Category Archives: Feature

10.26.11
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2012 MLB Schedule Analysis

Normally I do a review of the schedule immediately when it comes out. This time, I decided to step back in order to review the entire league. I’ve noticed a few things about how the schedule is put together, so I figured it would be best to take time to gear this post towards the traveler. I’ve done several ballpark trips over the years, and I’ve always been frustrated by the lack of tools available for those who want to take similar trips. Knowing this, I’ve taken the 2430-game 2012 MLB schedule and turned it into a grid (PDF), showing all games by home team and date. The teams are organized by geographical area (West Coast, Northeast, etc.) so it should easy to see how a traveler could hop from one city to another, catch a game in each market, then take a short trip to the next one. This first step is next season’s MLB slate, to be followed by all minor league teams. Then I’ll branch out to the winter sports, with the NHL to start, then NCAA basketball, and the NBA once if it gets its act together. I’ll round out the works with 2012 schedules for MLS and NFL/NCAA football.

[Tentative 2012 MLB schedule download in PDF format]

I’m getting ahead of myself. I’ve noticed in previous baseball seasons there are generally two “hot periods” for travelers to schedule ballpark trips for maximum efficiency. The first is mid-May, when interleague action starts. The other is around Labor Day. Those are the times when baseball tends to stray the most from its tendency not to schedule two teams in the same market concurrently. By allowing concurrent scheduling, fans can enjoy short travel distances between games and even the occasional two stadium, day-night doubleheader. This can be particularly effective on the East Coast and in the Midwest, where trips between markets are frequently four hours or less by car or train. Of course, the problem with having the “hot periods” occur in May and September is that they aren’t during the summer, when families are most likely to take long trips such as a weeklong pilgrimage to a few ballparks.

Shown in the spread format, there are a few other quirks about the schedule:

  • The A’s gave up a Sunday game (April 8) and a Thursday game (July 5) to accommodate the two “home” games to be played at the Tokyo Dome on March 28-29.
  • The A’s have another Sunday date with no game – August 26. For some reason, a three-game set with the Rays is scheduled for August 23-25, Thursday through Saturday. Update: This is due to a Republican National Convention event (thanks Nathan).
  • 16 marquee games are on the A’s home slate: 3 vs. the Giants, 6 vs. the Red Sox, 7 vs. the Yankees. 3 games vs. the Dodgers may also count. Expect these games to have premium pricing for non-season-ticket buyers.
  • The Miami Marlins play their inaugural game at the yet-unnamed, unsponsored ballpark on April 4, then don’t play another home game until April 13.
  • The Marlins have had 26 rainouts and 154 rain delays in their tenure at what used to be called Joe Robbie Stadium. MLB must really be looking forward to that going away for good.
  • There’s a unique opportunity from June 17 to June 26 to catch numerous games along the Northeast Corridor (Boston-NY-Philly-Balty-DC). If you don’t mind not watching the A’s, this is a flexible stretch during the summer.
  • The schedule PDF is poster size. Don’t expect it to look good being printed on a letter size sheet.

Enjoy the schedule. I appreciate any feedback you have on it.

10.10.11
by

$230,000,000

After the defeats of both the Yankees and Phillies in the divisional round, the most oft-tweeted fact was that all of the payrolls of the remaining four teams (Detroit, Texas, Milwaukee, St. Louis) were less than $107 million. All four teams can be considered midrange in terms of revenue and payroll, which makes it incredibly refreshing that those are the four left standing, not the mega-money teams of the biggest markets. We can only hope that this continues, if only to start a trend of “right-sizing” payrolls all over baseball in order to optimize efficiency. (Yeah right.)

That culling of the playoff herd was preceded by Lew Wolff’s observation (during the Tuesday interview with Carl Guardino) that should the A’s make the move to the South Bay, the team’s annual revenue could jump to $230-240 million. At first that seemed improbable and to me, perhaps a bit of a lark. Over the weekend I started to dig into the numbers to try to understand if it was possible. Not only is it possible, by the time the A’s finish their first year at Cisco Field, $230 million may be mandatory.

To get a better sense of this, it’s best to look at how MLB’s revenue has grown over the last decade, especially since the first revenue sharing CBA year in 2003. Back then, baseball’s total revenue was a shade under $3.9 billion. Last year was a cool $7 billion. During the last decade, the average annual revenue growth has been 6-7% year over year. That growth slowed with the recession, but it’s realistic to see growth rebounding to at least 4%, which would at least outpace inflation. To that end, I’ve run some projections over the next few years with a 5% growth rate (conservative, I expect Commissioner Selig and the owners to be satisfied with no less than 6% if the corporate customer base is considered healthy enough).

Mean and median revenue figures differ because of the distribution of big market teams with very high payrolls.

It gets even more interesting when the numbers are broken down per team.

Growth will be largely dictated by new media/broadcast deals, as well as additional gate revenue from new venues in Florida and California.

By 2015, the average revenue should be $250-260 million, an amount that would support a payroll of $125 million, almost twice what the A’s payroll was this past season. In effect, projecting to $230 million is merely trying to keep up with the Joneses. It’s what will be required for the A’s to truly minimize their revenue sharing “welfare” status. If the A’s can’t hit the median or mean revenue mark on a somewhat regular basis, it’s probably worth asking if it makes sense for the Bay Area to host two teams.

Rough revenue projections. Figures are for illustration purposes only and are not meant to be exact. Model assumes a continuation of the current 34% straight pool revenue sharing plan.

To get to $230 million in 2015, the A’s ownership group will have to sell the hell out of Cisco Field, including a 50% jump from 2014 to 2015 across the board in terms of local revenue sources. Given the meager results they’re getting while at the Coliseum, this is not an impossible task. (The Twins experienced a similar jump when Target Field opened.) Season sellouts for the first year or two would go a long way towards hitting the target. In 2015, the difference between 24,000 per game and 32,000 per game is over $26 million, let alone whatever additional money they get if the ballpark is larger than 32,000 seats.

When Lew Wolff and Billy Beane talk about planning for the next three years, the reasons for doing so start to crystallize when the numbers are laid out like this. Already, the Earthquakes’ $60 million stadium appears to be moving forward without significant upfront sponsorship commitments, indicating that Wolff is willing to make the cash calls necessary to get the ball rolling there. I’ve heard rumblings of private equity firms perhaps being involved, though it’s hard to see any heavy investment there when the return may not be as great as what such firms may be looking for. After all, it was only two months ago when Wolff said:

(Baseball’s) not an internal rate of return 20% or something like that. You shouldn’t be in this business if you want that.

Getting commitments for Cisco Field should not as difficult as for the Earthquakes stadium; in fact it should be a highly competitive situation. Still, ownership has to be looking at trying to reduce debt service as much as humanly possible, so they must have an internal target of upfront money they’ll need to push forward. Maybe it’s $200 million, maybe more (roughly 40% of the total cost). This is incredibly important because the private stadium loan market could be a complete wildcard over the next couple of years. Keeping debt service manageable doesn’t just help the bottom line, it will surely raise the franchise’s valuation due to its favorable debt position. Keep in mind that Cisco’s $120 million naming rights deal has a present value of $60 million, so the A’s will need much more than that to truly get going.

If Wolff gets a “no” decision from MLB, that leaves Beane with the regular revenue streams to fund the next several seasons’ payroll. It’s easy to see the A’s consistently hovering in that 74-86 win range depending on the team’s health. The team may be good enough to go for the division crown with some luck, and without luck the team would not be bad enough to score a top five first round draft pick. On the other hand, if San Jose is a go the controversial full rebuild could occur, with a key focus being another top ten pick to go along with Michael Choice (2010 #10). Jeffrey’s post from Friday explains the need for any money-challenged team to have a stable of developed top ten picks to serve as franchise cornerstones. This also highlights the importance of reining in debt, as it may be expected that the team run lean should a more aggressively enforced debt rule come into play.

In light of the lessons of Moneyball, it’s crazy to think that the A’s payroll in future seasons could frequently eclipse $100 million. Thanks to a little inflation and a lot of revenue sharing, the A’s are coming along for the ride. That will only take them so far, however. If the A’s are unable to significantly grow their own locally-sourced revenue on a regular basis, they be left behind competitively. With the future threat of multiple teams having $200+ million payrolls, the A’s have no choice. As Brad Pitt’s Beane flippantly says to a defiant Grady Fuson in the film, “Adapt or die.”

09.25.11
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Eminent domain the last hurdle for San Jose

I want to point out something before we begin. Whether it’s this story or the quotes from Susan Slusser’s articles, let’s remember that none of it are statements from the A’s, MLB, or San Jose. As close as they seem to the situation, there’s a lot of conflicting information out there so take all of this with multiple grains of salt.

It’s always been there, lingering in the background. I even wrote about it only six weeks ago. It’s the boogeyman. It’s eminent domain. A frequent commenter has the gory details:

I was at a bachelor party in San Diego this past weekend. A San Jose city council member was part of the group and we discussed the A’s in detail.

What he told me was this:

1. ATT is being a “pain in the ass” and will not move unless forced to by eminent domain. Even re-zoning the land for ATT in West San Jose did not help the cause at all. In fact the city council in hindsight would have never agreed to it had they known ATT would still refuse to leave.

2. The city will not use eminent domain on ATT unless MLB gives the OK that the A’s can move to San Jose. Therefore this is not a “race” between OAK and SJ. San Jose like Oakland is in a holding pattern waiting for MLB to make a decision…..Two cities, same boat.
He told me that they cannot “justify” using eminent domain on ATT without MLB approval to move forward.

3. He stated to me their RDA is pretty much done and he “implied” to me Wolff will have to buy the last 2 parcels himself but would not out right say it when I tried to question him more on it. The city council knows full well that Wolff will pay for it because everyone knows it is a “drop in the ocean” of the overall cost of the stadium. He also mentioned SJ unlike most cities did not misuse their RDA funds and used it for several successful developments across the city.

4. He agrees with me Lew Wolff has some kind of “backdoor” deal with Selig as being a former lawyer he does not understand Wolff’s patience with the situation. The city has brought up an anti-trust lawsuit to Wolff and he has told the city “not to sue” and to let the process play out despite San Jose having an excellent case in anti-trust court, which he agreed with me is “solid”.

5. Without Wolff supporting an anti-trust lawsuit San Jose is stuck in mud and he is very pessimistic the A’s to San Jose will ever occur. Although he is still holding out some hope.

