Selig slaps down Madden report

The Chronicle’s Giants beat writer Hank Schulman has the scoop directly from the commish’s office:

And, it is not true that Commissioner Bud Selig and baseball owners have all but decided to uphold the Giants’ territorial rights to San Jose, which would preclude the A’s from going there.

There are two schools of thought in how the owners operate in regards to these kinds of votes. One is that like other political bodies, there has to be some amount of lobbying – direct or indirect – to garner votes. That’s what a lot of the traditional media and Oakland-or-bust advocates say is the big obstacle for Lew Wolff in getting territorial rights to the South Bay granted to the A’s.

Then there’s the other school, proffered by many in the national media and the local beat writers, that Commissioner Bud Selig pulls all of the strings politically, and that a vote is effectively a formality, a formal show of unity. I subscribe to this view because Selig’s body of work is testament to it – witness how Selig pushed through the playoffs expansion. It took longer than most expected, but he waded through it and came up with short-term (2012 only) and long-term solutions.

LIke it or not, that’s how Selig works. He did the same thing with the Astros sale and coming move to the American League. It’s not that he’s rallying votes or support. He’s making the deal, or “engaging in shuttle diplomacy” as Schulman suggests. The owners begged Selig to continue as commissioner until he’s 80 years old at $20+ million per year. They’re paying him to act as a mediator, facilitator, and a leader for their cause (and to some degree, baseball’s). He’s there because the owners don’t have to deal with political infighting while he’s the commish because he arbitrates practically every major issue on their behalf. That, folks, is how The Lodge works.

Note: Remember how Selig’s extension was voted 29-1, with John Moores dissenting? They retook the vote ten days later, and the final tally was 30-0.

Dead-market team

If you haven’t seen it yet, make sure you read USA Today baseball writer Jorge Ortiz’s team capsule of the A’s. And I mean read all of it. There are some choice quotes from Billy Beane, like this one on trading Cahill/Gio/Bailey:

“We’re not doing it to be mean,” says Beane, aware of the trades’ impact on the team and its shrinking fan base. “It’s not like I come into this office like I just jumped off the stage of Wicked with a green-painted face and go, ‘How can I trade my guys?’ We do it because we have no other choice.”

Cue someone in the RF bleachers pasting a giant, green-tinted, smiling Beane face on Elphaba. Or maybe Brad Pitt’s face? It’s hard to tell them apart these days.

Then there’s ESPN Magazine cover boy Brandon McCarthy, who may have displayed a little too much of his trademark candor when he said this about how the A’s operate:

“It makes team-building and the competitive aspect that much harder here,” says right-hander Brandon McCarthy, the A’s likely opening-day starter. “It’s not even being a small-market team. It’s being a dead-market team.”

Merde.

Later in the article, Wolff provides two crucial pieces of information that I had not known previously.

  • Moving the team to San Jose should increase revenue $80-100 million annually.
  • The TV rights deal with CSN California runs 25 years with an opt-out at 15 (2024).

In last October’s post titled “$230,000,000“, I attempted to estimate what the A’s revenue model could look like if they moved into Cisco Field in 2015. I figured it would be $64 million more than they get currently. Clearly, Lew Wolff is aiming higher, though he may be using a lower 2010-11 revenue estimate of $150 million or thereabouts to make the comparison (which would fall in line with a +80 million target). In any case, he and the rest of the business side seem to have a pretty good idea of where they’re going.

The A’s TV rights deal with Comcast, which unlike most other recently negotiated team TV deals, did not have its numbers or length revealed, is of similar length to others negotiated by the Rangers, Angels, Astros, and Mariners. I hope the deal isn’t a flat, non-escalating deal, because if it is the A’s will surely be forgoing revenue during what should be considered their competitive window from 2015 through 2020 and beyond. The flipside of that is that at least it’s comforting to know that the A’s are locked in somewhere for at least 15 years. That’s a lot of time to build brand equity, and it’s a damn sight better than the broadcast musical chairs the A’s had to deal with during the pre-cable days.

