Category Archives: Owners

08.20.11
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News for 8/20/11

Though this August may be unseasonably cool, there’s no doubt that it’s the dog days – for a team mired in third place and those of us looking for ballpark news. Nevertheless, there is plenty to discuss that happened this week.

First up is a very good assessment of where various football stadium efforts stand, courtesy of the Merc and Trib (BANG). Naturally, Santa Clara has emerged in the race due to its diligence in getting a deal done, despite the highly questionable finances of the plan. Oakland lags well behind, and potential funding sources has been identified in the process: $105 million in county transit funding, a Chinese investment group. Transit funding for the Raiders? Yikes.

You may have noticed some upheaval around Hegenberger Road this week when going to/from an A’s game. That’s because the infamous Oakland Airport Connector project started construction this week! The $484 million people mover will shuttle riders between the Coliseum/Airport BART station and Oakland International Airport, all for a more-than-reasonable $6 each way. That’s more expensive than it costs to ride from Coliseum/Airport to Millbrae. (To be fair, the enormous cost of the SFO BART extension has caused Millbrae-to-SFO to cost $4 each way thanks to a surcharge.) And it appears that the only reasons the project kept going all this time are that $95 million has already been spent and up to $250 million has already been committed, making it nearly as much of a boondoggle even if it were cancelled. Initially, the only two stations on the OAC will be the terminals at the airport and BART station. A third station could be built at Doolittle and Hegenberger if the funding surfaces. Double yikes.

Former Rangers owner Tom Hicks is being sued over allegations that he took tens of millions from the team to acquire parking lots around Rangers Ballpark. The lawsuit foreshadows future legal wrangling between MLB and Frank McCourt, who reorganized the Dodgers into so many holding companies and dummy corporations that it’s impossible to say how Dodger Stadium and its land could be extricated from McCourt at this point.

A preliminary report on Kings arena funding indicates that much of the burden will be addressed by user fees on everything from tickets to hot dogs. These fees could generate anywhere from $5 million to $20 million per year. While not fan-friendly, it is more general taxpayer-friendly than sales or parcel taxes. A more fleshed out proposal is due September 8.

Silicon Valley Sports & Entertainment, the parent company of the Sharks, announced 19 layoffs from the business side of the company. Included in the layoffs was longtime director of communications Ken Arnold. Executive VP of business ops Malcolm Bordelon characterized this as “pruning for future growth”. He can’t just be talking about the parking garage the team will construct north of the arena as growth. There’s something else to this. That something may be related to former CEO Greg Jamison, who left a year ago and was never formally replaced, perhaps going after the Phoenix Coyotes as early as next week. Should Jamison pursue the Coyotes, he will have to sell his share of the Sharks. It’s not difficult to see Jamison bringing with him trusted lieutenants such as Arnold and sales/marketing head Kent Russell. It would also provide an opening for the A’s, if they were to be extended the opportunity. Lew Wolff (or a surrogate) could potentially get a stake in SVSE and reciprocate by providing a stake in the A’s/Quakes, making the two ownership groups virtually joined at the hip – and more importantly, fully aligned. That would be important in planning for the next 20-30 years around Diridon, as the two parties would be expected to have a major influence on how the area is planned and developed even if those plans are well down the road.

In tangentially related news, HP announced on Thursday that it will cease development of webOS devices such as the recently launched TouchPad tablet line and Pre smartphones. It may also spin off its Personal Systems Group, which includes webOS (Palm) and its industry market share leading computers operation. Should HP spin off PSG or divest it, there would be an interesting sports-related ripple effect down the line: what would happen to HP Pavilion at San Jose? The naming rights deal at the former San Jose Arena expires in 2016, and not coincidentally, the name reflects a line of personal computers HP makes. In between those two names, the name for a year or so was Compaq Center at San Jose. That deal was done by the final Compaq CEO, Michael Capellas, prior to the HP-Compaq merger (done by Carly Fiorina). It’s possible that HP will keep the name, given that enterprise competitor Oracle has the name on Oakland Arena. Then again, Oracle has a similar choice to make that same year because its naming rights deal ran only a decade. Chances are that both companies will drop the naming rights deals for different reasons: HP because it will no longer have the consumer focus to justify the deal, and Oracle because Larry Ellison lost out on owning the Warriors. Often naming rights deals are reflections of companies’ CEOs, and this is no different.

Capping off corporate talk is billionaire Carl Icahn threatening to perform a coup at Clorox (again). Icahn, who is worth $12.5 billion and has his tentacles seemingly everywhere, is the largest shareholder of CLX stock with a 9.4% stake in the company. Earlier in the summer, Icahn attempted a $10.2 billion buyout of Clorox, all in the name of achieving greater shareholder value (his M.O. for everything). Rebuffed in that attempt, Icahn is now trying to replace the company’s entire board of directors with himself and 11 of his own hand-picked people. Something on this front may happen in November, when the annual shareholders meeting will be held. Icahn doesn’t always win, but it is thought in some corners that his power influenced the sale of Motorola to Google for $12.5 billion (coincidence), which was reported on Monday. Why is this important? If Icahn gets his way, it’s likely that Clorox will eventually be sold to the highest bidder, perhaps one of its competitors such as Proctor and Gamble. P&G would be interesting in that they were forced to divest Clorox due to antitrust concerns around the time the A’s moved to Oakland. And if Clorox is bought and/or sold, CEO Donald Knauss, the former Coca-Cola exec who has shown interest in East Bay/Oakland sports to the extent that there are rumors of a possible naming rights deal, is also not long for Clorox either. If Knauss goes, so does that deal. Naming rights deals often reflect companies’ CEOs, remember?

08.10.11
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No chance for a SJ vote until MLB decides

Saw this tweet come across the internets:

No surprise here. Ever since Mayor Chuck Reed’s failed bluff, the City has had this stance regarding the referendum. What this means is a potential June 2012 vote, now that the state legislature has pushed back the upcoming primary from its previous February date. In all likelihood, that’s the last possible date for a ballpark vote in order to afford enough prep time for a Winter 2012/2013 groundbreaking and an April 2015 Opening Day. November 2012 could also be a possibility, but only if every other step such as demolition were either completed or well underway.

Of course, there’s the remote possibility that no referendum will be required. If the A’s were to buy all of Diridon land and pay for the Autumn Parkway project, I suspect that the city attorney will rule that no referendum is necessary. If the A’s don’t pay for Autumn Parkway, chances are that a referendum will be needed – even though the project would impact more than just the ballpark. Call it a hunch.

Keep in mind that we still haven’t heard what the status is of the remaining land buys. By not acting on a referendum now, the City can wait up to a full year to do the remaining acquisitions, even if they require eminent domain.

08.05.11
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The Big Lew Wolff Interview, Part 5

Part 5 of 5 (Part 1, Part 2, Part 3, Part 4)

LW: How about redevelopment? Don’t you want to talk about that?

ML: I’m getting right to that. Actually let’s talk about T-rights for one more question. If there was a dollar value attached to the T-rights here, is that something you’d consider? Is there a threshold or limit for that?

What do you mean, pay for this (Santa Clara County)? We should be paid for what we or the Haas family gave up?

ML: Well, I suppose this is an academic thing.

We’ll leave that up to the commissioner.

ML: Okay. Fair enough. On to San Jose and redevelopment. There are two properties remaining that have to be acquired. We last heard that they were supposed to be wrapped in June but we haven’t heard anything from the City about that. I’m guessing that they haven’t done it because of all the shakeup with the budget and the ending of redevelopment. Now that they’ve filed a lawsuit there’s all sorts of stuff up in the air.

San Jose went and acquired half the property or more, which is good for us because they’re committed. I spent most of my adult life in redevelopment. We’re not looking for redevelopment to hand us a check or a bond issue or anything. That’s true in Oakland too. The value of the land that we think it is, if San Jose needed that money to be paid to be the last properties (we’ll do it). We thought at first that we’d end up leasing land. Owning the land would be better for us. Whether it’s redevelopment, the city, a special district, whatever the hell they come up with, it makes no difference to us because we’re not looking for anything different than we would be normally. So in a funny way it’s a little better for us.

ML: Really?

Well, look. If we’re fortunate enough that they announce that we can go you have to close your eyes and say, “What will that mean?” The whole community is gonna be excited about that. The thing that bothers me is that – even in this economy – we need a ballpark whether the economy is good or bad. Right?

ML: Yeah.

So why should we be holding up jobs and construction and so on over an argument that I think is –

ML: Petty?

Petty. As a percentage of what we’re doing, the cost of the land, I don’t know what it’s going to be, if you’re going to spend $400-450 million the land is not going to be a situation where it costs X percent and it’s too much so we’re not going to build a new ballpark.

I hate to see what’s happening to redevelopment, because I think it’s one of the few aspects of government that has a cost-benefit to it. I’m still surprised – and I like Governor Brown – I didn’t get why he did that. The answer is that I’m sorry about what’s happening to all of these cities in California. We have a real shovel-ready project if nobody interferes with it. It’s not a concern. Your blog talks about it all the time which I think it good but it really isn’t a problem for us. We have one problem, and that’s the decision. Is that clear?

ML: Yes, and it’s somewhat reassuring in light of what we’ve learned in the past 6-7 months.

I didn’t say it was good for all cities.

