Fairweather Owner

You’ve probably seen John Fisher’s letter to fans from a couple days ago. In case you haven’t, here it is:

To our friends, family, and colleagues,

I hope each of you and your families are safe and sound during this challenging period.

I am writing to you personally today because you are our fans, employees, and members of our A’s family. This has been a tremendously difficult day and I wanted to share some important updates with you. While I normally stay behind the scenes, mostly because I believe in the leaders who run the team day-to-day, I felt that you should hear this news directly from me given the extraordinary nature of these times.

I am very saddened to let you know that we have implemented a significant temporary furlough of staff positions, and reduced compensation for staff members who are not furloughed. We are also suspending compensation for the A’s minor league players.

Our first priority is to those who are being impacted by these decisions, and we will do everything possible to support them during this time. Many of those affected by these decisions have been loyal to the A’s for years – some even decades. I want to apologize to every person impacted.

Baseball is more than a job – it is a way of life. People who work for our team are our family – our very foundation — and they work tirelessly to help the A’s compete in this most precious game. COVID-19 has brought a tragic loss of life and sickness to so many in our community, and it has impacted us all in ways we could have never imagined. Our organization, like so many others across the country, has had to make tough and painful decisions. We all miss baseball, and we want it back as soon as possible. We want the season to get underway soon, and we believe that the healing power of the game will help bring our community here at home – and across the nation — together again.

I know that many of you will wonder why the A’s are cutting costs now. Nobody knows how this pandemic will evolve over the long term. What is clear is that our revenues will be dramatically reduced this year. None of this diminishes the pain of today’s actions, but it is an honest acknowledgement of the circumstances of the moment.

I became involved with the A’s because I love the game of baseball. I love the drama that can unfold in a few innings, or even a single pitch. I love rooting for our team. I want our employees and fans to know that we remain deeply committed to the long-term future of the Oakland A’s, including our new ballpark, which we know can be a positive force for the City of Oakland and the East Bay. With this said, above all else, my concerns today are with every single person in our organization who is being personally affected. Through no fault of any of our staff, today’s actions are hard.

We look forward to welcoming employees and fans back to the game as soon as possible.

Sincerely,

John Fisher
Oakland A’s Managing General Partner

Fisher’s communiqué, his first as the true face of A’s ownership, is a sharp contrast from what we’ve seen from Lew Wolff and Dave Kaval, who were both brought in as frontmen to interface with fans and the business community in order to rally support for new ballpark initiatives. Since Wolff was moved from the control person role to an emeritus one, Fisher has taken a more prominent role, at least during baseball’s owner’s meetings, possibly at baseball’s behest. Though Fisher has behind practically all of the tough decisions made by the front office since 2005, this is the first time he truly had to put himself in the position to weather the backlash.

A’s ownership is getting to a crucial point, part of cycle that has been repeated since they were born over a century ago.

*Omitted the Schott-Hofmann group from the tweet because of the 240-character limit.

Fisher bankrolled most of the 2005 purchase of the A’s for $180 million. Forbes’ 2020 valuation of the team (presumably done pre-COVID) was $1.1 billion, which means that whatever was used to finance the purchase was paid back and then some. Everything after that is pure equity, especially when you consider the minimal capital improvements (ballparks and facilities) made by the ownership group since ’05. Most of the expenditures in recent years have been in sales and development, of the Howard Terminal plan and A’s Access at the Coliseum. When I spoke to Wolff many years ago about how a ballpark would be financed, he said it would be equity-based, but demurred on the details.

As for Fisher the individual, much has been made about his net worth. Also according to Forbes, as of April he was worth $2.1 Billion, not too shabby. That obscures the fact that only 2 years earlier, he was worth $2.8 Billion. Most of the $700 million loss was due to the the flagging fortunes of GAP, the family business.

No one’s shedding tears for Fisher now or ever. He was was rich before the pandemic, he’ll still be rich after. Furloughed scouts and minor leaguers not getting mere stipends don’t have that luxury. The cycle of A’s ownership, which may be repeating itself, remains troubling. It’s not a unique story. Pro sports franchises are hobbies or playthings for their owners, who usually buy those franchises with proceeds from other endeavors. Fisher has the family GAP money. Walter Haas was from Levi’s. Charlie Finley sold insurance. Only Connie Mack made his name as a baseball man from the start, which made it difficult for him to withstand the Great Depression and limited his income.

