Category Archives: Feature

02.15.11
by

Could Beane leave if San Jose is not approved?

After Ken Rosenthal (and Scott Boras) took a whack at the A’s murky future, Fox Sports colleague Bob Klapisch took his turn today. In his piece, Klapisch claims that unless things turn around from a revenue standpoint, Billy Beane may not be with the organization much longer:

In fact, Beane’s friends say this is his last go-round — if the A’s aren’t allowed to move to San Jose, he’ll officially pass the baton to assistant David Forst and look for a Plan B for the rest of his professional life. It’s anyone’s guess what would be next for Beane; remember, this is the same executive who turned down what should’ve been a dream job, controlling the Red Sox.

Beane’s record isn’t spotless. Like any GM not named Ruben Amaro, Jr., he’s made plenty of mistakes over the years regarding personnel. Yet he’s still among the top GMs in the game, and along with David Forst they once again have the A’s back on an upswing. That said, frequent talk of the A’s being small market – or more appropriately low revenue – sounds like whining after a while, and constantly bemoaning one’s station while being the only GM to own part of a team is not going to engender sympathy.

Thing is, Beane can only play Sisyphus for so long. Other GMs have a much larger margin of error when it comes to putting together teams and payrolls. We all know that pinning the franchise’s hopes on Eric Chavez set the team back for years. High revenue teams can have two or three Chavez contracts without suffering too much. Even the Giants got away with Barry Zito being a parasite last year, and his contract alone is worth two Chavys. It’s not hard to see how Beane could see that proverbial rock rolling back downhill and choose to walk away.

One of the things I think we’re seeing from the national media who’ve chimed in on this (Klapisch, Rosenthal, Gammons) is that they, like us, want to see what Billy can do when he has all of the tools the other GMs do. We all want to see a culmination to Billy’s story, because frankly, even with Moneyball, the story isn’t finished. So while some of the pro-Oakland crowd might look at the national media as ganging up on Oakland, it’s losing sight of the big picture. In the end the A’s need to be able to compete and the best economic chance to do so comes in San Jose, not Oakland. That observation comes in contrast to much of the local media (Newhouse, Ratto, Cohn, Killion), who have often been against ownership’s stadium wranglings, holding up the legacy of the team over all else – a valid argument but not one firmly planted in reality.

At 48, Billy Beane is still a reasonably young man for a GM. Even if he stays with the A’s, it’s not hard to see him being booted upstairs to a CEO/President type of position where he no longer does any day-to-day work with the ballclub. Whether he leaves or not, he’s not going to be a GM for the next 20 years. If he leaves before he and we feel his work his done, it’ll be a huge blow psychologically since it’ll be an admission that the A’s, as they currently stand in financial limbo, cannot compete long term. It won’t be easy to be a fan if that day comes.

02.14.11
by

This cup doth not runneth over

Update 2/17 16:00 – The Consumerist checked in with Aramark on the cup size controversy and received this response:

For a short time early last baseball season, we used an incorrect cup size for the $4.99 beer. The cup was larger than it should have been. When we discovered this, we began using the correct cup size.


That would mean that the GC12S (12/14 oz.) cup may be used instead. If so, I hope people enjoyed getting the extra suds on the mistakenly larger cup while it lasted.

Today at AN, a fanpost contained the following video comparing the “small” $5 domestic beer with the “large” $8 domestic.

I normally don’t drink one of the big domestic brews (BTW it’s SF Beer Week if you’re interested) and there’s no chance I’d pay $8 for a large one. A $3 upcharge for that tiny difference in cup volume is embarrassing. The same phenomenon has been seen at Seattle’s Qwest Field.

You may remember that the Coliseum complex changed to compostable cups (PDF) several years ago. The cups are manufactured by Fabri-Kal as part of their Greenware line. Greenware comes in a multitude of sizes, and the problem appears to be the specific sizes of cups used.

  • GC16S – The company lists this as one of their “squat” models. It’s listed with dual volumes, 16 oz./18 oz. and its “flush fill capacity” is 18.3 ounces. This is the cup used for the “small” beer size and for the various craft beers served all over the Coliseum.
  • GC20 – The taller “large” cup’s “flush fill capacity” is 20 ounces.

I broke out my abacus to determine the minuscule disparity of 1.7 ounces. That’s less than the capacity of a shot glass. If the A’s want to be fair to the swill-buying public they should up that large to 24 ounces. Then again, this immediately brought to mind a conversation I had yesterday with a bartender. His establishment is a noted beer bar, though they also keep swill on hand for those who ask. A customer with a large party had no interest in any of the great craft beer they had on tap and kept requesting bottled Coors. At the end of the night the party went through nearly two cases of the stuff. They were charged the same for the Coors as they would if they had requested Pliny the Elder.

Lesson for the consumer: If you must get a Bud or Bud Light, get the smaller size. Better yet, if you’re going to spend a couple extra bucks, get a craft beer. It won’t taste like piss.

P.S.: At the Coliseum the vendors don’t usually fill the small cup to the brim. They stop at a fill line on the cup – probably 16 oz.

02.07.11
by

Could San Jose A’s and Giants coexist?