6. He also agreed San Jose is getting the “best ballpark deal” of any city in history of MLB. The city is not paying for anything outside of what they have so far. Diridon will be re-developed regardless of the ball park but not for several years to come. BART or High Speed rail would have to be within 3-5 years of being in San Jose.

I wanted to share this info with everyone as this is first hand info from a SJ city council member that is as recent as yesterday.

AT&T owns the largest remaining property within the Diridon site. Its reluctance to sell will force San Jose to use eminent domain to acquire AT&T’s land (and possibly one other piece) in order to complete the site. There is no way to build a ballpark without the AT&T land.

AT&T land is in blue. Most of the rest has either been acquired or is no longer part of the planned site.

Even though Lew Wolff has expressed a willingness and confidence in the ability to acquire all of the ballpark site, not having a willing seller creates a big time hitch. San Jose can’t force AT&T and the A’s to negotiate on land. Instead, San Jose can acquire the land, then negotiate on the relocation and replacement land costs, then have the A’s reimburse the City. Making things more complicated is the fact that public-to-private exchanges tend to be politically unpopular. That may cause a final step in which the A’s buy the land, then convey it back to San Jose for free so that the site (and maybe the ballpark) are publicly owned. The Quakes stadium site is a publicly owned “island” surrounded by Quakes-owned land. Wolff indicated there are numerous ways this could play out, and these are just a couple different permutations.

Adding to the complications is the still lingering fate of redevelopment, which won’t be decided until January. Right now no agency is allowed to buy anything even though the state Supreme Court granted RDAs a six month stay to operate. San Jose is trying to bypass this roadblock by moving assets to its San Jose Diridon Development Authority, a redevelopment wing thinly disguised as a joint powers body. Keep in mind that San Jose has not made its ransom payment to keep its barebones redevelopment group running, choosing instead to sue Governor Jerry Brown over the new redevelopment laws. For that matter neither has Oakland, and Oakland could require eminent domain on multiple landowners to clear Victory Court.

Despite this major hurdle, all we’ve heard over the last week is a growing confidence in public statements by both Wolff and Billy Beane, indicating Sid’s item #4 may well be in play. If that’s the case, here’s how I see this playing out:

  1. Wolff gets green light during November owners meetings.
  2. San Jose seizes upon this and makes one last offer to AT&T before the end of the year. If AT&T continues to holdout, City notifies that it will start the eminent domain process via SJDDA.
  3. City can’t actually start eminent domain without a referendum, so if it’s required a special election will be held during the early spring (with MLB picking up part of the tab).
  4. City procedes to acquire the land and begin relocation, which should take 3-6 months to complete.
  5. Demolition and site clearing would have to be done throughout the summer and fall of 2012.
  6. Groundbreaking happens in November or December 2012.

It’s important to note that there’s always that final offer. Eminent domain is every bit as much a threat as it is a tool and may be used simply to bring parties to the table. AT&T knows that San Jose is hamstrung by the referendum requirement and other political realities, so it may be playing its own special brand of hardball. A supposed quid pro quo deal between City and AT&T over rezoning an old work site near Santana Row may have been AT&T playing City like a fiddle. The Death Star of telecom is no stranger to strongarm tactics. This is the company that thinks eliminating a wireless carrier by acquiring it will actually bring more competition to the industry.

FWIW, I’ve been consistent in my feeling that no one in the South Bay camp has the stomach for a lengthy antitrust challenge to MLB. As for the “best ballpark deal”, with the A’s on track to pay for everything ($450 million ballpark and up to $100 million in land and improvements), yes, it would be better than the deal for AT&T Park and any other MLB ballpark deal in the last century.

08.05.11
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The Big Lew Wolff Interview, Part 5

Part 5 of 5 (Part 1, Part 2, Part 3, Part 4)

LW: How about redevelopment? Don’t you want to talk about that?

ML: I’m getting right to that. Actually let’s talk about T-rights for one more question. If there was a dollar value attached to the T-rights here, is that something you’d consider? Is there a threshold or limit for that?

What do you mean, pay for this (Santa Clara County)? We should be paid for what we or the Haas family gave up?

ML: Well, I suppose this is an academic thing.

We’ll leave that up to the commissioner.

ML: Okay. Fair enough. On to San Jose and redevelopment. There are two properties remaining that have to be acquired. We last heard that they were supposed to be wrapped in June but we haven’t heard anything from the City about that. I’m guessing that they haven’t done it because of all the shakeup with the budget and the ending of redevelopment. Now that they’ve filed a lawsuit there’s all sorts of stuff up in the air.

San Jose went and acquired half the property or more, which is good for us because they’re committed. I spent most of my adult life in redevelopment. We’re not looking for redevelopment to hand us a check or a bond issue or anything. That’s true in Oakland too. The value of the land that we think it is, if San Jose needed that money to be paid to be the last properties (we’ll do it). We thought at first that we’d end up leasing land. Owning the land would be better for us. Whether it’s redevelopment, the city, a special district, whatever the hell they come up with, it makes no difference to us because we’re not looking for anything different than we would be normally. So in a funny way it’s a little better for us.

ML: Really?

Well, look. If we’re fortunate enough that they announce that we can go you have to close your eyes and say, “What will that mean?” The whole community is gonna be excited about that. The thing that bothers me is that – even in this economy – we need a ballpark whether the economy is good or bad. Right?

ML: Yeah.

So why should we be holding up jobs and construction and so on over an argument that I think is –

ML: Petty?

Petty. As a percentage of what we’re doing, the cost of the land, I don’t know what it’s going to be, if you’re going to spend $400-450 million the land is not going to be a situation where it costs X percent and it’s too much so we’re not going to build a new ballpark.

I hate to see what’s happening to redevelopment, because I think it’s one of the few aspects of government that has a cost-benefit to it. I’m still surprised – and I like Governor Brown – I didn’t get why he did that. The answer is that I’m sorry about what’s happening to all of these cities in California. We have a real shovel-ready project if nobody interferes with it. It’s not a concern. Your blog talks about it all the time which I think it good but it really isn’t a problem for us. We have one problem, and that’s the decision. Is that clear?

ML: Yes, and it’s somewhat reassuring in light of what we’ve learned in the past 6-7 months.

I didn’t say it was good for all cities.

ML: I’m not going to lie. There are a lot of people on the blog who read and comment who look at this and say, “That’ll be one more thing that eventually eliminates Oakland or some other city because they won’t have the resources to make it happen.”

By the way, they’re right. Not San Jose though – they’ve spent the resources. Their EIR is done. We may have a lawsuit from some phony – you know all that stuff. Starting now, somewhere else? Forget it, it’s not gonna happen. Anywhere.

ML: Did you even conceive that something like this would enter the equation when you started?

No, not at all.

ML: Going back to the first question, so much has changed in six years. 

A lot has changed and sometimes things that look negative may be positive for certain people, and vice-versa.

ML: The last questions I have are more fun stuff. I was considering bringing a book that I bought last year when I visited Target Field.

The Target Field book?

ML: The big book, the commemorative book. 

I have it.

ML: It’s beautiful, covers the entire history of how they got to that point. Other sites that were considered. Politics, and then finally the actual construction. Have you been to Target Field and maybe the Marlins ballpark?

I have been to Target Field but not the Marlins ballpark.

ML: What do you take away from Target Field?

Are you talking about the history of it?

ML: No, just the ballpark.

I think it looks terrific. It’s actually built on a smaller site than we have. It’s cantilevered out over –

ML: Over streets and railroads.

I don’t think we can afford to build that structure in California privately. They’ve had some help there (in Minnesota). What we’re planning to do is this. When you air-condition space like special restaurants and things. Because of San Jose and the economy and so on. We’re gonna have all of the great concessions but we’re not gonna have a stadium club because we want the downtown to provide that. The less air-conditioned space you have the more you can put into the field. Target Field is great. Give it to me tomorrow and I’ll take it in a second.

But we will be the closest to the field of any ballpark ever built in baseball, at least in my lifetime. And it’ll be fun. We just want to have fun. We want the fan to walk in and have fun. We don’t need to have a monument or tribute like Yankee Stadium – it’s incredible there, the materials and everything. It’s a $1.5-2 billion or whatever it costs. What we want is for somebody to go and say, “Gee, that was really a fun experience. I felt like I was really close to the player.” Each of our places in the ballpark – and my son can go over this with you – are neighborhoods. So it might be better to be in LF standing up than it would be to be behind home plate.

The average (attendance related to) capacity last year based on our study: 51%. So everybody’s saying we’re making this thing too small. Number one – we’re in a two-team market even though the other team doesn’t agree. [laughs] Number two – we think less is more. We want players to look up and have the stands filled. As much as they shouldn’t care whether it’s one person or 50,000, they do care.

ML: They absolutely care.

And so does the manager and so does the staff and the ticketing group. We have 130 people we employ and deserve to have a proper operating environment.

ML: Okay. Going to the Cisco Field renderings that were released last year by Baseball San Jose. A bunch of us, because we’re stadium geeks, started to dissect the pictures to figure out what’s in there, what’s going on. We were able to divine a few things and maybe some of my guesses were wrong. The first thing that stuck out from a pure baseball standpoint – because that’s what we watch, the action on the field – in RF you have that big wall of something facing Autumn Street. The dimensions of the field –

I’m gonna defer to my son Keith. who lives up here in the Bay Area. I’m gonna have him call you or you can call him, either way. He can sit down and explain this to you. It can be a separate blog time. I like it, but I just don’t have the info.

ML: Is Keith dealing with most of this technical stuff now, nose to the grindstone?

He’s my son so I don’t want to overdo it. He’s a little less emotional than I am. Probably smarter, Harvard MBA and all that. He’s a real estate developer and a good athlete. Billy wants to see more of Keith but Keith’s nose to the grindstone, trying to keep everything going here. On both soccer and baseball plus he has other activities outside of that. You’d get a kick out of talking to him.

ML: I’d love to do that, whether that’s soon or after the decision is made.

The other thing is the architect, who used to be with HOK then left – if the two of them were here you’d get a kick out of talking to them. They’re great people. I’ll work on that.

ML: That’s the stuff that we (on the blog) really want to talk about. You mentioned Billy Beane just now. Do Billy and Keith have an ongoing dialogue over how the ballpark should be developed? 