GAP is a strange mirror image of the A’s, forgoing rent and laying off workers by the thousands. In both cases there is a single fundamental truth to both businesses: there is no revenue. When revenue dries up, you look for expenditures to cut. You start with non-essential positions, like the bizdev folks the A’s hired during the Howard Terminal push over the last two years. Then you go with the minor leaguers and staff, who have no union and are considered more fungible than MLB. Those salaries are paid by the big league club’s player development budget, not by each minor league affiliate. In the past that amounted to $40-50 million annually across all minor league levels.

Going into 2020, the A’s had some money coming in. They had deposits and monthly installments on season tickets of different types, plus spring training revenue through the middle of March. I don’t know how the other game-related revenue deals (broadcasting, ads, concessions) are structured so I can’t comment on that. There’s also money from the league’s revenue sharing plan, which thanks to the current CBA was phased out gradually for the A’s (25% of a full share in 2019 or approximately $5 million, fully phased out in 2020). That aspect of the deal was premised on the A’s building Howard Terminal and emerging as a fully self-sufficient franchise when it opened in 2023.

In good times, pushing all your chips behind Howard Terminal makes sense. As we’ve seen as the plan progressed, its success depended on everything falling into place, from the environmental approvals to the working agreements with neighbors. The margin for error on a plan that complex was remarkably slim, especially when you take into account all of the external factors and how they could affect the day-to-day operation of the team. (BTW in case you’re wondering, there’s still no published draft EIR). Those external factors have created a sort of perfect storm moment for the franchise, rendering them broke in the face of the pandemic. We’re seeing what happens when you don’t make contingency plans on small and large scales, to horrific effect.

As the calendar moved from March into April and May with play stopped and no clear date to resume, I could see all the line items, the various expenses that Fisher and the rest of the ownership group would have to decide to retain or cut. Longtime minors coach Webster Garrison was spared from furlough as he recovers from COVID-related illness this spring. To treat him like the rest of the staff would’ve been a PR disaster of epic proportions, as if it isn’t already. The brutal truth of it all is that $5 million in reduced revenue sharing funds is already not going to go very far. The Rule 4 draft is two weeks. The Marlins and Padres were recently cited positively for continuing to pay players and minors staff for the next few months. Good for them! They still get revenue sharing! They should pay everyone accordingly! MLB owners and players are still divvying up the what’s left of the revenue pie for 2020, and the A’s have effectively painted themselves into a corner. If, as rumored, the ownership group has been squirreling away the revenue sharing checks into a rainy day fund, well, 2020 is a damned monsoon, John. Do what you will.

EIR will come out eventually (advanced thumb twiddling)

UPDATE 11:30 AM – The A’s are trying to respond to all the questions.

Can you imagine what this will be like if March comes and goes without delivery of the EIR?

The problem with this step of the process is that it’s opaque and inscrutable. So we wait.

ORIGINAL POST

Any day now.

I hope you readers understand why over the past several months I haven’t devoted many posts to the EIR process. Having read the completed reports for Levi’s Stadium, Earthquakes Stadium, and Chase Center, I wanted to wait until there was a finished (draft) work product for the Howard Terminal ballpark. And so we wait for that product.

Good thing we have spring training to pass the time. Until the report arrives, enjoy the spring. There’s plenty of other things to read. Or other diversions.

Barracuda to get their own Tank

Expanded training facility with planned garage (not depicted) across the street

When the Worcester Sharks moved to San Jose to share an arena and a practice facility with their parent club, I was curious to see how long that would last. The answer apparently is six years, as last week the rebranded San Jose Barracuda announced plans to construct a new, 4,200-seat arena adjacent to the Solar4America training facility they continue to share with the Sharks. From the press release:

The 4,200-seat spectator arena will include locker rooms, training facilities and executive office space for the Barracuda, an in-arena Jumbotron with a 360-degree LED display ring, 12 suites, eight loge boxes, one theatre suite, a 46-person party deck, three bar locations, seven food concession stations, a press room and press box and two team merchandise stores.

While I’m glad for the players and the Sharks farmhands that they’ll get better facilities, I feel an opportunity to grow the sport is being lost in the process. The Sharks are effectively doubling down on the South Bay, instead of using an opportunity to grow the sport. To the Sharks’ credit, they also operate ice rinks in Oakland and Fremont, so they are providing some exposure to the sport. When it comes to playing pro ice hockey, fans will still have to come down to San Jose or all the way out to Stockton for the privilege, which is disappointing. As longtime readers of this blog are well aware, I am more than anything else an advocate of spreading the “wealth” of pro sports all over the Bay Area and Northern California. It provides exposure to all communities instead of concentrating teams in San Francisco or San Jose, where ironically, the actual wealth is. This consolidation trend works against my desire and to me seems short-sighted.