Comparison of current and future AL West TV rights contracts

I had theorized that the A’s were getting $15 million per year via their cable deal, though I’ve been too lazy to actually verify this. Based on the actual revenue the A’s report or the Forbes reported figures, I can’t see how it’d be much higher than $20 million. Either number is a pittance compared to what the division foes are getting, and will be even less competitive once the M’s negotiate a new deal in the near future. While the A’s can’t control what other teams get and appear to be locked in with CSNCA, they should at the very least have the opportunity to get the $80-100 million Wolff claims he can get via a new ballpark. Because if he can’t, Brandon McCarthy will be more correct than anyone would’ve had the temerity to suggest. For all intents and purposes, the A’s will be in a dead market. Or as he said towards the end of the article:

“It’s a major issue,” says McCarthy, who also has pitched for the Rangers and Chicago White Sox. “I think it’s one of those things that’s crippling this franchise. I’ve never seen anything like this where something like that could just become the rolling avalanche of things not being the way they should. A decision has to come.”

No fan wants to hear this type of thing, whether they’re in Oakland, San Jose, or Springfield. It belies the optimism that spring should bring. But whether you believe McCarthy is simply regurgitating the team line or he’s a blunt, independent thinker as he’s repeatedly shown, he’s right. Something needs to happen. Hopefully McCarthy will stay healthy enough to get a nice payday next year, even if it isn’t with the A’s.

P.S. – McCarthy and Dallas Braden were interviewed by The Rise Guys this morning. Good audio.

Cespedes and a new ballpark

For Billy Beane, 30 is apparently the magic number.

Jason Giambi left the A’s for the Yankees after his 30th birthday as a highly prized free agent.

Miguel Tejada was not offered a potentially “insulting” deal when his arbitration years were up, allowing him to switch coasts to Baltimore. When he took the field in an Orioles uniform for the first time, he was a month shy of 30.

Assuming that Yoenis Cespedes stays with the A’s for all four years of his newly inked $36 million deal, he will be 30 years old when he becomes a free agent after the 2015 season.

With Lew Wolff’s admission that a 2016 Cisco Field opening is more likely than 2015 given the delays and necessary steps remaining, that puts Cespedes quite possibly gone from the A’s when the time comes. Or does it?

It’s really all a matter of value. If Cespedes really is the “Willie Mays of Cuba” then two things are possible. Either he’ll be too expensive to keep and he’ll be signed by a big market team to a huge deal (Pujols, Fielder), or he’ll be a strategic signing by Beane to have a marquee talent on hand for a new ballpark opening. Keep in mind that the San Jose ballpark is practically guaranteed to be more hitter-friendly than the Coliseum.

I figure that if the A’s can sign Cespedes and keep payroll below $100 million in 2016, they’ll do it if he’s performing. By that point Michael Choice should be in his arb years, as will Grant Green and most of the new young pitching talent the team has waiting in the wings. For a guide to how this might play out, look at how the Twins’ and Marlins’ payroll decisions are progressing. Both teams have committed well above $90 million before the low service time guys are signed. As cheap as many fans think the Wolff/Fisher ownership has been, ask yourself this: Are they cheaper than Jeff Loria or the late Carl Pohlad? Or Mike Ilitch during the Tiger Stadium years?

Right now 2015-16 seems so far away that’s it feels silly to project in this manner, especially the way Beane can trade guys at the drop of a hat. But we know that’s what the front office has to do, whether Cisco Field opens in 2015, 2016, or not at all. As long as we’ve stolen a slugger with real potential out from under many far richer teams, I’m taking the little victories whatever way I can get them.

It’ll happen when it happens

Update 2/9 2:30 PM – KQED FM’s Nina Thorsen has posted a transcript of Wolff’s talk.

It seems that when Lew Wolff makes one of his frequent trips up from LA to the Bay Area, he tries to pack as many appointments as possible. I mentioned during the August interview that just after our discussion, he was going up to Oakland to chat with Mayor Jean Quan. When we met in 2009, it was just after he met with San Jose Mayor Chuck Reed. Today he discussed the A’s and Quakes at a San Jose Rotary lunch in downtown San Jose, a day after he appeared on Bloomberg TV. The better to save on jet fuel, I guess.

