Category Archives: News

06.17.11
by

Howard Bryant reviews “high stakes game of chicken”

This one’s a must read, people.

mlb_bay_battle_576

Howard Bryant may be a Boston guy through and through, but he cut his teeth at the Merc’s sports department for years as the A’s beat writer. He’s also written some excellent books on baseball: Juicing the Game, Shut Out, and his most recent work, The Last Hero: A Life of Henry Aaron. Now he’s taken some time to write about the future of the A’s, and it’s fairly comprehensive (though he gets the last lease year wrong – it’s 2013, and he confuses Coliseum North with Uptown).

There’s too much meat in the column to cherry pick any one passage, so I’ll leave it up to you to read the whole thing. Then come back here to comment. As Bill King often said of the occasional high scoring game, “this one has become a donnybrook.”

06.17.11
by

Sometimes a tree has to be chopped down

Nearly thirty years ago I went on a field trip with my brother and dad to a nursery in the Santa Cruz mountains. The nursery mostly grew coast redwoods. The afternoon was chilly as the marine layer wafted in over the mountains, giving the trees the moist, dense air that makes them thrive. As we left, my brother and I were both given redwood saplings in half-gallon milk cartons. We decided to plant them in the planter strip near the curb in front of the house. I forgot which brother was responsible for which tree.

Ten years later both trees had grown, though not taller than the other trees on the block. The western tree was taller than the eastern tree and had a thicker trunk. They required no maintenance. My dad laid down iceplant (just like at the old Coliseum!) around the trees and everything coexisted peacefully.

Another ten years passed, and from all appearances the western tree was growing like crazy, whereas the eastern tree was stalling out. The western tree also had much more substantial root growth, which could be identified by the uprooted sidewalk next to the tree. Its brother to the east posed no threat to strollers and skateboarders. Eventually the city noticed the problem with the sidewalk and told us that we had no business planting those trees next to the curb. We were told to put a tree in the yard next time, where it could have more space to grow. One day the city chopped down the western tree, which had grown to 20 feet tall. Later they pulled out the stump and fixed the sidewalk. The eastern tree still stands, growing little by little (I think). My dad calls it the Christmas tree and runs the holiday lights out to the former sapling every December. It remains the only redwood on the block.

San Jose’s redevelopment agency is much like the western tree. It grew as a mighty redwood was supposed to, big and tall and fast. Over time it became too big for its own good, and to keep it from destroying the street it had to be chopped down. SJRA’s mission was informed by a quest to become a big city, which meant putting tons of resources into it. Some of it was well directed (library, convention center, arena, museums) and some of it wasn’t (numerous retail failures). SJRA has a ton of fundamental problems that make it difficult to easily chop down. Yet that’s exactly what it’s done. In preparation for the upcoming fiscal year 109 jobs were slashed, or 91% of staff. Even as they expressed outrage at the passage of the twin “kill” bills, they clearly saw what was coming down the road and prepared for it.

Over the next year it’s expected that many RDA’s will be chopped down like the western tree. Most of those will be agencies that have grown too big or have become unmanageable. The loose definitions of blight and even the term “redevelopment” have allowed the agencies to grow unchecked. Controller John Chiang’s audit covered numerous instances of waste and abuse. Agencies who have mismanaged themselves are likely to get cut down, while the properly managed ones – and they do exist – have a chance to stay alive, like the eastern tree. What we don’t know is the criteria for separating the good ones from the bad ones.

With the first real salvo fired in the redevelopment war on Wednesday, every agency throughout the state is scrambling to protect or save themselves from the coming onslaught.

If you’ve read this far, you now get a treat of ballpark news! The Merc’s Tracy Seipel checked in with both Lew Wolff and San Jose Mayor Chuck Reed to catch their responses to the redevelopment shuffle. Wolff appears undeterred, still saying he can buy land if necessary, though he hasn’t actually done it. Maybe he’s waiting to find out what he might have to buy once the dust settles. Reed provided three scenarios under which the Diridon land can be made whole:

  • Wolff could buy the two parcels, and the city could sell him the rest of the ballpark site.
  • The city could sell agency assets to buy the last two parcels, then sell the entire site to Wolff.
  • The city could buy the last two parcels and lease the site to Wolff, with the city using the lease as security for financing to pay for the land.

