Category Archives: San Jose

08.07.13
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MLB asserts antitrust exemption in filing motion to dismiss San Jose lawsuit

MLB filed a motion to dismiss San Jose’s antitrust lawsuit today. The 32-page filing claims that the City’s only agreement with the A’s is the land option on the Diridon ballpark site, and nothing else. This was to be expected.

Perhaps more interestingly, MLB asserted the very thing being attacked, baseball’s antitrust exemption, in the motion. It didn’t have to do this, yet it did and in the process, kind of rubbed the City’s face in it. From page 13:

To withstand a motion to dismiss, Plaintiffs must plausibly demonstrate that Defendants committed an act that is “proscribed by some constitutional, statutory, regulatory, common law, or other determinable legal standard.” Id. at 1159. Here, the only independently wrongful act that Plaintiffs have asserted is an antitrust violation. Since Defendants are exempt from antitrust regulation here, there is no “independently wrongful act.”

In addition, MLB says that it is no “stranger” to the relationship between the A’s and San Jose because of baseball’s covenant including the member clubs. One of the key claims is that since San Jose is not a part of MLB, only a city hoping to host a MLB club, the City has no standing. Consider what that message effectively says to all cities: The teams matter, you don’t.

The motion reads as a pretty vigorous defense of MLB’s business practices, and shows that baseball is intent on not allowing those practices to be changed. Plaintiffs will have a chance to respond before the initial hearing, and just like this filing and the initial filing, it promises to be juicy reading.

I’ll let the armchair legal experts sound off in the comments. The best ones will be added to this post.

08.02.13
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Stand for San Jose launches second lawsuit against City of San Jose

Earlier this week I added a section to the sidebar called Lawsuits so that people could easily find references to the ongoing legal battles among the City of San Jose, MLB, and the Giants. Little did I know at the time that the section would have to be expanded. Yet here we are with now a third lawsuit to keep track of. This time it’s between the same Giants-lawyered astroturf group that filed the first lawsuit, Stand for San Jose, and the City of San Jose.

Santa Clara Superior Court Case 1-13-CV-250372, filed Wednesday, seeks to challenge the transfer of the Diridon ballpark site [thanks John Woolfolk of the Merc] to the Successor Agency (SARA), whose oversight board is composed of San Jose and Santa Clara County representatives. In March, the State Controller ruled that the transfer of the Diridon parcels to the separate Diridon Development Authority was not allowed, which forced the City to hand over the properties to SARA. At the time, SARA had its own objections to the ruling, namely that it felt it had a deal with A’s ownership by virtue of the option inked in November 2011. The Controller ruled that the November deal came after the cutoff date proscribed by AB 1X26, whereas the City said that the date was meaningless. Naturally, the Controller stuck with its original ruling, which led to the June transfer of the land to SARA.

Keep in mind that the land wasn’t transferred or sold to the A’s. It was only moved from one governmental body to another as defined by the new law. The option was signed by the A’s, with the only obligation within the first five years being that the A’s pay a nominal annual fee.

S4SJ’s argument is that the option isn’t valid at all because of the ruling. It’s a strange set of circumstances because in the other lawsuit, S4SJ is challenging the entirety of the ballpark deal on three issues:

  • The EIR was “incomplete” (despite having been certified for two different-sized stadia and with updated traffic studies)
  • The deal would take funds away from schools and city services (hard to argue because per the terms of the AB 1X26, city/county/schools have to be made whole)
  • The deal was done without a public vote (City was dissuaded from holding a referendum by Bud Selig).

Now S4SJ is going after the SARA transfer, but what they’re really after is the option. The option is a basic tenet of San Jose’s lawsuit against MLB, and if S4SJ can disarm that threat the antitrust suit would take a big hit. The argument is that there’s no option because the Controller ruled against the transfer to DDA. But that’s as far as the Controller’s power goes. Once the land ends up in SARA’s hands, it can dispose of it as it sees fit, including to the “late” A’s. The Controller and SARA went back and forth after the final ruling. From the Controller’s final ruling:

The City feels that this finding is “simply form over substance and wastes valuable time, energy and resources to arrive at the same result;” however, the legislation is clear that the oversight board shall have the authority to dispose of all assets and properties of the former redevelopment agency (Health and Safety Code Section 34181 (a)). Any attempt to deny the oversight board its rights would be thwarting the intent of the legislation.

