t truthful, Signature wouldn’t be trying to offload O29 on any Tom, Dick, or Harry who might be interested in land. It’s telling that one of the chief pro-Oakland arguments is that baseball doesn’t have the wherewithal to change T-rights on Wolff’s behalf. That’s all well and good, but how is that confidence-inspiring for Oakland?

03.21.12
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Forbes has Giants twice as valuable as A’s

Forbes came out with their annual overview of The Business of Baseball, and if you’ve followed this site or other sports economics sites much you won’t be surprised by the results. The A’s, stuck in limbo, have the lowest valuation of any of the 30 MLB franchises at $321 million. The figure hasn’t quite caught up with Forbes’ pre-downturn, 2008 valuation of $323 million (which may have factored in a future in Fremont). Despite this, the number is up 5% over last year. Some other numbers and extrapolations:

  • The Yankees are worth the most at $1.85 billion, followed by the Dodgers at $1.4 billion (based on current franchise bids).
  • The Angels ($656 million) and Giants ($643 million) follow the Dodgers as most valuable on the West Coast.
  • Aggregate value of all franchises is $18.1 billion. The A’s account for only 1.77% of this total currently.
  • A’s revenue is estimated at $160 million, roughly in line with last year’s amount. This includes revenue sharing, if you’re asking. (I assume that Lew Wolff may quibble with the figure a bit.)
  • Player expenses for the A’s are listed at $81 million, slightly more than the 50% “salary cap” that we frequently discuss here.
  • The blurb on the A’s page questions what team president Michael Crowley does. Besides saying no, I wonder that myself sometimes.

A closer look at how the valuations for the Giants and A’s breaks down yields some additional insight.

Stadium and brand make up most of the difference

The big takeaway is that for the first time, the Giants are considered twice as valuable as the A’s. It’s reflective of the constraints the A’s are under, as well as the team’s lack of promotion within the market(s). To their credit, the A’s have a much more permanent media presence than they had in the last 20 years. It’s still a long climb out of the cellar. The team’s stadium value would probably be double in a sold out new ballpark, and the brand value could see a similar increase. Sport would see a drop due to less reliance on revenue sharing. Market’s a tougher question. Clearly, that number could double if the A’s were allowed to build in San Jose, but it should also go up appreciably if they built something new in Oakland. Some back-of-the-napkin math has me estimating the team’s value in a new ballpark in Oakland at $400 million, San Jose at $450 million.

 

03.20.12
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Dominoes are falling

One by one, the various ownership crises facing baseball and Commissioner Bud Selig are being resolved. Yesterday, the Mets settled with a trustee in the ongoing Madoff suit for at most $162 million, probably less when the final bill comes due. Compared to the threat of a $1 billion judgement against the team, it’s a bargain. They’ll get even more of a reprieve by not having to make any payments for four years.

The Mets managed to pay off $65 million in short-term debt, thanks to a $240 million selloff of minority shares in the team (8 x $30 million). While Sandy Alderson will have to run the team on the lean side for at least this season, prospects for a rebound are decent.

On the other coast, MLB and Frank McCourt have narrowed down the lister of bidders for the Dodgers to four groups. MLB’s favorite appears to be the group headed by Magic Johnson and former Nats president Stan Kasten, largely because the bid is local. McCourt’s favorite may be the bid by New York hedge fund magnate Steven Cohen. The Cohen bid boost may have gotten a boost thanks to Patrick Soon-Shiong, an LA billionaire whose sudden presence as a minority partner gives Cohen some local bonafides. Unlike the Johnson-Kasten syndicate bid, Cohen was going solo (until Soon-Shiong) and is ready to post an incredible $900 million cash as part of his $1.4 billion (not highest) bid. Ironically, Soon-Shiong picked up Magic’s minority share of the Lakers last year. Magic vacated that share and his executive position within the organization to get his ducks lined up for the Dodgers bid.

The other two bids are by Rams owner Stan Kroenke and a joint bid by possibly outgoing Grizzlies owner Michael Heisley and LA financier Tony Ressler, who initially headed separate bids. By the terms of McCourt’s divorce settlement, he must pick a winning bidder and close the sale by April 30 so that he can make a massive $131 million payment to his ex-wife, Jamie McCourt.