These are all scenarios we’ve discussed here on the blog. None of what San Jose has done has been sexy or attention-grabbing. I’ve noted in the past that I could often count all of the people present at a ballpark-related session on two hands. The point is that they get things done. Every time an obstacle has come up, they’ve figured out a way to deal with it. Consider the following:

  • PG&E substation move? Not needed, ballpark configured to fit within purchased land.
  • Fire training station move? Garage requirement eliminated, no longer necessary.
  • Sharks objections? Lifted once entitlements were made for garage/commercial development on north side of HP Pavilion.
  • AT&T land stalemate? Possibly resolved when city provided entitlements to AT&T for land near Santana Row.
  • Worries about parking related EIR impacts? Not if “enough” parking is found on the other side of Guadalupe Parkway. (*shakes head*)

We’re in for an interesting rest of the year. In the morning I’ll check on what ORA and City Hall did with the $100 million.

One more thing: Billy Beane obliterates Lowell Cohn in this interview.

06.15.11
by

Redevelopment: The Reckoning

Today is the deadline for the state to pass its budget. As part of the budget, two new redevelopment bills are being debated.

AB 26x/SB 14x
Redevelopment, Part 1
Eliminates redevelopment agencies and provides for orderly wind-down of RDA activities including payment of existing debt and the continuation of pass-throughs. The related bill (AB 27x/SB 14x) creates an alternative ongoing RDA program.

AB 27x/SB 15x
Redevelopment, Part 2
Creates a voluntary alternative RDA program that allows existing RDAs to continue with reforms. The new program requires community remittances to schools, fire districts, and transit districts, of $1.7 billion in 2011-12 and about $400 million ongoing. Results in $1.7 billion budget “solution.”

The bills have Assembly and Senate designations to help them move through both houses simultaneously. These are compromise bills which lean more towards Governor Brown’s plans instead of AB 1250/SB 286, which would more fully preserve existing redevelopment. Already the new bills have attracted controversy. Redevelopment proponents have called the dual bills “ransom”. And AB 27x has already been scrubbed due to language that seemed to favor Los Angeles’ redevelopment agency over others.

It’s starting to get hot and heavy in the Capitol. More to come.

Update 2:40 PM – Main budget bills have been passed in both houses. Trailer bills are flying through with the exception of redevelopment, for which one bill is stuck two votes short of 2/3rds majority.

Update 3:20 PM – After a recess and some strongarming, both AB 26 and 27 barely pass the Senate. Assembly is next, then the governor.

Update 3:55 PM – Now in Assembly. Republican Asyman compares bills to a Sopranos-style shakedown. Italian-American Democrat is enraged, the two nearly come to blows. Theater. Yowza.

Update 4:07 PM – Assembly passes both bills. Entire package goes to the governor to sign. I’m still trying to grasp the full impact. Old RDA is dead. New RDA is… Enough? Crippled? Analysis later, followed by lawsuits for certain..

06.14.11
by

San Jose City Council passes budget

After a lengthy four hour debate, the San Jose City Council approved a $2.5 billion budget, a 10% drop from last year. The budget includes the first ever layoffs at SJPD, totaling 100 officers. The 7-4 vote included dissenters who wanted additional funding for police in light of an increasing homicide rate.

Couple that with Mayor Chuck Reed possibly backing off his pension reform ballot measure, and it looks like the political skies will be relatively clear for a ballpark referendum over the next 6-9 months. (Or at least until the next budget crisis hits next year, which would start the process all over again.) Remember that to make Opening Day 2015, shovels must be in the ground no later than late Fall 2012.

06.14.11
by

KBWF May ratings plummet in SF market, rise in SJ

95.7 Sportsradio’s ratings took a 33% dive from 0.9 in April to 0.6 in May in the SF-Oakland market. Conversely, they rose 33% in San Jose from 0.6 to 0.8.

Ratings for the twin KNBR’s have stayed steady. As for still-in-receivership KTRB, it’s possible that their AM license may be turned back in to the FCC, a rarity in the business.

Going back to KBWF, it looks like Dan Dibley was brought in to cohost with the temporary guys in the morning/mid-morning, with the idea that he’d get his own show or cohost at some point. I think it’s time to take the training wheels off and let him do his thing. While they’re at it, bring in the “permanent” local talent.