What Billy wants is to do is be able to walk into an office where he doesn’t trip over boxes and stuff. The answer is that we have Steve Vucinich [Ed.: VOOSE! A’s equipment manager]. He has a continuing list of all things the things he’d like to see in the ballpark. He’s been keeping the list for so long that it’s been getting yellow, he teases me. We will use all of our people – we have already but not to the degree when we start actually determining storage space, down to the details. We have great resources for this. Better than just consultants.

ML: That reminds me of when what is now Chase Field was being planned, they left a lot of the conceptual stuff to Buck Showalter, a manager. 

A manager would like to have more space between the foul line and the stands. We want to have one inch. So we’ll have that kind of battle going.

ML: I like that kind of battle. It’s a good thing to sink your teeth into. One more question. During the Fremont unveiling, you referenced ancillary development items such as the baseball village and museum. What happened to the museum concept? 

We probably don’t have room for it there. My partners, the Fishers, they contributed a wing to an art museum in San Francisco. They talk about a museum all the time. They look at the art of baseball. Or maybe they’re talking about pure art. They’ve also been down here and have had a conversation with the local museum. [Ed. – As we are talking I look out the window at the San Jose Museum of Art, a short throw from where I sit.] They have a great art collection, it’s not necessarily sports-related or sports memorabilia. We haven’t thought about it, but we’re open to those kind of fun things. Right now we don’t know if we can incorporate too much of that into the ballpark because of the size. So it isn’t perfect. If John Fisher were here he’d be talking about bringing great contemporary art to a baseball park and I’d be talking about bringing somebody’s uniform.

ML: You know what? I went to Cowboys Stadium last year and there were several contemporary art installations throughout. And it’s really beautiful and striking. 

John will be a big influence on this facility.

ML: That’s great. One last thing. When you look at the renderings, I’ve had a few people tell me it looks like a modernized mirror image of Fenway Park. 

You know, I don’t see it that way but I’m not sure. It is small and compact. Again, I’d like to defer that to the meeting with Keith and so forth. I mean, if we had Fenway Park right now I’d be very happy. [laughs]

ML: [laughs] For years, Fenway had 33,000 seats and no one complained.

You gotta always remember we’re in a two-team market. While there’s plenty of baseball, there’s plenty of other attractions in California, in fact there are more attractions than in Boston for the consumer. We gotta be careful about that.

Is that helpful? I’m pleased you were willing to do this. Believe me.

ML: I’m pleased that you had time to sit down and discuss this.

I guess the point is that I keep getting beaten up, and if people feel that way fine. I feel there are areas where we’ve really been diligent that people don’t want to think about.

ML: This was really great. It’ll be really productive when it gets posted. 

[Ed. – I had originally meant to follow up the museum question with one about honoring A’s history but was thrown off by Lew Wolff’s response that I forgot it. We were also heading into a hard stop. I’ll be sure to broach that in the discussion with Keith Wolff.]

08.04.11
by

The Big Lew Wolff Interview, Part 4

Part 4 of 5 (Part 1, Part 2, Part 3)

ML: Now lets move onto everyone’s favorite topic – tarps. They’ve been a bone of contention ever since they’ve been up there. What have you learned from having them up there, whether they were an experiment or another initiative, do they help? Hurt? Does it even matter?

Actually, I want to go to your site. The doubleheader the other day. It was interesting. Somebody caught me the other day at the soccer game, he said, “Oh, I went to the doubleheader, I’m a Giant fan but it was so much fun.” But in your own blog, there were a whole lot of comments saying, “Gee the (Coliseum crowd) looked great because the tarps were there.”

ML: A lot of people said that.

There you are, I win, they (the critics) lose. Move on.

ML: [laughs] And it wasn’t even a sellout. 27,000.

I know, but it would be better if the seats weren’t there. Look, we have $2 Wednesday and a $1 hot dog. You personally have a problem with that. There’s a limit of ten (hot dogs). [laughs]

ML: It’s true. [Ed.: Years ago I once ate six dollar dogs in one sitting. I am no Joey Chestnut.]

I want to see the person who eats that. All kidding aside. Everybody’s saying you have to open this or do that, make it cheaper and cheaper. We need revenue, yet nobody says, “Look how reasonable the A’s game is compared to the Giants.” Which is fine, they have a better environment to go to. You should pay more there.

ML: That actually gets me to something I’ve been thinking about for a while. All the discounts that are available. They’re great and they allow families to come in (more frequently), but sometimes I wonder if there are too many discounts, that it devalues the product.

It definitely does. If everything is product – I’m not saying gouge people – but everything is product. I sort of get a kick out of Groupon. It’s a big problem all sports and concerts, Stubhub and others. Somebody wrote an article in the LA Times where the people went to a Dodgers game for $2.95, they got three seats. It’s also in the hotel business – you’ve got all these sites like Expedia. I don’t know where it’s going but a lot of people go on StubHub. Sometimes they’ll buy seats for triple. Sometimes they’ll buy seats for a third. It’s a very good point. Baseball’s looking at it. The hotel is looking at it in a different way. Who owns the content and controls the price? We own the content. I’m not sure we control the price.

ML: The Tuesday free parking promotion that you’ve had for couple years. Monday’s attendance was 11,000. Tuesday’s was 12,000. 

In the house Monday was 5,500. Tuesday was 8,000. I don’t know if the parking was a factor.

ML: It doesn’t seem like it has a lot of traction.

One of the problems is that we don’t have (much to work with). I think our marketing group may be one of the best in baseball because they have such a challenge. It’s fun to be at the Coliseum, but I don’t know (beyond that). We try everything. The critics say, “Lew’s trying to discourage fans.” That’s really not true. If they want to believe that it’s fine.

Our revenues are around $140-150 million. Our payroll is $75 million. That’s about right. I could name another team or two teams whose payroll is around $40 million. We’d make a lot of money if we did that. I will not do that.

ML: The team you’re playing right now (Tampa Bay).

They run pretty well. I was thinking of a different team.

[Ed. – Wolff demurred on naming the team.]

Over a time period, because of where they were in the standings, all of a sudden they got some terrific young players through the minors. Billy has kept us competitive, and he doesn’t get as much credit as he should, but that leaves us in the middle of the draft. So where other teams get higher picks –

ML: Top ten pick.

That’s never been my goal. I’m convinced that we will have a new stadium in 4-5 years. I hope it’s here. I can’t keep asking Billy and his guys to (deal with being a low revenue, low payroll team).

ML: In the past two years regarding player development, it seems you have gone in a different direction of going after international players, whether it’s Michael Ynoa or Hisashi Iwakuma. Outside the draft. Is that some sort of new targeted strategy?

It’s a strategy but it’s not new. The big money teams. I don’t have the exact figure, but in the last few months the Rangers have spent some $20+ million in the Dominican Republic. [Ed. – Technically this was $23 million for three players, two from D.R. and one from Cuba.]

If the new CBA has draft pick slotting and an international draft it’ll be better for us. We can’t go after free agents and pay somebody six years [trails off]. Last year we thought we had the makings of a pretty good team. We sat down with – and I personally was involved with Billy and David and Scott Boras – and we sat down with Adrian Beltre. We went down to Orange County and met with him. At the end of the day we offered somewhere over $70 million for however many years, pretty much equal to what the Angels offered. Scott said, “No he’s gonna get $90 million.” And Adrian was wonderful. We left and thought, “That’s not what he’s getting.” And then Texas paid him.

We went after Lance Berkman, the (National) league leader in home runs. I didn’t do that. Billy literally flew to his home and talked to him. We offered him 2 years at $8 million (per year), I don’t remember the exact figure. St. Louis only offered him one year at that. I don’t like to blame on Oakland. For reasons of his own choosing, he decided to go to St. Louis. Those two players would’ve been very important to us. We went out and got other terrific players, free agents – DeJesus, Willingham, and so forth. It’s a little disappointing that the hitting (hasn’t panned out). We’re starting to look at our air conditioning (the marine layer). Why do they hit .280 (somewhere else) and then come here (and not hit)? We’re starting to hit now, hitting’s a little contagious.

So when fans say that we’re trying to discourage and we’re trying to make the product bad, they’re wrong. We’re doing the best we can. We send in a report every year about how we use revenue sharing. We don’t put it in our pocket. Our best approach is to build through the minor leagues, drafting, and (hopefully) the international draft.  That’s our best chance of competing.

ML: Do you think that slotting and the international draft will be part of the next CBA?

I don’t know. I hope so, I think it’s good for everybody.

ML: I sure hope so. It’s crazy that given all the reporting about big money payrolls being 2x, 3x, 4x the A’s, it’s sort of underreported how much development budgets make expenditures that much higher.

Well, we have no choice. So we have to use our money efficiently. So it isn’t a matter of lowering your payroll for a major league team. In fact you have to use that extra money in the minor leagues – on the draft and so on.

ML: Could the A’s to land a top tier free agent – say a slugger – next year or the year after that regardless of the ballpark situation? Would you take a shot at it?

We took a shot at Beltre. That was a six or five year deal. The answer is yes, but that isn’t where we’re going to get (that productivity). First of all, the probabilities of our being successful are limited. Boston, Texas, the Yankees – they can just offer another this or another that. We will not intentionally lose money because it’s not good for baseball. It’s not good for the team. We’ve tried everything. We got lucky once with Frank Thomas (in 2006).

The year we went to the playoffs, this is what scared me the most. My people told me, “Just you watch.” Going into 2007, after we got to the ALCS, all we needed was another this or that (player). We had less season ticket sales going into 2007 (than in 2006). How is that possible? It’s just a function of our market is shared. When all of these columnists report this and remember that, when we were playing in the Coliseum and the Giants were playing in Candlestick. That’s a lot different today than it was then. They’ve got a beautiful new ballpark. We don’t.

ML: That’s really what it comes down to, doesn’t it?

It’s not totally that. I think our management talent is as good as anybody’s. I tell you I’ve got owners all over the place who laughed I when I gave Billy and Mike (Crowley) long term contracts and shares of ownership. Now they’re saying how smart (the deals) are. I don’t know two other people, plus David (Forst) and Farhan (Zaidi), who could operate under the conditions that we have – which I’m not complaining about, they’re just what they are – any better than those guys.

ML: Yeah. I’m not sure what else you can do other than hoping a lot of high draft picks all of sudden drop in your lap. That’s not happening.