SARA’s argument is that the deal with the A’s was going to happen with either DDA (transfer upheld) or SARA (transfer rejected). Which is exactly what happened. San Jose Mayor Chuck Reed telegraphed the strategy at the time. Did the deal not count because the Controller ruled it was late? Is it a deal because of the technicality the City is trying to argue? Or is it a deal regardless?

The real question is, How quickly can S4SJ get a ruling on this? I have no idea how this lawsuit would proceed through the system, especially because it has a related case just starting its trial phase in the fall. S4SJ attorney Ronald Van Buskirk indicates that the two S4SJ lawsuits will be combined, likely creating further delay. Importantly, the new suit names SARA as a party. SARA didn’t exist when the original lawsuit was filed.

Woolfolk notes that the San Jose Giants aren’t a plaintiff/petitioner, which would presumably protect the lawsuit from the discovery actions taken by the City last summer. Still, it’s clear that the SF Giants are behind the whole thing since this move was timed a few weeks after the antitrust lawsuit – just as the S4SJ lawsuit was filed a month after the A’s option deal was struck. At this point, all of the players must have a good idea what moves can and will be played by their counterparts.

Armchair legal experts, have at it.

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P.S. – I have a request or two. Please try to stay on topic, and also try to stay away from the usual “XXXX Sucks” type of discourse. If all you’re going to do is vent, I’ll probably delete it. Bite a towel or something.

07.29.13
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Earthquakes Stadium opening delayed until 2H 2014

If you’ve been following the (lack of) progress in getting the Airport West/FMC site ready for an 18,000-seat soccer stadium, you’d know that they been finding some interesting and unusual things in the excavation process. Just about everywhere there have been thick foundation work, underground facilities, and in keeping with the site’s previous life as a munitions manufacturer, bomb shelters. Both President Dave Kaval and Lew Wolff have been backtracking in recent months about opening the stadium in time for the 2014 MLS season, and today’s announcement makes it official.

Unfortunately, the news creates a bit of confusion for fans, who until now have been sold on the prospects of a brand new stadium opening in March of next year, not June or July. Quakes management has a bit of a mess to deal with at the stadium site and at Buck Shaw Stadium, whose capacity is barely more than half of the new venue’s. Kaval will have a Google Hangout at 3:30 today, in which he’ll field questions from fans.

Several other MLS stadia have also experienced opening delays, including StubHub Center (LA Galaxy home, formerly Home Depot Center), Sporting Park (Kansas City), Saputo Stadium (Montreal), PPL Park (Philadelphia), and Toyota Park (Chicago). Utah’s Rio Tinto Stadium didn’t open until the end of the 2008 season, and even the first soccer specific stadium, Columbus Crew Stadium, was delayed long enough (mid-May 1999) to have the team embark on a lengthy road trip to start the season.

It just goes to show that having a site considered “shovel-ready” isn’t enough. Sometimes you need more than shovels.

06.29.13
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When meaningless numbers are spun

In the eight-plus years I’ve been writing this blog, I’ve remembered a lot of little details. I’ve also forgotten just as many. Such was the case Thursday, when a John Shea article brought up San Jose’s economic impact report from 2009 (Exhibit 3 in the antitrust case filing). Shea asked whether a move to San Jose would boost attendance. He then pointed to the report’s assumption of only 2.1 million in annual attendance at a hypothetical 32,000-seat ballpark.

A’s superfan, radio gadfly and occasional commenter here (and friend of the blog) Bleacher Dave stepped up to push the idea that San Jose has an attendance problem, even though an Athletics game has never been hosted there. I rebutted that the attendance claims were never meant to forecast actual demand, only to provide a baseline for tax benefits (conservatively) and indirect benefits (usually outrageous). No matter, Dave pressed on, citing study author CSL’s experience in the field to buttress his argument.