As usual, Wolff didn’t reveal in his talk with staunch ballpark proponent and Santa Clara County Assessor Larry Stone. Much of what he’s said we’ve written about, so I won’t both rehashing much of it. If you want a recap, read Merc scribe John Woolfork’s article. BANG A’s beat writer Joe Stiglich was there, as was KQED’s Nina Thorsen, mic in hand. The news of the day was this:

(Wolff) gave no indication why it wouldn’t go his way. But he also said nothing’s changed with regard to the Giants’ position that Santa Clara County is theirs alone. There’s been no discussion of a monetary figure for buying off the Giants’ territorial claims, though Wolff noted the Giants didn’t pay the A’s to acquire them.

Now I don’t expect MLB or Wolff to say anything about T-rights negotiations, however deep or frequent they’ve been. If the Giants hold fast to their no-negotiation stance, and the A’s believe that they shouldn’t have to pay for T-rights, then it’s difficult to see what Commissioner Bud Selig has to work with unless he decrees an amount or lets the matter go to arbitration.

Wolff also said that the team would be named the “San Jose Athletics”, which is no surprise. According to an AP report, there was Stomper doll on display with a San Jose Athletics uniform on. One unaffiliated company has gone as far as mocking up logos (non-MLB Properties infringing, of course) with San Jose and green and gold. The results look quite professional, I have to say.

Stiglich mentioned that Wolff would like to hear a decision in a couple of months. At some point we’re going to have to use Friedman Units or Kardashians in describing how long this is taking. Right now, it’s 6 FU’s. It’ll happen when it happens, I suppose. Wake me when there’s real news to report.

Regime change? Not likely

In an interview with Bloomberg West, Lew Wolff mentioned that the upper management duo of Billy Beane and Michael Crowley will be extended through 2019.

Wow.

Here are a couple of clips from Bloomberg, story by Jon Erlichman and Rob Gloster:

Links

News for 2/5/12

Lots of got stuff for y’all to digest (along with your Super Bowl feast) today:

  • Two Bay Area sports families are at odds. According to Matier and Ross, the heirs to former Warriors owner Franklin Mieuli are suing the York family over the value of a 5% minority share of the 49ers. The Yorks say the team’s only worth $360 million, making the stake’s value only $18 million. The Mieuli heirs are pointing to Forbes’ recent valuation of the 49ers, $990 million, and want to sell the stake 5% of that valuation, or $49.5 million. Considering how the lowly Jacksonville Jaguars were sold two months ago for $760 million, you have to think the Yorks will come out on the losing end of this or settle before any trial begins.
  • The Detroit News has a new profile of Tigers and Red Wings owner Mike Ilitch. During his tenure as Tigers owner, Ilitch went from miser to saint. What changed? Strategic moves to properly build a team and bring in free agent talent after a new ballpark was built. It’s a clear case of a ballpark not being the panacea, but rather the foundation upon which a competitive team can be built, rebuilt, and sustained.

“They had an old ballpark in Tiger Stadium that was self-limiting in terms of attendance and revenue. There would be a Catch-22 to Ilitch’s early years: Until he got a new ballpark, he could not subsidize big contracts. Once he got a new ballpark, he was stuck with a bad team and heavy debt.

The combination punch was a haymaker, at least in the early years after Comerica Park opened in 2000.

But by late 2003, after the team had bottomed out, Ilitch made a series of Red Wings-caliber moves.

He expanded payroll at the same time a new front office was about to chart an upward plan in strategies that, coupled with investments in Rodriguez, Ordonez, etc., fueled a baseball revival in Detroit.

Once the stimulus package was in place, team fortunes — and revenues — soared.”

  • The Marlins are laying down grass at their 97%-complete ballpark, and they plan to grow it long to support an aggressive running team.
  • A San Francisco-based hedge fund manager, Christopher Hansen, is aiming to buy the Sacramento Kings and move them to his hometown, Seattle, where he and city leaders are working on a new arena deal. Two reports are in from the Sacramento Bee and the Seattle Times.
  • Yet another plan to replace the Metrodome is being “fast-tracked” through the Minnesota legislature. The plan would require playing as few as two games at the University of Minnesota’s TCF Bank Stadium after the Metrodome was torn down and while the new stadium was being built.
  • Did you know that Reno-Tahoe is putting together a bid for the 2022 Winter Olympics? A group has formed to explore a possible bid. Reno-Tahoe may be competing with Denver for the honor of representing the US for the 2022 games. Denver would seem to have the advantage in terms of facilities, though the distance between Denver and the region’s best ski resorts in Vail/Beaver Creek and Breckenridge is pretty long (though that didn’t stop Vancouver, whose 2-hour trip to Whistler was even longer). Preliminary cost estimates for the bids are around $1.5 billion, which would be less than Vancouver’s 2010 effort.
  • For some unknown reason, secondary ticket prices for today’s Super Bowl are down 50% compared to last year, even though the game is being played in a smaller venue.
  • The Nats are trying out a “Take Back the Park” campaign, in which they are pre-selling tickets to a single April series between the Nats and Phillies. The catch? They’re only selling to buyers with DC/VA/MD addresses, verified via credit card records. The Phillies, whose own ballpark is frequently sold out, often have fans take the 2.5-hour trip down I-95 or Amtrak to the District to catch their team drub (maybe not for much longer) the Nats.

