Category Archives: Hockey

11.17.11
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News for 11/17/11 (Post Owners Meetings Edition)

Time for a recap of the owners meetings.

  • The Astros will be in the American League West starting in 2013. Next up: Figuring out the details of the scheduling format. Despite the grousing from many about the change, a few columnists have written in favor of the move, including ESPN’s Jayson Stark and Danny Knobler of CBS Sports. Newly approved owner Jim Crane was required to accept the move to the AL as a condition of his approval. Crane was unanimously approved.
  • Stark also considers how another change, the addition of two more wild-card teams, could affect the annual playoff chase and divisional races.
  • MLB and the MLBPA have agreed to a five-year CBA. Ken Rosenthal reports that an announcement will occur on Monday.
  • Larry Baer was approved as the “control person” representing the San Francisco Giants at future owners meetings. There may have been more recent instances of this, but one high-profile one I clearly remember is Paul Beeston when he became CEO of the Toronto Blue Jays. Howard Lincoln also performs a similar duty on behalf of Nintendo for the Seattle Mariners.
  • The Los Angeles Dodgers saga continues, with pre-screening for prospective bidders scheduled to begin soon. That’s a good thing, because as Forbes’ Mike Ozanian reports, the Dodgers are saddled with a whopping $555 million in debt. Another lawsuit has been filed by Frank McCourt against Fox for allegedly trying to “interfere with the sale of the Dodgers and their assets in bankruptcy.”
  • Nothing on the A’s front, though there are murmurs of something happening in January. Maybe. The wait continues.

In other news…

  • The outlook for the NBA is not good. Dwyane Wade and most of the players rank-and-file believe the 2011-12 season can be saved (as they should since they’re losing paychecks from here on out). Meanwhile, former players union executive director Charles Grantham joined Kareem Abdul-Jabbar and Magic Johnson in voicing their opinion that the players should have taken the last “50%” deal.
  • NHL players are looking at what’s happening in the NBA very carefully, since hockey’s CBA will end next September.
  • Starting Friday, the Florida Marlins will no longer exist. They will be known forevermore as the Miami Marlins.
  • I haven’t posted much on the Minnesota Vikings’ stadium push, simply because it doesn’t seem to have any real momentum or money behind it. The team remains focused on the Arden Hills munitions site in suburban Ramsey County, whereas the City of Minneapolis has sites within city limits.
  • CSN Bay Area’s Nick Rosano has an update on the San Jose Earthquakes’ stadium plans. A permit hearing should be held soon. I’ll attend it if I can.
  • Santa Clara approved the $10 million expenditure for pre-construction work at the 49ers stadium site. $6 million will actually be loaned by the team.
  • MLB is commissioning a study on the economic impact of Miller Park now that the ballpark is well-established and past its honeymoon period. The study will be done by the University of Wisconsin-Milwaukee’s Institute for Survey and Policy Research. The same group did a study shortly after the opening of Miller Park which fell under heavy criticism. The study is due in the spring and could provide ammunition for either pro or anti-ballpark groups in San Jose (yes, I know that the anti-ballpark folks will trot out a Cato Institute study). Since the study is being commissioned by MLB, I expect it to be somewhat baseball-friendly, though not as much as the previous one.
  • The Financial Times has a Moneyball article featuring both Billy Beane and Michael Lewis. It’s a good read and serves as a nice epilogue to the book and movie. There’s also a discussion of the article at AN.
  • A new article by Carol Rosen of the Almaden Resident (a Silicon Valley Community Newspaper) examines the pro and anti San Jose ballpark factions and their stances.

That’s all for now.

11.06.11
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CBA Talk: Cost certainty is a four-letter word

After another 8-hour marathon negotiating session, the NBA and NBPA again found themselves without any kind of agreement for a new CBA. This time, Commissioner David Stern also threw down the gauntlet, leaving the owners’ newest offer on the table for the players to stew over until the close of business Wednesday. If the players don’t accept the offer, the league will pull the deal and offer something measurably worse. First, let’s go over the basic tenets of the league’s offer.