ML: I’m not going to lie. There are a lot of people on the blog who read and comment who look at this and say, “That’ll be one more thing that eventually eliminates Oakland or some other city because they won’t have the resources to make it happen.”

By the way, they’re right. Not San Jose though – they’ve spent the resources. Their EIR is done. We may have a lawsuit from some phony – you know all that stuff. Starting now, somewhere else? Forget it, it’s not gonna happen. Anywhere.

ML: Did you even conceive that something like this would enter the equation when you started?

No, not at all.

ML: Going back to the first question, so much has changed in six years. 

A lot has changed and sometimes things that look negative may be positive for certain people, and vice-versa.

ML: The last questions I have are more fun stuff. I was considering bringing a book that I bought last year when I visited Target Field.

The Target Field book?

ML: The big book, the commemorative book. 

I have it.

ML: It’s beautiful, covers the entire history of how they got to that point. Other sites that were considered. Politics, and then finally the actual construction. Have you been to Target Field and maybe the Marlins ballpark?

I have been to Target Field but not the Marlins ballpark.

ML: What do you take away from Target Field?

Are you talking about the history of it?

ML: No, just the ballpark.

I think it looks terrific. It’s actually built on a smaller site than we have. It’s cantilevered out over –

ML: Over streets and railroads.

I don’t think we can afford to build that structure in California privately. They’ve had some help there (in Minnesota). What we’re planning to do is this. When you air-condition space like special restaurants and things. Because of San Jose and the economy and so on. We’re gonna have all of the great concessions but we’re not gonna have a stadium club because we want the downtown to provide that. The less air-conditioned space you have the more you can put into the field. Target Field is great. Give it to me tomorrow and I’ll take it in a second.

But we will be the closest to the field of any ballpark ever built in baseball, at least in my lifetime. And it’ll be fun. We just want to have fun. We want the fan to walk in and have fun. We don’t need to have a monument or tribute like Yankee Stadium – it’s incredible there, the materials and everything. It’s a $1.5-2 billion or whatever it costs. What we want is for somebody to go and say, “Gee, that was really a fun experience. I felt like I was really close to the player.” Each of our places in the ballpark – and my son can go over this with you – are neighborhoods. So it might be better to be in LF standing up than it would be to be behind home plate.

The average (attendance related to) capacity last year based on our study: 51%. So everybody’s saying we’re making this thing too small. Number one – we’re in a two-team market even though the other team doesn’t agree. [laughs] Number two – we think less is more. We want players to look up and have the stands filled. As much as they shouldn’t care whether it’s one person or 50,000, they do care.

ML: They absolutely care.

And so does the manager and so does the staff and the ticketing group. We have 130 people we employ and deserve to have a proper operating environment.

ML: Okay. Going to the Cisco Field renderings that were released last year by Baseball San Jose. A bunch of us, because we’re stadium geeks, started to dissect the pictures to figure out what’s in there, what’s going on. We were able to divine a few things and maybe some of my guesses were wrong. The first thing that stuck out from a pure baseball standpoint – because that’s what we watch, the action on the field – in RF you have that big wall of something facing Autumn Street. The dimensions of the field –

I’m gonna defer to my son Keith. who lives up here in the Bay Area. I’m gonna have him call you or you can call him, either way. He can sit down and explain this to you. It can be a separate blog time. I like it, but I just don’t have the info.

ML: Is Keith dealing with most of this technical stuff now, nose to the grindstone?

He’s my son so I don’t want to overdo it. He’s a little less emotional than I am. Probably smarter, Harvard MBA and all that. He’s a real estate developer and a good athlete. Billy wants to see more of Keith but Keith’s nose to the grindstone, trying to keep everything going here. On both soccer and baseball plus he has other activities outside of that. You’d get a kick out of talking to him.

ML: I’d love to do that, whether that’s soon or after the decision is made.

The other thing is the architect, who used to be with HOK then left – if the two of them were here you’d get a kick out of talking to them. They’re great people. I’ll work on that.

ML: That’s the stuff that we (on the blog) really want to talk about. You mentioned Billy Beane just now. Do Billy and Keith have an ongoing dialogue over how the ballpark should be developed? 

What Billy wants is to do is be able to walk into an office where he doesn’t trip over boxes and stuff. The answer is that we have Steve Vucinich [Ed.: VOOSE! A’s equipment manager]. He has a continuing list of all things the things he’d like to see in the ballpark. He’s been keeping the list for so long that it’s been getting yellow, he teases me. We will use all of our people – we have already but not to the degree when we start actually determining storage space, down to the details. We have great resources for this. Better than just consultants.

ML: That reminds me of when what is now Chase Field was being planned, they left a lot of the conceptual stuff to Buck Showalter, a manager. 

A manager would like to have more space between the foul line and the stands. We want to have one inch. So we’ll have that kind of battle going.

ML: I like that kind of battle. It’s a good thing to sink your teeth into. One more question. During the Fremont unveiling, you referenced ancillary development items such as the baseball village and museum. What happened to the museum concept? 

We probably don’t have room for it there. My partners, the Fishers, they contributed a wing to an art museum in San Francisco. They talk about a museum all the time. They look at the art of baseball. Or maybe they’re talking about pure art. They’ve also been down here and have had a conversation with the local museum. [Ed. – As we are talking I look out the window at the San Jose Museum of Art, a short throw from where I sit.] They have a great art collection, it’s not necessarily sports-related or sports memorabilia. We haven’t thought about it, but we’re open to those kind of fun things. Right now we don’t know if we can incorporate too much of that into the ballpark because of the size. So it isn’t perfect. If John Fisher were here he’d be talking about bringing great contemporary art to a baseball park and I’d be talking about bringing somebody’s uniform.

ML: You know what? I went to Cowboys Stadium last year and there were several contemporary art installations throughout. And it’s really beautiful and striking. 

John will be a big influence on this facility.

ML: That’s great. One last thing. When you look at the renderings, I’ve had a few people tell me it looks like a modernized mirror image of Fenway Park. 

You know, I don’t see it that way but I’m not sure. It is small and compact. Again, I’d like to defer that to the meeting with Keith and so forth. I mean, if we had Fenway Park right now I’d be very happy. [laughs]

ML: [laughs] For years, Fenway had 33,000 seats and no one complained.

You gotta always remember we’re in a two-team market. While there’s plenty of baseball, there’s plenty of other attractions in California, in fact there are more attractions than in Boston for the consumer. We gotta be careful about that.

Is that helpful? I’m pleased you were willing to do this. Believe me.

ML: I’m pleased that you had time to sit down and discuss this.

I guess the point is that I keep getting beaten up, and if people feel that way fine. I feel there are areas where we’ve really been diligent that people don’t want to think about.

ML: This was really great. It’ll be really productive when it gets posted. 

[Ed. – I had originally meant to follow up the museum question with one about honoring A’s history but was thrown off by Lew Wolff’s response that I forgot it. We were also heading into a hard stop. I’ll be sure to broach that in the discussion with Keith Wolff.]

08.04.11
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Pulling the trigger on Zito

In 2005, Gwen Knapp proposed that the A’s trade Barry Zito, he of the Cy Young award and two All Star appearances to date, to the Giants for the territorial rights to Santa Clara County. I had remarked that the concept wasn’t that far-fetched, though readers noted that Knapp was probably was writing with tongue placed firmly in cheek. Now there’s talk that the Giants may waive Zito outright, with two years and $46 million ($7 million buyout in 2014) remaining on his contract.

With the Giants not budging on territorial rights, $19-20 million for each of the next two years is a lot to waste with Tim Lincecum and Matt Cain accruing service time in the process, and Brandon Belt looking not ready for prime time. The team is raking in the dough, for sure, but with the mortgage on AT&T Park they aren’t exactly up in the revenue stratosphere with the Red Sox and Yankees. That means that they’ll need every bit of that $19-20 million if they want to sign a Prince Fielder-type, who have (post-Bonds) been reluctant to play out their careers at hitter-unfriendly China Basin. Even for the Giants, windows of contention are finite, though longer than for, say, the A’s.

The A’s will have a largish revenue sharing check coming this offseason, and they usually have the ability to absorb additional salary up to a $75 million payroll, based on their annual revenue. They could conceivably take Zito in a trade for scraps (ex.: Josh Outman), which would limit payroll flexibility for the A’s while increasing it for the Giants. A trade by the waiver deadline would go through uninterrupted since no other GM is going to touch Zito’s contract with a ten-foot pole. The Giants would not throw in any cash, making Zito’s total value around $49 million including his prorated remaining salary for 2011 (assuming Zito comes off the DL in time for a trade/physical).

Should a San Jose ballpark open in 2015, the Giants’ claim of damages related to the move amounts to $60 million to cover the final three years of debt service on AT&T Park (2015-17). $49 million is clearly short of $60 million, but there’s also a matter of opportunity cost as well. How much is that extra $19-20 million for 2012-13 worth to the Giants? In a way it’s worth twice as much since the money would be freed up to get another player that they wouldn’t be able to get if they were hamstrung by Zito’s contract.