The cover story in this week’s San Jose/Silicon Valley Business Journal discusses multiple scenarios in which the A’s (subscription required, written by Eli Segall), should they move to San Jose, would have to indemnify the San Jose Giants, the High-A affiliate of the San Francisco ballclub. The parent club bought controlling interest in the team last year, which could lead into a handsome payoff just for the minor league team in addition to whatever is agreed upon for the SF team. In the article, Roger Noll estimates that the A’s would have to pay the SJ Giants $4 million, which would be in addition to $20-30 million for the parent club Noll estimated a year ago.

The worry for the “little” Giants is that the A’s will siphon away sponsorship dollars, which in a large city such as San Jose is a goldmine for a mere Class-A club. The rest of the California League cities can’t hold a candle to San Jose in terms of corporate sponsorship potential. Despite the looming A’s threat, SJ Giants CEO Jim Weyermann isn’t worried much about losing attendance since the fan demographics are different, and there’s a chance that sponsors could be retained.

A sidebar mentions the fact that $14.5 million in renovations to San Jose Municipal Stadium are on hold pending the fate of the SJ Giants, which is of course tied to the A’s. Should the A’s move to SJ it’s likely that the SJ Giants would be forced to move. But that isn’t a given as Lew Wolff signaled that he’d be fine with the Giants staying there. Going this route would change the eventual terms of compensation, since Wolff and his partners wouldn’t have to go out-of-pocket for relocation costs. Instead they might have to foot part of the bill for compensation and for renovations to Muni – still not cheap but definitely cheaper.

Last month, Pacific Baseball Partners head Chris Lee made news when he admitted that the SF Giants’ refusal to do anything regarding T-rights has put his ballpark project in jeopardy. After I made my post I got this clarification from Lee:

“…note that the request to the (SF Giants) is not to move their affiliate to Sonoma County, but to relocate some other team, whatever its affiliation may be.”

It is possible that one of the other Cal League teams, perhaps Bakersfield, could relocate to Windsor, though given the circumstances, the frontrunner would still be the San Jose Giants. For that change to happen, the A’s move would have to be the first domino to fall.

If the San Jose Giants can stay in town, great. The parent Giants could choose to keep the team there in order to keep its foothold, though that would work against any idea that they bought into the little Giants to raise potential compensation. Keeping the SJ Giants in town would undoubtedly be the cheapest option for the A’s from a bottom line standpoint. From a strategic standpoint, it would make much more sense for the Giants to take advantage of an opening in the North Bay if the A’s go south. The SF Giants aren’t exactly greatly accessible from Sonoma County, with an hour drive from Santa Rosa to Larkspur just to catch the ferry. Still, it’s not as if common sense has prevailed in these matters so far. Why think it would happen now?

02.04.11
by

Struggling in The Town

Let’s go back two weeks. Lost in the glorious vengeance that usually comes with an Al Davis press conference was a question about a future stadium from KPIX’s Kim Coyle. Davis admitted that he is not involved day-to-day in the work, but he pressed the notion that the Raiders need a new stadium… somewhere. Go 24 minutes into this video to get the question and response. Below is the text.

“The best place for a site is the Oakland Coliseum. It really is. Traffic-wise, the BART, all those amenities that go there – it’s the best place. BUT. If they can’t get it done, you’re gonna have to use other avenues. You’re gonna have to do other things. And we need a new stadium.”

“I mean we’re no different just like someone here brought up, being able to compete… If we’re going to be able to compete we need a new stadium.”

“And we want the Raider Nation, we want the fans out there, you gotta support us.”

“Someone said we had 22,000 (season tickets). We’re at the low end or close to the low end and we’ve gotta to do better. That’s just the facts.”

After the press conference officially ended, Davis talked a bit more. Asked about the impact of the new CBA and the extension of the regular season to 18 games, he said this:

“What does a club do that’s in a depressed area like Oakland, where we find out that the fans don’t have all the money we’re hoping they do?” Davis asked. “What do the Raiders do about 18 games, which means another home game? These are important things that we have to decide.”

So you have the short term danger of even more blackouts coming from greater ticket inventory, thanks to 18 games. Yet Davis is clear in favoring Oakland first, as opposed to immediately looking south to Santa Clara or even Los Angeles.

There’s the dilemma. The Coliseum is great from an accessibility standpoint. It is rich in history and legacy. Is that enough? Davis did something no other owner in the Bay Area is really willing to do – talk directly about the elephant in the room, Oakland’s struggles as a city. Unfortunately, to ignore Oakland’s issues is to ignore reality. Yes, there are great places to live within the city limits. Yes, it is only one-sixth of the East Bay’s population and is near many other wealthier cities. But it has issues that make it difficult to consider from the standpoint of funding a near billion-dollar stadium (not to mention a half-billion-dollar ballpark), and Davis has been feeling that pinch for a while. You’re not going to hear outsiders or “carpetbaggers” like Lew Wolff or Joe Lacob talk about this. They’ll dance around it as much as possible. Davis has nothing to lose at this point and has never edited or censored himself for good or bad. His opinion counts more than most other local owners because he’s part of the community, at least much more than Wolff or Lacob. Apparently Davis gets credit for giving the Coliseum a real college try – at his behest no less. If it’s too hard and the Raiders explore those “other avenues,” what then? Does that college try translate into greater goodwill? A shrug? Or will people remember only the endgame?

01.31.11
by

Redevapocalypse What-If Scenarios

Now for the “fun” part.

Last night I described the fate of redevelopment in a California where the concept no longer works within the budget framework. Today it’s time to discuss all of the great/terrible fates that await our favorite local sports franchises should RDA funding sources dry up.