CSL also did similar reports for the 49ers and Raiders to back those teams’ respective stadium campaigns. So far, only the 49ers have their stadium going. I pointed Dave to the Raiders report. Later I remembered that Let’s Go Oakland did its own report for a hypothetical Oakland ballpark either at the Coliseum or somewhere in the Jack London Square area.

Funny thing. Gruen Gruen & Associates, the firm hired to do LGO’s study, made its own attendance assumptions for a new ballpark:

  • Coliseum: 2.11 million/year
  • Jack London Square: 2.24 million/year

The key difference is that LGO’s study has a ballpark capacity of 36,000 instead of San Jose’s 32,000, which would in theory allow for larger sellout crowds when sellouts occur. The projections put the Coliseum roughly on par with San Jose and JLS ahead of both to the tune of 1,600 fans per game. If San Jose’s capacity were greater and had a similar number of sellouts, San Jose would land somewhere in the middle of the Coliseum and JLS projections.

Now if I wanted to twist these numbers into something they aren’t, I’d say that there’s something definitely wrong with the supposedly rabid Oakland fanbase only increasing attendance over the old Coliseum years by 7-13%. Surely there’d be a better response than that, right?

But I won’t. Because that’s not what these studies are for. The studies base their assumptions on five-year historical ticket sales at the Coliseum, which as we all know isn’t exactly an attractive, modern venue. Only one of those years was a playoff year. A major rebuilding plan marked the following years, which negatively affected ticket sales and fan interest. Wherever the A’s build, they won’t have the luxury of getting a big public subsidy as was the case in Miami or Washington, DC. If this thing actually gets built, it’s reasonable to expect that there will be so much pent-up desire to be there (the wildcard of on-field performance notwithstanding) that attendance should easily surpass those assumptions. It all has to do with season ticket sales.

Before a single pile is driven or brick is laid, the A’s will probably have to get somewhere in the neighborhood of 15,000 season ticket commitments or FSEs (full season equivalents). The closer to 20,000, the better (the A’s hover below 10k currently last I heard). The Giants maintain 25-27,000 FSEs annually, and they were so confident in the demand when their park opened that they only offered full season ticket subscriptions. (Note: More upfront ST commitments – especially multiyear – also proves to banks that the project is worth financing.)

The greater the ST sales, the better for the whole A’s market. It creates scarcity for the remaining seats, it provides a solid secondary market, and if pricing tiers are set correctly, should create good value for fans at multiple levels. It also means a lot fewer really cheap seats, but that’s the price of growing into a better, privately funded facility.

The two economic impact reports written for San Jose and Oakland provided none of this context and took none of these factors into account. All they did was average attendance over a short window, bump it initially upon opening, and taper it down over time as the honeymoon effect wore off. That’s the most basic of analysis and should be treated as such. Actual numbers should be better, but could also be worse if prices are too high or the team is pitiful. There are no guarantees.

If the goal of certain individuals is to create a gotcha moment out of a misinterpreted number, then we’re going to waste a lot of time finding gotcha numbers and moments everywhere. It smacks of a political race. There are much more important numbers to consider, such as the cost of Howard Terminal or a territorial rights payoff. Those are the numbers that matter. Not some previously ignored projections from several years old documents that are easily disregarded.

If people want to persist with stuff like this, I can’t stop them. We’ll be here as we always have, ready to provide the nuance that the news articles, tweets, and radio callers often lack.

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P.S. – Oakland Fan Pledge, which was started to prove fan commitment to the A’s, has just over 4,000 pledges so far (including mine). We’ve got a long way to go, folks.

P.P.S. – One more thing to consider. The Giants have long maintained that they need attendance of 30,000 every game in order to take care of AT&T Park’s debt service and field a competitive roster. How on earth would the A’s be able to pay for a more expensive park with 25,000 a game, even if prices were jacked up?

06.25.13
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Knauss on 95.7 The Game: We think the world’s changed here

Clorox CEO was on with Chris Townsend earlier today. As usual, Townsend had a pretty thorough, wide-ranging interview that touched on a number of A’s and stadium-related topics. I’m going to highlight a couple of items.