From a business of baseball standpoint, it would also be the cleanest way to resolve the T-rights debate since it wouldn’t require any action by Bud Selig other than the approval of the trade by the league office and then the procedural vote during the winter meetings. It would be a clean, above-board deal, done conveniently to coincide with rewritten definitions of T-rights in the next ML Constitution (however they’re written). There’d be no need to redirect the A’s revenue sharing check or other financial gymnastics. Politically, it would fit Selig’s M.O. of waiting around until a solution presented itself. And while the A’s payroll flexibility would be less, at least they’d be getting back a fan favorite during a rebuilding era.

Brian Sabean got a taste of glory last November, along with a hefty contract extension. It might be difficult to convince Bill Neukom to go along with the idea, but Neukom’s also taking a chance on not getting anything at all when the time comes. Competitiveness now over anticompetitive business practices? I wouldn’t put it past Neukom to go with the latter. I’d like to think that, in the end, he’s a sensible man. Strange how the tables have turned, eh?

08.04.11
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The Big Lew Wolff Interview, Part 4

Part 4 of 5 (Part 1, Part 2, Part 3)

ML: Now lets move onto everyone’s favorite topic – tarps. They’ve been a bone of contention ever since they’ve been up there. What have you learned from having them up there, whether they were an experiment or another initiative, do they help? Hurt? Does it even matter?

Actually, I want to go to your site. The doubleheader the other day. It was interesting. Somebody caught me the other day at the soccer game, he said, “Oh, I went to the doubleheader, I’m a Giant fan but it was so much fun.” But in your own blog, there were a whole lot of comments saying, “Gee the (Coliseum crowd) looked great because the tarps were there.”

ML: A lot of people said that.

There you are, I win, they (the critics) lose. Move on.

ML: [laughs] And it wasn’t even a sellout. 27,000.

I know, but it would be better if the seats weren’t there. Look, we have $2 Wednesday and a $1 hot dog. You personally have a problem with that. There’s a limit of ten (hot dogs). [laughs]

ML: It’s true. [Ed.: Years ago I once ate six dollar dogs in one sitting. I am no Joey Chestnut.]

I want to see the person who eats that. All kidding aside. Everybody’s saying you have to open this or do that, make it cheaper and cheaper. We need revenue, yet nobody says, “Look how reasonable the A’s game is compared to the Giants.” Which is fine, they have a better environment to go to. You should pay more there.

ML: That actually gets me to something I’ve been thinking about for a while. All the discounts that are available. They’re great and they allow families to come in (more frequently), but sometimes I wonder if there are too many discounts, that it devalues the product.

It definitely does. If everything is product – I’m not saying gouge people – but everything is product. I sort of get a kick out of Groupon. It’s a big problem all sports and concerts, Stubhub and others. Somebody wrote an article in the LA Times where the people went to a Dodgers game for $2.95, they got three seats. It’s also in the hotel business – you’ve got all these sites like Expedia. I don’t know where it’s going but a lot of people go on StubHub. Sometimes they’ll buy seats for triple. Sometimes they’ll buy seats for a third. It’s a very good point. Baseball’s looking at it. The hotel is looking at it in a different way. Who owns the content and controls the price? We own the content. I’m not sure we control the price.

ML: The Tuesday free parking promotion that you’ve had for couple years. Monday’s attendance was 11,000. Tuesday’s was 12,000. 

In the house Monday was 5,500. Tuesday was 8,000. I don’t know if the parking was a factor.

ML: It doesn’t seem like it has a lot of traction.

One of the problems is that we don’t have (much to work with). I think our marketing group may be one of the best in baseball because they have such a challenge. It’s fun to be at the Coliseum, but I don’t know (beyond that). We try everything. The critics say, “Lew’s trying to discourage fans.” That’s really not true. If they want to believe that it’s fine.

Our revenues are around $140-150 million. Our payroll is $75 million. That’s about right. I could name another team or two teams whose payroll is around $40 million. We’d make a lot of money if we did that. I will not do that.

ML: The team you’re playing right now (Tampa Bay).

They run pretty well. I was thinking of a different team.

[Ed. – Wolff demurred on naming the team.]

Over a time period, because of where they were in the standings, all of a sudden they got some terrific young players through the minors. Billy has kept us competitive, and he doesn’t get as much credit as he should, but that leaves us in the middle of the draft. So where other teams get higher picks –

ML: Top ten pick.

That’s never been my goal. I’m convinced that we will have a new stadium in 4-5 years. I hope it’s here. I can’t keep asking Billy and his guys to (deal with being a low revenue, low payroll team).

ML: In the past two years regarding player development, it seems you have gone in a different direction of going after international players, whether it’s Michael Ynoa or Hisashi Iwakuma. Outside the draft. Is that some sort of new targeted strategy?

It’s a strategy but it’s not new. The big money teams. I don’t have the exact figure, but in the last few months the Rangers have spent some $20+ million in the Dominican Republic. [Ed. – Technically this was $23 million for three players, two from D.R. and one from Cuba.]

If the new CBA has draft pick slotting and an international draft it’ll be better for us. We can’t go after free agents and pay somebody six years [trails off]. Last year we thought we had the makings of a pretty good team. We sat down with – and I personally was involved with Billy and David and Scott Boras – and we sat down with Adrian Beltre. We went down to Orange County and met with him. At the end of the day we offered somewhere over $70 million for however many years, pretty much equal to what the Angels offered. Scott said, “No he’s gonna get $90 million.” And Adrian was wonderful. We left and thought, “That’s not what he’s getting.” And then Texas paid him.

We went after Lance Berkman, the (National) league leader in home runs. I didn’t do that. Billy literally flew to his home and talked to him. We offered him 2 years at $8 million (per year), I don’t remember the exact figure. St. Louis only offered him one year at that. I don’t like to blame on Oakland. For reasons of his own choosing, he decided to go to St. Louis. Those two players would’ve been very important to us. We went out and got other terrific players, free agents – DeJesus, Willingham, and so forth. It’s a little disappointing that the hitting (hasn’t panned out). We’re starting to look at our air conditioning (the marine layer). Why do they hit .280 (somewhere else) and then come here (and not hit)? We’re starting to hit now, hitting’s a little contagious.

So when fans say that we’re trying to discourage and we’re trying to make the product bad, they’re wrong. We’re doing the best we can. We send in a report every year about how we use revenue sharing. We don’t put it in our pocket. Our best approach is to build through the minor leagues, drafting, and (hopefully) the international draft.  That’s our best chance of competing.

ML: Do you think that slotting and the international draft will be part of the next CBA?

I don’t know. I hope so, I think it’s good for everybody.

ML: I sure hope so. It’s crazy that given all the reporting about big money payrolls being 2x, 3x, 4x the A’s, it’s sort of underreported how much development budgets make expenditures that much higher.

Well, we have no choice. So we have to use our money efficiently. So it isn’t a matter of lowering your payroll for a major league team. In fact you have to use that extra money in the minor leagues – on the draft and so on.

ML: Could the A’s to land a top tier free agent – say a slugger – next year or the year after that regardless of the ballpark situation? Would you take a shot at it?

We took a shot at Beltre. That was a six or five year deal. The answer is yes, but that isn’t where we’re going to get (that productivity). First of all, the probabilities of our being successful are limited. Boston, Texas, the Yankees – they can just offer another this or another that. We will not intentionally lose money because it’s not good for baseball. It’s not good for the team. We’ve tried everything. We got lucky once with Frank Thomas (in 2006).

The year we went to the playoffs, this is what scared me the most. My people told me, “Just you watch.” Going into 2007, after we got to the ALCS, all we needed was another this or that (player). We had less season ticket sales going into 2007 (than in 2006). How is that possible? It’s just a function of our market is shared. When all of these columnists report this and remember that, when we were playing in the Coliseum and the Giants were playing in Candlestick. That’s a lot different today than it was then. They’ve got a beautiful new ballpark. We don’t.

ML: That’s really what it comes down to, doesn’t it?

It’s not totally that. I think our management talent is as good as anybody’s. I tell you I’ve got owners all over the place who laughed I when I gave Billy and Mike (Crowley) long term contracts and shares of ownership. Now they’re saying how smart (the deals) are. I don’t know two other people, plus David (Forst) and Farhan (Zaidi), who could operate under the conditions that we have – which I’m not complaining about, they’re just what they are – any better than those guys.

ML: Yeah. I’m not sure what else you can do other than hoping a lot of high draft picks all of sudden drop in your lap. That’s not happening.

We’ll be okay. We’ve got the trade deadline coming up. We’re not looking to acquire anybody. We’re not going to give away people just to reduce salary. We want to get something for that. I don’t know how many teams are – so many teams have $100+ million payroll that even if they’re on the cusp of getting to the playoffs they may not be that interested. All of that accelerates from now until Sunday.

ML: If you get a really great offer that you can’t refuse…

We’ll look at it, but I like the way the team is playing now. Plus we’ll get draft choices if we don’t keep certain players. We’re not in a panic position.

ML: No fire sale.

No fire sale. The nice thing about us, and you have to give Billy a lot of credit, one of my favorite all time keepers, not just a player, a keeper, is Mark Ellis. We have a young guy in Jemile Weeks who we hope to be our future. The only thing that we did was – Billy did this, I didn’t even think about it – we wanted Mark to be in a position where he was playing all the time. [Ed. – Ellis to Colorado trade]

ML: Which he is now.

So that was sort of a below market deal, but it was good for him and we owed it to him.

ML: I think it had near universal praise for the way it was handled.

