Happy Anniversary Shark Tank!

Saturday, September 7 was a fairly ho-hum day at the newly-renamed SAP Center, formerly HP Pavilion, Compaq Center, and San Jose Arena. There was an event, a mariachi festival called Vivafest. Preseason hockey wasn’t scheduled to start for two weeks, the regular season for a month.  It seemed like there wasn’t much to celebrate.

Shortly after the first puck drop on Saturday night at SAP Center

Shortly after the first puck drop on Saturday night vs. Ottawa at SAP Center

Oh, but there was. September 7, 2013 marked the 20th anniversary of the opening of the arena, affectionally known as the Shark Tank (the Sharks would play their first home game on 9/30/93). Though it’s 20 years old, the place still looks nearly new and spiffy, with Sharks ownership and the San Jose Arena Authority committed to maintaining the venue to ensure its place as a premier sports and concert venue, and to keep up with rival franchises. Even though the structure is mostly precast, poured and block concrete, the glass entries and color highlights make the place feel more friendly and inviting than a largely concrete structure should. The steel cladded façade proved to be an aesthetic mistake, though it shimmers nicely at night. I joked shortly after the arena opened to some friends that the City needed to figure out a way to keep the arena in the dark all the time.

Since its opening, the Tank has hosted multiple NCAA basketball men’s regionals, the women’s Final Four, the US Gymnastics and Figure Skating Championships, pro wrestling, boxing, and MMA, and countless concerts. While in my relative youth I had reservations about the publicly-funded nature of the arena, the fact that Sharks ownership (led by the late George Gund at the time) spent a good sum of money upfront to ensure the arena would an industry leader, and the venue has held its place as a highly competitive, well-run NHL arena ever since. Unlike most other arenas, the team ran the venue themselves, parlaying that experience into the acquisition and operation of other venues in the area.

Circulation was always simpler at the Tank than at Oracle Arena thanks to wider concourses.

Circulation was always simpler at the Tank than at Oracle Arena thanks to wider concourses and a simplified layout.

SAP Center didn’t mention the moment on either its Facebook page or Twitter timeline. There was no special event. Maybe this was because the Sharks franchise celebrated its own 20-year anniversary in 2011, which would’ve made this celebration a bit much. Perhaps it’s a mark of the Hasso Plattner’s ownership. Whatever the case, San Jose should’ve celebrated the anniversary. It’s the best thing San Jose’s now shuttered Redevelopment Agency has accomplished. It’s worthy of praise, so I’ll do it here, admittedly in belated manner.

Happy Anniversary, Shark Tank! Here’s to 20 more years of great events at the arena. San Jose wouldn’t be the same without you. Take a bow.

The new SAP Center sign, installed Friday, replaced the HP Pavilion moniker.

The new SAP Center sign, installed Friday, replaced the HP Pavilion moniker.

The Kid

I know we’re all hurting from Game 4. Let’s just take a minute to appreciate this.

Tomas Hertl is 19 years old from the Czech Republic. He scored 4 goals against the Rangers. He’s the youngest to score four goals since 1988. He’s already a Calder Trophy (rookie of the year) candidate. Once in a while we’re blessed to see truly transcendent talents like Joe Montana, Rickey Henderson, or Barry Bonds. Like Yoenis Cespedes, Hertl speaks little English. Like the aforementioned legends, this kid can carry a team, sell tickets, do the unthinkable. He’s that good. Just drink it in, and know that he’s probably going to be a Shark for a long, long time.

News for 7/24/13

A lot of smaller items this week that I felt should go into a single post.

  • Added 7/25 1:48 PM – Cowboys Stadium will now be known as AT&T Stadium, at a rate of $17-19 million per year (length unknown). For reference, Levi’s bought the naming rights at the 49ers stadium for $11 million/year, while AT&T Park’s deal was for roughly $2 million/year through 2024. Oracle Arena and SAP Center have deals worth $3 million/year.
  • Added 7/25 1:40 PMReally good interview on Athletics Nation with A’s Sales & Marketing veep Jim Leahey about how hard it is to sell tickets for the A’s at the Coliseum.
  • Added 8:40 PM – Completely forgot that the A’s have changed the gate opening schedule on Fridays to 4:30. Normally the gates open 90 minutes before first pitch on weekdays, 2 hours before first pitch on weekends. This is to accommodate a request by many fans (including me) to observe home team batting practice, featuring Derby winner Yoenis Cespedes. Home BP is usually held a little over 2 hours before first pitch in most ballparks. For now the time change is only for Fridays. It could change, but remember that for day-after-night games many teams choose to cancel BP. As luck would have it, I’m flying into OAK from Salt Lake City at 3 on Friday, so I’ll have a chance to watch Cespy do his thing.
  • The Chicago City Council approved a controversial $500 million renovation of Wrigley Field, which will include a big electronic scoreboard, increased signage and advertising, and the development of a hotel and office complex across Clark St from the ballpark.
  • The Port of Oakland’s settlement with SSA was approved and accompanied by a celebratory press release by the terminal operator. Though there’s an interesting bit at the end:

The settlement agreement “has nothing to do with the baseball park,” (Port Board President Ces) Butner said. “We have not determined what we are going to do with Howard Terminal yet. We are going to have to figure out what it will be.”