  • League offers 49-51% “band” of BRI (defined league revenue) to players. This is essentially the same as the 50% offered to the players previously, but with a few wrinkles. The base offer is 50% to players, plus 1% annually set aside to fund retired player benefits. The 50% share would be dependent on the league reaching an unspecified BRI level, probably $4 billion. Any amount over that threshold would be split 57-43 in favor of the players, up to a total cumulative BRI split of 51% for the players. Running the numbers, for the players to reach 51% the league would have to beat the $4B revenue projection by $666 million, or 16.67%. That led NBPA president Derek Fisher to characterize the 51% figure as “impossible” to attain. In a move reminiscent of the NHL’s CBA, the players would be limited to 49% of BRI if BRI were significantly lower than the projection (also by an unspecified amount).
  • Escalating Luxury Tax. The previous dollar-for-dollar tax would be transformed into a much more punitive tax, starting at $1.50 per dollar over the tax threshold for the first $5 million over, then $1.75 for the next $5 million, $2.50 for the next $5 million, and $3.25 for the next five million. In addition, a “double tax” would be assessed at either $1 (league) or $0.50 (union) for teams who pay the tax three out of five years.
  • Variable Mid-level exception. There would actually be two definitions of the exception. For teams not over the luxury tax threshold, they’d be able to pay $3-4 million for 3-4 years. Teams over the threshold would only be able to pay $2.5 million for up to two years. There’s also some talk of having the maximum length of a MLE contract vary from season to season. This is clearly the most confusing part of the discussions and may be in flux, so expect some corrections in a few hours.
  • Sign-and-trade modifications. Luxury taxpayers would no longer have the ability to do sign-and-trade deals. If a team is over the cap and tax threshold and wanted a marquee free agent, they could work out a trade with that player’s previous team by having the previous team sign him for a lengthy max deal, then trade him immediately to the desired team for a mix of other players and draft picks.
  • Offer valid until close of business Wednesday (November 9).

Those five tenets were suggested by federal mediator George Cohen, and subsequently adopted by the league. A sixth item involving higher shared revenues for teams who don’t trigger the luxury taxes was not approved. For their part, the players aren’t backing off their request for 52.5% of BRI, though Fisher seemed to be somewhat amenable to 51% if it were a truly achievable number.

The Wednesday ultimatum sort of acts as a mini Doomsday, since the NBA will offer less if no deal is reached and it will probably cancel games in December. Any hopes of being able to play a full 82-game schedule in 2011-12 would be dashed. And there’s the growing possibility that the union will take a page out of the NFLPA’s playbook by calling for the union to decertify and an antitrust lawsuit against the NBA.

BRI for the 2010-11 season was $3.8 billion, which was up from 2009-10’s $3.65 billion, so it’s not hard to see the $4 B target as achievable. That’s where both sides are getting the “$40 million equals 1%” argument from. The players got 57% of BRI in the previous agreement, so a drop to 52.5% or 50% is a major concession. The problem for the players is that there’s a huge difference between the economy back when the last two CBAs were ratified and today’s economy. The NFL accomplished a major pullback in its negotiations with its players. The NHL is looking at the NBA talks with great interest, and is rumored to be pushing for a major pullback as well. MLB has no guaranteed payout to players as it has no salary cap or floor, but it regularly pays less than 50% to its players. The new trend for the four major North American sports is for the player-league split to drop to between 48% and 52%, depending on how revenue is defined. It’s quickly becoming a matter of bargaining against the other leagues, perhaps more than it is about preserving or changing existing agreements.