Selig told me never to fall in love with a player because they always move.

ML: Naw, we all loved Ellie.

That guy is so sweet and so decent. We’ve got quite a few but he’s special.

ML: It’s the great legacy of A’s second basemen from Rapid City, SD. Like this stadium business, the radio saga dragged on much longer than it should have? What did you learn from that experience?

Again, the Giants have a better situation (because of KNBR). We didn’t learn much. We learned that sometimes the people who administer bankruptcy, sometimes they get fees for that. Sometimes they don’t operate in the best interest of the very people they’re working for. The situation that came along in the middle of that (95.7 KBWF) was fine and we did it. It’s not perfect but it’s working out better than we thought. I was getting tired of listening to country music, and then the ballgame, and then a religious channel.

ML: Those were trying times. Let’s go back to territorial rights. What is the best way you think this should be resolved?

Good. I always say that if I had a magic wand, we should share the territory.

ML: Flat out.

Just like all the other two-team markets. Your article is right. Santa Clara County was nobody’s territory at one point. That’s good information, it’s true. I have seen the minutes of those meetings, and the Haases were complemented for being cooperative. The reason that happened was to build a ballpark in San Jose. I was even active in that as a businessman. I had no thoughts in ever being involved in baseball. For the Giants to say they have the territory but they didn’t mean to – I just think we should share the market like the other teams. Theoretically the Angels could move right next to the Dodgers if they want.

ML: They could but it’d be crazy.

The Mets could move next to Yankee Stadium. The White Sox could move across town. They’re not going to but it’s allowed. And we’re further from the other team than any other. [Ed. – Again, not including DC/BAL] The whole thing in an academic sense, I can’t imagine the debate.

ML: Do you think the owners understand this? Do you have to talk to them or lobby them about this?

I made up my mind not to lobby them. Over this long period of time they’ll tease me a little bit about it. In fact several have told me, “I’ll talk to Bud for you.” I say no. It’s being done the way it’s supposed to be and let’s just see what happens. Running around and lobbying, I just don’t do that. It’s just not worth it. First of all, everyone’s going to go along pretty much with the commissioner’s decision.

ML: What’s your confidence level right now that this will get done by the end of the year?

In your lifetime? I have a lot of confidence that it’ll be done this year, but I said that last year too.

ML: Right.

Who knew that baseball would explode in two or three other areas? I still have a high degree of confidence that we’ll get an answer one way or the other. That’s all I’m asking for. I mean, I want a yes for sharing. In lieu of that I’ll take a no.

ML: Do you have a hard stop or a deadline for getting this done?

Yes. We missed it by two years. [laughs]

ML: There you go.

The answer is no, not now I don’t. As I say, I’ll pass the baton to those who are working on it. We’re working on this everyday. We’re talking about sight lines and everything. We just haven’t pulled the trigger to spend because we want to know it’s there (first).

ML: Okay.

08.03.11
by

The Big Lew Wolff Interview, Part 3

[Ed. – Before I start again I have to mention that there are some blogs out there who are cutting and pasting huge chunks of this interview for further commentary. I have no problem with that. I do have a problem with the fact that I haven’t received a single request to use this interview for any kind of reuse of large chunks of it. I mean, really, it’s not like I’ve spent a lot of time on this. It’s not like people care about professionalism or common courtesy anymore. How about a heads up? Maybe a link to the original interview? It’s the least you can do. The very least. We may not agree on much, but we can at least show courtesy and respect others’ work. That’s all.]

Part 3 of 5 (Part 1, Part 2)

ML: You’ve frequently said here and everywhere that it’s all about keeping the A’s in the Bay Area, in this market –

For our ownership.

ML: Right. Recently, Giants president Larry Baer has hinted that while he supports the A’s looking in their territory – Alameda and Contra Costa counties – but if they can’t they’re welcome to try somewhere else such as Sacramento. How do you respond to that “hint” by Baer and the Giants?

If tomorrow you had the only McDonald’s in San Francisco, and fourteen miles away there was another location in Oakland. And your SF McDonald’s is worth $10 million and the Oakland McDonald’s is worth $100,000. That was fine for you (SF). Now the Oakland location says they’re closing up and they’re moving outside of the territory. What happens to the only McDonald’s then? Larry and the Giants would benefit hugely, I guess, in their minds. They dominate the market now, they may want to dominate it totally. Their market value might jump a huge amount.

However, I don’t get it. I don’t get why they’re so adamant about this. It’s just a difference of opinion.

ML: Do you think the Giants have a motive for protecting their territorial rights other than what they’ve stated publicly? Which is – they just want to pay off the ballpark.

I’ll have to say that going back to – forget that it’s Oakland or San Jose – there are four two-team markets. [Ed.: Note exclusion of DC-Baltimore] Three already have the same boundaries. I think this one should too. I think we would have a great rivalry with them. Why shouldn’t we have a beautiful ballpark? In fact, one of the backers and instigators is my partner and his family, the Fishers. I think if you actually went to a lot of the passive investors in the Giants – these are people who want to support the Bay Area, not just one team. What is it gonna hurt? In fact I think it’s gonna be better for them too. Everybody has their own views.

ML: There’s been some talk from fans and media about challenging baseball’s antitrust exemption. Knowing what you know, being in what they call “The Lodge”, is there anything realistic about that?

Well, today we live in a litigious society. If you want to sue over this chair you’re sitting on you can sue the manufacturer because you’re not feeling well. We are not of that ilk. We are a partner. Maybe this is an odd view, but I believe that we’ve entered a partnership. This is what the commissioner chose. As I said before, we’re not even thinking about it (suing). It’s not right based on being part of a partnership. Therefore it’s not a lever for us, it might be for someone else. If the reverse is true, maybe a smart attorney running a baseball team might say, “We can do this, we can do that.” [Ed.: I chuckled] We’re not going to do it, that’s all there is to it. It’s just not right.

ML: This seems to be something very consistent that you’ve said, even going back a couple of years ago. The partnership idea that all of the owners are in one boat and they’re all supposed to be rowing in the same direction.

I know I’m a little naïve when it comes to that, in the world that we live it, but that’s how I’m gonna run it.

ML: Okay. When it comes to making a decision, is it really all up to the commissioner?

Yep. Well – that’s a good question – he would need a vote of the owners [Ed.: 3/4 of owners]. Since I’ve been there, there haven’t been a lot of votes. Maybe the Giants wouldn’t vote for it or a couple of teams. Again, it’s a collaborative thing. With all the work that’s gone into this, whatever the decision is, it’ll have a lot of backing. I think if he decides to let us move to San Jose that he’ll get a lot of votes. I don’t think the voting will be an issue. He even has the power to go beyond that if it’s for the good of baseball. I really don’t sit there and analyze this from a legal point of view. If the decision is “you can’t” or “you can” the support will be to follow the commissioner’s lead.

ML: And that’s really all you’re looking for. Yes or no.

Yeah.

ML: You mentioned the Dodgers and Mets offhand. Are they on the front burner and the A’s on the back burner, or does it not work like that?

You’d have to ask the commissioner. No, I don’t think we’re on the back burner. I really think the Mets and the Dodgers are two different situations. But they’re both important (teams), important markets, important to us. The Mets aren’t suing baseball. They’re just trying to survive – and maybe they made some errors with this Madoff thing – I don’t know that much about it. The Dodgers are attacking, they put their team in bankruptcy. If they follow the constitution of baseball that’s cause for taking over the team. I’ve got my own stuff I worry about every day. We need those markets to have ownerships that are committed and capable of not getting into these issues.

ML: Commissioner Selig, when asked about what’s happening with the A’s a couple of times this year has said, “We’re working on it,” in nice, vague terms. Are they really still working on it? Seriously.

[laughs] I think what he’s working on – and I don’t know – is unless Oakland knows something that I don’t know. I answer is I think he’s contemplative. Way beyond where I am. We talk several times a week, not on this issue but on others I’m involved in. I’m having a – I enjoy the commissioner. We’ve known each other a very long time, longer than I’ve known my wife – and we’ve been married 54 years. I think he’s got enough information to make a decision. He may be trying to figure out a good way that the Giants are happy and we’re happy. He tends to do that. And right now, what choice do I have? Last night we won a game. That’s more fun than worrying about this crap.

ML: I agree, I agree. Now let’s talk a little about the Coliseum. I’m sure you’re aware that attendance is up this year as opposed to last year, and over 2009 as well. 

When Russia went from communism to capitalism they had a huge jump in economics, but that’s from a very low base. [laughs] When I talk to the commish he’ll say to me, “You know, you’re up 4.5%.” The one thing he follows is attendance. Now I follow paid attendance, I’m not sure that he does.

ML: Fair enough.

Attendance is up (league-wide) according to my last conversation. They’re up a little bit in the American League.

ML: Yeah, I think it turned around after the weather. 

Now I don’t know if it means in the ballpark. I look at Dodger Stadium and it looks almost empty sometimes.

ML: I believe that it’s paid attendance and it’s somehow withstood the drop for the Mets and Dodgers. 

What happens is that some people are afraid to give up their tickets. I was hesitant to give up my Laker tickets. But then I look back and ask how many games did I go to since my kids all moved out of L.A. Do I really need these tickets? And then a year later I decide to do one more year. I worry about the impact of that.

ML: I see.