Tim Kawakami also tweeted this:

Kawakami went on to talk about different uses and configurations for the land. Oakland wanted two downtowns with Coliseum City. I guess they can also explore two Coliseums (Colisea?). It’s all fun to think about until somebody has to pay the bill.

  • According to an annual Harris Poll, the A’s are tied for last (27th) in terms of team popularity in MLB. The poll was conducted in mid-June with 2,210 American fans. Predictably, the Yankees and Red Sox are at the top. The Giants rank 10th in the survey, though they’ve moved around a lot over the years.
  • The Giants played a rare doubleheader at AT&T Park, which occurred thanks to a prior rainout in Cincinnati. While the first game was played as a regularly scheduled home game, the second game had the Reds playing as the home team and batting last. A different type of doubleheader is scheduled for this weekend, with the A’s playing the Angels at 12:05 (national Fox TV game) and the Giants hosting the Cubs at 6:05. I’m seriously considering going to both as I’ve done this doubleheader the past two years.
  • SF State professor and longtime Oakland political scenester Joe Tuman is expected to announce that he is running for Mayor today. An announcement is coming at Oakland City Hall at noon. Earlier today I had said something about San Jose’s antitrust lawsuit and MLB’s leverage, which aroused this response from Tuman:
  • Not to be forgotten, Oakland City Councilman Larry Reid has been waiting for a “sign from God” to put him in the race, though his increasingly snarky commentary at public meetings suggests that this is a mere formality. Having both Reid and Tuman in there could make the race entertaining, to say the least.
  • Sacramento arena proponents have accused anti-arena petition gatherers of lies and dirty pool in making claims about the ESC plan. Neither side looks great, as the anti-arena group may have out-of-town support and the “facts” that the pro-arena group are citing are projections, not facts. Yeesh.
  • Despite the City of Detroit officially filing for bankruptcy, it’s likely that $283 million in TIF-based funding for a new downtown Red Wings arena will go through. All sorts of wrong with that.

More if it comes.

News for 7/3/13

There’s a lot of news during this holiday week. I figured it would be best to drop it all in here. First up, A’s news.

MLB announced today that it has retained John Keker of SF firm Keker & Van Nest to represent baseball in the San Jose antitrust lawsuit. Keker has a long and colorful history as one of the country’s top trial lawyers, and would be a formidable opponent for Joe Cotchett if the suit ever went to trial. Or, as a former partner at KVN, Wendy Thurm (@hangingsliders), put it:

Keker’s first statement about the case description of himself as a frequent defense lawyer is also colorful:

Keker also has his hands full defending Standard & Poor’s in the federal government’s lawsuit over allegedly fraudulent practices. Let the games begin, I say.

Besides MLB announcement, if you were worried that the lawsuit would leave the news cycle, there are new articles from the LA Times and Forbes covering the matter. In other news:

  • Members of the ILWU (Longeshoremen’s Union) are opposing the SSA settlement, which would close Howard Terminal and potentially convert it to a ballpark site. The union’s complaint is that the net effect of the settlement and consolidation is the loss of union jobs. This contention has evidently forced the Port of Oakland to again delay voting on the settlement to July 11.
  • BART’s still on strike. Last night’s announced attendance was 17,273, the smallest crowd since the end of May. Tonight’s a fireworks game with the 4th tomorrow, so crowds should be hefty despite the lack of BART.


Away from the A’s…

  • The City of Glendale, Arizona, approved a 15-year lease deal to further subsidize the Coyotes NHL club, keeping them in town until at least 2018. The team has an out clause after only five years if they demonstrate they’ve lost $50 million over those first five years. In return, the team will be renamed the Arizona Coyotes. While the NHL continues to own the team in the interim until a purchase is finalized by Renaissance Sports & Entertainment, a new arena operator has been found in titan Global Spectrum.
  • Folks in Seattle were following the happenings in Glendale closely and were ready to pounce if no agreement could be made. Now the Emerald City and Chris Hansen are officially 0-for-2 in attempts to lure franchises to Puget Sound.
  • The City of Anaheim and the Angels are jointly funding a study to determine the cost to keep Angel Stadium up-to-date. Initial estimates have the cost to renovate Angel Stadium at $120-150 million. After the Dodgers spent $100 million to renovate clubhouses and scoreboards, I’d be surprised if the Angel Stadium tab was only $150 million.
  • As the cost to build a AAA ballpark in El Paso rises, the new owners of the franchise backed away from giving $12 million in personal guarantees towards the project.
  • Curbed has a neat pictorial retrospective on the various ballparks that have called New York home over the decades.