Barracuda Tank looks pretty nice

I suspect that Oakland was out of the question, because the Oakland Ice Center can’t be easily expanded and the Sharks don’t operate the Oakland Arena, which is newly empty with a part-time tenant in the Panthers arena football team (who kick off in March). The ‘Cuda play a 68-game schedule, which means the arena would have to maintain an ice surface on-and-off for a full seven months annually. Hockey teams remain sensitive to ice surface quality, which is tough to maintain in balmy California. A leading argument for having both the Sharks and Barracuda play at SAP Center was to give a reason to maintain the ice at the big arena. Instead, the Sharks are pulling back at SAP, opening dates for concerts and other events while consolidating work at an expanded Solar4America Ice facility.

I have a few friends who are season ticket holders to the Barracuda, so I’m interested to see how willing they’ll be to move southeast with the team. It’s only 3+ miles, but anyone who goes to SJ Giants or SJSU Spartans football games nearby know that public transit isn’t a great option to the South Campus area. Parking should be easier as a garage rises across the street from the facility to replace the spaces lost with the expansion. Another loss is a city-owned firing range at the edge of the property, though I don’t know enough about that to gauge its impact. SJSU’s hockey club is probably licking their chops, since they already play at Solar4America Ice and would enjoy the benefits a new arena provides to a college program. First, the Sharks might want to beef up their electrical capacity.

With the Sharks’ minor league affiliate getting its own arena and SJSU blowing out the east side of CEFCU/Spartan Stadium to expand it, it’s a boom period in what is historically a sleepy industrial part of town. Along with what the Giants are doing in Scottsdale and Phoenix, I guess people have money to burn.

Giles out as A’s COO to start own business

Fairly big news out of Jack London Square today:

Giles had been largely responsible for the subscription-style “A’s Access” plans that supplanted traditional season tickets, as well as other OOTB marketing ideas.

Next time you see Chris Giles he might be slinging a guitar instead of a bat

My immediate thought is that Giles was getting good feedback around baseball (and perhaps other sports) about how well A’s Access was implemented. He then saw a nice consulting opportunity coming out of that. His work, in the COO role, is more-or-less done for now. If Howard Terminal gets approved, which likely won’t be this year, Giles would be waiting like the rest of us for the next big steps. Chief Operating Officer was, for the A’s, created for Giles, so if Giles is replaced, I could see the A’s filling from within the organization or choosing not to replace Giles at all. Ron Leuty’s SFBT summary suggests that the A’s have a deep bench if the need arises.

Even if I were a huge Howard Terminal supporter, I wouldn’t be too concerned about the loss of Giles or some of the other organizational losses over the last few months. The A’s are, after a long period of running lean, growing a much larger sales and marketing side of the business. Some attrition is to be expected. As I’ve been saying throughout 2019, we haven’t hit the really difficult obstacles yet. Save your fretting for when those come up.

Clock Is Ticking, Says Manfred

After he threatened to move the A’s from Oakland to Las Vegas in October, MLB commissioner Rob Manfred pumped the brakes during the Winter Meetings this week. Asked about the state of the A’s, Manfred reverted to good cop mode:

“I think one of the things baseball has done well over decades is maintain its commitment to its current cities and we’d desperately like to maintain our commitment to the city of Oakland. I think the wild-card game and the excitement surrounding it shows there is a fan base there, but the clock is ticking. It’s time to get to it in terms of that stadium.”

It’s important to look at the A’s through the lens of Manfred’s entire tenure, not just through individual moves.

Throughout these five years, Manfred exercised patience with Oakland the market and Oakland the political sphere. The Warriors and Raiders announced their moves, giving the A’s the East Bay to themselves. If that was the goal, Manfred’s patience was warranted. However, emptying out a market couldn’t be the ultimate goal. A new ballpark in that market is the ultimate goal. The resistance to the Peralta site didn’t raise Manfred’s ire. The friction at the Coliseum did. Additional obstacles at Howard Terminal could do the same. Manfred’s “clock is ticking” comment is a gentle reminder that he can break out the move card at any time.

The question I have for you readers is, How much of a threat does Manfred actually hold? Vegas is a sore spot because they’ll be the home for the Raiders starting in 2020 and into the foreseeable future. Yet Vegas isn’t exactly ready to build a ballpark for the A’s, or the Dbacks, or anyone else for that matter. Vegas plays the classic stalking horse role at the moment, same as they did when Oscar Goodman was parading showgirls in front of The Lodge 15 years ago. A ballpark in Vegas would be predicated on the same ancillary development scheme being considered in Portland and yes, Oakland. In addition to the 2-3 years needed to build a domed ballpark, Vegas or Clark County or the State of Nevada would have to fire up the political machine to put together a land deal and financing scheme for the ballpark-cum-village, an effort that will surely take at least two more years.