Every week lost in the 2011-12 NBA season translates to $100 million lost in game revenue, including tickets, other arena revenue, and broadcasting revenue. Over the span of ten years, which is the preferred CBA length for both NBA and NBPA, a few hundred million is not that much to lose compared to the impact of losing 2.5% of BRI over the course of ten years ($1+ billion). The league may see this as a test of the union’s collective will. Some want to play ASAP, others want to go the decertification route. It’s getting to the point that several weeks of games (and thus paychecks) will be lost and unsalvageable. There’s no guarantee that by holding out, the players will end up with a better deal. It didn’t work for the NHL players, and it didn’t work for the NFL players. MLB and the MLBPA must be laughing at their counterparts. Their biggest bone of contention is fixed slotting for first round draft picks, which the players union considers its own miniature form of salary cap. Somehow both sides have convinced the players that the lack of a salary cap/floor/guarantee is best for all concerned, despite the players getting less combined than their counterparts. But they get the biggest, longest individual contracts with most guaranteed years. While baseball’s business model does little for broad competitiveness among teams, it generally works for the players in terms of meritocracy and tenure. That’s hard to argue with when the other leagues have so much trouble arguing over details.

06.04.11
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Winnipeg reaches 13k goal in less than a week

Now that’s how you sell a place out.

True North, the company buying the Atlanta Thrashers in an effort to move them to Winnipeg, announced earlier today that it had reached its goal of 13,000 season tickets sold. Not only that, they’ve also amassed an 8,000-person waiting list – and they had to cut it off to boot. The goal was reached only 17 minutes after general sales to the public opened this morning.

Pre-sales to existing Manitoba Moose season ticket holders occurred during a 3-day window from Wednesday to Friday, totaling 7,158 packages. That means 5,842 packages sold to the public in those 17 minutes. If there’s any doubt as to whether Winnipeg loves its hockey, those concerns have been most assuredly quelled. Only deposits were required upfront. The use of monthly payment plans will probably make things easier, and the waiting list will make up for whomever didn’t check in properly with their spouses first and eventually had to drop off.

In any case, good for you Winnipeg. You’re now the Green Bay of hockey. Enjoy those frequent trips to Tampa and Fort Lauderdale (I smell lucrative road trip packages coming). The not-Thrashers will continue to be in the Southeast Division next season. The NHL’s Board of Governors votes on the move June 21.

05.31.11
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Winnipeg’s drive to 13,000

Before True North’s press conference devolved into a lengthy sales pitch for season tickets, there was an air of justice and patriotism in the crowd. I really sensed that a wrong was being righted, similar to the way a wrongly convicted man was getting his release. Of course, it’s borderline ludicrous to compare the two, but that’s the passion in Winnipeg right now. They’re getting NHL hockey back in town. Whether it remains there depends on how they sell out. And by selling out, I mean season tickets. 13,000 to be exact in a 15,000-seat arena. If True North can feed on this passion, MTS Centre will be the toughest ticket in Canada for years to come.

Notice how there's no team name? They haven't picked one yet. Um, Jets?

True North kicked off the sales campaign by launching a website, Driveto13.com. It describes the pricing plans, sales dates, and terms. There’s even a toteboard for fans and media to keep track of progress, and True North will be sending out a press release every afternoon with an update.

Winnipeg is a tiny market, with only 700,000 within its metro. It’s actually smaller than San Mateo County. Despite the passion for hockey in Winnipeg and throughout Manitoba, the NHL is most concerned with whether that passion can properly counterbalance that size problem. To assuage Gary Bettman’s concerns, True North is putting a few terms on ticket purchasers which should, if successful, address the franchise’s long-term viability in Winnipeg.

Prices are reasonable, we swear

These prices are consistent with those of other Canadian teams. However there is a catch.

A three-day presale will be afforded to season ticket holders for the Manitoba Moose AHL team, who were brought in when the Jets left for Phoenix. These ticket holders should be prepared for some sticker shock, as the highest priced seat package for the NHL team will be 3.5x the price of the same seats for the Moose. After the presale period ends the general sale begins, and that’s when it’ll get interesting. The NHL Board of Governors has to approve the move. Rest assured that they and Bettman will be looking at the toteboard with a critical eye.