That’s all I got. Enjoy the game.

Forbes loves the Warriors

As part of Forbes’ annual analysis of the NBA, staff writer Tom Van Riper put out a piece on our hometown heroes, the Golden State Warriors. Much of the info in the article has been dealt with elsewhere, such as the differences between Chris Cohan and the Joe Lacob/Peter Guber ownership group, or the latter’s interest in a new arena in San Francisco. More interesting and revealing is this tidbit about the new TV deal negotiated between the Warriors and Comcast:

That agreement paid the Warriors approximately $50 million up front—enough to take the sting off the purchase price—and roughly tripled the annual rights fee to over $25 million from $9 million. The agreement is for 18 years, with provisions to periodically renegotiate along the way.

Indeed, the $50 million probably did help pay down debt associated with the franchise purchase. Plus they didn’t take too much upfront, as $25 million per year is a healthy amount for an NBA team – though far less than the $150 million per year the Lakers are getting. No matter how bad the team gets (and they’re still bad despite a new coach this year), the Warriors remain an attendance and ratings bonanza. So hats off to Lacob and Guber for working the numbers. The TV deal runs well past the end of the new CBA, though it’s likely the team will option out and negotiate a new one before the decade is out.

When it comes to building a new arena, the obstacles are clear. It’s hard to build in this state. It costs 20% more to build than in most other markets. There is no redevelopment money available, let alone other public funds. The Bay Area won’t approve a stadium or arena tax. Yet it’s clear that ownership sees the gleaming lights of SF and wants to turn them into dollar signs. The only issue is the cost of a new arena, which Forbes pegs at up to $1 billion. That may be true, especially if the arena can’t open earlier than 2018. I think that $1 billion is the line of demarcation. Anything under that it and it would be worthwhile to invest in arena. Above that and it’s prohibitively expensive.

The actual raw cost to build at Mission Bay shouldn’t be more than $750 million even in 2017. Material and labor costs shouldn’t rise that high. The additional cost would be to furnish the arena, which would be co-owned and operated with the Giants, Burdened by a high construction cost (mortgage), both parties would be motivated to sell the arena for every kind of event from tiny to large, so the club areas, suites, and auxiliary spaces would be decked out to a degree never before seen in the Bay Area. And it’s likely that given the locale, the teams would attract a third party interested in fronting some of the construction cost in order to secure the operations contract for the venue. That could be AEG, Global Spectrum (a Comcast subsidiary), or even the Sharks, who operate HP Pavilion.

Right now the Warriors are a mere renter at Oracle Arena, and not for cheap at $4.7 million per year and little access to non-game revenues. They don’t have a say on who runs the arena, which has led to allegations that SMG didn’t try very hard to bring in events. Last summer, AEG and Live Nation were set to bid on the next deal to run Oracle Arena. Can’t exactly blame Lacob and Guber for trying to maximize their investment, though building in SF as opposed to staying in and improving Oracle Arena could prove a more cost-effective decision in the long run.

A perfect spot for a new arena is Lot C near AT&T Park.

As the Warriors reach the end of their contract, SF and Oakland will be “forced” into a bidding war for the W’s. SF and the Giants will be ready with an infrastructure/development rights deal, probably at Lot C on the other side of Mission Creek. The lot measures 400′ x 514′ not including sidewalks, which should be enough for a typical roundrect or oval arena, though not wide enough for the circular bowl layouts utilized at Oracle Arena or Staples Center. (HP Pavilion is roughly 440′ square). If Lot C were used, only 800 parking spaces would be lost, which would be easily replaced by a garage and ancillary development on Lot A. Lot C has a T-Third stop right outside it, plus Caltrain is only a few blocks away.