06.12.11
by

MLB serious about one-team realignment

Last month I tossed off this article about realignment and interleague play mostly as a short thought experiment. Now, according to Buster Olney, Selig and MLB are taking the prospect of a one-team realignment seriously. The change, which could arrive as early as next year with the next CBA, would send Houston to the AL West. That would create two 15-team leagues with 5-team divisions throughout. It would also cause interleague play throughout the year. (I mocked up a schedule of such games throughout the season.) On Baseball Tonight, Olney characterized the probability at less than 50/50 at this point, but it could develop momentum as talks progress throughout the summer.

Simple change has Houston moving to AL West

Key to the realignment plan is Olney’s assertion that the players are very supportive. Unlike the tension-filled CBA stalemates for the NFL and NBA, there is a prevailing notion that a CBA for baseball could be approved by the end of the season. Houston is the frontrunning realignment candidate, though Florida has also been discussed. Olney also brought the possibility that approval of Jim Crane’s ownership bid may be dependent on his accepting realignment. Houston Chronicle baseball writer Richard Justice is onboard with the switch.

The intriguing wrinkle to the talks is a newly floated idea that divisions should be eliminated, leaving only two 15-team leagues. Like the divisional arrangement, the playoffs would be expanded to 10 teams (5 per league), with each league constituting a “single table” format much like the one used for Premier League soccer. The 4th and 5th place teams would have some kind of elimination game or series to start the playoffs, with the winner facing the top seed next.

How the teams would finish in 15-team, no-division leagues if the season ended today.

This kind of change is being championed by teams in the AL East, thanks to the difficulty of unseating the big money Yankees and Red Sox at the top of the division. Realignment along these lines could increase the chances of third Eastern team making the playoffs. What it really does is reduce the chances of any team with less than 90 wins going to the postseason, which personally is fine with me.

Anyone yearning for a return to the balanced schedule will get it with the elimination of divisions. As shown in the table below (C), each team would play everyone else in the league 10 or 11 times. No, that’s not the magic number of 12 that makes it possible for teams to visit every city twice a year, but for the 10 opponents with 11 matchups, two trips would still be possible. For the remaining four 10-matchup opponents, scheduling would require a mix of 6 home/4 road games.

* - 10 opponents with 11 games (3-3-3-2), 4 opponents with 10 games (3-4-3)

Also on Baseball Tonight, Tim Kurkjian suggested that because of the level of detail that would have to be worked out, there’s little chance any kind of realignment could happen in time for next season. That doesn’t make much sense to me. MLB receives drafts of schedules well in advance so that they can smooth over any issues. The process is automated, for the most part. It shouldn’t take a year of analysis to determine want the impacts are for each team from a revenue/cost standpoint. It could easily be completed by the end of the season. Of course, we’re talking about MLB and Bud Selig here, and if there’s anything we can count on, it’s Selig’s “deliberative” process.

06.06.11
by

U2 to destroy O.co field

Like the A’s, blades of grass at the Coliseum are often second-class citizens. If you’re planted in the infield you get the most meticulous maintenance and aside from occasional spikes and cleats, and you are likely to last an entire year. On the other hand, if you’re an outfield blade of grass you’re pretty much screwed. You might get until August when preseason football begins, but this year you won’t even get that thanks to this:

Construction for U2's elaborate stage setup over the weekend. Credit: SBNation (Ron Brasil)

I’m sure that the big U2 show will be entertaining, though personally I’ve never been a fan of huge stadium shows (I would pay $1k to see them at the Fillmore or Fox Oakland). Depending on what happens the rest of the A’s current homestand (and the ramifications of it), it’ll be just a tiny bit more depressing to plant my fat ass in my value deck seat next week only to see new, slightly off-colored sod in the outfield. Sometimes the best thing about going to the Coliseum is the expansive grass in both fair and foul territories, the symmetry and postmodern concentric circles. It was One Perfect Green Blanket.

Well, the outfield grass may get some good karma if the NFL labor stoppage lasts throughout the summer. I’m pulling for you, grass. And I’m definitely pulling for groundskeeper Clay Wood and his staff, who may have the toughest job in pro sports dealing with this stuff.

06.04.11
by

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.