We’ll be okay. We’ve got the trade deadline coming up. We’re not looking to acquire anybody. We’re not going to give away people just to reduce salary. We want to get something for that. I don’t know how many teams are – so many teams have $100+ million payroll that even if they’re on the cusp of getting to the playoffs they may not be that interested. All of that accelerates from now until Sunday.

ML: If you get a really great offer that you can’t refuse…

We’ll look at it, but I like the way the team is playing now. Plus we’ll get draft choices if we don’t keep certain players. We’re not in a panic position.

ML: No fire sale.

No fire sale. The nice thing about us, and you have to give Billy a lot of credit, one of my favorite all time keepers, not just a player, a keeper, is Mark Ellis. We have a young guy in Jemile Weeks who we hope to be our future. The only thing that we did was – Billy did this, I didn’t even think about it – we wanted Mark to be in a position where he was playing all the time. [Ed. – Ellis to Colorado trade]

ML: Which he is now.

So that was sort of a below market deal, but it was good for him and we owed it to him.

ML: I think it had near universal praise for the way it was handled.

Selig told me never to fall in love with a player because they always move.

ML: Naw, we all loved Ellie.

That guy is so sweet and so decent. We’ve got quite a few but he’s special.

ML: It’s the great legacy of A’s second basemen from Rapid City, SD. Like this stadium business, the radio saga dragged on much longer than it should have? What did you learn from that experience?

Again, the Giants have a better situation (because of KNBR). We didn’t learn much. We learned that sometimes the people who administer bankruptcy, sometimes they get fees for that. Sometimes they don’t operate in the best interest of the very people they’re working for. The situation that came along in the middle of that (95.7 KBWF) was fine and we did it. It’s not perfect but it’s working out better than we thought. I was getting tired of listening to country music, and then the ballgame, and then a religious channel.

ML: Those were trying times. Let’s go back to territorial rights. What is the best way you think this should be resolved?

Good. I always say that if I had a magic wand, we should share the territory.

ML: Flat out.

Just like all the other two-team markets. Your article is right. Santa Clara County was nobody’s territory at one point. That’s good information, it’s true. I have seen the minutes of those meetings, and the Haases were complemented for being cooperative. The reason that happened was to build a ballpark in San Jose. I was even active in that as a businessman. I had no thoughts in ever being involved in baseball. For the Giants to say they have the territory but they didn’t mean to – I just think we should share the market like the other teams. Theoretically the Angels could move right next to the Dodgers if they want.

ML: They could but it’d be crazy.

The Mets could move next to Yankee Stadium. The White Sox could move across town. They’re not going to but it’s allowed. And we’re further from the other team than any other. [Ed. – Again, not including DC/BAL] The whole thing in an academic sense, I can’t imagine the debate.

ML: Do you think the owners understand this? Do you have to talk to them or lobby them about this?

I made up my mind not to lobby them. Over this long period of time they’ll tease me a little bit about it. In fact several have told me, “I’ll talk to Bud for you.” I say no. It’s being done the way it’s supposed to be and let’s just see what happens. Running around and lobbying, I just don’t do that. It’s just not worth it. First of all, everyone’s going to go along pretty much with the commissioner’s decision.

ML: What’s your confidence level right now that this will get done by the end of the year?

In your lifetime? I have a lot of confidence that it’ll be done this year, but I said that last year too.

ML: Right.

Who knew that baseball would explode in two or three other areas? I still have a high degree of confidence that we’ll get an answer one way or the other. That’s all I’m asking for. I mean, I want a yes for sharing. In lieu of that I’ll take a no.

ML: Do you have a hard stop or a deadline for getting this done?

Yes. We missed it by two years. [laughs]

ML: There you go.

The answer is no, not now I don’t. As I say, I’ll pass the baton to those who are working on it. We’re working on this everyday. We’re talking about sight lines and everything. We just haven’t pulled the trigger to spend because we want to know it’s there (first).

ML: Okay.

08.03.11
by

The Big Lew Wolff Interview, Part 3

[Ed. – Before I start again I have to mention that there are some blogs out there who are cutting and pasting huge chunks of this interview for further commentary. I have no problem with that. I do have a problem with the fact that I haven’t received a single request to use this interview for any kind of reuse of large chunks of it. I mean, really, it’s not like I’ve spent a lot of time on this. It’s not like people care about professionalism or common courtesy anymore. How about a heads up? Maybe a link to the original interview? It’s the least you can do. The very least. We may not agree on much, but we can at least show courtesy and respect others’ work. That’s all.]

Part 3 of 5 (Part 1, Part 2)

ML: You’ve frequently said here and everywhere that it’s all about keeping the A’s in the Bay Area, in this market –

For our ownership.

ML: Right. Recently, Giants president Larry Baer has hinted that while he supports the A’s looking in their territory – Alameda and Contra Costa counties – but if they can’t they’re welcome to try somewhere else such as Sacramento. How do you respond to that “hint” by Baer and the Giants?

If tomorrow you had the only McDonald’s in San Francisco, and fourteen miles away there was another location in Oakland. And your SF McDonald’s is worth $10 million and the Oakland McDonald’s is worth $100,000. That was fine for you (SF). Now the Oakland location says they’re closing up and they’re moving outside of the territory. What happens to the only McDonald’s then? Larry and the Giants would benefit hugely, I guess, in their minds. They dominate the market now, they may want to dominate it totally. Their market value might jump a huge amount.

However, I don’t get it. I don’t get why they’re so adamant about this. It’s just a difference of opinion.

ML: Do you think the Giants have a motive for protecting their territorial rights other than what they’ve stated publicly? Which is – they just want to pay off the ballpark.

I’ll have to say that going back to – forget that it’s Oakland or San Jose – there are four two-team markets. [Ed.: Note exclusion of DC-Baltimore] Three already have the same boundaries. I think this one should too. I think we would have a great rivalry with them. Why shouldn’t we have a beautiful ballpark? In fact, one of the backers and instigators is my partner and his family, the Fishers. I think if you actually went to a lot of the passive investors in the Giants – these are people who want to support the Bay Area, not just one team. What is it gonna hurt? In fact I think it’s gonna be better for them too. Everybody has their own views.

ML: There’s been some talk from fans and media about challenging baseball’s antitrust exemption. Knowing what you know, being in what they call “The Lodge”, is there anything realistic about that?

Well, today we live in a litigious society. If you want to sue over this chair you’re sitting on you can sue the manufacturer because you’re not feeling well. We are not of that ilk. We are a partner. Maybe this is an odd view, but I believe that we’ve entered a partnership. This is what the commissioner chose. As I said before, we’re not even thinking about it (suing). It’s not right based on being part of a partnership. Therefore it’s not a lever for us, it might be for someone else. If the reverse is true, maybe a smart attorney running a baseball team might say, “We can do this, we can do that.” [Ed.: I chuckled] We’re not going to do it, that’s all there is to it. It’s just not right.

ML: This seems to be something very consistent that you’ve said, even going back a couple of years ago. The partnership idea that all of the owners are in one boat and they’re all supposed to be rowing in the same direction.

I know I’m a little naïve when it comes to that, in the world that we live it, but that’s how I’m gonna run it.

ML: Okay. When it comes to making a decision, is it really all up to the commissioner?

Yep. Well – that’s a good question – he would need a vote of the owners [Ed.: 3/4 of owners]. Since I’ve been there, there haven’t been a lot of votes. Maybe the Giants wouldn’t vote for it or a couple of teams. Again, it’s a collaborative thing. With all the work that’s gone into this, whatever the decision is, it’ll have a lot of backing. I think if he decides to let us move to San Jose that he’ll get a lot of votes. I don’t think the voting will be an issue. He even has the power to go beyond that if it’s for the good of baseball. I really don’t sit there and analyze this from a legal point of view. If the decision is “you can’t” or “you can” the support will be to follow the commissioner’s lead.

ML: And that’s really all you’re looking for. Yes or no.

Yeah.

ML: You mentioned the Dodgers and Mets offhand. Are they on the front burner and the A’s on the back burner, or does it not work like that?

You’d have to ask the commissioner. No, I don’t think we’re on the back burner. I really think the Mets and the Dodgers are two different situations. But they’re both important (teams), important markets, important to us. The Mets aren’t suing baseball. They’re just trying to survive – and maybe they made some errors with this Madoff thing – I don’t know that much about it. The Dodgers are attacking, they put their team in bankruptcy. If they follow the constitution of baseball that’s cause for taking over the team. I’ve got my own stuff I worry about every day. We need those markets to have ownerships that are committed and capable of not getting into these issues.

ML: Commissioner Selig, when asked about what’s happening with the A’s a couple of times this year has said, “We’re working on it,” in nice, vague terms. Are they really still working on it? Seriously.

[laughs] I think what he’s working on – and I don’t know – is unless Oakland knows something that I don’t know. I answer is I think he’s contemplative. Way beyond where I am. We talk several times a week, not on this issue but on others I’m involved in. I’m having a – I enjoy the commissioner. We’ve known each other a very long time, longer than I’ve known my wife – and we’ve been married 54 years. I think he’s got enough information to make a decision. He may be trying to figure out a good way that the Giants are happy and we’re happy. He tends to do that. And right now, what choice do I have? Last night we won a game. That’s more fun than worrying about this crap.

ML: I agree, I agree. Now let’s talk a little about the Coliseum. I’m sure you’re aware that attendance is up this year as opposed to last year, and over 2009 as well. 

When Russia went from communism to capitalism they had a huge jump in economics, but that’s from a very low base. [laughs] When I talk to the commish he’ll say to me, “You know, you’re up 4.5%.” The one thing he follows is attendance. Now I follow paid attendance, I’m not sure that he does.

ML: Fair enough.

Attendance is up (league-wide) according to my last conversation. They’re up a little bit in the American League.

ML: Yeah, I think it turned around after the weather. 

Now I don’t know if it means in the ballpark. I look at Dodger Stadium and it looks almost empty sometimes.

ML: I believe that it’s paid attendance and it’s somehow withstood the drop for the Mets and Dodgers. 

What happens is that some people are afraid to give up their tickets. I was hesitant to give up my Laker tickets. But then I look back and ask how many games did I go to since my kids all moved out of L.A. Do I really need these tickets? And then a year later I decide to do one more year. I worry about the impact of that.

ML: I see.

I just wish the Dodger thing was settled and we could move on.