Oakland and Alameda County’s pitch lies squarely in the Coliseum City concept. By the time the cities get to brass tacks, we should know where the A’s and Raiders will be playing in 2014 and beyond. The A’s have a long-term play, the Raiders have both short and long-term scenarios. If both teams were to sign onto Coliseum City, it’d be very easy for the Warriors to partner up with everyone else. If the A’s and Raiders are headed elsewhere, it would be difficult to convince W’s ownership to shoulder the load for Coliseum City, especially if a compelling offer were coming from across the bay. I’ve advocated in the past for a downtown Oakland arena or one at Victory Court, but the cost to make that happen would probably be higher than the already city-owned lots in SF, so that’s not happening.

All the while, David Stern (or his replacement) would be pumping up the “need” for the Warriors, just as he’s done in practically every other city. The Cohan-era Warriors were analogous to the Autry-era Angels, in that they were generally undervalued and have great potential. Lacob and Guber intend to make good on the potential, preferably both on and off-court, though they’ll settle for off-court at least in the near term. If that path leads across a shiny new east span of the Bay Bridge, so be it. At least they don’t have territorial rights standing in their way.

Wolff talks with Shea, on with The Rise Guys Friday morning

Update 10:57 AM – Link to the archived interview here. MP3 download here.

Prior to FanFest, Lew Wolff is making the media rounds again. Friday’s Chronicle has decent length discussion between Wolff and John Shea about both on-field and off-field issues. There isn’t anything new on the business side other than Wolff’s admission that the team actually made $370,000 post-revenue sharing in 2011 thanks to the World Series going seven games. Wolff can thank fellow St. Louis-area native David Freese for that.

Wolff’s scheduled one-on-ones with fans are going to be interesting. I see why he’s doing this, but I don’t expect much to come of it. Maybe if he convinces a few fans regarding the earnestness of his effort it’ll be worth it. It just seems like people on one side or another have such ingrained opinions that it’s a futile task.

Later this morning, Wolff will be on The Game with The Rise Guys at 9:15, probably talking about FanFest, Johnny Gomes, Bartolo Colon, and maybe Manny Ramirez.

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Quick note about FanFest – I expect to be there at 9. Jeffrey should be there around 11. I will be tweeting throughout, so pay attention to the @newballpark feed for updates from FanFest.

News for 1/17/12

Today I did an TV interview on Get Real with Brian Stuckey, a show produced out of CreaTV San Jose. CreaTV is a non-profit to whom Comcast has farmed out all of their public access programming for much of the South Bay. The segment will air January 30 on Comcast channel 15 with a web stream simulcast, so my ugly mug won’t show up until then. I doubt anything will have fundamentally changed by then, but you never know.

On to the news.

  • Matier and Ross report that nothing official happened on the A’s-to-San Jose front. That’s true at least when it comes to making a decision or coming to a compromise plan. We set those expectations going into the owners meetings. Yet background work did occur, including the presentation to the executive committee and Selig’s statement that the A’s are now on the front burner. Write that off all you want, it’s movement that wasn’t happening six, nine, twelve months ago. Remember that as incalcitrant the Giants are, there’s always the threat of binding arbitration to force the Giants’ hand. Commissioner Selig won’t give San Jose a greenlight for a vote (for either MLB owners or the city referendum) unless the Giants drop their lawsuit, making the legal action the last real weapon in the Giants’ arsenal to block the A’s efforts.
  • While the Giants are doing everything possible to stop A’s ownership, they’re actively encouraging new arena deals. We all know about their overtures towards the Warriors. Yesterday, Larry Baer gave a pep talk to Sacramento civic leaders pushing for a new downtown Kings arena. Baer said that after four defeats at the ballot box, the effort to get a ballpark going was “worth the fight.” I imagine that Lew Wolff feels the exact same way, Larry.

“It can be done, don’t give up,” Baer said. “You must persevere, you must exercise patience, you must have strong leadership in the private and public sector.”

When a man’s right, he’s right.