I just wish the Dodger thing was settled and we could move on.

ML: In the past you’ve mentioned the Coliseum’s defects and its chronic state of decay. Could a ballpark be built alongside or replace the existing Coliseum? For now let’s put aside the financing – well no, we can’t put it aside.

No, let’s put it aside for the moment. First I looked at the Coliseum, because there was nothing downtown. We’re talking about the physical stadium. This is where I read the older (sports) writers, they’re living in the past. A lot has changed for Oakland since then. The last year the Haases owned the team they had the highest payroll in baseball and drew 1.2 million. You might want to check that out.

ML: They were. [Ed. – 1.2 million in the strike-shortened 1994 season, 1.1 million in each of the following two seasons.]

[Ed. – At this point Lew’s son-in-law, Dean Rossi, comes by with his son, Arthur. It’s mostly a personal conversation so I’ll leave this out. Lew will drop Arthur off at the Coliseum to run around the clubhouse – every kid’s dream – before heading up to City Hall to meet with Mayor Quan. Note: Two partners in Rossi’s law firm help run Baseball San Jose.]

So where were we? Coliseum.

ML: So is it possible?

Let’s talk about it. Aside from the market being – Oakland used to have several major corporations, doesn’t have them any longer. The whole thing with the Raider thing, Mt. Davis, we had nothing to do with that. You can never get sight lines that satisfy two sports in one venue anymore. Even inside it’s not good to have hockey and basketball. You can do it but, you know.

There are so many physical issues. Right now if we wanted to move the fans closer, I don’t know what to do. The field is 22 feet below sea level so there’s no way to move forward without tearing down all the seats. You’d understand that better than most.

ML: Yeah.

The field is great until football. The field is great because we have a great groundskeeper, Clay Wood. As soon as the Raiders come in – it’s just not good.

About the site. You can make all the drawings you want on that site. This is what really bothered me. The Coliseum wasn’t even the #1 site in the HOK study. Even Fremont was in the study. The Coliseum had a little line about some kind of utility thing. I asked if there was a title report ordered for the Coliseum. In my world that’s one of the first things you do. Nobody knew, the city didn’t know, it was just a bunch of bureaucratic nothing. So we ordered the title report, which is just about this thick [fingers spread an inch apart]. There is an easement.

[Ed. – The Coliseum Authority recently bought the land in question as part of its new Raiders stadium effort. Oakland Councilman Larry Reid envisions an ancillary development project similar to L.A. Live in downtown Los Angeles, next to Staples Center. The Authority is also proposing $4 million in additional expenditures related to project study costs.]

ML: You mentioned this. It was the sewer interceptor.

It’s not an easement you can move. So any architect who wants to build over the freeway or whatever, needs to sit down and determine what easement does relative to placing a football stadium or arena. That kind of even minor detail, we could say, “oh we’ll do it” but never do it. None of that’s done. The average fan shouldn’t have to bother with that. But that site isn’t as simple as we thought.

One time I thought it would be a good idea to buy the triangle that heads out to Hegenberger (Malibu/HomeBase lots). I said, “Look, we don’t know if we’re gonna stay here, but we need that piece to do parking or mitigate, otherwise it’s chaos if you’re trying to develop that site.” All of a sudden another architect comes up with an idea for these multistory garages. Well, who’s gonna pay for those? And if you’re on the fifth floor of a garage for a baseball team, you might as well stay home. So it was just a hundred inhibitions.

Now, we recently had someone come up to me, a legitimate guy. I didn’t ask who it was as it came through someone else. He said, “Gee whiz, we think there’s a way to remain in Oakland and live with the Coliseum” and so on. Well, tell me what it is. “If you guys want to sell the team” and all that stuff. I’d like to know what you’re talking about before I would even contemplate that. Other owners haven’t been able to do anything in Oakland (build stadia) either. We’re not the only one. The Coliseum’s an over 40-year old facility. Dodger Stadium is too. Dodger Stadium, I believe, would take a minimum of $100 million to keep it going – and they keep it pretty well maintained. So you tell me what this would cost.

ML: I have no idea.

I don’t either. They (Coliseum Authority) don’t have any money. We’re constantly making repairs that are not our obligation.

ML: Really? Like what?

Leaks and things. The scoreboard. There are two of them because of football. I think they’re finally going to replace them, but if they don’t there are no more parts. If a light goes out we borrow it from another one. It’s aggravating. But they basically say they don’t have any money. They still have bonds to pay off. The place is old and this is not the time for cities to write a check for sports.

ML: Yet they’re going forward with a study for the Raiders.

All these studies. If I were an investigative reporter I’d like to know how much is spent. Supposedly that study is done. And that’s fine, they should, the Raiders are fine. Where are all these things? Who’s doing them? If it’s a six month study what happened to the first two months? We have heard nothing. And we’ve been more tolerant than the other two teams (as tenants). We’ve never affected our rights there. If we win (legally), what do we win if they don’t have any money? It was a baseball park once. I wasn’t around when any of that happened, but the amount put into that sure seems strange to me. That was before my time.

ML: The litigious part kind of speaks for itself at least for the other two teams.

Look, I’m just not litigious. I think our legal system is killing us, so much initiative. I’ve been in business almost 50 years. I’m a real estate developer. Most of my contemporaries are suing someone every three months. I’ve had two lawsuits my entire career. I think everything can be settled. But you can’t do it if someone’s not willing to cooperate.

08.02.11
by

The Big Lew Wolff Interview, Part 2

Be sure to check out Part 1 of this interview, posted yesterday. You can also get the full interview in PDF and e-reader formats by donating $5 via the PayPal link on the right.

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Part 2

ML: As I understand it, you had met with Mayor Quan in Oakland recently.

I’m actually having lunch with her today. I have not met with her (yet). She has been very nice to make time to see me. There’s no agenda.

[Ed. – I have not heard anything from either camp about what was discussed during that meeting. Nothing to the regular media either, AFAIK.]

ML: Just a chat, really.

What I’m telling you is what I’ll tell her. There’s no magic bullet here. If there was it’s simple. MLB (the panel) would’ve come to me with Oakland and said, “Here’s a suggested financial plan”

ML: Comprehensive.

Remember that they’re the messenger. They’re just doing what they’ve been asked to do and I’m sure they’ve done it three times now. It sort of says to me that nothing has been produced that means anything, to my knowledge. There may be other reasons. The commissioner is contemplating whatever he wants to do. I think we’re getting there soon. I just don’t know.

ML: Okay.

The only thing missing is that I would’ve enjoyed the process of building the ballpark, financing it, and doing all these things. It looks like because of my age (I won’t be able to). So my son (Keith Wolff), who I think is as good or better at this than I am, and he’s a lot more calm than I am. I believe that development – public or private – can’t get done without a sense of urgency.

ML: It sure seems that way.

We have the resources and we have the people. It’s just that I final – I mean I can but I’m the commissioner’s age. I want to be very careful. None of us are going to live forever or be as active forever. I’m lucky, I think baseball’s keeping me active.

[Ed.: I have to point out that he ordered a frittata with fruit on the side, no starches, coffee with no cream. I ordered Eggs Benedict with potatoes, lots of cream with my coffee. Multiple cups.] 

ML: It seemed like that happened with the Marlins, where Jeff Loria fought for years, and when he finally got approval his son-in-law took over.

That’s also true in Minnesota. I’m sad that the owner (Carl Pohlad) didn’t get to see his ballpark. We’re very advanced in our opinion. Why go out and spend $20 million on working drawings if you don’t know you have a site?

So it’s just a matter of waiting for a decision. I’m not a patient person but I’ve become very patient. The thing that makes me most comfortable is that I have a lot of backup to get this done. That’s number one. On the hand this is affecting our whole organization. We’ve got great people – Billy’s been there for fifteen, sixteen years, twenty years for Mike Crowley. I’ve promised them a new, modern facility and I feel responsible.

There’s something I think you’ll like to know. When we bought the team (2005), six teams had payrolls above $100 million. Now it’s twelve or thirteen. While Billy and his guys are fantastic at doing what they do, there’s only so much they can do. We can go and lose $30 million a year like the Haas family was doing but we’re not gonna do that. So if anyone wants me to do that I’m gonna have to say that we won’t.

[Ed. – According to Forbes/Financial World numbers the A’s lost $6-10 million per year during the last years of the Haas era, which would be worth $9-15 million now. MLB’s stance historically has been to consider Forbes’ numbers inaccurate.] 

ML: That’s something I’ve been arguing for years.

And baseball doesn’t want us to do that. All these teams that have spent haphazardly without breaking even have gone and caused problems for themselves and baseball. Remember that baseball is a partnership. The rule of thumb for running a team before you get huge revenues is that if you can keep your MLB salary at 50% of your revenues you’ll probably be at the break even point or make a few dollars. It’s not an internal rate of return 20% or something like that. You shouldn’t be in this business if you want that.

The great thing about Billy and Mike and their people is that they’ve been able to keep us competitive until we get a new ballpark – I haven’t delivered. We’re in a total revenue issue. We just need more revenue and we can’t get it without a new ballpark. We need some scarcity. We can’t have 70,000 seats or people yelling about tarps.

ML: I’ll get into that later.

I don’t have a yacht [laughs] that we’re paying for out of secret proceeds from the ballpark.