ML: In the past you’ve mentioned the Coliseum’s defects and its chronic state of decay. Could a ballpark be built alongside or replace the existing Coliseum? For now let’s put aside the financing – well no, we can’t put it aside.

No, let’s put it aside for the moment. First I looked at the Coliseum, because there was nothing downtown. We’re talking about the physical stadium. This is where I read the older (sports) writers, they’re living in the past. A lot has changed for Oakland since then. The last year the Haases owned the team they had the highest payroll in baseball and drew 1.2 million. You might want to check that out.

ML: They were. [Ed. – 1.2 million in the strike-shortened 1994 season, 1.1 million in each of the following two seasons.]

[Ed. – At this point Lew’s son-in-law, Dean Rossi, comes by with his son, Arthur. It’s mostly a personal conversation so I’ll leave this out. Lew will drop Arthur off at the Coliseum to run around the clubhouse – every kid’s dream – before heading up to City Hall to meet with Mayor Quan. Note: Two partners in Rossi’s law firm help run Baseball San Jose.]

So where were we? Coliseum.

ML: So is it possible?

Let’s talk about it. Aside from the market being – Oakland used to have several major corporations, doesn’t have them any longer. The whole thing with the Raider thing, Mt. Davis, we had nothing to do with that. You can never get sight lines that satisfy two sports in one venue anymore. Even inside it’s not good to have hockey and basketball. You can do it but, you know.

There are so many physical issues. Right now if we wanted to move the fans closer, I don’t know what to do. The field is 22 feet below sea level so there’s no way to move forward without tearing down all the seats. You’d understand that better than most.

ML: Yeah.

The field is great until football. The field is great because we have a great groundskeeper, Clay Wood. As soon as the Raiders come in – it’s just not good.

About the site. You can make all the drawings you want on that site. This is what really bothered me. The Coliseum wasn’t even the #1 site in the HOK study. Even Fremont was in the study. The Coliseum had a little line about some kind of utility thing. I asked if there was a title report ordered for the Coliseum. In my world that’s one of the first things you do. Nobody knew, the city didn’t know, it was just a bunch of bureaucratic nothing. So we ordered the title report, which is just about this thick [fingers spread an inch apart]. There is an easement.

[Ed. – The Coliseum Authority recently bought the land in question as part of its new Raiders stadium effort. Oakland Councilman Larry Reid envisions an ancillary development project similar to L.A. Live in downtown Los Angeles, next to Staples Center. The Authority is also proposing $4 million in additional expenditures related to project study costs.]

ML: You mentioned this. It was the sewer interceptor.

It’s not an easement you can move. So any architect who wants to build over the freeway or whatever, needs to sit down and determine what easement does relative to placing a football stadium or arena. That kind of even minor detail, we could say, “oh we’ll do it” but never do it. None of that’s done. The average fan shouldn’t have to bother with that. But that site isn’t as simple as we thought.

One time I thought it would be a good idea to buy the triangle that heads out to Hegenberger (Malibu/HomeBase lots). I said, “Look, we don’t know if we’re gonna stay here, but we need that piece to do parking or mitigate, otherwise it’s chaos if you’re trying to develop that site.” All of a sudden another architect comes up with an idea for these multistory garages. Well, who’s gonna pay for those? And if you’re on the fifth floor of a garage for a baseball team, you might as well stay home. So it was just a hundred inhibitions.

Now, we recently had someone come up to me, a legitimate guy. I didn’t ask who it was as it came through someone else. He said, “Gee whiz, we think there’s a way to remain in Oakland and live with the Coliseum” and so on. Well, tell me what it is. “If you guys want to sell the team” and all that stuff. I’d like to know what you’re talking about before I would even contemplate that. Other owners haven’t been able to do anything in Oakland (build stadia) either. We’re not the only one. The Coliseum’s an over 40-year old facility. Dodger Stadium is too. Dodger Stadium, I believe, would take a minimum of $100 million to keep it going – and they keep it pretty well maintained. So you tell me what this would cost.

ML: I have no idea.

I don’t either. They (Coliseum Authority) don’t have any money. We’re constantly making repairs that are not our obligation.

ML: Really? Like what?

Leaks and things. The scoreboard. There are two of them because of football. I think they’re finally going to replace them, but if they don’t there are no more parts. If a light goes out we borrow it from another one. It’s aggravating. But they basically say they don’t have any money. They still have bonds to pay off. The place is old and this is not the time for cities to write a check for sports.

ML: Yet they’re going forward with a study for the Raiders.

All these studies. If I were an investigative reporter I’d like to know how much is spent. Supposedly that study is done. And that’s fine, they should, the Raiders are fine. Where are all these things? Who’s doing them? If it’s a six month study what happened to the first two months? We have heard nothing. And we’ve been more tolerant than the other two teams (as tenants). We’ve never affected our rights there. If we win (legally), what do we win if they don’t have any money? It was a baseball park once. I wasn’t around when any of that happened, but the amount put into that sure seems strange to me. That was before my time.

ML: The litigious part kind of speaks for itself at least for the other two teams.

Look, I’m just not litigious. I think our legal system is killing us, so much initiative. I’ve been in business almost 50 years. I’m a real estate developer. Most of my contemporaries are suing someone every three months. I’ve had two lawsuits my entire career. I think everything can be settled. But you can’t do it if someone’s not willing to cooperate.

08.02.11
by

The Big Lew Wolff Interview, Part 2

Be sure to check out Part 1 of this interview, posted yesterday. You can also get the full interview in PDF and e-reader formats by donating $5 via the PayPal link on the right.

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Part 2

ML: As I understand it, you had met with Mayor Quan in Oakland recently.

I’m actually having lunch with her today. I have not met with her (yet). She has been very nice to make time to see me. There’s no agenda.

[Ed. – I have not heard anything from either camp about what was discussed during that meeting. Nothing to the regular media either, AFAIK.]

ML: Just a chat, really.

What I’m telling you is what I’ll tell her. There’s no magic bullet here. If there was it’s simple. MLB (the panel) would’ve come to me with Oakland and said, “Here’s a suggested financial plan”

ML: Comprehensive.

Remember that they’re the messenger. They’re just doing what they’ve been asked to do and I’m sure they’ve done it three times now. It sort of says to me that nothing has been produced that means anything, to my knowledge. There may be other reasons. The commissioner is contemplating whatever he wants to do. I think we’re getting there soon. I just don’t know.

ML: Okay.

The only thing missing is that I would’ve enjoyed the process of building the ballpark, financing it, and doing all these things. It looks like because of my age (I won’t be able to). So my son (Keith Wolff), who I think is as good or better at this than I am, and he’s a lot more calm than I am. I believe that development – public or private – can’t get done without a sense of urgency.

ML: It sure seems that way.

We have the resources and we have the people. It’s just that I final – I mean I can but I’m the commissioner’s age. I want to be very careful. None of us are going to live forever or be as active forever. I’m lucky, I think baseball’s keeping me active.

[Ed.: I have to point out that he ordered a frittata with fruit on the side, no starches, coffee with no cream. I ordered Eggs Benedict with potatoes, lots of cream with my coffee. Multiple cups.] 

ML: It seemed like that happened with the Marlins, where Jeff Loria fought for years, and when he finally got approval his son-in-law took over.

That’s also true in Minnesota. I’m sad that the owner (Carl Pohlad) didn’t get to see his ballpark. We’re very advanced in our opinion. Why go out and spend $20 million on working drawings if you don’t know you have a site?

So it’s just a matter of waiting for a decision. I’m not a patient person but I’ve become very patient. The thing that makes me most comfortable is that I have a lot of backup to get this done. That’s number one. On the hand this is affecting our whole organization. We’ve got great people – Billy’s been there for fifteen, sixteen years, twenty years for Mike Crowley. I’ve promised them a new, modern facility and I feel responsible.

There’s something I think you’ll like to know. When we bought the team (2005), six teams had payrolls above $100 million. Now it’s twelve or thirteen. While Billy and his guys are fantastic at doing what they do, there’s only so much they can do. We can go and lose $30 million a year like the Haas family was doing but we’re not gonna do that. So if anyone wants me to do that I’m gonna have to say that we won’t.

[Ed. – According to Forbes/Financial World numbers the A’s lost $6-10 million per year during the last years of the Haas era, which would be worth $9-15 million now. MLB’s stance historically has been to consider Forbes’ numbers inaccurate.] 

ML: That’s something I’ve been arguing for years.

And baseball doesn’t want us to do that. All these teams that have spent haphazardly without breaking even have gone and caused problems for themselves and baseball. Remember that baseball is a partnership. The rule of thumb for running a team before you get huge revenues is that if you can keep your MLB salary at 50% of your revenues you’ll probably be at the break even point or make a few dollars. It’s not an internal rate of return 20% or something like that. You shouldn’t be in this business if you want that.

The great thing about Billy and Mike and their people is that they’ve been able to keep us competitive until we get a new ballpark – I haven’t delivered. We’re in a total revenue issue. We just need more revenue and we can’t get it without a new ballpark. We need some scarcity. We can’t have 70,000 seats or people yelling about tarps.

ML: I’ll get into that later.

I don’t have a yacht [laughs] that we’re paying for out of secret proceeds from the ballpark.

ML: We’re talking about Oakland for a little bit. Has anyone presented you with other information about Victory Court, a sales pitch, or anything like that?

Absolutely not. However, gotta be fair. I think Oakland thinks, “We’re not dealing with Lew Wolff. We’re dealing with this committee.” If the committee has done that, I don’t know about it. I think what’s happened is that they’ve discovered what we’ve known. Through no fault of Oakland, the ability to build a new ballpark – well, you know that drawing a boundary around six blocks or ten blocks doesn’t make a ballpark. Is there a soil test? Will you do eminent domain, will you take people’s property? Do the off-ramps have to be replaced? Hundreds of items. And that kind of Socratic discipline – why should a fan in LF worry about that? Those rich owners over there are supposed to do it no matter what.

ML: Let’s move on to this freeway park. It was proposed by an Oakland architect, Bryan Grunwald, who occasionally posts on the blog. 980 Park is a concrete deck over a submerged section of freeway near downtown Oakland. You said that you consider it an A+ in planning and an F in implementation. Care to elaborate?