49ers Bond Rush
It all starts not with the Oakland Athletics, but rather the San Francisco 49ers. The linchpin to the Santa Clara stadium plan is $114 million in public funds, $42 million of it from the RDA (the 49ers would provide a partial advance). This money would have to be raised before any RDA dissolution or cutbacks take place, so the deadline would presumably be sometime in the next 4-5 months. This means that Santa Clara would have to go to the bond market three times for the stadium project:

  • $42 million from the RDA
  • $35 million from the newly assembled Mello-Roos district (hotel taxes)
  • $330 million from the Stadium Authority

If the RDA doesn’t get the bonds by the deadline, there’s no chance that the hotels will even tax themselves for their piece, let alone fund a RDA shortfall. The agreement between Santa Clara and the Niners would have to be reopened so that an alternate funding source could be inserted, and that source couldn’t be tied to the general fund in any way. The Stadium Authority couldn’t get started because there’d be no certainty of the project getting off the ground until the funding package worked itself out.

$40 million doesn’t seem like a big deal as it’s less then 5% of the project cost. It’s still a lot of money to raise and a big enough gap to throw a wrench into the works. There’s a chance that both parties could figure out a way to bridge the gap but it’s not going to happen immediately, and unless it’s the team pledging to cover it completely, any contractual details will require renewed scrutiny.

Should the team find the sledding too rough, there’s always a Plan B. They can run to Oakland, where the Coliseum Authority and the Raiders will be waiting with open arms.

The Coliseum Authority has bonding authority and capacity through its joint powers, the City of Oakland and Alameda County. There’s that nagging problem of ongoing debt burdening both parties through 2026, which can be looked at one of two ways: Should the JPA endeavor to get a new two-team NFL stadium built in the hopes that helps cover the debt or cut its losses and keep paying the debt even though the Raiders could be long gone before it’s retired? (Not that amassing more debt is favorable as the current bonds were downgraded to BBB last month.)

The problem Oakland and the JPA has going forward is the fact that the new Raiders stadium plan had integrated redevelopment along Hegenberger, including a new conference center, hotel and retail. With the well run dry, none of that stuff could get built unless some new taxation/indebtedness occurred, or unless the stadium project’s funding coved it. So what you’d be left with is in all likelihood an updated version of the stadium and arena complex, surrounded by parking. Sounds familiar, eh?

On the other hand, if Santa Clara is able to get the funding ball rolling, it’ll prompt the Raiders to move more quickly in order to leave Oakland. Al Davis isn’t going to live forever, and Roger Goodell is a take-no-prisoners negotiator who has been clamoring for the two teams to share a stadium. Whatever the location, expect an agreement between the host city and the two teams sooner rather than later. Otherwise it might be too late for both.

Which Way Warriors
We’ve discussed the Warriors and the Lacob-Guber group’s interest in San Francisco. The Port of SF owns land to the south of AT&T Park that could be well suited for an arena. This is important as the money’s already spent, no new funds required. In order for a new arena to be built, it would have to be privately financed and it would make the most fiscal sense if two teams shared the arena, not just one. This model has worked well in Chicago and Dallas, where both cities’ representative hoops and hockey teams created partnerships to build their venues. The Giants being the developer has only limited impact since they couldn’t materially impact which touring acts or other events came to town. Two teams means two major winter sports teams, not just the W’s and a minor league franchise.

Can it be done? The Giants/Warriors would have to attract the Sharks or a second NHL team, neither of which seems likely. SVSE would probably entertain the offer as a way to extract lease concessions from San Jose, but it wouldn’t move beyond that. It’s much like trying to get the W’s to move south permanently – it’s technically doable but highly unlikely. Lacob-Guber could also use the SF arena as a stalking horse for improvements to the Arena.

Again, any new arena in SF is only possible if it is privately financed. The good news? There will be so little big project construction in the future (save for public facilities) that the labor could be relatively cheap.

It was nice knowing you Cowtown
Unlike some of the whispering about MLB contracting two teams, there actually has been talk about contracting the Kings. And it will only get louder as the current season draws to a close later this summer. The woes of the Kings and the Maloofs have been chronicled here and elsewhere for some time now, and there doesn’t seem to be a light at the end of the tunnel for them. Mayor Kevin Johnson is playing this like he has to walk the ball up the floor and dump it into the post every possession instead of being able to do anything dynamic like this. Being a mayor is a tough job. I want to see the Kings stay in Sac, but it’s hard to see long term with every proposal linked to some kind of redevelopment. The NBA probably won’t buy them as it did the Hornets, which leaves the Kings in some sort of limbo for years to come.

San JosA’s
The landbanking strategy San Jose has used for years has never been more wise than right now, as it works to cobble together the remaining land at Diridon. As I understand it, the money is basically untouchable at this point and SJRA can do whatever it wants as long it takes care of its housing set-asides (25%). If SJ and the A’s are given the green light, the vote this summer or fall won’t be about ballparks vs. schools since the money will already be spent. The debate will be about baseball vs. other housing or commercial developers in a time of a glut of both housing and office space. And yes, the decision could drag on for another several months or even a year.