And a quick announcement: I plan to be in New York for a few days around August 24-25 Labor Day weekend. I’m still locking down the plans. The Yankees are in town that weekend and the Mets prior to that. I’m working to take in games at both ballparks, and some US Open tennis action if I can fit it in. If you’re there at that time, drop me a line (email, Twitter) and we can have a chat and/or take in a game.

Millionaires need not apply

In 1960, Arnold Johnson sold the A’s to Charlie Finley for $4 million ($31 million today).

In 1981, Finley sold the team to Wally Haas for $12.4 million (also about $31 million today).

Steve Schott and Ken Hofmann bought the A’s from Haas in 1995 for $95 million ($140 million in 2013), followed by Lew Wolff and John Fisher buying the franchise in 2005 for $180 million ($210 million today). If you’re looking for hockey-stick style growth, owning a pro sports franchise is a good bet.

That makes the big news this week out of Sharks camp rather eye-opening. Partners Kevin Compton and Stratton Sciavos are selling their stakes to Hasso Plattner, who has until now been the silent money in the ownership group. A reason cited was ongoing losses sustained by Sharks Sports and Entertainment, totaling $15 million during the 2011-12 season. Assuming that they’re not engaged in accounting hijinks, Compton’s and Sciavos’s individual losses (or cash calls) were probably in the $1-2 million range. While I can’t find a published net worth of either, it’s clear that neither approaches the wealth of Plattner, the SAP head (and Larry Ellison foil) who is worth $7.2 billion, more than the Giants’ Charles Johnson and Fisher combined. For Compton and Sciavos, $1 million is nothing to take lightly.

Plattner even admitted today that hockey teams don’t make money. A man of his wealth can truly own a team like the Sharks and absorb a loss without batting an eyelash. He also owns CordeValle golf course in South County (San Martin), several other golf courses in Africa and other hotels. That doesn’t mean he’ll start going crazy with free agent signings in the future, but he can afford to be less concerned about having to make cash calls when the time comes. The Sharks aren’t hurt by turnout at HP Pavilion. They’re hurt by lagging national and local TV revenues. Both of those can improve over time, but they’re definitely playing a long game, not one where a millionaire coming in might look for 8-10% annual returns. The Sharks’ lease is on the second of three five-year options, the last of which ends in a decade.

It’s that return-poor situation that probably doomed Greg Jamison, the former Sharks CEO who missed today’s deadline to assemble a group to save the Coyotes in Phoenix. That’s despite Glendale, AZ promising an eight-figure subsidy for each of the next 20 years to offset the team’s operating losses. Now that a new City Council has promised to not give away the farm for another Coyotes ownership group, speculation is rampant that the team will once again relocate. Prime candidates include the Toronto suburb of Markham, Ontario, where the City Council approved an arena last night. The favorite may well be Seattle, where an arena deal is in place and an ownership group has deep pockets, especially in the form of Microsoft CEO Steve Ballmer.

If you want to be taken seriously in the business, it’s best to have at least one multi-billionaire on your team to cover the occasional lean times and cash calls. Especially in hockey.

George Gund III: 1937-2013

I never met George Gund. I’ve heard quite a few stories about him. He was a character, an iconoclast, a real fan who just happened to be rich. He lived the kind of lifestyle many sports fans would’ve liked to live, jetting off to tournaments and film festivals and pretty much doing whatever he wanted. To appreciate the man, read these four articles about Gund:

What I’d like to do is tie his career into the fabric of the Bay Area sports world. First, we have to start in Cleveland. Gund was what we’d now call a trust fund baby. He loved sports, film, and classical music. In keeping with those passions, he bought two hockey franchises, married a filmmaker, and sat on the board of an orchestra. He partnered with his brother, Gordon Gund, to buy the Cleveland Cavaliers. George was always the hockey fanatic while Gordon was the basketball junkie. It worked out pretty well for both in the end.