  • While the Oakland-only crowd was eager to jump on a graf in the M&R report, they buried the lead: Thanks to the death of redevelopment, the City of Oakland will have to cut 200 jobs and hand out 1,500 pink slips. The Mayor and City Council may also have to take huge cuts in pay on top of cuts already taken last year. How does this affect San Jose? Not that much, since as of the end of 2011 there were only about 10-12 people left in SJRA, with budget cuts and changes already enacted. Not that San Jose actually anticipated the change. SJRA’s fiscal issues forced it shut down early.
  • Less than three months from the opening of the Marlins Ballpark in Miami, and there’s no solution for funding transit options that can bring fans from downtown or the nearest Metrorail (BART-like) station.
  • The Cubs are replacing their right field bleacher section with a Green Monster Seats-style party deck, fronted by one of those new-fangled LED scoreboards.
  • Santa Clara’s City Attorney declared a petition effort by 49er stadium opponents illegal. That doesn’t mean the opponents can’t sue. We’ll see if they have the resources to sue for the right. We’ve seen this happen before.

On a lighter note – since Jeffrey and I will both be at FanFest, would any readers like to do a meetup? Not exactly sure of where we could do it, we can talk through the details.

The San Diego problem

I frequently look to San Diego for inspiration, whether for the weather, the beer, my brother’s wonderful Rottweiler, Jojo, or major league baseball. No, I’m not saying that the Padres are baseball’s model franchise. Instead, San Diego – the market – is a good comparison to the way the A’s are situated in the Bay Area. Consider the following:

  • With a population of 3 million, San Diego is slightly larger than the East Bay’s population.
  • The gross metropolitan product (GMP) of San Diego is slightly larger than that of the South Bay. (The East Bay is considered part of the San Francisco region from a Census perspective).
  • San Diego has a broad economy, from the military and government services to healthcare to technology.

San Diego will never be able to have a large share of the Southern California television and radio market because of the presence of the two Los Angeles teams. That hasn’t stopped the team from inking a 20-year TV deal with Fox Sports, worth $25-30 million per year. It pales in comparison to the Angels’ new deal and the upcoming Dodgers’ deal, but it’s still a major improvement over the $15 million per year the Padres were getting from broadcast station Cox-4. The deal starts in April.

Of course, this is MLB, where any snag that can be hit will be hit. Commissioner Bud Selig tabled the sale of the Pads from John Moores to Jeff Moorad as other owners raised numerous questions about financing that weren’t satisfactorily answered. Both Selig and Moorad say the snag won’t jeopardize the sale. It sounds like Moorad will take Jim Crane’s recently vacated hot seat, as the sale gets dragged on for several more weeks or months while outgoing majority owner John Moores stews.

According to this summary from Gaslamp Ball, Moorad has all of his money lined up, including the last $100 million of cash in escrow. That’s somewhat impressive, given that Moorad was given an unusual five-year phase-in plan to acquire all of the team. Moorad sold his minority stake in the Diamondbacks, got Bob Piccinini and others (many of whom are Modesto based) in a 12-member investor group, and seemingly got the money three years ahead of schedule. Yet there remain questions about what debt instruments Moorad used to raise the capital, and perhaps additional questions about where some of that TV money is going to go when the Padres start getting paid (some of it may go to pay down debt instead of the team). All of this harkens back to the McCourt debacle, where Frank kept borrowing against the team and related properties to fund an extravagant lifestyle for him and his ex-wife. With new debt rules in places thanks to the new CBA, Moorad’s group may be Exhibit A in ensuring that teams, especially mid-markets, stay true.

A decade ago, Piccinini-Dolich group experienced similar troubles when trying to buy the A’s. They brought in numerous new partners over several months, trying to appease Selig and the owners. Whether you believe they were shafted or there were lingering unanswered questions about how the group would finance and run the team, their bid was denied. Though it’s interesting to consider for a moment that with the makeup of the Padres’ investor group and Moorad’s place as the managing partner, it’s not hard to see that had things turned out differently, Moorad might be the A’s owner now, perhaps phasing out Dolich over time. Would the group have been so steadfast to stay in Oakland, or would Piccinini have become a Ken Hofmann-like weak supporter of the East Bay? Would Moorad, smelling the money in the South Bay, have gotten his agent juices flowing again and pushed for San Jose? We’ll never know. If you want to see how the Piccinini group would’ve operated the A’s with limited resources (like those in San Diego), all you need to do is see what Moorad does in the future with the Padres.