Oakland mayor Jean Quan has been publicly silent on what the death of RDAs could mean for the Victory Court project, and that’s not a good sign. When the mayors went up to the Capitol last week, the most quotable guy there was Chuck Reed, not Quan. There should be a greater sense of urgency there if Oakland’s various supporters want the donut hole strategy to come to fruition, but it’s not happening publicly, perhaps by design. Should the EIR be delivered at the beginning of April, there will be ample opportunity to go over every detail of the document, and it’s that thoroughness baked into the CEQA process that could eventually kill MLB in Oakland. The way I see it, Bud Selig is looking for a politically expedient opportunity to declare support for San Jose, and that could come in the form of a 400-page EIR that brings up more questions than answers. Why? Because Lew Wolff has to have been in his ear constantly about this redevelopment business, and opportunities are running out fast. Maybe the day of reckoning wont occur immediately, it might occur well along in the process as it did in Fremont. Either way the clock is ticking as it is for AT&T in that commercial for the Verizon iPhone.

Of course, if Let’s Go Oakland had declared Victory Court as its site in December 2009 instead of 2010, Oakland might not be in such a bad position. Oakland’s only saving grace now is something out of its control: the continued difficulty with T-rights negotiations. That’s like basing your retirement plan on an upcoming shared inheritance – will you get a good enough piece, or will it mostly go to the more favored child/mistress/charity? It’s not a real investment strategy.

01.29.11
by

Caltrain’s Identity Crisis

The Save Caltrain Summit, held in San Carlos and sponsored by Friends of Caltrain, just wrapped up. I’d like to say I came out of it the session hopeful, but I can’t. Yes, this session and the many town halls to come were prompted by service cuts amidst the ongoing transit fiscal crunch. Moving forward, Caltrain’s problems are more linked to what it really is and how it wants to be perceived.

A few years back, Caltrain ran nearly 100 trains up and down the Peninsula every weekday, including every 30 minutes during middays. Right now it runs 86 trains on weekdays, and this summer will run 48 per weekday (commute hours only) unless Jerry Brown gives the transit agency a $30 million gift.

Amidst all of the debate over electrification, grade separations, and degrading service was a specific question: What kind of service does Caltrain want to run? Does it aspire to be a rapid metro service like BART or a much simpler commuter train?

Obviously, that’s a question easily answered in good times. In lean times, not so much. Should Caltrain roll back its service to commuter only, the perception of it as infrequent – and therefore inferior – will only grow. Ridership will decline dramatically as the agency finds itself in a funding death spiral.

Should austerity prevail long term and limit Caltrain to only commuter service, it won’t just affect a San Jose A’s team as well as the Giants. While it would be easy to get to an A’s game on Caltrain, getting back home would be an entirely different kettle of fish.

The problems Caltrain faces are severe enough that it is fielding bids for outside companies to run its operations. It’s quite possible that at some point in the near future, BART could run Caltrain just as it does Capitol Corridor. Clem Tillier, who runs the Caltrain HSR Compatibility Blog, thinks Caltrain trains with BART livery and logos wouldn’t be a bad thing, as it could at reduce some of the bureaucratic overhead and lead to better synchronization of the services. It would also be a step toward unification of all of the disparate transit agencies into one, which would help riders. BART is set to startup its own commuter eBART service, a DMU service which will run from Pittsburg/Baypoint to Antioch.

Frankly, I think it’d be a great idea to bring all heavy rail service (BART/Caltrain/Capitol Corridor/ACE) under a single body with one brand, while the individual bus/light rail services act as “last mile” customers/partners. Each of the rail agencies is tied to a separate joint powers agreement between counties, creating a huge amount of overlap and waste. Caltrain’s dependence on other agencies and not a separate operating subsidy makes it a candidate for merging with BART.

Does Caltrain have to be killed to save it? In one sense, yes. Due to the dire situation Caltrain faces, it may be time for someone else to take the controls. As gas heads back to $4/gallon and the roads start to get clogged due to the Bay Area’s growth, citizens need solutions that work. As Caltrain is reorganized, residents can create the proper framework by which Peninsula rail will operate for the rest of the century.

My dad moved the family from San Francisco to Sunnyvale in December 1979, when I was 4. My mom still loved the City after the move, so she would take my brother and me to SF to visit relatives or go to Chinatown regularly. She didn’t even get a driver’s license until the mid 80’s and was terribly afraid of driving on freeways. Back in the 80’s the change to Caltrain wasn’t yet complete so we called it Southern Pacific, after the old rail company that was contracted to operate the service. Caltrain grew and gained a foothold in the community. The trains even inspired the design of what would be HP Pavilion. Caltrain may be the Peninsula’s rail service, but that identity does nothing for it outside of the Bay Area. Let’s cast aside the perverse tribalism we’ve created in our transit world, and let’s get going.

01.18.11
by

CBA Talk: MLB’s detente becomes entente

August 30, 2002. The A’s were coming off an off-day, a well-deserved rest after extending The Streak to 15 games. Even with the delirium we all felt about the on-field stuff, a dark cloud loomed on the horizon. The league and union were at the latter’s deadline to ratify a new CBA, otherwise a strike was certain. The most controversial bone of contention was the possibility that MLB could contract two teams. The four candidates most cited were the Expos, Marlins, Twins and A’s. None had stadium deals in the near future. All four of the teams’ owners involved were considered cheap at best, criminally awful at worst. Coincidentally, the Twins were in town for a weekend series with the A’s, both teams in playoff contention. I was terribly distracted by the labor situation, and that combined with it being Friday made for one of the more unproductive workdays on record. I spent a good deal of time hanging out at friends’ cubicles, listening to the radio and checking ESPN.com and a new service called Google News every couple of minutes for updates. We learned in the afternoon that after some nonstop negotiation, a new agreement was reached. Later we would find out that contraction would be off the table until at least 2007.