All of this movement should put the A’s situation truly on the front burner, press release wars and gossip aside. That doesn’t mean that Selig will be able to come to a mutually beneficial agreement for the A’s and Giants – for some time my argument has been that this is the obstacle, not gathering votes or self-serving agendas. With the next owners meetings coming in mid-May, perhaps this is the chance to truly address the issue once and for all. Selig deserves as much blame for allowing the Mets and Dodgers to fester as he gets credit for saving them from the financial disaster, but from both quantitative and qualitative measure both teams are worth more (and deserve more attention) than the A’s and Giants’ squabble. Let’s hope, then, that he’ll be able to muster enough resources to resolve the A’s problems once and for all, instead of playing the perennial game of kick-the-can with the green and gold. Seven years is long enough.

03.15.12
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Ownership Swap

Note: This is another “what if” scenario for this week. The conjecture within is not based on any recent news or reports.

Several teams throughout MLB are in some form of transition, whether it’s a venue (Marlins) or a sale (Padres, Dodgers, Astros). Some of these teams are taking far longer than they initially expected to get their transitions completed, creating a bit of heartache for their constituent ownership groups and business partners.

In January I wrote about the problems facing Jeff Moorad in his quest to gain control of the Padres. As reported last week, Moorad withdrew his application to become the “control person” in order for the team’s new TV deal with Fox Sports San Diego to go through. Moorad’s deal to buy the team from John Moores was set to take as much as five years on a sort of layaway plan, though Moorad has already assumed operation of the team. He also has clearly been looking to accelerate the process, yet hasn’t made any headway within The Lodge for several months. The control person issue hasn’t even gone to a vote, unlike the uncontentious decision made in when Larry Baer was approved by MLB four months ago. Maury Brown thinks that in addition to financial concerns, there may be others among the other owners who have it in for Moorad, including Jerry Reinsdorf and Moorad’s former partner, Ken Kendrick of the Diamondbacks.

With the troubles that Moorad’s facing in San Diego and Lew Wolff is dealing with in Oakland, could the time be coming for the two to switch places? Moorad’s group, which famously includes Save Mart CEO and one-time A’s bidder Bob Piccinini, would be able to get in the club with a lower price ($100+ million less) in Oakland than in San Diego. The group, which is reportedly full of Modesto-area interests, would be able to see a locally-based team. There still the fundamental issue of what to do in terms of a venue, but I’ll get to that later.

For Wolff and John Fisher, it would be an acknowledgement of defeat in terms of trying to build a venue. However, Wolff and his family would at least be able to continue to be owners of a franchise, and a Wolff-Fisher ownership group would have more capital on hand to pass muster with the Elders at The Lodge. Wolff himself is based in LA, so a move to the San Diego franchise would also be relatively local. Future revenue streams are far more stable and predictable for the Padres than they are for the A’s at this point, so aside from the fact that there’s no dream legacy-piece stadium to build (except maybe for AAA), it’s a good investment.

There’s a $100 million difference between the A’s and Padres valuations (latter is higher), which would have to be accounted for. Politically, a franchise swap could be the catalyst Oakland needs to get its Coliseum City/Victory Court/980 Park/Flavor-of-the-week stadium plan moving. It would allow Piccinini the opportunity to prove that he could keep the team in Oakland. It’s possible that Andy Dolich, who Piccinini teamed with last time and recently lost out in the Dodgers bidding process, could come on with a minority share. And if Oakland can’t get its act together or if the cost to stay in Oakland were too great, the group would be well-positioned to move the team to Sacramento, which is closer and a more hassle-free drive from Modesto (and further away from the Giants, who would rent the Mayflower trucks for the move).

Obviously, swapping ownership groups is not nearly as simple as I’ve described. It’s only been done once in modern baseball history when John Henry took over the Red Sox while Jeff Loria sold the Expos and bought the Marlins. The important thing is that unlike the T-rights dispute, there is a real precedent for this. Whether you think this is realistic or farfetched is probably dependent on your view of current ownership and your opinion of Oakland or San Jose.