06.03.11
by

The debt is too damn high

LA Times baseball writer Bill Shaikin reported today that as many as nine teams throughout MLB may be in violation of the league’s debt rules. Those teams are (reason for debt in parentheses):

  • LA Dodgers (McCourt divorce)
  • NY Mets (new stadium, Madoff scandal)
  • Chicago Cubs (recent sale)
  • Texas (recent sale, high assumed debt)
  • Washington (new stadium highly leveraged team purchase)
  • Florida (new stadium)
  • Detroit (extremely high payroll compared to revenue)
  • Baltimore (new regional sports network startup costs)

If the A’s build a ballpark somewhere they’ll join these teams. The A’s current debt load is reasonably low according to Forbes’ figures. It will surely rise when it comes time to finance a venue, though I would expect additional partners to be brought in to help soften the blow. At the end of last season I wrote about what the debt rule’s effects on the A’s are now and into the future. Then the post was about payroll. Now it’s about debt service on a new ballpark.

30-year financing of a $450 million ballpark at 6% will cost $27 million per year. For the sake of this discussion, let’s assume there are some cost overruns assumed by the A’s, plus additional soft costs and insurance, bringing debt service to a round $30 million per year. That’s 25x the lease payment they’re making this season, so the revenue streams they’re getting from a new ballpark better be worth it. Lew Wolff has maintained for some time that seat licenses aren’t part of the equation, so no upfront payments are included.

At the same time, it’s no fun having a new ballpark if all you’re going to do is pay a mortgage. Stadium revenue needs to be well above and beyond the debt service amount to make it worthwhile. The Giants and Cardinals have proved it’s possible to make it work, but the amount the A’s will have to shoulder will be unprecedented for a team that’s not in one of the big three markets. To understand the team’s challenge, I’ve broken down how the $30 million can be addressed using multiple revenue sources.

The table above assumes attendance 30,000+ per game, with a complete sellout of premium seating options. In-stadium sponsorships also play a big role, one-third of the debt. Having improved amenities such as rental facilities, a large video board, and ribbon boards will make a huge difference. That makes revenue from every attendee above the 30,000 mark pure gravy. The Giants have operated in this manner since their ballpark opened.

Pretty pie chart

It all seems hunky dory when the fans are filling the place. What happens when they don’t? Let’s look at a scenario in which the A’s only pull in 22,500 per game, or 1.8 million per season.

Lower demand of 25% all around affects all sales, regular and premium. It also puts the team at risk of coming up short, which may force them to cut costs such as payroll.

A drop of $5 million per year is nothing compared to what the Mets and Dodgers are experiencing. However it has broad effects for the A’s because it limits their flexibility. Less money is available upfront for payroll, and they may have to pull from non-stadium sources (TV/Radio) to make ends meet. At the end of the season, they may even find themselves back on revenue sharing welfare (ex.: Pittsburgh). They’ll still have the benefit of the stadium expenses writeoff to help ease the pain, but it’s not a situation anyone wants to be in long term.

Bud Selig and the owners have to be keenly aware of the risk, which may be a legitimate reason why they’re moving so slothlike regarding the A’s. For Oakland, where corporate support isn’t the strongest and attendance has historically been weak, they’ll be looking to keep the A’s from being a bad leverage case like the Dodgers. For San Jose, the question of territorial rights may effectively push the true cost of the ballpark up, though it’s not known how much. Neither is an easy issue to address. Most previous ballparks had huge public financing components to take care of debt service with only a nominal lease payment required of the team tenant. The Giants continue to claim that revenue the South Bay is absolutely necessary to guarantee payments at AT&T Park. Despite the large debt the A’s could accrue, the potential for an extra $30-50 million or more per year after debt service makes it worthwhile, compared to languishing at the Coliseum with no real hope for significant revenue. I’d like to see a $90 million payroll at some point, even if I have to pay more out of pocket to make it happen.

06.02.11
by

Poole accuses Wolff/Fisher of being “slumlords”

Cue the weekly flamefest in the comments. In the Trib, Monte Poole writes:

They have become a wealthy guy (Wolff) and an obscenely wealthy guy (Fisher) who acquired a valuable property, neglected it outright and continue to reap profits. It’s the slumlord model.

At this point in the Wolff/Fisher tenure, perception tends to be reality. Local perception is that the team is neglected by ownership. National perception is that the team is stuck thanks to a bad stadium. Both are equally true. As much as Lew Wolff will point out the need for revenues, fans in general don’t care. They want marquee players. They want Billy Beane to swindle another GM before the non-waiver trade deadline every year. Fans also don’t care that the A’s payroll is $67 million and should’ve been close to $80 million if they had signed Adrian Beltre as desired. It’s about results. It’s about scoreboard.