Fast forward eight years, and the landscape is quite different. The Expos are no more, as Bud Selig prepared an elaborate dog-and-pony show to attract cities to bid for the ‘Spos, only to drive up the price for DC interests while swindling the District out of $611 million for a new ballpark. The Twins eventually got their ballpark, somehow by raising sales taxes without requiring a referendum. The Marlins also tricked Miami-Dade County and the City of Miami into funding two-thirds of their new digs. Here we are, in 2011, and the biggest reason the A’s don’t have a new stadium is that there’s no way we’d go for a publicly funded one. C’est la vie.

Anyway, it would be only slightly hyperbolic to characterize the relationship between MLB and MLBPA as marital bliss. Other than squabbling over fines and suspensions and changes to the drug policy, it’s been smooth sailing. Meanwhile, the other leagues have dug trenches and donned armor for their labor battles, and there’s no telling how or when some of them will end. So what’s the secret behind the MLB’s success?

Four years ago, I offhandedly suggested that the players would be helped if they agreed to a salary cap and floor implementation in the salary/payroll structure. By doing this they could guarantee a higher percentage of revenue than what they have gotten historically. Over time, it could also lead to greater parity if executed correctly. They would be more in line with their counterparts in the other leagues. Sounded good at the time, right?

Silly me. The players don’t want that kind of nonsense. The top 32 free agents this offseason signed a combined $1 Billion in new contracts! They’re perfectly happy where they are for the most part. The biggest upcoming bargaining item has nothing to do with established players and everything to do with amateurs and draftees. Other money-related items, such as increasing the minimum salary or changing service time requirements, are only modifications of the current system, not wholesale changes. Last week, the owners meetings had the CBA as its #1 agenda item. All the talk coming out of it was about new replay rules and the possible inclusion of an extra wild card playoff team. It’s almost eerie how little financial matters are playing into this. So what’s Bud’s secret?

The big key to this unnatural harmony is the lack of a set percentage of revenue given to the players. The other three leagues have defined guarantees and/or limits for players, ranging from 50-60%. Setting that number is like opening Pandora’s Box. It automatically creates a new tug-of-war between management and labor, an arbitrary way by which they can measure themselves. In the modern or expansion era, there have always been pendulum swings between the two sides, and victories could be measured by rights gained or lost. Now everything is ultra-quantitative, which is great for people like me who like to count the numbers, but not so great in terms of properly assessing the health of a sport. Is there a way to determine whether players getting 52% or 56% of a league’s revenues make the quality of play proportionally better or worse? Not really. With no set percentage, there’s no tension, even though guys like me will occasionally question the players’ wisdom in getting less when they could get more in theory.

There’s also one curious thing I’ve noticed about the Big Four’s CBA documents – their length. The NFL’s CBA is 361 pages long. The NHL’s is 472 pages including exhibits while the NBA’s is 425 pages excluding exhibits. MLB? Only 241 pages. There’s also the Major League Constitution, but it is also fairly brief at only 23 pages. I have no interest in combing through 1200 pages of legalese to pinpoint all of the differences, but I’m guessing that MLB’s lack of language regarding salary caps and floors helps a lot. It’s telling that the longest section in the entire CBA, at 22 pages, is titled Article XXIII – Competitive Balance Tax. This relatively recent addition to the document deals with the luxury tax, a feature of the CBA that usually only applies to 2-4 teams each season, one of them guaranteed to be the Yankees. Less rules, less to negotiate. Perhaps this is due to the change-averse way MLB has operated.

Then what are they negotiating? Mostly it’s competition-related stuff, which is great because all fans can have an opinion without feeling dirty. Take replay, for instance. Currently, the system is much like the NHL’s video replay system in that it’s controlled by the league office and it can only be used for scoring plays. MLB restricts this further by only using instant replay for home run calls, not other plays on the field such as missed tags or a runner missing the plate/base. MLB also gives the umpiring crew the final say instead of a remote replay judge. The NBA does the same thing for buzzer-beating shots or three-pointers where a guy may be on the line. Football lacks a consensus. College football has replay possible for every play by the booth, except for penalties. The NFL has the dual-challenge system, which is replaced by booth review in the last two minutes of every half. Still, the referee has the final say. It’s all a hodgepodge of different implementations, which makes little sense. College football has somehow managed to incorporate a more thorough system than all other sports without noticeably slowing down the game. Surely there’s a way to make this work in baseball.

Drug policy is not likely to change right away, as MLB only started its fantasy unicorn HGH blood test in the minors last summer. MLB has had the latitude to make changes in the middle of the agreement when it proved politically expedient, so if the heat is turned up for some reason they may react in kind. Since baseball is trending more pitcher friendly these days, my guess is that Bud will get back to us at some point. Whenever.

The idea of adding wild cards is interesting, though it is too complex to add to the 2011 season. A popular option seems to be a play-in game for two wild card teams, with the loser going home. I personally don’t mind expansion as long as it doesn’t add more than 3 days to the postseason schedule while keeping the regular season intact.

So-called “hard slotting” of the draft will be up for debate. It’s a good opportunity for MLBPA to gain a concession in exchange for agreeing to this rookie cap. Fundamentally, the big difference between MLB/NFL and NBA/NHL is who determines the numbers. In the end, who’d you rather have figure this out – the players and league by enshrining it in a document, or a Scott Boras-type who has the power to dictate the figures in the weeks leading up to the draft?