Townsend: When it comes to buying the A’s, are you personally interested? Is Clorox interested?

Knauss: No I wouldn’t say we’re interested (Clorox) in buying the A’s. We clearly would love to work with the current ownership, Lew Wolff and John Fisher, on keeping the A’s here. I think there’s a lot of old data that Lew Wolff has about working in Oakland… We think the world’s changed here.

Later in the interview…

Knauss: I think we have this tremendous site down Howard Terminal, which is just adjacent to Jack London Square. We have what I believe can be the premier site in baseball… When I last talked to Lew about that last year, he said ‘we looked at that a long time ago, it’s not viable’. I think the last time the A’s actually sat down with the City in any serious way was over five years ago with Mayor Dellums. At the time I heard some of the old excuses why Howard Terminal wouldn’t work and they’re all void now, it’s a completely different place.

Townsend: Why do you believe Howard Terminal is viable?

Knauss: In 2005 the last time they looked, the Port was close to full capacity. Now it’s under 50% utilization. The Port can easily use Howard Terminal for a ballpark without adversely affecting the shipping business… The second thing I’ve heard over the years is that there is this environmental contamination on the site and people throwing some crazy numbers around about remediating that site. We’ve done the diligence there as well and have been assured by experts that the ballpark can be built on that site without a substantial cost associated with cleanup. Basically we can build a ballpark right on top of that site without scraping the site clean, the same way AT&T Park was built on that pier.

Knauss went on to talk about the revitalization of Jack London Square and the recent Brooklyn Basin deal. Then Townsend moved onto Knauss’s potential interest in owning the A’s.

Townsend: In the past you’ve talked about having a group to buy the A’s. Why have you never made an offer?

Knauss: We’re trying to respect baseball’s protocol. Our attitude is to negotiate this and not litigate this… We’d love to have Lew sit down with us and go over the new world that’s down there, not the old world that he’s familiar with. The other thing is that we’re close to getting this lease renewed so I think we’re demonstrating that you can get things down in Oakland and Alameda County… The second thing is getting site control of Howard Terminal. So I think that’s the reason we haven’t said, ‘Let’s find another ownership group.’ We think that could be viable, but I think clearly we’d rather say, ‘Look Lew, we’ve got a viable site, we believe that the team deserves a new world class ballpark, but there’s a way to get that done here in Oakland.’

Townsend: Clorox moved a number of jobs to Pleasanton. Why do you do that but yet you still say, ‘Ah we’re still about Oakland.’

Knauss: It’s a fair question. There are two things we wanted to try to achieve with that. One is, it’s a bus- it’s really a focus on innovation. The reason we’ve been around for 100 years is because it constantly innovates new products. We wanted to get all of our innovation people in one location. Now obviously innovation is driven by R&D, and we’ve always had R&D people folks out in Pleasanton. We had about 400 scientists out there and we’ve had ’em out there for decades. What we’ve learned over the years is that when you put all of the functions out there that drive innovation – marketing, sales, finance, human resources, legal, etc. – put all those people out there with the R&D people, then you get much quicker innovation, you get bigger ideas developed. So we wanted to create a new campus out in Pleasanton where we had our nucleus and add those people. We moved a lot of those folks out of downtown Oakland out to Pleasanton – but we kept them in Alameda County.

The second reason we did it was a business continuity issue. The headquarters building – obviously we’re all in the Bay Area sitting on various faults. We wanted to get some dispersion of our IT resources out in Pleasanton too where we thought we could spread out some of our risk from a business continuity standpoint. Those were the two central reasons: better innovation, better business continuity, minimizing risk. We’ve kept people in Alameda County, and we’ve kept our general office in Oakland, and certainly I’m sitting here in Oakland and I live in Oakland. So we’re committed to Oakland.