I look forward to the comments on this one. Fire away.

03.14.12
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A way to Sacramento

A year ago, Giants CEO Larry Baer hinted that it would be good for the A’s to look somewhere outside the Bay Area for a new ballpark, if a deal for an East Bay park couldn’t be worked out. I wrote three years ago that an expansion to Raley Field would cost at least $250 million. It would be hard for the A’s to make a large contribution towards the expansion project because Sacramento’s government town status makes the corporate revenue pickings slim. If the A’s are going to pay for it, and MLB isn’t going to pay for it, who will?

The Giants, of course.

Now, I’m not actually suggesting that the Giants will pay for the stadium directly. They’re coming to the end of their own mortgage, so why would they saddle themselves with someone else’s? They wouldn’t. Yet if the A’s were forced to vacate the Bay Area, the Giants would likely pay the A’s to surrender the territorial rights to the East Bay. Such money which could be used to build or expand a stadium elsewhere. The Giants would end up indirectly funding the A’s stadium as a result.

We’d start with the MLB standard compensation package: $75 million, half coming from the commissioner and half coming from the paying team. That’s too small of compensation for the 2.5 million-strong East Bay, especially when you consider that the Giants’ franchise valuation could get a 2-3x boost from the A’s leaving. $150 million is probably a fairer package with the same 50/50 terms.

By the time the A’s were able to consider such a move in 2016-17, the $250 million cost could easily balloon to $300 million. That puts the Giants/MLB contribution at half. The A’s might be able to contribute $75 million on their own (via a new lease and revenue share), meaning the rest would have to come from a public source. This is absolutely important so that the A’s don’t get relegated to being another small market team. If the A’s move to Sacramento and have to pay a fat mortgage, that’s not an improvement upon staying in Oakland. The A’s best chance to thrive in Sacramento is if their stadium costs are as minimal as possible.

For Sacramento’s part, the plan only makes sense if the Kings are gone. The A’s still need corporate support to sell out premium offerings, and it’s expected that the Railyards Arena will suck up all of those customers. Involvement of AEG will only enhance that. The controversial parking revenue play won’t work because the plan is to expand Raley Field in West Sacramento, which is out of the Capitol City’s jurisdiction. A joint powers agreement between Yolo and Sacramento Counties sounds like a possibility.

At the actual stadium, the hard work includes taking down the press box and suites, ripping up the concourse to put in new columns, and putting in new facilities under the concourse such as modern, MLB-standard team clubhouses and a kitchen/commissary. Then the A’s could focus on putting in a club level, new suites, an MLB-standard press box, and a third deck to bring in those extra needed seats. The scope of work reminds me of this:

Mount Davis added 10,000 seats in a three-deck grandstand, an expansive indoor club, and 96 suites. The scope of work is similar to what would be required at Raley Field (sans tarps).

Would $300 million be enough in the end? It’s hard to say. It would be easy to argue that MLB wouldn’t want to skimp on amenities, or else Raley Field could be viewed as a cheap, temporary solution. Terms published for Nationals Park showed that MLB wasn’t interested in cost effectiveness – except in terms of external finishings. Marlins Ballpark is a testament to excess with its bizarre center field sculpture and aquarium behind the plate. The “wedge” in the Railyards dedicated for the arena isn’t large enough for a ballpark, so if MLB weren’t satisfied with Raley and wanted to look in Downtown Sacramento, it would have to use another plot within the project area for a completely new stadium, and a $500+ million price tag to go with it. Unless MLB was really desperate (which they usually aren’t), it seems iffy for baseball go along with the expansion plan when Sacramento was willing to foot a large part of the bill for a brand new arena.

There’s also at least one inside baseball consideration. MLB is fully aware of what Sacramento’s market limitations are. If the Railyards arena deal falls through, it won’t look good to MLB that the City couldn’t put together either a cohesive local or regional plan to retain a team. Sacramento wouldn’t show up on the top of anyone’s “viability” list, even though the resources to support a baseball team alone are there. Yet if the arena deal were successful, the market is too limited to exploit for a second major sports franchise, especially one whose economic requirements are much greater than those for a basketball or hockey team. It’s definitely a strange paradox.