Locking the fans in

To head off concerns about viability, True North is attempting to lock in season ticket buyers for up to 5 years.

An interesting tack being taken by True North is a mandate of multiyear commitments for season tickets. This is where the rubber meets the road, as it will demonstrate how far Winnipeggers’ passion will stretch. A median-priced seat in the lower bowl end or corner will require an outlay of over $14,000 over four years. The best seats will cost twice as much over five years. Only the worst season ticket pricing levels will have the option for half-season plans. To make the price easier to swallow, True North is also advertising monthly payment plans, which for the purposes of comparison amounts to the cost of a car payment (depending on how luxurious the car). Nominal deposts will also be required. One thing not part of the conversation is the dreaded personal seat license, which is a good move given the stigma associated with PSLs.

These are aggressive moves and goals for True North and Winnipeg. We’ll see soon see if the fan response translates into chopping away into the 13,000 goal over the summer. As for the team name, I hope the Jets are available. If not, I have a suggestion.

(BTW, I don’t really care for the name “Polar Bears”. I needed an excuse to insert the clip.)

There are also some potentially good takeaways for the A’s, and especially ballpark supporters in Oakland, a city that has limitations like Winnipeg (though not as severe). If a goal can be set, perhaps 15,000 season tickets, with 3-5 year commitments, that would go a long way towards convincing Bud Selig and the owners that Oakland is viable. The same could also go for San Jose, in that it would prove that the T-rights battle is worth it. In any case, though it’s tough to see hockey leave Atlanta a second (and final) time, it’s nice to see that hockey is back in Winnipeg, where it belongs. Good luck, Manitobans.

05.12.11
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The 15,000-seat question

Two weeks ago the City of Sacramento got a one-year reprieve. Today it’s Glendale, AZ, as the lucky city to get one year to fix its problems. Glendale’s City Council approved a $25 million subsidy to keep the Phoenix Coyotes at Jobing.com Arena. This follows another $25 million spent last year in hopes of keeping the Coyotes in the desert. Despite the exhorbitant sums spent to keep the team afloat, the NHL (which currently owns team) is giving that one year to find new ownership to take over and keep the team in Phoenix long term. Chicago-based businessman Matthew Hulsizer was in talks to buy the Coyotes, but part of his partnership pulled out today and Hulsizer is rumored to follow suit. If the league can’t find a suitable bidder, the team will probably head north of the border.

Unlike the Sacramento Kings, the Coyotes have been a perennial poor attendance performer. Over the last 10 seasons, they’ve averaged over 15,000 fans per game twice. The last two seasons brought in averages of 11,989 and 12,208. The Wayne Gretzky era failed to bring in fans via either the Great One’s name recognition or him GM/coaching prowess, no thanks to then-owner Jerry Moyes’ ongoing money problems. When the NHL took over, it wasn’t expected that getting a new owner would take too terribly long. RIM co-CEO Jim Balsillie pushed to move the team to Hamilton, Ontario, but a court order struck the sale down and upheld the major four sports’ rights to determine franchise (re)location.

Now it’s two years after the Balsillie decision and Coyotes fans are still waiting for a savior owner. Attendance continues to be poor despite the team making the Stanley Cup Playoffs the last two years, perhaps a product of the continued uncertainty. The year reprieve prevents bidder True North from buying the team and moving it to Winnipeg, the city that just happens to be where the Coyotes are originally from. Instead, True North may be turn to Atlanta, where the Thrashers are also flailing financially while being bad at the gate. A Q&A posted by the Atlanta Journal-Constitution paints a grim future for the Thrashers, who don’t appear to be lease-bound to Philips Arena in any significant way.

The only problem with a Winnipeg move at this point is the capacity of its arena, MTS Centre (really good website BTW). The venue was built after the Jets moved to Phoenix to become the Coyotes and had a small capacity in keeping with its minor league tenant (Manitoba Moose) and Winnipeg’s status as a small market backwater, or so some may have thought. MTS Centre maxes out at 15,015 for hockey, and there is scant space for expansion. Last year the hockey press box in the rafters was expanded to “NHL size” though True North didn’t admit that was the motivation. Unmodified, the arena would be 2,000 seats short of any other modern NHL arena, which would limit its revenue-generating capability.