Let’s try to put this in perspective. Don Knauss was brought in as Clorox CEO in October 2006, shortly before Ron Dellums was elected mayor. Knauss is clearly referring to the anti-sports Brown administration and the general absence of leadership during the Dellums era. Are we – and Wolff & MLB – supposed to believe that a new sheriff is in town, that Oakland has suddenly gotten its act together? Moreover, Knauss recited Quan’s stance on the ballpark issue: As long as we provide the site, the A’s and MLB can’t turn us down. I think it’s pretty simple. If Oakland provides all site prep costs, streamlines the process, and throws in $200 million, then you can get MLB to pay attention. Without that it’s not really an even playing field with San Jose, where the greater number and size of upfront revenue commitments can help pay down ballpark debt early, just as is being done in Santa Clara.

Knauss also talked at length about the issues associated with developing Howard Terminal, which he minimized as much as possible. Muppet151 has a little insight into this:

HT is in a state of constant and PERMANENT review. I talked to the guy in charge of overseeing the site who said it’s somewhat similar to what contained contamination at the San Jose Arena. You can read the SJ documents here:

https://www.envirostor.dtsc.ca.gov/public/profile_report.asp?global_id=43730007

The HT project manager explained things a little further in an email to me when he said “While the Land Use Covenant restricts activities that would interfere with the cap from being conducted without DTSC approval, it is common in development plans to engineer acceptable solutions that modify cleanup remedies including caps under DTSC oversight.” If the footprint of the stadium extends outward to the point it’s over the capped area, and it’s my understanding it would, the stated scenario would take place.

From a technical standpoint, HT is definitely possible, and can be done. The problem is that this is not a 1 time fix. This is a permanent issue, and worst of all this is infrastructure work that the public will be on the hook for. There was cleanup work done in the area in 2004 making the ballpark possibility a little stronger. But the 200,000 cubic yards of capped material remains, as done the 2002 CA DTSC estimate of a $100 million cleanup should something go wrong. And again, that’s public money. Things might go smoothly….but over time, caps need maintenance, and putting a stadium over the underwater caps makes the situation remarkably unique.

Currently, nothing can be built at the San Jose Arena parking lot, including a garage for the arena or a future high speed rail terminal, without a comprehensive and costly remediation plan. Right now there’s only a sealed asphalt cap there.

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Knauss also brought out the “respecting the process” stance used by many on the outside, including the mayors of both San Jose and Oakland. They’re all willing to “respect the process” until they hear something that doesn’t work with their agenda. That’s how the game is played. Unfortunately, as we’ve seen recently, the only way to get Bud Selig’s attention these days is to sue baseball.

When asked about Clorox’s move of hundreds of jobs to Pleasanton, Knauss’s previously well-focused responses devolved into some incredibly inane, weaselly CEO-speak. Read that response carefully. Earthquake faults? When Loma Prieta hit on the San Andreas fault, the Coliseum had enough structural damage to force Games 3 & 4 to be played at the ‘Stick, despite the Coli being on the Hayward fault (and supposedly less prone to damage). Knauss didn’t touch the issue that really caused the move: many of the scientists and their families lived along the 680 corridor and preferred to work there instead of commuting to Oakland. Knauss had to make the tough decision to keep Clorox competitive. That’s the reality of the move, not some BS reasoning about earthquake faults or risk management. And that’s the irony of it. Clorox is perfectly able to move 500 jobs to Pleasanton or 300 jobs to Arizona if it has business or competitive reasons. In terms of pure economic impact (tax revenue, job creation), the A’s are a much smaller company than Clorox, yet they can’t move 35 miles for competitive reasons. Makes me wonder if Knauss just did this to provide cover for the company’s previous and future moves under his leadership. It didn’t cost him anything, that’s for sure.

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Further reading:

06.23.13
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Who is Joe Cotchett?

Let’s meet Joe Cotchett.

Cotchett, as lawyers are wont to do when filing high profile lawsuits, was full of bluster, using terms like “economic rape and pillage” and “moral outrage” in the first minute of his interview with NBC Bay Area‘s Raj Mathai. By the end of the interview, Cotchett dialed down his rhetoric a tad, admitting that the real goal of the lawsuit was to force a settlement, not a wholesale teardown of MLB’s antitrust exemption. Though if MLB remained recalcitrant, Cotchett would certainly relish the opportunity to tear down AE himself.