If MLBPA accepts hard slotting, I figure they’ll be able to keep Super 2 status, even though teams are bound to abuse the system by repeatedly holding back players to keep them from earning service time. On this point, it’s not worth fighting too much since it’s really a pyrrhic victory with the way it’s used. I haven’t heard anything about the players trying to shorten the six-year period covered by the reserve clause to five years. Not much to argue about right now.

Negotiations for the next CBA could begin as early as this spring, now that MLB is getting its ducks in a row. This time around is not expected to be much different than last time, with bitterness and acrimony missing from the talks. That’s great, because I’d rather have Bud and his minions figure out the A’s stadium situation once and for all. Help a brother out, Bud.

P.S.: AN readers who may be interested in putting this into a fanpost have my express permission to do so – the entire post – with attribution.

01.17.11
by

CBA Talk: The NBA’s road to hell is paved with good intentions

It’s generally not well-known that the NBA was the first major pro sport to institute a salary cap. The modern form of it came in 1984, in the midst of the great Celtics-Lakers rivalry and the first season of Michael Jordan. The cap has served David Stern’s league well, controlling costs while incrementally making players richer than their counterparts in the other pro sports (to be fair, they play more than their counterparts as well). Even with a lockout that bit off a third of the 1998-99 season and the retirement of Jordan, the league’s recovery was quick and impressive. As the current season hits the midpoint, both sides are steeling themselves for another protracted battle. This time, it might last a while though it doesn’t have to.

Of the three leagues to have salary caps (NHL, NFL, NBA), the NBA is the only one to have what’s called a soft cap. The hard cap concept is simple – a team’s payroll can’t go over the limit, period. The soft cap allows teams to go over the prescribed limit ($58 million or so) to sign its own free agents for basically as much as they want. There’s also a luxury tax threshold (~$70 million) which creates a dollar-for-dollar penalty for every team whose payroll is above the threshold. Teams can also sign other teams’ free agents while over the cap, though they are restrictions in terms of what they can offer. What was initially designed as a way for teams to keep their franchise cornerstones in place has turned into an ugly monster in which most players are grossly overpaid and teams end up trading players more to get rid of contracts than to attain talent.

Exceptions were created to help teams keep their own players, which would in turn boost competition in the league. Over the past decade or so, the exact opposite has happened. One team has won five championships, another has three, and the others are perennial contenders, leaving most of the rest of league as also-rans. With a relatively short roster and the great impact a single player can have on a franchise, the results are somewhat understandable. What doesn’t make sense is the incredible number of players who get franchise-type money who are clearly best as second or third bananas, guys who really can’t carry teams.

Per Larry Coon’s NBA Salary Cap FAQ, here’s a list of the exceptions teams can use to sign free agents:

  • Larry Bird – Famously misnamed because the Celtics supposedly used it to sign their superstar (not really). Allows teams to sign their own veteran free agents (three years or more on the same team) for any amount up to the max salary. Plenty of players are worthy of the coin, such as Kobe Bryant and Tim Duncan. For every success story, there are at least two huge failures such as Gilbert Arenas, Vince Carter, Tracy McGrady and Andrei Kirilenko.
  • Early Bird (75% raise) and Non-Bird (20% raise) – Players who have been with their teams for two years can sign for a set percentage above their previous salary. These are actually pretty smart exception, though sometimes they act as preludes to big money deals via the Larry Bird exception.
  • Midlevel – Perhaps the most contentious part of the current CBA, this exception allows teams to sign one player every year at the league’s average salary ($5-6 million). This tool has been severely abused and plenty of marginal players have received 5 year, $30 million contracts as a result. Particularly poor examples of these contracts include Vladimir Radmanovic, Brian “The Custodian” Cardinal, Jerome James, and Dan Gadzuric. Not surprisingly, two of the guys I just named are on the Warriors and another was once a Warrior. The exception is also important because in its current form, it’s the maximum teams who are over the cap can offer to other teams’ free agents. The Warriors suffered in the previous CBA when this wasn’t spelled out when they lost Gilbert Arenas to the Wizards, though in hindsight this might not have been such a bad thing. The league wants to eliminate or at least significantly curtail the use of the midlevel, while the players union loves it. Expect it to be available on a much more limited basis, like the next exception.
  • Bi-Annual – Located somewhere between the midlevel and the veterans’ minimum salary, the BAE allows teams to pull in quality bench players for relatively cheap (~$2 million). As the naming suggests, it is only available every other year.
  • Minimum – Allows teams to sign veterans or rookies for minimum scale. Also allows each signee to count only a certain amount against the cap, which could reduce luxury tax payments.

There are also exceptions such as the Traded Player Exception, in which a team receives what is essentially a voucher if the value of the players they send away in a trade is more than the amount they take in. All of these exceptions work against the league in that they provide no downward pressure on salaries. And that’s bad for a league that doesn’t have enough jobs to create serious competition among players for those jobs. When you look at the number of exceptions that can be used, it’s clear that a team can sign half of their roster even if they are already over the cap. It’s this model that has allowed some serious financial mismanagement among many teams. Of course, it’s easy to say that owners and GM’s don’t have to use these exceptions, but that runs counter to the notion of attempting to compete every year. It’s this desire to compete that pushes teams to put themselves in bad financial positions with contracts, and when those contracts don’t pan out as results on the court, salary dumps for pennies on the dollar.