Then again, what if 15,015 (or a few hundred more) is enough? MLB ballparks range from 37,000 to 50,000 right now, though MLB teams aren’t as dependent on selling out venues as the indoor sports are. NHL commissioner Gary Bettman seemed to support “right-sizing” venues, as evidenced by this quote from December 2009:

“While we play to 93 to 94 per cent capacity, we’d like to play to 100 per cent capacity,” Bettman said. “A 15,000-16,000 seat arena might work better in some markets than a 19,000-seat arena.”

In Glendale and Atlanta, they’re playing to nowhere near 93-94%, more like 70-80%. MTS Centre was built relatively cheaply (C$133 million) and they might be able to put a few hundred penthouse seats (like those at HP Pavilion) opposite the new press box for a few million bucks. The reborn fanbase would have an easier time selling out the arena, which is slightly smaller than the old Winnipeg Arena it replaced. In 2010 True North built MTS Iceplex, a hockey training facility which also can’t have been built to lure a NHL team, obviously. Cost certainty built into the current CBA makes it much easier for a small market franchise to function – as long as they sell well.

It’s clear that Bettman has been stalling in Phoenix in hopes of saving that market, just as David Stern is doing with the New Orleans Hornets by having the league buy the team. Both markets are affected by not having really passionate, willing local bidders in ownership (an issue for another day). If neither team works out, it’ll be tragic for those fanbases but it won’t be the first time. Ask Vancouver Grizzlies fans. Or Atlanta Flames, Hartford Whalers, and Seattle SuperSonics fans. Having a team is not a God-given right, and that fact becomes more self-evident every year.

04.17.11
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San Jose City Council Session 4/28 Agenda

An agenda for the April 28 (9-12 AM) City Council Special Session was posted recently (PDF) at the City of San Jose website. The relevant stuff:

Note one of the focus items: HP Pavilion. Undoubtedly, the City and the Arena Authority are looking at what’s transpiring in both Sacramento and Anaheim and they’re using that information as a guide for a future NBA team pursuit, if/when the opportunity arises. Honda Center has more square footage than HP Pavilion due to having three concourses, but its footprint is slightly smaller than HP Pavilion (though there’s more room to expand in Anaheim). Should Anaheim get the green light for the Kings/Royals, the cost baseline will be set by the final, league-approved agreement between the team and arena operator.

Beyond that, the City Council is looking to approve the Draft Diridon Station Area Plan. The most recent version was released this month, so if you’re interested in the vision it’s worth a look. Keep in mind that this new transit hub vision isn’t going to get built until at least after the end of the next presidential term. With that in mind, the discussion is expected to be long-range, though there may also be some mention of the impacts of federal transportation funding cutbacks and $4-per-gallon gas.

There are a ton of interesting details in the plan, which if approved would be subject to a lengthy CEQA review.

  • The six-block area between the ballpark site and arena has a 130′ building height limit. That would make it higher than both the arena’s roof and probably higher than the light standards at the ballpark. The area remains small, but having 10-story buildings could make up for that somewhat. All of the development there would be commercial in nature.
  • The Central Zone, which includes the ballpark site and the six blocks between the ballpark and arena, would be slated for up to 140,000 square feet of retail, 1.14 million square feet of office space, 250 hotel rooms, and 920 spaces (all in garages).
  • Montgomery Street is the designated retail corridor and would be closed off to vehicular traffic for special events. Those scenes on Autumn Street outside HP Pavilion during Sharks games? They’ll be moved to Montgomery.
  • The only new venue-specific parking would be the garage north of HP Pavilion that was approved by the City last year. Additional mixed-use parking may be available should new office development occur in the industrial areas north and west of the arena. Total parking for both: 6,832 spaces, almost all of them in garages.
  • Residential development would be confined to the Southern Zone, south of Park Avenue.