While making the media rounds earlier in the week, Cotchett was also on The Game with John Lund and Greg Papa. Apparently Papa wasn’t aware of Cotchett’s role as attorney for the NFL and the Rams when the then-Oakland Raiders forced a move to Los Angeles in 1981. Cotchett’s involvement in pro sports is quite long and varied, though most of it is with the NFL, not MLB.

  • 1981-82 – Cotchett represents NFL & Rams in Al Davis and LA Memorial Coliseum’s antitrust lawsuit against the league. After a mistrial, Davis wins, paving the way for the move.
  • 1994 – Billy Sullivan, who had recently sold the Patriots to Victor Kiam, sues the NFL for not approving a public offering deal that would’ve provided Sullivan with more operating cash. The lawsuit is settled for just over $11 million. Cotchett represented the NFL.
  • 1995 – Cotchett attempts to put together a group to keep Rams in LA. Instead, team owner Georgia Frontiere takes $300 million deal to move Rams to St. Louis.
  • 2004 – This time representing the Raiders, Cotchett successfully defends Davis against a lawsuit by Raiders minority partners attempting to remove Davis as managing partner. Cotchett and the Raiders win using argument that minority partners have no standing.

As you can see, Cotchett has plenty of experience on both sides of the franchise move and antitrust issues, winning and losing some while settling others. While antitrust is Cotchett’s game, he was also successful going up against Charles Keating in the Lincoln Savings & Loan scandal and Bernie Madoff. The State Bar of California named Cotchett their Antitrust Lawyer of the Year in 2011. He’s also made a habit of taking numerous cases on either a pro bono or contingency basis, with attorneys fees to be paid by the losing defendants (as has indicated for the San Jose-vs.-MLB case).

MLB is a different ball of wax, as shown by its still preserved antitrust exemption. Cotchett will argue that MLB is no different from the NFL or any other pro sports league and is subject to the same commerce laws and regulations as the others. Chances are that he won’t get to make that argument given what San Jose and baseball are looking for, but you never know what can happen if/when a trial starts. One thing that can be universally said about the new lawsuit: It’s anything but frivolous.

06.21.13
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Dust settles after the big lawsuit filing

I’ve spent much of the last week in transit, as my job requires a lot of travel all over the country. Some of the pictures and posts you’ve seen since the beginning of the season have been a byproduct of little side jaunts taken at the end of business trips or cashed in frequent flyer miles. It’s allowed me to visit a lot of the parks I’ve wanted to see fairly cheaply, though the downside is that it has severely reduced my attendance at A’s home games.

Another byproduct of near-constant travel is that I can’t get into a good writing rhythm. I’m already a rather deliberate writer, and I’m envious of the pros who can toss out 500 words constructed in cogent manner in only 15 minutes. Instead I’ve preferred to shift my writing to ever longer pieces, 1000-1500 words, eliminating many of the peripheral “busy” posts that I used to do.

Yet when the San Jose-vs.-MLB lawsuit was filed on Tuesday, I was left at a loss as to how I was going to cover it. While I get a lot of advice from lawyers and legal experts, I still went through the week uncomfortable about touching the legal issue with any real depth. I wasn’t sure I could do it justice (pun intended). Instead I sat back and read all of the great writing by many lawyers-turned/cum-baseball writers like Jason Wojciechowski, Wendy Thurm, and Craig Calcaterra. ESPN legal analyst Lester Munson covered the lawsuit in the broadest manner possible, but the effect of his piece was greater than most because of the wide audience. And we have plenty of lawyers who read and comment on this site. Judging from the last post, they’ve been waiting for this moment for a long time. I’m glad that they may have a chance to sink their teeth into something juicy like this. As for me, I’m glad that at long last the A’s plight is getting the attention it deserves (and San Jose to a lesser extent). (While I was in Phoenix on Thursday, the local ESPN affiliate did a wide-ranging interview with Tim Kurkjian, and the A’s/San Jose/Sewergate were one of the main topics!)