Last week St. Petersburg’s Mayor shut down the Montreal-shared-custody Rays plan. Manfred responded by continuing to push the plan with far less fervor. Instead, he said that for now, the lease at Tropicana Field would continue to be honored. Of course, another city like Nashville or Charlotte could act as a new stalking horse for the Rays.

Manfred supported Stu Sternberg in the latter’s cockamamie scheme. Kriseman said no. Back to the drawing board. While some Rays fans are left dreaming of a new home for their team, the team itself remains status quo, for better and worse. They’re not going anywhere until after the 2027 season, unless a successor ballpark is built in the area. The A’s are in the same scenario until 2024. Just as threats to move the Rays ring hollow, so do the threats to move the A’s. Honestly everyone, don’t fall for it.

Enjoy the walkoffs

As the media starts to write their farewells to the Raiders, it’s important to remember that one team remains and should be here for years, if not decades, to come. It’s not time to scramble to make any deal just because the A’s are the only team left in town. Everyone – the team, the fans, the citizens of Oakland and Alameda County – deserves a fair deal. That means questions need to be asked. Questions that you might not want to ask. Questions that some of us haven’t even considered to ask yet. Maybe some of those questions won’t be fully answered. It won’t be for lack of trying. For now, enjoy the team that calls Oakland home. As we’ve seen with the other teams, nothing is forever.

Offseason News: Sans-Oakland Edition

Next week the MLB’s annual GM meetings get underway in San Diego. Before that, the business sides of several franchises used this week to take care of, er, business.

The Angels struck a deal with the City of Anaheim to extend their stay in town until at least 2050, as reported by the LA Times’ Bill Shaikin. The team will also develop much of the Angels Stadium parking lot, which should help fund a new stadium on the 153-acre site. Much like what deal the Giants made with San Francisco to develop the parking lots near China Basin, and the more complex reimagining of the Coliseum by the A’s, ownership groups are using their teams to propel nearby real estate investment. In the Giants’ case, the process was delayed until the stadium was practically paid off. The A’s are trying to manage two sites several miles apart, while the Angels want to keep everything in one place. The one major complication for the Angels is the status of the The Grove, a city-owned 1,700-seat auditorium on the north side of the lot. The Grove’s location is right on Katella Avenue, the main arterial street in the area.

Locals will undoubtedly complain about the eventual loss of easy ingress/egress as the area is redeveloped. Some may also point to the notion that dev rights or entitlements are a form of indirect subsidy. Pro sports has its price, and if indirect subsidies are what keeps the team from moving to Long Beach or Las Vegas that’s the price. Anaheim’s City Council votes on the deal on December 20.

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St. Petersburg Mayor Rick Kriseman laid the hammer down on the Rays, killing any idea of the team having a split home situation: spring/early regular season in Tampa Bay, summer/fall in Montreal. Or did he? As Noah Pransky opined:

Yikes. In any case, the Rays are stuck in St. Pete through 2027. Or until someone concocts the next scheme to get them out. Underneath all of this is the existential problem facing the Rays that no other market has to deal with. The Rays are a major league team in an area saturated with minor league teams. The area is also saturated with spring training teams on a seasonal basis, plus many east coast teams have year-round training facilities there. In the past few years, teams have left the Orlando area to concentrate on the Suncoast or Gold Coast, leaving Orlando as a possible MLB relocation candidate. Former Orlando Magic exec Pat Williams is leading the effort. Orlando may seem to be a sideways move at best for the Rays, but it’s important to point out that Arizona cleared the decks for the Dbacks by getting rid of minor league teams and consolidating spring training facilities. The playbook, however unlikely, has been used before.

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Speaking of Arizona, the Dbacks put together a 67-page wishlist for their new park. The list has all the current trending items:

  • Smaller – 36,000-42,000
  • Retractable roof
  • Integrated concert venue/auditorium seating up to 5,000
  • Lots of ancillary development

While Henderson, NV pitched a plan earlier this year, the team says it’s focused on Maricopa County (the Phoenix area). It’s worth asking if the point of all this development is to help pay for the ballpark, or to use the ballpark to fatten owners’ portfolios. Some might call that synergy. As I live in Scottsdale, I am following this one to some extent. The team continues to look at the Scottsdale-Tempe corridor for a solution.

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The Marlins are installing the new version of artificial turf similar to the kind installed last year at Chase Field and slated to go into Globe Life Field for its inaugural season. They’re also bringing in the fences.