It’s probable that much of this stuff won’t get built. The EIR process may dictate lower building heights, and the market for office space and retail may not warrant extensive building even a decade from now. Changes to the redevelopment may curb the scope of development in the area. Even so, city and community have been shaping this for the last three years and if San Jose is going to be less car-centric city, this is a huge step forward. That’s the point of defining a vision.

01.31.11
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Redevapocalypse What-If Scenarios

Now for the “fun” part.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

01.21.11
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Quick visual study in arena conversions

Last weekend HP Pavilion scheduled one of its occasional day-night event doubleheaders. The Harlem Globetrotters were in town for a 1 PM matinee, followed up by a 7:30 PM Sharks-Blues matchup. The Sharks/SVSE took a time-lapse video of the changeover.

The Globetrotters don’t attract sellout crowds, yet they routinely play in some of the largest, most modern arenas. HP Pavilion’s main tenant is a hockey team, so any arena floor or seating changes have to be done with preserving the rink in mind. In the Globetrotters’ case, there’s no need to pull out the special basketball risers that would be used for a NCAA hoops regional or NBA game. Instead, they use a set of low-rise risers while the end seats at the hockey boards aren’t used. When the big hoops games come, the end seats are retracted and replaced by a different set of risers. The change seen above requires a little less labor, so no big deal. If you tried to sit along the hockey boards at the ends, your view of the court would be obstructed.

At American Airlines Center in Dallas, the end seats are in a dual-rise system which allows for maximum flexibility. The risers are well-pitched for hockey games, but they convert into a more gradual pitch for basketball. The chief benefit of this arrangement is that none of the end basketball seats are on the floor – except for the ones closest to the court. Just about every new dual-sport arena has something like this in place. This one in Dallas or Portland’s Rose Garden or the Verizon Center in DC are perhaps the most extreme.

For perhaps the worst example of how to do this, you don’t need to go much farther than everyone’s favorite whipping boy, Power Balance Pavilion ARCO Arena. There, the floor’s bizarrely unique configuration has its sideline seats retract to create extra floor space. By doing this, all ice shows or hockey games have to played on transversely mounted ice. Since a basketball team is the chief tenant, ice is not a permanent floor feature, so the ice brought in from containers in sheet form and mounted much the same way a floor would.

There may actually be a way to pull this off in a more modern arena with the right technology. Unfortunately, ARCO’s not getting any of that stuff.

01.13.11
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CBA Talk: The NHL and what might have been

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

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

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

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

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

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

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

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

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

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

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

01.08.11
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CBA Talk 2011: A comparison of leagues

Three of the four major professional sports leagues have collective bargaining agreements which will expire later this year. In the NBA and NFL, discussions between management and labor have been contentious for at least the last year, with threats of work stoppages all too real and quite likely. That makes MLB an outlier, as there has been little tension in its ongoing labor discussions, even though its CBA will run out only a few months after the other two leagues’. The NHLPA authorized a one-year extension of its current agreement in the fall, allowing its CBA to expire after the 2011-12 season, but under the terms of the agreement, no further extension can be negotiated between the union and league. With Donald Fehr brought in to helm the NHLPA’s side of future talks, the players there aren’t looking to go soft at the table.

Before we get into the details, I’ve put together an overview of each league’s current CBA, sans drug testing details. Next week, each league will get its own post and in depth analysis. For now, take a look at the table and if any questions or corrections come to mind, throw them into comments. Every effort has been made to verify all of the data in the table, including each league’s CBA documents when possible. Still, there may be some issues with what’s reported, so here’s your chance to fact check. It’s also your opportunity to steer the discussion in a certain direction if you so choose.

I look forward to your questions and comments. Until then, enjoy the rest of the football weekend. My thoughts are with those who were senselessly hurt or killed at the Tucson atrocity today, and their families.