The problem with that is that talking to you is easy. Talking to guy looking for $2 ticket night on Wednesday is different. I can’t even imagine the cost on that. Forget about a ballpark. Say you’re putting up a hospital there or a park. I think we’re talking a billion – I have no idea. Air rights, we have them all over California. I haven’t seen too many places where they’re building over there – bridges and stuff. Let’s assume that we did that tomorrow. It would take a decade. I wouldn’t know where to start. First of all, we’d say to Oakland or somebody, “Give us the platform and we’ll build on it.” The platform itself has got to be overwhelming. I love those kind of ideas. They win architectural contests, a student gets a master’s degree for doing them, and we do have huge amounts of air rights all over the world. It just will not happen. If that’s the best we can do, might as well forget it.

ML: There are few places where air rights translate into anything. Those are places where the need is great, such as Manhattan.

I just don’t get it. It would be fun to have an architectural contest. But it’s like an iceberg, beautiful at the top, huge (beneath the surface). If that’s the best any of us can do, we have to forget it.

ML: Let’s shift over to San Jose now. You’ve had an ongoing dialogue with the City and Mayor about the Earthquakes stadium. How is that going?

The Earthquakes stadium also has to be privately financed. Certainly it’s a lot less expensive than a baseball park. I think – I don’t have the numbers exactly – they just opened a new soccer stadium in Kansas City. I think it was $150 million or something and I believe every penny of that was public money [Ed.: Cost was actually $200 million, all public]. We’ve worked very hard. What we want in a soccer stadium is a place you can go – we’re not looking to build Wembley Stadium – we’re in the 15-18,000 seat goal in this market. We’ve worked really hard to get the cost down to about $50 million, which everyone in soccer asks, “How can you do that?” Well, people can do it if it’s their own money, it’s not the government. There’s no soccer stadium that I know, except maybe Home Depot Center (that was not fully public).

ML: That was years ago. [Ed.: Columbus Crew Stadium was also privately financed by Lamar Hunt.]

Well they also had a good deal from CSU-Dominguez Hills. I’d like to move it faster but we’re doing it in stages. Right now we’re going through a planning process, not for a building permit but a use permit. We spent money to tear down the FMC building, but we haven’t pulled the string yet to build it because if you look at the economics of it you’re only using it for 19 games or 20 games. The ancillary use of these facilities, which I think is better than what my consultants think, concerts aren’t what they used to be, high school graduations. It’s Silicon Valley, I think you can have product introductions there. A lot of these things that you can’t predetermine. So what we’ve done is that if there are 10 steps to it we’re in step 7 or 8. We’ve spent money to do that but we haven’t pulled the string yet.

ML: On a related note, I went to the game at Stanford against the Red Bulls. I hate to belittle Buck Shaw, but it’s a small venue. Stanford, which was another example of something built with private funds, cost controlled by John Arrillaga. Many people came from down the Peninsula, there were plenty of the existing fan base, locals. For the fans it felt like it was overdue. Did the experience of that game – 40,000 people, the place was buzzing with excitement – change your thinking or reinforce it in terms of what the Quakes need to thrive?

No. Two reasons. One, One of the people at MLS called me and asked if it was it the game or the fireworks. The game was around the 4th of July. If you look at our fireworks games in Oakland –

ML: They’re consistently higher in attendance.

So I said to our guys, “Why don’t we just work out a deal to play at Stanford all the time?” Stanford doesn’t want that. I don’t want it. No, the depth of the market means that except for three cities, maybe, soccer is not profitable. The owners – Anchutz, my guy John Fisher, the Krafts – they love soccer and they’re gonna support it if it takes another decade to get it where it needs to be. We’re the same way. But the market is not for 40,000 people. We wish it was. If we have 15-18,000 fans and they’re really on top of the field – we’re not trying to have private boxes, soccer is a family sport – we couldn’t do Stanford every week in my opinion.

ML – One of the things I noticed from the renderings is that other than the fact that it’s three sides with one open, the design looks like a miniaturized version of White Hart Lane, where Tottenham Hotspur plays. Is there anything to that?

We’re close to them as you know. I don’t think so, except that when you think about a soccer stadium the dimensions of a field are the dimensions of a field. The only real difference to me is if there’s a track, which really screws it up. All we want to do is get noisy and close. I would say that 70 or 80% of them are like that.

ML – The NFL just completed its CBA negotiations after 3 month lockout. MLB has been, as I understand it, having some ongoing discussions with the players union about their new CBA, which is expected to be done by the end of the season – 

End of the year. Or sooner.

ML – Does what’s happening here with the stadium and the unknown that it is right now have any impact with the CBA?

No. However, I believe that, or I hope that we will have a non-confrontational negotiation, which has been ongoing. What you’ll have is, I don’t know the exact term, probably 3-5 years of what we call labor peace. We had that the last 5 years. I think some of the things that both sides are discussing – I don’t want to get into that information – will be beneficial to all of baseball and all of the union. I don’t think it’ll be the threatening kind of thing we’ve seen in basketball.

ML – There’s been almost no media coverage except for the occasional article from a national baseball writer.

I think it’ll get a little more coverage as we get closer to finalizing an agreement. It may not be controversial at all. This is the year to finish that agreement if possible. We’re working on it very hard. It isn’t like one side is screaming at the other.

ML – The players appear to be offering ideas that the owners may be interested in.

I follow it but I don’t want to get into it. The commissioner – you need to give him a lot of credit. His orders, and the head of the union, are we’re in this business together. Let’s work something out. I haven’t heard anything earthshaking.

ML – That’s good to hear.

Usually union negotiations get tougher close to the end. [laughs]

ML – What do you think about talk – and this is coming from national writers who are spitballing – about contraction of the A’s, Rays, or both?

We (the A’s) are against contraction. Nobody’s called us up and said, “We’re thinking about contracting you.” Contraction has a lot more issues to it than just shutting down a team and so on. They’d pay us the value (of the franchise). Then you’ve got minor leagues, places, cities all over the country with ballparks based on our activities, not just Tampa. We want to do the opposite.

ML – Do you think there’s pressure to get this done (a ballpark) so that nobody even has to consider that step?

That’s a very good question. I think getting it done has nothing to do with contraction. Baseball may have as many teams as they need. Some years it’ll be like we ought to contract. I do think that there’s so much going on with the Mets and the Dodgers, you can only address so many things. All of us are multitaskers. I don’t know that it’s so true in baseball. I don’t think it has to do with contraction. But sure, we and Tampa both need viable environments for our fans, or we won’t have any. It isn’t anything against any city.

ML – Do you and Stuart Sternberg (owner of the Rays) ever commiserate at the owner’s meetings about whose plight is worse? 

I’ve decided that mine is worse than his. He’s a good guy.

ML – He’s also a little younger.

He’s got more time. We don’t commiserate so much but we are both concerned. Very concerned.

08.01.11
by

The Big Lew Wolff Interview, Part 1

This interview, at 12,000+ words long, is an order of magnitude longer than the typical posts on this blog. Because of that length, and because of my desire to confine the discussion to the topics within each post, the interview is being split into five parts. However, you can also get copies of the entire interview right away if you donate via the PayPal button on the right. The interview is available in PDF, ePub (e-reader), and Mobi (Kindle) formats for you to use on your computer or preferred device (Kindle uploads require calibre or similar software). Here are your options:

  • Do nothing and get all five parts for free on the site from Monday through Friday.
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It’s rare that I ask readers for anything, and I intend to keep it that way. I took a lot of time out to work on this and I would simply like to recover that effort. Thanks for your support.

–

Last Monday, I received an email from A’s PR man Bob Rose. He indicated that his boss, A’s owner Lew Wolff, wanted to have a chat with me. After some back and forth, we arranged for a meeting at the Fountain Restaurant inside Wolff’s Fairmont San Jose early Wednesday morning. The discussion went two hours long and covered a wide range of topics. Wolff expressed his interest in having an unedited conversation to explain what he’s been doing, and I was more than happy to have that chat. The transcribed discussion below has minimal editing – only to clean up incomplete sentences, the inevitable “uh” and “um” moments, and for me to add brief editor’s notes when I felt the need. My comments and questions are all in bold, while Wolff’s is in regular font. Editor’s notes are in italics/square brackets. I have intentionally not included links so as to not distract the reader. The interview runs more than 12,000 words. This is Part 1 of 5. The topics covered are as follows:

  • Part 1 – History of working in Oakland, 980 Park site, Process
  • Part 2 – Oakland now and what it takes, Earthquakes, contraction
  • Part 3 – Territorial rights, Giants’ motives, Dodgers/Mets, Coliseum
  • Part 4 – Tarps, discounts, player development, CBA, payroll, T-rights again
  • Part 5 – Redevelopment, Target Field, Cisco Field, Keith Wolff, museum and history

I hope you enjoy this interview as much as I did. I think you’ll feel that there are many revealing answers in there, and plenty of stuff for Oakland and San Jose backers to dislike. I’d also like to thank Lew for allowing me the opportunity to do this Q&A.

– Marine Layer

–

ML: You became managing partner in 2005, after a year-plus stint as VP of venue development. Coincidentally, I started this blog in 2005, partly as a writing exercise, and to inform fans. Over six years have elapsed. Did you think it would take this long?

LW: No, obviously I didn’t. Prior to buying the team I was working on the thing. I’m not sure the title meant anything. I thought that we would figure out a way to do it on the Coliseum site or one of the sites in Oakland. At the time the economy was booming and the value of residential entitlements or zoning was huge. There were a lot of public companies, all these big homebuilders, were dying for the ability to get more and more residential rights, to build apartments or homes.

We came up with the idea. The very first editorial which I saved in Oakland – this was before I was even the owner – said “No public money in baseball.” Which is okay. Except for the Giants and Dodgers, all teams’ new ballparks have had some form of public help (financing). So we had an idea that if we brought a new ballpark to Oakland or any place, we could say to the community, “You don’t have to write a check, but we’d like to entitle certain property for residential” – not for our developer. The reason this escapes everybody is because nobody’s going to take their time to look into it except you.