To combat this, the NBA is trying to shorten maximum contract lengths from six years to five. Previously they had succeeded in reducing them from seven years to six. They’re also looking to reduce the guaranteed percentage the players get as part of the CBA, which currently stands at 57% – the highest of the major four pro sports. While I doubt they can get to 50% as the NFL has done, they could bump it down a few percentage points, which could mean $100 million or more in reduced free agent money every year. If they eliminate some of those exceptions or restrict their usage to once every 2-3 years, money could be spent more wisely and strategically. The owners are also talking about taking additional measures:

Unfortunately for the players, they have little leverage. Some of them could choose to play in Europe for a year, but that’s a hollow threat and wasn’t employed much during the last lockout. In the end, perhaps the biggest thing that the players could allow is the reuse of the amnesty clause, last used in 2005 after the current CBA was ratified. Also known as the Allan Houston rule, the clause allowed teams to get rid of certain highly-paid, injury-ridden players. While the players were still paid and they counted against the cap, they would not count against the luxury tax threshold, which could save teams somewhere in the nine figures if used appropriately. The clause could even be expanded to ensure that those contracts don’t count against the cap, though that’s a much harder sell. IMHO the amnesty clause should be in every NBA CBA going forward, just as a way to clean up garbage contracts on a once-per-CBA basis.

Posturing between management and labor started before the season started, and so far things don’t look good. It’s quite possible that just like the NFL, there will be some kind of work stoppage for the NBA next fall. Unlike the NFL, there are several ways to achieve the better cost certainty that Stern and the owners want to achieve. It’s really just a matter of how greedy they want to get about it.

01.16.11
by

CBA Talk: The NFL is getting ready for war

Every time I tried to start this post earlier in the week, some fantastic new nugget from Maury Brown (site/Twitter) got me to read further. If you really want to get in depth, follow Maury’s thorough, seemingly unending coverage at The Biz of Football and at Forbes. It’s pretty much one-stop shopping if you want to get up to speed.

That said, I’ll preface my overview via an exchange I had with Maury a couple days ago on Twitter.

me: @BizballMaury If you walk into a restaurant filled with NFL players, your meal will be on them guaranteed.

Maury: RT Ha! Really want NFL accountability @marinelay3r: You walk into a restaurant filled w/NFL players, your meal will be on them guaranteed

For some time, he’s been trying to get some hard numbers to determine whether or not the NFL’s claims of economic turmoil have any real merit. So far, the evidence points to the league’s case being B.S. They’re trying to argue that rising player costs, combined with falling revenues, requires a reduction in the guaranteed share the players get. Here’s the league’s case in bullet point form:

  • NFL wants a roughly 18% drop ($1 Billion) in the amount of money given to players.
  • In lieu of a drop, the NFL wants to convert 2 preseason games into regular season games, making the regular season now 18 games long plus 2 preseason games.
  • A rookie cap or slotting system must be introduced to keep rookie contracts in check.

The players union wants things kept the same, a sign that usually means that they (the side that favors the status quo) have the better end of things. And the lack of a rookie cap makes things seem a bit out of whack, even though the evidence is mostly anecdotal. The big issue is really the 18-game schedule. The NFL’s position is that revenue coming from the 16-game schedule is not good enough to sustain the teams, even though 30 of 32 showed profits in each of the last three years.

The players are most concerned with their own health. Most fans know that during the preseason, teams don’t usually have their starters play entire games, even having them play only a series in the first game and a quarter in the second game. The rest of the time is spent figuring out which other players will make the roster. The NFL wants to convert two of those games to meaningful regular season games, which is great from the standpoint that at least we as fans won’t be subjected to five pointless exhibitions in August. But it also increases the chances that players will be injured, even though they’re not getting anything extra from it.

Why is the NFL pushing for this so hard? Because they can afford to. They have a ton of leverage in this situation. League activity ends with this April’s NFL Draft, which itself will be different because teams won’t be able to sign players during the proceedings, and there may be limitations on trades during the draft. After that the nation will be in lockout watch, and precious team-building time in the form of OTA’s, minicamp and training camp will be lost. All the while, the players won’t be paid yet the league and owners will pocket $4 Billion in TV revenue even though there’s no guarantee that any games will be played. With no pressure to get anything done except their own agenda, it’s likely that a lockout will drag on well into the fall, perhaps longer than the 1987 NFL Strike.

The prevailing thought many fans may have is, “These guys can’t gamble on losing fans with an extended work stoppage.” Frankly, I think this is hogwash. Football has hit a perfect nexus of attracting both hardcore and casual fans. HDTV significantly improves the presentation, not as much as it does for hockey but more than baseball or basketball. If you’re a casual fan, you don’t need to show up more than once a week for four hours. If you’re a hardcore fan, you have plenty of things to suck you in during the week: the endless news cycles on ESPN and NFL Network, fantasy football, talk radio. There’s also the Super Bowl if you don’t care more than once a year. Even with each network paying out $1 Billion for the right to broadcast games annually, that’s a small price to pay for a ratings slam-dunk product. If there is a pro sport that is most resistant to backlash from a work stoppage, it’s pro football. In recent weeks NFL commissioner Roger Goodell has repeatedly tried to ensure the public that a deal could be done easily and quickly. NFLPA head De Maurice Smith has been sounding the alarm for a lockout for over a year. The NFL has had almost 25 years of labor peace and unmitigated growth thanks to the most harmonious labor-management relationship in pro sports. Right now, it’s hard to see them getting back to that point.