The journey, however, was long and at times quite difficult for the Gunds. After George Gund permanently moved out to San Francisco, he took a minority stake in the California Golden Seals NHL franchise. The Golden Seals were sold by Charlie Finley, who tried and failed to establish his “branding” on the hockey club (green and gold colors, white skates). Gund partnered with Mel Swig, who owned the Fairmont in SF (like someone we know). For various reasons, running the Seals wasn’t working out at the Coliseum Arena. Swig tried to put together an arena deal in SF, but that fell through. The Gund brothers bought the team from Swig and relocated it to their childhood home of Cleveland.

Except that the team, now named the Cleveland Barons, played out in the sticks at the Richfield Coliseum, about halfway between Cleveland and Akron. The idea was to leverage the fanbase from both markets, and it failed miserably. With the Barons and the Minnesota North Stars in danger of folding and the NHL still struggling against the rival WHA, the league decided to merge the two teams. The franchise remained the Minnesota North Stars and would have a good deal of stability for the next decade, including a Stanley Cup Finals appearance in 1981 (a loss to the juggernaut NY Islanders). The Cavs stuck it out in Richfield for over a decade before moving back to downtown Cleveland. The new home was named Gund Arena.

In 1991, George saw his opportunity to bring a team to the Bay Area. The NHL was starting its Sun Belt expansion phase, and it seemed a good time to put a team in the Bay Area. Howard Baldwin, who was already known as a sort of serial franchise owner, was pushing hard for the franchise to be in San Jose. George Gund stepped in to swap the North Stars for the rights to the expansion franchise, which eventually became known as the San Jose Sharks.

The Sharks played its first two seasons at the aging Cow Palace, an arena that was already outdated for both the Warriors and Golden Seals by the mid-70’s. A new, hockey-focused arena deal was in the works in San Jose, with recent transplant and future Sharks play-by-play man Randy Hahn playing a key organizing role. Gund had the opportunity to try the Oakland experiment again even though the Coliseum was small and poorly set up for hockey, or try to get an arena built in SF. He found willing partners in San Jose in Mayor Tom McEnery and numerous business leaders, all of whom were willing to do what it took to put San Jose “on the map”.

With two major franchise moves under his belt, George Gund could’ve been considered a carpetbagger. He didn’t live in San Jose, choosing to stay in SF and build an apartment inside San Jose Arena. (Frankly, I’d do it if I was asked to contribute.) Yet his legacy stands as a key figure who made San Jose major league and cultivated a great, appreciative fanbase – even though the Sharks mostly sucked during the Gund era.

Gund’s story as an owner is similar to that of Wally Haas, Jr. Both were scions of very wealthy families. Both were revered by their respective team’s fans. Both made great efforts to make their teams successful, business of the game running secondary to winning. Both were well known as philanthropists. Both bought teams from Charlie Finley. The biggest difference between the two was the state of their leagues – while MLB was still clearly the national pastime during the 80’s, the NHL had major competition, growing pains, and difficulty carving out a niche as the fourth major North American pro sports league. Haas was 20 years older than Gund and part of the established SF gentry, so I can’t imagine they ran in the same circles. But I imagine that when Gund took the elevator upstairs over the weekend, he was greeted by Haas and Franklin Mieuli. Mieuli handed Gund a cigar and the beverage of his choice, while Haas showed him the way to the lounge. They could talk about how the Warriors and A’s are resurgent, and that Gund got there just in time to watch his beloved Sharks start their new season. You’re home now, George. Relax and enjoy the game.

Comparison of current (2013) CBAs

A few years ago I did a comparison of CBAs. Now that the NHL deal framework is in place, it’s time to update the table. Here’s what we have now.

MLB remains the only major pro sports league in the US/Canada that has no salary cap.

MLB remains the only major pro sports league in the US/Canada that has no salary cap. NHL cap and NBA salary floor figures are for 2013-14 season.

The untold story is league debt. The NFL is far and away the richest league, but it also has a massive amount of debt. In 2008 that figure was $9.5 billion and has only grown with the expensive new stadia in New Jersey, Arlington, and Santa Clara. MLB’s credit facility, which is meant as a short-term solution for teams, had $1 billion going into this summer and issued $300 million more since then. None of the leagues are in jeopardy because of their respective debt positions because in most cases, that debt is backed by long term TV deals. Individual teams are at greater risk due to the lack of revenue stability in weaker markets, which is frequently the case in the NHL.

Luxury tax structures implemented in MLB and the NBA have worked to reign in many free-spending teams. The NY Knicks are under the NBA’s luxury tax threshold for the first time in recent memory, and the Yankees are set to follow suit in baseball.

All of this goes to show that for all of the talk of economic parity in pro sports, there are instances of haves and have-nots everywhere. It’s unavoidable, and thanks to CBAs that will run for as long as a decade, it’s enshrined. Cheers!