ML: We’re talking about Oakland for a little bit. Has anyone presented you with other information about Victory Court, a sales pitch, or anything like that?

Absolutely not. However, gotta be fair. I think Oakland thinks, “We’re not dealing with Lew Wolff. We’re dealing with this committee.” If the committee has done that, I don’t know about it. I think what’s happened is that they’ve discovered what we’ve known. Through no fault of Oakland, the ability to build a new ballpark – well, you know that drawing a boundary around six blocks or ten blocks doesn’t make a ballpark. Is there a soil test? Will you do eminent domain, will you take people’s property? Do the off-ramps have to be replaced? Hundreds of items. And that kind of Socratic discipline – why should a fan in LF worry about that? Those rich owners over there are supposed to do it no matter what.

ML: Let’s move on to this freeway park. It was proposed by an Oakland architect, Bryan Grunwald, who occasionally posts on the blog. 980 Park is a concrete deck over a submerged section of freeway near downtown Oakland. You said that you consider it an A+ in planning and an F in implementation. Care to elaborate?

The problem with that is that talking to you is easy. Talking to guy looking for $2 ticket night on Wednesday is different. I can’t even imagine the cost on that. Forget about a ballpark. Say you’re putting up a hospital there or a park. I think we’re talking a billion – I have no idea. Air rights, we have them all over California. I haven’t seen too many places where they’re building over there – bridges and stuff. Let’s assume that we did that tomorrow. It would take a decade. I wouldn’t know where to start. First of all, we’d say to Oakland or somebody, “Give us the platform and we’ll build on it.” The platform itself has got to be overwhelming. I love those kind of ideas. They win architectural contests, a student gets a master’s degree for doing them, and we do have huge amounts of air rights all over the world. It just will not happen. If that’s the best we can do, might as well forget it.

ML: There are few places where air rights translate into anything. Those are places where the need is great, such as Manhattan.

I just don’t get it. It would be fun to have an architectural contest. But it’s like an iceberg, beautiful at the top, huge (beneath the surface). If that’s the best any of us can do, we have to forget it.

ML: Let’s shift over to San Jose now. You’ve had an ongoing dialogue with the City and Mayor about the Earthquakes stadium. How is that going?

The Earthquakes stadium also has to be privately financed. Certainly it’s a lot less expensive than a baseball park. I think – I don’t have the numbers exactly – they just opened a new soccer stadium in Kansas City. I think it was $150 million or something and I believe every penny of that was public money [Ed.: Cost was actually $200 million, all public]. We’ve worked very hard. What we want in a soccer stadium is a place you can go – we’re not looking to build Wembley Stadium – we’re in the 15-18,000 seat goal in this market. We’ve worked really hard to get the cost down to about $50 million, which everyone in soccer asks, “How can you do that?” Well, people can do it if it’s their own money, it’s not the government. There’s no soccer stadium that I know, except maybe Home Depot Center (that was not fully public).

ML: That was years ago. [Ed.: Columbus Crew Stadium was also privately financed by Lamar Hunt.]

Well they also had a good deal from CSU-Dominguez Hills. I’d like to move it faster but we’re doing it in stages. Right now we’re going through a planning process, not for a building permit but a use permit. We spent money to tear down the FMC building, but we haven’t pulled the string yet to build it because if you look at the economics of it you’re only using it for 19 games or 20 games. The ancillary use of these facilities, which I think is better than what my consultants think, concerts aren’t what they used to be, high school graduations. It’s Silicon Valley, I think you can have product introductions there. A lot of these things that you can’t predetermine. So what we’ve done is that if there are 10 steps to it we’re in step 7 or 8. We’ve spent money to do that but we haven’t pulled the string yet.

ML: On a related note, I went to the game at Stanford against the Red Bulls. I hate to belittle Buck Shaw, but it’s a small venue. Stanford, which was another example of something built with private funds, cost controlled by John Arrillaga. Many people came from down the Peninsula, there were plenty of the existing fan base, locals. For the fans it felt like it was overdue. Did the experience of that game – 40,000 people, the place was buzzing with excitement – change your thinking or reinforce it in terms of what the Quakes need to thrive?

No. Two reasons. One, One of the people at MLS called me and asked if it was it the game or the fireworks. The game was around the 4th of July. If you look at our fireworks games in Oakland –

ML: They’re consistently higher in attendance.

So I said to our guys, “Why don’t we just work out a deal to play at Stanford all the time?” Stanford doesn’t want that. I don’t want it. No, the depth of the market means that except for three cities, maybe, soccer is not profitable. The owners – Anchutz, my guy John Fisher, the Krafts – they love soccer and they’re gonna support it if it takes another decade to get it where it needs to be. We’re the same way. But the market is not for 40,000 people. We wish it was. If we have 15-18,000 fans and they’re really on top of the field – we’re not trying to have private boxes, soccer is a family sport – we couldn’t do Stanford every week in my opinion.

ML – One of the things I noticed from the renderings is that other than the fact that it’s three sides with one open, the design looks like a miniaturized version of White Hart Lane, where Tottenham Hotspur plays. Is there anything to that?

We’re close to them as you know. I don’t think so, except that when you think about a soccer stadium the dimensions of a field are the dimensions of a field. The only real difference to me is if there’s a track, which really screws it up. All we want to do is get noisy and close. I would say that 70 or 80% of them are like that.

ML – The NFL just completed its CBA negotiations after 3 month lockout. MLB has been, as I understand it, having some ongoing discussions with the players union about their new CBA, which is expected to be done by the end of the season – 

End of the year. Or sooner.

ML – Does what’s happening here with the stadium and the unknown that it is right now have any impact with the CBA?

No. However, I believe that, or I hope that we will have a non-confrontational negotiation, which has been ongoing. What you’ll have is, I don’t know the exact term, probably 3-5 years of what we call labor peace. We had that the last 5 years. I think some of the things that both sides are discussing – I don’t want to get into that information – will be beneficial to all of baseball and all of the union. I don’t think it’ll be the threatening kind of thing we’ve seen in basketball.

ML – There’s been almost no media coverage except for the occasional article from a national baseball writer.

I think it’ll get a little more coverage as we get closer to finalizing an agreement. It may not be controversial at all. This is the year to finish that agreement if possible. We’re working on it very hard. It isn’t like one side is screaming at the other.

ML – The players appear to be offering ideas that the owners may be interested in.

I follow it but I don’t want to get into it. The commissioner – you need to give him a lot of credit. His orders, and the head of the union, are we’re in this business together. Let’s work something out. I haven’t heard anything earthshaking.

ML – That’s good to hear.

Usually union negotiations get tougher close to the end. [laughs]

ML – What do you think about talk – and this is coming from national writers who are spitballing – about contraction of the A’s, Rays, or both?

We (the A’s) are against contraction. Nobody’s called us up and said, “We’re thinking about contracting you.” Contraction has a lot more issues to it than just shutting down a team and so on. They’d pay us the value (of the franchise). Then you’ve got minor leagues, places, cities all over the country with ballparks based on our activities, not just Tampa. We want to do the opposite.

ML – Do you think there’s pressure to get this done (a ballpark) so that nobody even has to consider that step?

That’s a very good question. I think getting it done has nothing to do with contraction. Baseball may have as many teams as they need. Some years it’ll be like we ought to contract. I do think that there’s so much going on with the Mets and the Dodgers, you can only address so many things. All of us are multitaskers. I don’t know that it’s so true in baseball. I don’t think it has to do with contraction. But sure, we and Tampa both need viable environments for our fans, or we won’t have any. It isn’t anything against any city.

ML – Do you and Stuart Sternberg (owner of the Rays) ever commiserate at the owner’s meetings about whose plight is worse? 

I’ve decided that mine is worse than his. He’s a good guy.

ML – He’s also a little younger.

He’s got more time. We don’t commiserate so much but we are both concerned. Very concerned.

08.01.11
by

The Big Lew Wolff Interview, Part 1

This interview, at 12,000+ words long, is an order of magnitude longer than the typical posts on this blog. Because of that length, and because of my desire to confine the discussion to the topics within each post, the interview is being split into five parts. However, you can also get copies of the entire interview right away if you donate via the PayPal button on the right. The interview is available in PDF, ePub (e-reader), and Mobi (Kindle) formats for you to use on your computer or preferred device (Kindle uploads require calibre or similar software). Here are your options:

  • Do nothing and get all five parts for free on the site from Monday through Friday.
  • Donate $5 or more this week and you get the transcribed formats as soon as Monday morning.
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It’s rare that I ask readers for anything, and I intend to keep it that way. I took a lot of time out to work on this and I would simply like to recover that effort. Thanks for your support.