I ventured out to Chase a couple times this year to check out the turf.

We’re getting to the point where the difference between natural grass and artificial turf matters less and less aesthetically. Turf technology continues to incrementally improve in terms of playability and player safety, making the choice between grass and turf mostly a value proposition. Teams in the Sun Belt face dying grass fields indoors, which leads to novel solutions like grass trays that roll outside. That’s harder to accomplish with an irregularly-shaped field used in baseball than with a smaller football gridiron or soccer field, so baseball is trending back towards the fake stuff in some cases. Sun Belt teams also face huge air conditioning bills, which teams can reduce those costs by not keeping a retractable roof with debatable effectiveness open. In California, where it rains infrequently during the baseball season, or the Midwest or Northeast, where there are no baseball domes, there is no debate.

As for bringing in the fences, Marlins Park was extremely triples-friendly and below average for home runs last year. This follows a similar effort in 2016. I suppose it’s better to build big and bring the fences in than to build a bandbox and have little space to expand out.

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Staying in the Sun Belt, the Rangers held batting practice in Globe Life Field. The dimensions were released as well.

Joey Gallo likes it. I’m sure Matt Olson will too. It isn’t as extreme as Minute Maid Park to left, but right field is pretty much the same. Unlike predecessor Globe Life Park, the crazy winds should be kept in check thanks to the dome even when open. Maybe the Rangers have finally built a place that Bill King would be happy to step foot in.

Contraction Comes To The Minors

Change is a-coming. Maybe.

The above map shows the 42 cities MLB is considering to wipe off the face of the earth. That is, if the face of the earth constituted of affliated minor league baseball teams. (Go ahead, take a few minutes to expand the map and study it.) Some people call this a restructuring of the minors. Others call it contraction. I come from the tech world. We call this downsizing.

Read about what’s being proposed:

I’ve been thinking about this for much of the weekend. My initial reaction is to try to preserve professional baseball in all cities and towns that have it regardless of size or affiliation. I do recognize that, historically, baseball has undergone numerous transformations regarding its relationship with its farm system(s) for decades. If you look at the map, you’ll see that California is mostly safe from this downsizing, with the exception of the high-A Lancaster JetHawks, whose current stadium opened in 1996. But if you scratch the surface, you’ll see that the California League has itself undergone a great deal of restructuring, losing teams and changing affiliations at a rapid rate recently. (Remember how the A’s used to have two Cal League affiliates?) The new trends of vertical ownership (MLB teams owning choice affiliates) and minimizing lower level team affiliations is foreboding for cities in the Pioneer and Appalachian Leagues, where the cities are literally several hours from the nearest MLB stadium and long bus rides from each other. Dropping teams is a surefire way to kill baseball fandom in those places, by making it much less accessible to the average fan or family.

The thing is, I see the point of the ruthless efficiency at work here. I live in Scottsdale, within walking distance of the Giants’ Cactus League stadium and training facility. I’m 15 minutes from the A’s in Mesa. I’m practically down the road from Phoenix Muni, where the A’s used to play and ASU’s baseball program now plays its home games after the A’s left for Mesa. I can see baseball for cheap or free nine months a year, without having to pay escalating MLB prices. That is a tremendous gift to me, and an enormous convenience for the 15 teams that have Cactus League facilities. They can do regular spring training, extended spring training, summer league, fall league, and rehab all in one place. Bus rides are mercifully short. Living costs are manageable. That doesn’t mean that minor league ball is obsolete. In fact, MiLB drew over 41 million fans last season, and there continue to be new venues popping up all over the country. Prospects still need to prove themselves at different levels. Yet there is an argument for some sort of consolidation.

That said, looming over all of this is potential backlash. If MLB chooses to cut ties with dozens of cities, good luck trying to get the next smallish municipality to buy into the baseball-as-boon concept. There’s talk of lawsuits. Surely there would be many of those, though MLB’s antitrust protection only extends to major league games and the cities that host MLB teams. It’s not surprising that the idea may have originated with the already-on-the-hot-seat Houston Astros organization. Whether this is merely a trial balloon or the start of a major reform effort, minor league baseball has major issues to address, such as paying a living wage.

As much as I am a fan of an analytically driven approach to baseball, there are limits. Baseball is still a game played by human beings, in communities, not entirely on spreadsheets. Not everything about the sport should be boiled down to being a revenue or cost center, or an investment with an ROI. As we saw during the World Series, there has to be room for drama and feeling. That’s what loving baseball – or any spectator sport – is about. If you suffocate the communities, you kill the game. I hope that the Lodge, in its infinite wisdom, doesn’t forget how important that is.