The idea was this: Say someone wanted to build 1,000 apartment units. And they’re going through the process. You entitle that – assuming the city wants that – those entitlements back then were worth $100k per unit just for the right to build, sort of like land value. Instead of the developer taking that money, that money would go into a small joint powers unit (authority) and be used to fund a baseball park. That’s a double win there. The city gets more housing and those entitlements don’t have to be by the ballpark. They could be in Dublin or Fremont, they could be anywhere (in Alameda County). This was a very interesting concept and we checked it legally. It was very clearly stated in an article in the Chronicle, so it wasn’t a hidden idea. With all the delay and difficulty in both Oakland and Fremont – Oakland in the sense of land availability because it’s a built up city – to get land assembled, and then all the issues with traffic and freeways and off-ramps and so on – so time went on and of course the economy changed. So this entitlement approach to build a ballpark is a dead issue, and we don’t see it coming back for a long time. That says, “Oh my goodness,”  instead of putting up $100 million, which we were hoping to do at the most, we now have to do the whole thing ourselves. That pretty much requires us to be in a central business district (downtown) because the infrastructure is already there. We don’t have to rebuild the freeway or an off-ramp. The entitlement aspect of it – somebody should’ve jumped on it. We couldn’t do it by ourselves. We weren’t looking for money, we were looking for process. So we spent the time before we bought the team and about a year or so after. I think I told you before – I don’t have the book with me- that it takes me one hour, forty-five minutes to go through everything we did in Oakland. Even though somebody has a sign in RF saying, “Lew lied, he never did anything.” That person hasn’t come and sat down and asked, “Tell me what you did do?”

The other side of it is that side – Oakland, Richmond – that whole area was built up rapidly during WWII, shipbuilding and so on. (Land) ownership is very diverse. Just land acquisition alone is difficult. Even though some of the areas look blighted, as soon as you say we’re trying to build a ballpark there, immediately the land values go way up. Some people say that the “North of 66” plan was just a gimmick. What they’re not willing to do and be fair about is that we looked at every possible site – Coliseum, Laney, even the Victory area – all that stuff and somebody at the City said to me, “We can’t help you here. What do you think?” At the same time Councilman Larry Reid was looking at another area around the Coliseum where he was going to acquire a lot of stuff. I drove through there and it looked pretty blighted. All I wanted to do is start a dialogue with 50 property owners or 30. Except for one or two people, nobody wanted to even discuss it. There was relocation, we could’ve moved people to the (shuttered Oakland) Army Base. People will just say, “Oh he just made that up.” If I had my material with me you’d see that before even looking at that we looked at every opportunity that was available. We wouldn’t do it if everybody didn’t want to do it. We couldn’t even get traction.

It’s very simple. One of the very first things any city should do is look at their (county) assessor’s office. Draw a boundary around Victory Court or something. It takes a day or two determine there are 20 property owners and their names. Some of them are in a trust or something. If you just took the assessed value – and because you’re going to buy the property add 50% – you’d have a good idea of the that (total value) is and if you really wanted to, you’d call each person and say, “We’re just thinking about this. You’re a property owner here. We’re not doing anything yet.” Then you’d get an idea of the desire to participate from the beginning. Someone might say, “Oh my god, that’s my business, I can’t take it.” If we gave you that assessed value, and then we paid for relocation to the Army Base and a nicer (newer) facility – I mean it’s a lot of work. I didn’t expect Oakland to do that. But I also didn’t expect them just to draw a line around six blocks and say, “Oh there’s a ballpark.”

ML: We get that too much now.

That’s all we’re getting, because I believe – and this is not a defense – it’s because we’ve explored everything more than once. For two years now this committee, which I ‘ve had very little access to – and I’m sure they haven’t talked too much to the Giants either – guys I know, they’re good guys. They’re supposed to step in and check out if I did everything, and if I missed something. I haven’t heard that I missed anything. You could’ve written a PhD dissertation by now.

ML: Certainly.

There’s other reasons that perhaps Bud Selig is contemplating this. He’s my friend, and he’s involved in lots of stuff in baseball.

ML: You’ve had that information that you showed me last time we talked here two years ago. Because it’s taken this long and you have access to this panel, do you feel that the you and the argument you’ve made have been somewhat rebuked?

No, just the opposite. I think they can’t find a flaw in it. If they can, tell me what it is. They’re not rebuking me. I think it’s so overwhelming. If someone flew in from Mars and you were going to put a ballpark somewhere and one was already in San Francisco, where would you put the next one? [laughs]

Had they come up with a different approach that could be refuted or digested, I think it I would’ve seen it by now. At the same time, I can’t give a reason why a decision hasn’t been made. It’s a baseball decision. The commissioner is a very contemplative person. I’m an owner that wants to cooperate with baseball. When I got into this Bud Selig told me, “What I encourage owners to do is to put baseball first and their teams a very close second.” Instead of putting a team in bankruptcy or whatever’s happening in other cities. I’m just not cut out for that. I feel that being in baseball is a privilege, and we’re enjoying it.

ML: We’ve already gone plenty into my second topic, which is a lot about the pro-Oakland crowd who’ve said you’ve lied. I’ve written that the only thing you’ve really lied about is that you didn’t have a Plan B. Is that right, or am I off-base there?

Well, the word lie is a very strong word in my life. I don’t call people liars. The Plan B would be that if someone says to us – no fault of Oakland by the way – that “you have a team that you can’t move and you have to stay in this facility and make it work with the Raiders there.” Plan B is fairly simple, it’s just that we haven’t addressed them. Moving out of the state to other markets, of which there aren’t many. Selling the team to somebody that can do what we can’t do.

ML: Which a lot of them are hoping that you do.

That’s fine, but that party should also have a real plan, go through what we’ve gone through. The one thing that I wanted to do, because I’ve been in public dealings with cities my entire life, is that I didn’t want to be the owner who says, “If you don’t do what I tell you we’re moving to San Antonio.” Also, I didn’t want to get on a plane and start schmoozing with the mayor of San Antonio or Portland or Las Vegas or Monterrey, Mexico. I don’t think that’s the way to do one of these things. I still don’t think it’s the way to do it. But almost every new ballpark, including the Giants’, has been done under the threat of leaving town. So Plan B, the options are obvious. I think a better way to phrase your question is, “Have you spent time doing that?” The answer is, “We have not.” We still don’t feel like we’re moving out of the market.

ML: I’m in the market and I just took the train down here.

Exactly. Frankly, I don’t have the energy to start discussing with another city council outside the state of California. If we were dead in the water, we’d have to ask baseball what they’d want us to do.

ML: You’ve led into my next subject already with the discussion about what’s been done in Oakland. What is the difference between getting something done here, in San Jose, and in Oakland right now?

Very simple. One, we have a downtown location. When I say “San Jose” all I’m talking about is a specific site in San Jose.

ML: That one. [Ed.: I point in general direction of Diridon]

If somebody that you could go to San Jose instead of Oakland, that doesn’t mean it just happens. San Jose acquired land and went through the process of acquiring it in a downtown area where the off-site costs are minimized. They would be in downtown Oakland if there was a site. There’s a demographic difference, but if our entitlement program worked in either Oakland or Fremont we would’ve been there. I don’t care what people say. We would’ve been there. As much as I love San Jose I wasn’t thinking about San Jose at the time at all. We wouldn’t have spent the amount of time and money we did on Fremont if we wanted to get out of our district. People don’t remember that.

There have been huge demographic changes since the Bash Brothers and the A’s drew X attendance. Back then the population of Oakland was probably twice what it is today. [Ed.: The 1990 population of Oakland was 370,000, slightly less than the current figure of 390,000.] I don’t track it. St. Louis is the city where I came from, and the city used to be 800,000 people, it’s 300,000 now [Ed.: This is correct]. There used to be ten, twelve major company headquarters there. Now there aren’t any except Anheuser Busch, who is rumored to be leaving. There’s been a shift. Even if there were a site in Oakland, if we didn’t have the entitlement program it would be very hard to rationalize it. It’s even hard now. $400-450 million for a privately financed stadium – which it should be private, why should the people pay for it. The process that the public can help you with it can be huge. San Jose, through whatever reasons, has gotten the process so that we can go ahead.

If we started in Oakland, whether it’s Victory Court or floating over the freeway – I want to talk to you about that one.

ML: Yeah. We’ll get to that one (980 Park).

Can I tell you my quick stance on that one?

ML: Sure, go ahead.

It’s an A+ in planning and an F in implementation. [laughs]

ML: Okay!

I love concepts like that.

ML: Well, it came from an architect.

Geodesic dome over a city so that you can control the climate?

ML: [laughs]

I like that stuff, but I’ll let somebody else do it.

ML: That reminds me of a documentary on Robert Moses. There were all these concepts for a Dodgers’ stadium. One of them was a geodesic dome by Buckminster Fuller, which would’ve been interesting for 20 years until they got tired of it.

Two things about that. One thing I think you’ll like intellectually. Housing filters down. So if the Rockefellers live in a mansion with a roof and spread out. I did some work years ago in Guam. A subdivision house with a carport and so on is what filtered down. Now if the Rockefellers were living in a geodesic dome we’d have geodesic domes everywhere.

ML: Makes sense. 

Give me Robert Moses for one year and I’ll have a new ballpark anywhere you want. [laughs] He had more power than the mayor and the president. This great metropolis (New York), that great ability to create, we don’t have that today. I always give a speech that if you have a cure for cancer somebody will be against it. I like the democratic approach to things, but it’s inhibiting the state getting things done.

ML: Sure is. State. Country.

You know when the President said, “shovel ready?” If he meant shovel ready after the environmental work, we’d be talking about a decade sometimes.

07.14.11
by

Refreshing the Territorial Rights debate

A bunch of comments about T-rights in the last thread got me thinking it’s time to reset the debate. There’s some confusion about what was done when and for whom. Previously I’ve written a primer and other posts designed to get into further depth (The Neukom Doctrine, When encroachment is not encroachment). Now let’s get a long-held myth out of the way.

Team X originally held the rights to Santa Clara County. FALSE. According to Doug Pappas, the use of counties to define territorial rights did not become part of the Major League by-laws until the early 90’s. Not coincidentally, this was at the same time that Wally Haas agreed to “give” Santa Clara County to Bob Lurie so that the Giants could pursue ballpark proposals in San Jose and Santa Clara (the city). Historically, teams held rights to their own cities and in some cases other cities well outside their own metropolitan region. In the 90’s teams started to define what their regions were by annexing surrounding counties.The Baltimore Orioles also pursued this line by specifying just about everything between Baltimore and DC, even including parts of the District via the use of Rule 52, also known as the 15-mile rule.

The table below lists all teams in the two-team markets and some data for comparison, including the defined operating territory for each team. The Major League Constitution defines an operating territory as the area “within which (clubs) have the right and obligation to play baseball games as the home Club.”