–

Last Monday, I received an email from A’s PR man Bob Rose. He indicated that his boss, A’s owner Lew Wolff, wanted to have a chat with me. After some back and forth, we arranged for a meeting at the Fountain Restaurant inside Wolff’s Fairmont San Jose early Wednesday morning. The discussion went two hours long and covered a wide range of topics. Wolff expressed his interest in having an unedited conversation to explain what he’s been doing, and I was more than happy to have that chat. The transcribed discussion below has minimal editing – only to clean up incomplete sentences, the inevitable “uh” and “um” moments, and for me to add brief editor’s notes when I felt the need. My comments and questions are all in bold, while Wolff’s is in regular font. Editor’s notes are in italics/square brackets. I have intentionally not included links so as to not distract the reader. The interview runs more than 12,000 words. This is Part 1 of 5. The topics covered are as follows:

  • Part 1 – History of working in Oakland, 980 Park site, Process
  • Part 2 – Oakland now and what it takes, Earthquakes, contraction
  • Part 3 – Territorial rights, Giants’ motives, Dodgers/Mets, Coliseum
  • Part 4 – Tarps, discounts, player development, CBA, payroll, T-rights again
  • Part 5 – Redevelopment, Target Field, Cisco Field, Keith Wolff, museum and history

I hope you enjoy this interview as much as I did. I think you’ll feel that there are many revealing answers in there, and plenty of stuff for Oakland and San Jose backers to dislike. I’d also like to thank Lew for allowing me the opportunity to do this Q&A.

– Marine Layer

–

ML: You became managing partner in 2005, after a year-plus stint as VP of venue development. Coincidentally, I started this blog in 2005, partly as a writing exercise, and to inform fans. Over six years have elapsed. Did you think it would take this long?

LW: No, obviously I didn’t. Prior to buying the team I was working on the thing. I’m not sure the title meant anything. I thought that we would figure out a way to do it on the Coliseum site or one of the sites in Oakland. At the time the economy was booming and the value of residential entitlements or zoning was huge. There were a lot of public companies, all these big homebuilders, were dying for the ability to get more and more residential rights, to build apartments or homes.

We came up with the idea. The very first editorial which I saved in Oakland – this was before I was even the owner – said “No public money in baseball.” Which is okay. Except for the Giants and Dodgers, all teams’ new ballparks have had some form of public help (financing). So we had an idea that if we brought a new ballpark to Oakland or any place, we could say to the community, “You don’t have to write a check, but we’d like to entitle certain property for residential” – not for our developer. The reason this escapes everybody is because nobody’s going to take their time to look into it except you.

The idea was this: Say someone wanted to build 1,000 apartment units. And they’re going through the process. You entitle that – assuming the city wants that – those entitlements back then were worth $100k per unit just for the right to build, sort of like land value. Instead of the developer taking that money, that money would go into a small joint powers unit (authority) and be used to fund a baseball park. That’s a double win there. The city gets more housing and those entitlements don’t have to be by the ballpark. They could be in Dublin or Fremont, they could be anywhere (in Alameda County). This was a very interesting concept and we checked it legally. It was very clearly stated in an article in the Chronicle, so it wasn’t a hidden idea. With all the delay and difficulty in both Oakland and Fremont – Oakland in the sense of land availability because it’s a built up city – to get land assembled, and then all the issues with traffic and freeways and off-ramps and so on – so time went on and of course the economy changed. So this entitlement approach to build a ballpark is a dead issue, and we don’t see it coming back for a long time. That says, “Oh my goodness,”  instead of putting up $100 million, which we were hoping to do at the most, we now have to do the whole thing ourselves. That pretty much requires us to be in a central business district (downtown) because the infrastructure is already there. We don’t have to rebuild the freeway or an off-ramp. The entitlement aspect of it – somebody should’ve jumped on it. We couldn’t do it by ourselves. We weren’t looking for money, we were looking for process. So we spent the time before we bought the team and about a year or so after. I think I told you before – I don’t have the book with me- that it takes me one hour, forty-five minutes to go through everything we did in Oakland. Even though somebody has a sign in RF saying, “Lew lied, he never did anything.” That person hasn’t come and sat down and asked, “Tell me what you did do?”

The other side of it is that side – Oakland, Richmond – that whole area was built up rapidly during WWII, shipbuilding and so on. (Land) ownership is very diverse. Just land acquisition alone is difficult. Even though some of the areas look blighted, as soon as you say we’re trying to build a ballpark there, immediately the land values go way up. Some people say that the “North of 66” plan was just a gimmick. What they’re not willing to do and be fair about is that we looked at every possible site – Coliseum, Laney, even the Victory area – all that stuff and somebody at the City said to me, “We can’t help you here. What do you think?” At the same time Councilman Larry Reid was looking at another area around the Coliseum where he was going to acquire a lot of stuff. I drove through there and it looked pretty blighted. All I wanted to do is start a dialogue with 50 property owners or 30. Except for one or two people, nobody wanted to even discuss it. There was relocation, we could’ve moved people to the (shuttered Oakland) Army Base. People will just say, “Oh he just made that up.” If I had my material with me you’d see that before even looking at that we looked at every opportunity that was available. We wouldn’t do it if everybody didn’t want to do it. We couldn’t even get traction.

It’s very simple. One of the very first things any city should do is look at their (county) assessor’s office. Draw a boundary around Victory Court or something. It takes a day or two determine there are 20 property owners and their names. Some of them are in a trust or something. If you just took the assessed value – and because you’re going to buy the property add 50% – you’d have a good idea of the that (total value) is and if you really wanted to, you’d call each person and say, “We’re just thinking about this. You’re a property owner here. We’re not doing anything yet.” Then you’d get an idea of the desire to participate from the beginning. Someone might say, “Oh my god, that’s my business, I can’t take it.” If we gave you that assessed value, and then we paid for relocation to the Army Base and a nicer (newer) facility – I mean it’s a lot of work. I didn’t expect Oakland to do that. But I also didn’t expect them just to draw a line around six blocks and say, “Oh there’s a ballpark.”

ML: We get that too much now.

That’s all we’re getting, because I believe – and this is not a defense – it’s because we’ve explored everything more than once. For two years now this committee, which I ‘ve had very little access to – and I’m sure they haven’t talked too much to the Giants either – guys I know, they’re good guys. They’re supposed to step in and check out if I did everything, and if I missed something. I haven’t heard that I missed anything. You could’ve written a PhD dissertation by now.

ML: Certainly.

There’s other reasons that perhaps Bud Selig is contemplating this. He’s my friend, and he’s involved in lots of stuff in baseball.

ML: You’ve had that information that you showed me last time we talked here two years ago. Because it’s taken this long and you have access to this panel, do you feel that the you and the argument you’ve made have been somewhat rebuked?

No, just the opposite. I think they can’t find a flaw in it. If they can, tell me what it is. They’re not rebuking me. I think it’s so overwhelming. If someone flew in from Mars and you were going to put a ballpark somewhere and one was already in San Francisco, where would you put the next one? [laughs]

Had they come up with a different approach that could be refuted or digested, I think it I would’ve seen it by now. At the same time, I can’t give a reason why a decision hasn’t been made. It’s a baseball decision. The commissioner is a very contemplative person. I’m an owner that wants to cooperate with baseball. When I got into this Bud Selig told me, “What I encourage owners to do is to put baseball first and their teams a very close second.” Instead of putting a team in bankruptcy or whatever’s happening in other cities. I’m just not cut out for that. I feel that being in baseball is a privilege, and we’re enjoying it.

ML: We’ve already gone plenty into my second topic, which is a lot about the pro-Oakland crowd who’ve said you’ve lied. I’ve written that the only thing you’ve really lied about is that you didn’t have a Plan B. Is that right, or am I off-base there?

Well, the word lie is a very strong word in my life. I don’t call people liars. The Plan B would be that if someone says to us – no fault of Oakland by the way – that “you have a team that you can’t move and you have to stay in this facility and make it work with the Raiders there.” Plan B is fairly simple, it’s just that we haven’t addressed them. Moving out of the state to other markets, of which there aren’t many. Selling the team to somebody that can do what we can’t do.

ML: Which a lot of them are hoping that you do.

That’s fine, but that party should also have a real plan, go through what we’ve gone through. The one thing that I wanted to do, because I’ve been in public dealings with cities my entire life, is that I didn’t want to be the owner who says, “If you don’t do what I tell you we’re moving to San Antonio.” Also, I didn’t want to get on a plane and start schmoozing with the mayor of San Antonio or Portland or Las Vegas or Monterrey, Mexico. I don’t think that’s the way to do one of these things. I still don’t think it’s the way to do it. But almost every new ballpark, including the Giants’, has been done under the threat of leaving town. So Plan B, the options are obvious. I think a better way to phrase your question is, “Have you spent time doing that?” The answer is, “We have not.” We still don’t feel like we’re moving out of the market.

ML: I’m in the market and I just took the train down here.

Exactly. Frankly, I don’t have the energy to start discussing with another city council outside the state of California. If we were dead in the water, we’d have to ask baseball what they’d want us to do.

ML: You’ve led into my next subject already with the discussion about what’s been done in Oakland. What is the difference between getting something done here, in San Jose, and in Oakland right now?

Very simple. One, we have a downtown location. When I say “San Jose” all I’m talking about is a specific site in San Jose.

ML: That one. [Ed.: I point in general direction of Diridon]

If somebody that you could go to San Jose instead of Oakland, that doesn’t mean it just happens. San Jose acquired land and went through the process of acquiring it in a downtown area where the off-site costs are minimized. They would be in downtown Oakland if there was a site. There’s a demographic difference, but if our entitlement program worked in either Oakland or Fremont we would’ve been there. I don’t care what people say. We would’ve been there. As much as I love San Jose I wasn’t thinking about San Jose at the time at all. We wouldn’t have spent the amount of time and money we did on Fremont if we wanted to get out of our district. People don’t remember that.