01.13.11
by

CBA Talk: The NHL and what might have been

Everyone remembers the 2004-05 NHL lockout, the one that eventually cancelled the entire hockey season, the only time this has occurred in the modern era of professional sports. Now that the NHL has recovered reasonably well from the turmoil and uncertainty that surrounded that work stoppage, observers can look back in hindsight and consider it a cautionary tale. The league now has cost certainty to keep salaries from spiraling out of control and revenue sharing to help the lower income teams. Yet, it never needed to go as far as canceling an entire season. If cooler, future-oriented minds within the league and union had prevailed 10 years prior, the chain of events that led to the 2004-05 lockout may never have happened.

Bob Goodenow was hired as head of the NHLPA in 1992. His tenure spanned three CBAs and included a 10-day players strike (1992), an owners’ lockout in 1994 that took out nearly half of the season, and the 2004 lockout that cost the entire season. During the 2004 lockout, Goodenow was fired.

Gary Bettman became NHL commissioner during the 1992 offseason, coming over from a stint as a deputy to David Stern in the NBA. Bettman was brought in to help the league control costs, namely through the institution of a salary cap. The salary cap became the key issue in negotiations between the league and union, eventually leading to all three work stoppages. NHL owners looked at the its leading competitor in the NBA and saw that basketball had a cap in place for nearly twenty years.

Throughout it all, neither side budged much. The league brought in former SEC chair Arthur Levitt to determine how much the league was losing annually, which amounted to $273 million in 2003. Forbes looked at the numbers and found that the owners were hiding revenue here and there, yet the league was still losing money overall, $123 million for the same period. Either way, the situation was unbalanced and required significant financial restructuring.

To help bring the league back into the black, existing owners accepted new expansion teams in several US West and South markets, including the Bay Area and Atlanta, where the NHL had failed previously (Golden Seals and Flames, respectively). While a market like San Jose has been a success, many of the other non-traditional markets such as South Florida, Nashville, and Phoenix have struggled. Seeing this, some abandoned cities (Winnipeg, Quebec City) and upcoming cities (Hamilton) have expressed interest in landing some of the struggling teams. In the mid 90’s, no one would have thought Winnipeg would be able to have an NHL team again, but now it has a modern, if small arena in place with a capacity of 15,015. Taking a page from MLB, there appears to be a movement to “right-size” arenas for each market. What’s better, 5,000 empty seats and dozens of empty suites in a Southern arena that seats 19,000, or a packed, intimate, 15,000-seat arena north of the 48th parallel?

A Bureau of Labor Statistics article (PDF) published in December 2005 analyzed the circumstances that led up to the lockout and the subsequent CBA. Its opinion generally agreed with virtually every media outlet and even the players in saying that the owners dominated the new agreement. The owners got a salary cap, floor, and revenue sharing. The players were thrown bones here and there, in the forms of earlier free agency triggers throughout the CBA and a greater percentage of revenues if certain targets were reached by the league.

While both sides have lived in relative labor peace over the last several years, both sides are gearing up for at least a little conflict. Rich teams such as the Original Six want to be able to go over the cap since their revenue easily outstrip the cap. Low revenue teams, which make up around two-thirds of the NHL, have no interest in this. Of course, the have-nots would also love to lower the salary floor, which sits at $43 million this season. Both sides could grant concessions to soften both the cap and the floor, but there’s a slippery slope in doing that as it could practically negate the parity effects of having a cap/floor in the place. There’s also a quirk in the revenue sharing agreement in which have-nots which are in markets larger than 2.5 million households cannot qualify for a handout, even if they are in dire straits. This has caused a teams like the Ducks, Islanders, and Devils to make severe cuts over the past several years (the Devils have stabilized after moving into Prudential Center).

The union would love for these revenue sharing matters to become wedge issues among the owners, as they could bolster their case to soften the cap. As mentioned previously, Donald Fehr has been brought in to head the NHLPA, and he’s just as difficult to deal with as Bob Goodenow. Another issue is the players being forced to put 12% of their salaries in an escrow account to guard against revenue shortfalls. That escrow money essentially acts as an extra tax on them, and it will be an important negotiating item come 2012.

In the end, the NHL and the players benefited most from two events that were completely out of their control. The rise of the Canadian dollar to near parity with the US dollar brought the Canadian teams closer to financial equality with their south-of-the-border counterparts. Had this occurred in the mid-90’s instead of five years ago, there might not have been an exodus of teams like the Quebec Nordiques and Winnipeg Jets, and expansion could have happened in Denver and then fewer southern markets.

The other factor is the advent of HDTV, which has been key to increased viewership even though the NHL is no longer on ESPN. No sport has benefited more from an enhanced and far superior viewing experience than hockey. HDTV broadcasting en masse didn’t start happening until 2006.

It seems hard to imagine that hockey, with all of its labor strife over that past 20 years, could so easily shoot themselves in foot once again. You’d think they’d have run out of feet at this point. As badly as the NHLPA lost in the last round, prior to Fehr they had been rudderless, so it was imperative they had someone leading them with a coherent strategy and direction. The issue that remains is whether or not that direction is off a cliff.