Note that operating territories in several cases includes both cities and counties. On the other hand, television broadcast territories are all shared.

Note that operating territories in several cases includes both cities and counties. On the other hand, television broadcast territories are all shared.

Baltimore’s deal looks similar to what the A’s are getting now. The biggest difference is that they control their local TV market through MASN, which was created as part of the deal to allow the Expos to move to DC. The O’s pay the Nats a fee to carry TV rights, controlling all revenues that come into the network. Once Nationals Park opened, the Nats actually surpassed the O’s in annual revenue.

The ongoing Dodgers saga could provide its own test of territorial rights. SPORTSbyBrooks reports that MLB is in talks with AEG about a possible downtown ballpark near Staples Center and the LACC. That’s the same area targeted for a NFL domed stadium, making it highly unlikely that both could be downtown. However, it’s not hard to see MLB using this as a stalking horse against Frank McCourt, just in case bankruptcy proceedings allow him to keep Dodger Stadium and the parking lots, if not the team itself. Even if both the NFL and the Dodgers don’t bite there could be another interested party: Angels owner Arte Moreno. Despite the recent signing of lease options at The Big A, the Angels are only locked in through the 2016 season. Moreno is open to looking all over the LA for the next home, and unlike the A’s restrictions vis-a-vis Santa Clara County, Moreno can look at the entire region. That includes downtown LA, which would place the Angels 2.5 miles from Dodger Stadium. Preposterous as it sounds, Moreno hasn’t been afraid to play the leverage game, and the timing of having such an option available would play right into his hands. It’s unlikely that the next version of the ML Constitution will split the LA market unless MLB arranges a downtown LA ballpark deal with AEG and the Dodgers’ next owner, a deal that sounds too complicated to actually work.

Going back to the Bay Area situation, I’ve been trying to figure out how redrawn territories might look if the A’s were to move to San Jose. The pro-San Jose crowd likes to think that the Bay Area would become a large shared territory, like NY/LA/CHI. However, I don’t think that’s realistic. DC-Baltimore remains a split market and with the teams separated by 35 miles and the cities having their own distinct identities, it’s a much better comparison to the Bay Area. A swap of the East Bay for the South Bay is also suspect because it’s practically worthless to the Giants. Operating territories mean nothing except when it comes to playing home games, and the Giants aren’t going to look at building in Oakland anytime in the next, well, forever. Yet the Giants would object to leaving the East Bay unassigned since they wouldn’t want a third MLB team 10 miles or less from China Basin, as unlikely as that sounds. Pro-Oakland forces could lobby MLB to leave the East Bay unassigned, but that does little to address the monetary obstacles in getting a new ballpark built there. It’s clear that either San Jose or Santa Clara County would have to be assigned to the A’s instead of the territory being shared.

The strange thing about the county-based annexation done during the 90’s is that most ballparks are built in downtowns, or at least within major cities’ limits. The Rangers are the only exception to this rule, with their home being halfway between Dallas and Fort Worth in Arlington. One of the iterations of the Washington Senators moved to the Twin Cities suburb of Bloomington at first before moving to Minneapolis proper. The Florida Marlins have always played in the Miami suburb of Miami Gardens, though they’ll move to a ballpark within the city limits next season. With public dollars drying up and tools like redevelopment severely restricted in California, it may be time to redefine what an operating territory is. Just from a practical standpoint, we know several things about what MLB looks for in a ballpark site (in no particular order):

  • Downtown or sufficiently urban location, close to transit if possible
  • Significant infrastructure already in place near the ballpark site
  • Large enough market population and economic strength to make a move worthwhile for the team and MLB as a whole
  • Proximity to existing fans in cases where building in an established market

It’s hard to believe that a piece of suburban, undeveloped land would fulfill these requirements. Knowing this, it may be best to pare back the definition of operating territory to cities instead of counties. For the Bay Area, that would mean the Giants’ territory would strictly be the City/County of San Francisco, while the A’s territory would strictly be San Jose. The rest of the Bay Area could be shared/restricted from the standpoint of hosting a major league franchise, with both teams requiring consent for further moves or incursions by each other or “invading” major or minor league teams. The point of the operating territory is to maximize physical accessibility to fans throughout a market. The Bay Area’s sprawling landscape makes it difficult to do that for all fans, since either the North Bay or South Bay will be pinched. If MLB is looking to evolve the game now just as they did 20 years ago, T-rights are worth a rethink in order to maximize presence for baseball fans throughout the Bay Area, not just the Giants.

06.29.11
by

Onus

Update 4:50 PM – The League of California Cities, a redevelopment and city lobbying group, is going straight to the California Supreme Court for a ruling on the constitutionality of the new laws.

Update 2:40 PM – Governor Brown has signed the twin kill redevelopment bills.

Reminder: Lew Wolff will be on The Chris Townsend Show (95.7 FM) at 5:30 PM today.

At the end of Howard Bryant’s first column on the state of the A’s, it might have been easy to lose track of something Lew Wolff said.

Though the clock is ticking on the A’s, sources also say the committee has not expressed any time pressure to present Selig of its findings.

“That’s very true,” Wolff said. “The pressure isn’t on them. It’s on me.”

Starting today, the pressure will definitely be on Wolff – despite the fact that this pressure will come from circumstances beyond his control. At the Capitol, Republicans briefly delayed the inevitable passage of the budget, which was constructed from a combination of realignment and suspect revenue projections. The final package includes the two redevelopment bills (one to kill, one for ransom/rebirth) that were passed by the legislature two weeks ago. Cities throughout the state are lawyering up, though it’s hard to see what settlement could arise since any compromise on the state’s part would have consequences for the budget.

Legal challenges or not, all cities have to deal with the repercussions of the budget passage. Redevelopment advocates have called the twin bills little more than an extortion scheme to allow them to continue to work, and they’re not wrong. As mentioned last Tuesday, here are the amounts that would have to be paid for cities and counties to keep their RDA’s functional:

  • Alameda County: $7.7 million
  • Fremont: $9 million
  • Oakland: $39.7 million
  • San Diego: $69.8 million
  • San Francisco: $24.6 million
  • San Jose: $47.6 million
  • Santa Clara: $11.4 million

The figures are the extortion amounts. See how the Oakland amount is nearly as high as the San Jose amount even though it has less than half the population? That’s because so much land in Oakland (most of the flats) is in one redevelopment zone or another. Oakland North reports that the ransom payment won’t be factored into whatever budget is passed by the City of Oakland, which is understandable since it’s such a recent happening. As of this writing, Oakland is still choosing one of several budget proposals to approve, with the tough battle to gain union concessions won by Mayor Jean Quan. For Oakland, the issue with redevelopment becomes a matter of what they’ll be allowed to do once October 1 hits. Unlike San Jose, Oakland hasn’t gone to the trouble of winding down ORA’s activities, which makes extracting ORA from City Hall difficult. Currently, 17 police officers have their salaries paid by ORA, as well as half the salaries of the mayor and city council (who serve on the ORA board). As they scramble to figure out how some of those needs will be met, it’s not hard to see how actual projects which haven’t started in earnest could fall by the wayside.

Worse, not operating a RDA doesn’t mean that the state won’t get its pound of flesh. It’ll still entitled to the $40 million, only it gets to decide at a later point how it will extract the money from the city. If a city decides it can “play ball” it can pay the vig this year and a smaller amount for next three years, and whatever’s leftover can be used for RDA uses by a successor agency, or as I called it previously, “Son of RDA”. If a city decides it can’t play ball, a successor agency will be created for them, much the same way a defendant can get a court-appointed public defender. That agency’s sole purpose will be to tally up and distribute tax increment as it comes in, none going to new projects. Most importantly, in the can’t-play-ball scenario cities won’t be able to issue new debt. That’s a killer for Oakland, which was counting on being able to tap into new bonds to pay for some of the Victory Court project (land/infrastructure) cost. It’s even more important now that ORA had to absorb some of the city’s budgetary cost by acquiring HJKCC. Without that ability to issue new debt, Oakland’s liable to say, at “Our hands are tied, sorry we couldn’t do more.” And they’d be perfectly within their rights to do so. Thanks for killing the A’s again, Governor Moonbeam.

Then again, there may be a loophole, one that some of the largest RDA’s have been looking to exploit – and one that may have the biggest legal test. When Oakland initiated $100 million in property transfers from ORA back to the city two weeks ago, my response was, “What took so long?” Los Angeles transferred $1 billion worth of assets in a similar fashion in January. While these transfers may have occurred before the 2011-12 fiscal year begins, language written into ABX 26, the redevelopment killing bill, allows state-appointed auditors to determine if any transactions done January 1, 2011 or later (effectively after Brown took office) to be reviewed. What that means for those assets is anyone’s guess at this point, and probably will be the focus of more legal wrangling should the state start looking to liquidate assets to get its revenue.

There’s also the case of San Jose’s newly and hastily created SJ Diridon Development Authority. All thats missing from the name is “Re”. The whole affair seems like an overreaction to Brown, though there may be some hidden wisdom in there somewhere. Regardless of whether work is done through the skeleton crew at SJRA or SJDDA, at some point San Jose will also have to decide if it wants to pay to play. Recently, Mayor Chuck Reed and Lew Wolff have been adamant that they will find the necessary funds to cover the rest of the ballpark land acquisition and infrastructure change, $27+ million total. However, San Jose will also have to pay its $47 million soon if they want to be clear of the state’s reach. That would preclude merely piecemealing the remaining land sales/buys, as they have suggested. Instead, the onus may be on Wolff to deliver on the $89 million price of the Airport West (Earthquakes Stadium) land renegotiated last December. That money isn’t due until 2015, yet here we are with pushed up deadlines thanks to the death of redevelopment. $89 million would provide enough cash for SJ to complete its work and fund other infrastructure in the area it wants to be known as Silicon Valley’s Times Square (I thought it was Grand Central?).

Soon, a coalition of the ten largest cities in the state (including SF, SJ, and Oakland) will put together a lawsuit to vigorously challenge Brown’s redevelopment pay-to-play-or-die scheme. Their case is supported by the passage of Proposition 22 last November, which prohibits state-based redirects of property taxes. Legal murkiness started during the gubernatorial transition when Governors Schwarzenegger and Brown signed off on declaring a fiscal state of emergency, which set the framework for the redevelopment reform bills. Which has greater precedence, a new law or an even newer declared state of emergency? That’s what the courts will have to decide.