The inconvenient truth is that the revenue problem does matter. Wolff/Fisher may be the 4th richest ownership in baseball, but if team revenues are near the bottom every year even when a handsome revenue sharing check is included, they can’t do anything other than operate the team within its means. That means the payroll will rarely be higher than $70 million and never beyond $90 million as long as this economic state lingers. When you’re getting swept by the 3X payroll Yankees, it’s not comforting. The worst part is that even if the tarps were ripped off the third deck and attendance rose to 2.5 million, the A’s would still need some $5-10 million in revenue sharing every year.

In the past we’ve discussed contention windows and how brief and sensitive they are for low revenue teams. Beane gambled on Eric Chavez and lost, and we suffered as a result. No position player in the organization has that franchise cornerstone look or appeal. The other poor, bad stadium team is Tampa Bay, and they have a franchise player in Evan Longoria who, fortunately for the Rays and Rays fans, did not break his back in the playoffs. They’ve had time to figure out whether a previous phenom like B.J. Upton is worth a big future contract (so far, no), and while they’re at it they might throw money at Matt Joyce instead when the time comes.

A's and Rays financials for the past dozen years. Data from Forbes.

In the chart above, the percentage of player expenses as part of revenue only rises above 60% once. That was the 2005 Athletics, another example of when a clearly overpaid journeyman lineup repeatedly failed to support a brilliant young pitching staff. The Rays shed so much payroll during the recent offseason that (unlike Forbes’ numbers above) they have a lower payroll than the A’s. They can do that because Longoria isn’t hamstringing the team fiscally as Chavez did and they didn’t lock up Upton, giving them flexibility. They’ve been able to play the rent-a-slugger game effectively, the same way the A’s did 5-10 years ago. Even with their recent success, the Rays aren’t taking any major risks, and have put themselves in the position to delay those kinds of decisions for at least another couple of years. Same risk-averse money strategy, different results, thanks to whomever is on the team.

Unfortunately, history is repeating itself regarding the A’s hitters. The notable exception is free agent-to-be Josh Willingham, who is, as I pointed out to Jeffrey the other day, 2nd on the West Coast in home runs. (In this era that has to be an achievement of sorts.) As long as the A’s have that severe pitching-hitting imbalance on the roster, and none of the pitchers is a 200 K/year flamethrower, there’ll be little to provide buzz for the media or casual fans.

There is a Cahill Street outside Diridon Station that ends at what would be the third base gate for Cisco Field. It’s not like Wolff and his marketing people don’t see the great marketing opportunity that awaits if they can get a ballpark in San Jose. Curiously, Trevor Cahill was signed through the 2015 season, with reasonable options for 2016 and 2017. Cisco Field can’t open before 2015. Beyond the value of a good young pitcher with cost controls in place, there is a definite effort to cultivate a star, and a uniquely Californian one at that. The thing is that ground balls aren’t sexy.

What does that have to do with Wolff and Fisher being slumlords? Nothing, because it’s a bad comparison. It’s not like Beane and David Forst aren’t trying to draft, trade for, and develop great hitters the same way a slumlord won’t fix the heating or plumbing in an apartment building. People often point to the Carlos Gonzalez trade debacle, but we’re nearly three years removed from that and we still don’t know who the real CarGo is, or if he can really hit a breaking pitch at sea level (kind of important at the Coliseum). Now we can point to what appears to be a systemic failure to develop hitters over the last several years, and that goes straight to the top. That may be incompetent, but not necessarily negligent. Does anyone honestly think that a guy of Billy’s reputation and ego doesn’t want to go out there and compete? Come on now. And I’ll go out on a limb and guess that no one within the organization was counting on the amount of regression shown by the A’s hitters collectively this season.

Are Wolff and Beane doing everything possible to win? Of course not. Are they doing everything within their means? I’d say so, for better or worse. For Sunday’s game, none of the concession stands on the plaza level other than the club area were open. It felt like a ghost town. Yet the stands elsewhere else weren’t busy enough to warrant staffing another stand. Just because the landlord isn’t gifting a granite and maple kitchen with stainless steel appliances to his tenants doesn’t mean he’s a slumlord. He’s working within his limitations. It’s not his fault the location sucks. Oh, and if you want those amenities, guess what? You’ll need to move into another building. He’s got one of those if you’re interested…