There have been huge demographic changes since the Bash Brothers and the A’s drew X attendance. Back then the population of Oakland was probably twice what it is today. [Ed.: The 1990 population of Oakland was 370,000, slightly less than the current figure of 390,000.] I don’t track it. St. Louis is the city where I came from, and the city used to be 800,000 people, it’s 300,000 now [Ed.: This is correct]. There used to be ten, twelve major company headquarters there. Now there aren’t any except Anheuser Busch, who is rumored to be leaving. There’s been a shift. Even if there were a site in Oakland, if we didn’t have the entitlement program it would be very hard to rationalize it. It’s even hard now. $400-450 million for a privately financed stadium – which it should be private, why should the people pay for it. The process that the public can help you with it can be huge. San Jose, through whatever reasons, has gotten the process so that we can go ahead.

If we started in Oakland, whether it’s Victory Court or floating over the freeway – I want to talk to you about that one.

ML: Yeah. We’ll get to that one (980 Park).

Can I tell you my quick stance on that one?

ML: Sure, go ahead.

It’s an A+ in planning and an F in implementation. [laughs]

ML: Okay!

I love concepts like that.

ML: Well, it came from an architect.

Geodesic dome over a city so that you can control the climate?

ML: [laughs]

I like that stuff, but I’ll let somebody else do it.

ML: That reminds me of a documentary on Robert Moses. There were all these concepts for a Dodgers’ stadium. One of them was a geodesic dome by Buckminster Fuller, which would’ve been interesting for 20 years until they got tired of it.

Two things about that. One thing I think you’ll like intellectually. Housing filters down. So if the Rockefellers live in a mansion with a roof and spread out. I did some work years ago in Guam. A subdivision house with a carport and so on is what filtered down. Now if the Rockefellers were living in a geodesic dome we’d have geodesic domes everywhere.

ML: Makes sense. 

Give me Robert Moses for one year and I’ll have a new ballpark anywhere you want. [laughs] He had more power than the mayor and the president. This great metropolis (New York), that great ability to create, we don’t have that today. I always give a speech that if you have a cure for cancer somebody will be against it. I like the democratic approach to things, but it’s inhibiting the state getting things done.

ML: Sure is. State. Country.

You know when the President said, “shovel ready?” If he meant shovel ready after the environmental work, we’d be talking about a decade sometimes.

07.31.11
by

News for 7/31/11

No, this is not the big reveal. That’s coming in a few hours. Relax. I’m only putting up this post to cover some news items of interest.

Lew Wolff is the first owner to publicly call for Frank McCourt’s ouster.

Wolff said he did not speak out as a way to curry favor with Selig, his fraternity brother at the University of Wisconsin, who has kept the A’s waiting more than two years for a decision on a proposed move to San Jose. Wolff said no one — including Selig — had asked him to speak out and said he had no interest in buying the Dodgers.

I don’t get the sense that Wolff wants to deal with the mess that is the Dodgers. At this point, he’s a lot more like Murtaugh than Riggs. Added – At Biz of Baseball, Maury Brown traced back the chronology of McCourt buying the Dodgers. As always, the truth is more complicated than convenient.

The San Diego Chargers released an “update” on how their stadium campaign is going. For now, they continue to focus on a downtown SD site near the Convention Center and PETCO Park. They also have a very interesting response to a question about the death of redevelopment.

You’ve stated that recently-passed California redevelopment law changes may still undergo a legal process before they’re set in stone. If the legislation remains unchanged, how does it affect your efforts?

Assuming that the California Supreme Court does not invalidate the new redevelopment laws, the changes will impact our efforts in the following ways:

(1) The City of San Diego will not have available redevelopment money until sometime into the next decade – perhaps as late as 2024 or 2025. So we can no longer count on any immediate redevelopment funding for our project.

(2) Therefore, we now need to find alternative sources of funding. One idea that is getting some traction is the creation of a new Sports and Entertainment District that would tie closely into the existing Convention Center – and perhaps become part of the proposed Convention Center expansion. This sort of District could give us access to funding sources that are now not available for a simple stand-alone pro football stadium.

(3) Finally, we are exploring ways to bridge the gap between when stadium funding would be necessary and the time when redevelopment funding would be available in the next decade. It may be possible, with the cooperation of other government entities in the region, to bond against the future redevelopment revenues so that stadium construction can begin before the actual redevelopment dollars are available. This option increases the cost of the project, but such cost increases may be unavoidable in light of the recent state law changes.

Sounds a lot they’re using the 49ers sales pitch, though the ability to use the Q site as financial backing for the new stadium seems questionable at best.

Montreal interests want MLB back in town. They’ll need a comprehensive ballpark plan before anyone pays attention, unless they want to be used as a stalking horse. BTW – a $60 million payroll could be supported? Any team nowadays should be able to support $60-70 million without blinking an eye thanks to revenue sharing.

We may have been incredulous at the prospect of building two ballparks in Omaha – one for AAA ball and one for the CWS. Now it appears that a valid reason has surfaced for the separation of teams: one of the ballparks just had to have circus rides for kids and a big bar for the adults.

95.7 Sports Radio relaunches Monday at 6 AM as 95.7 The Game. The hosts are:

  • 6-10 AM – The Rise Guys (Whitey Gleason, Mark Kreidler, Dan Dibley) come from Sacramento
  • 10 AM-2 PM – The Wheelhouse with John Lund (Lund is from Portland)
  • 2 PM-6 PM – The Drive with Brandon Tierney and Eric Davis (Tierney was on NY’s ESPN 1050, Davis was the All-Pro ex-49er cornerback)
  • 6-10 PM – The Chris Townsend Show (coincides with baseball during the season, includes his pre/postgame duties on weekdays)
  • Weekends – Rick Tittle will be handling pre/postgame for the A’s on weekends.

According to Darren Rovell, the Versus network will be re-branded NBC Sports next January. Yawn.

Thanks for your patience on the big reveal. I’m still finding things that need tweaking so I’ve needed every hour.

07.18.11
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News for 7/18/11: Poison pill edition

Update 4:45 PM – The lawsuit has been filed. Heading the suit are the expected lobbying groups, The League of California Cities and California Redevelopment Association, plus the cities of San Jose and Union City. Oakland signed a declaration in support of the lawsuit.

The Merc’s Tracy Seipel reports on the redevelopment lawsuits that are set to happen any day now but for whatever reason haven’t happened yet. Perhaps the reasoning for this is a poison pill inserted into the first bill (ABX1 26) that could prevent any cities who successfully sue the state over redevelopment from issuing additional debt. I have to admit that I didn’t notice the poison pill in my readings of the bills over the last month or so, despite the fact that the language is front and center.

(3) The bill would prohibit a redevelopment agency from issuing new bonds, notes, interim certificates, debentures, or other obligations if any legal challenge to invalidate a provision of this act is successful.

The poison pill may be the trump card forcing cities to pay-to-play for future redevelopment, since the cities have little chance of getting their payments back.

(Assembly Speaker Perez’s spokeman John) Vigna said if the agencies win a court challenge, the provision would force them back to the negotiating table and “continue working on something that satisfies the governor’s concerns, and their concerns.” But the negotiations would only involve those agencies that can make the upfront payment.

Wondering where the money for the last two parcels in San Jose is going? My guess is partly to the county for a prior settlement (which has a lien on some city properties), and partly to the state for the budget. It’s your move, Lew.

Funny that redevelopment wasn’t mentioned once in Dave Newhouse’s glowing interview with Oakland City Councilmember Rebecca Kaplan. While I admire Kaplan’s gusto, her continued pushing of the Coliseum is almost inexplicable. It’s not what MLB wants, it conflicts with what the Raiders are trying to do there, and the aforementioned freeze on redevelopment makes it just as complicated to work out a deal there as the downtown sites (if not more complicated). It’s also disingenuous to start making bold claims about which city doesn’t have money when the fact is that no city has money, and neither Oakland nor San Jose have articulated how they’ll get out of the RDA pickle.

Other tidbits:

June radio ratings are out. 95.7 (KBWF) dropped from 0.6 to 0.5 in the San Francisco-Oakland market, and stayed steady at 0.8 in San Jose.

Frank McCourt’s hubris continues, as he refers to Selig as “the devil” with “an eye jaundiced towards irrational animosity” in today’s court filing. Read this Vanity Fair article chronicling the McCourt divorce and you might think his arguments are a bit rich.

Carmen Policy was profiled in Sunday’s Chronicle (no public link yet, subscribers only) continuing to lobby for a 49ers stadium at Hunters Point. Policy is on master developer Lennar’s payroll to advocate for the stadium, which ironically Lennar no longer has to support and would actually would save $100+ million if they abandoned the stadium part of the project. Policy, ever a SF/Wine Country guy, also takes a shot at Oakland in the process:

“If I were part of a group that somehow wound up owning the Raiders, I would be looking to expand my influence throughout the Bay Area as far as possible, and one sure way of doing that is playing outside of Oakland.”

Is Policy not aware of what the Raiders’ identity is? Baffling.

The NFL and NFLPA may finally be wrapping up their negotiations, with the possibility of a “global settlement” covering all outstanding bargaining items and external lawsuits, such as Brady vs. NFL. Then again, we’ve heard the two sides were close to finalizing a CBA for well over a month.