However, let’s be clear about what we should expect from this potential circus. While many can’t agree on what the outcome will be, let’s understand what’s really at stake.

1. San Jose isn’t really trying to overturn baseball’s antitrust exemption.

Attorney Joe Cotchett’s initial bluster aside, San Jose would be perfectly fine with territorial rights being modified, their basic structure left intact. That could mean sharing Santa Clara County or the Bay Area at large, or something in between. As long as they have the right to host the A’s, they’d be fine with territorial rights maintaining monopolies (or duopolies as the case may be) here and elsewhere.

2. San Jose didn’t decide to do this on a whim.

Mayor Chuck Reed told Lew Wolff last week that the City was planning to sue baseball. Councilman Sam Liccardo had been talking up the lawsuit threat since spring 2012. From what I hear Cotchett has been involved for nearly as long. What they’ve been doing during that time is strategizing the particulars. What they came up with is arguably weak from the standpoint of trying to overturn AE, but if the goal is shake up baseball, there’s a chance it could work. SewerGate became a most serendipitous event PR-wise – as serendipitous as rising floods of sewage can be.

3. MLB is not concerned… yet.

MLB knows San Jose’s strategy, and they will certainly push hard to get the case thrown out for lack of standing. If they succeed, we go back to the status quo and San Jose is at the mercy of baseball. That doesn’t mean that San Jose is done, it just means the City can’t force the issue. All parties, including the A’s, know this. The important thing for MLB is that San Jose remains an option, however slight, because if the only option is Oakland and a scramble for extremely limited public funds, the option is poor. Of course, the City could decide at that point that it would give up the seemingly quixotic quest for a MLB franchise. Knowing how the current mayor and leading mayoral candidates operate, that’s highly unlikely. The lawsuit is costing them nothing and giving the City a ton of press and awareness. None of it is bad except that it annoys Bud Selig, who is supposedly in his lame duck period anyway.

On the other hand, if the federal judge finds that the City does have standing, then MLB has to decide what it’s willing to risk during the pre-trial discovery phase, when pertinent documents are exchanged between the two sides. As we saw in the Stand for San Jose case, one side made the blunder of providing privileged information, which the opposing side tried to use in its case. S4SJ’s attorneys, who didn’t disclose or return the confidential docs until they were caught, then were dressed down by two separate judges and nearly thrown off the case. The Lodge has demonstrated in the past that they are very fearful of any releases of team or league financial data, forced or leaked. I wouldn’t expect them to fold like cheap tents, but if enough pressure is applied, the pendulum could swing in the City’s direction as the owners simply prefer the quickest exit to the fiasco. The quick exit won’t come cheap or easy because the issue is complex, as Selig has said (but never properly articulated).

MLB’s lawyers will argue that there is no contract, hence no standing. The City’s lawyers will argue that there could’ve been a contract if MLB hadn’t dillydallied. It’s not mentioned in the lawsuit, but they could easily point to…

4. The Earthquakes

Lew Wolff and San Jose have a contract in place to build a stadium. In San Jose. On land sold by the City to Lew Wolff that started with an option. While the stadium has been delayed due to financing and general economic problems, it’s getting done. Without tortious interference – the real issue in this case. The bar for some antitrust complaints may be lower in California than the federal standard, thanks to the Cartwright Act. Whether this passes muster is up for a judge to decide.

5. The A’s are a defendant

In suing MLB, San Jose is suing all 30 member clubs in the process. So even though Lew Wolff wants to move the A’s to San Jose, he isn’t joining the lawsuit. Wolff’s public statement indicates, yet again, that he doesn’t want any part of the legal process, fiddle-dee-dee. And it sort of makes sense given that teams are bound by the MLB Constitution not to sue baseball or each other. Except that…

6. MLB’s Constitution expired?

According to Cotchett, the last Major League Constitution expired at the end of 2012. Baseball hasn’t posted a new one, so it appears that they aren’t operating with one. It sounds crazy to think that baseball could operate without a Constitution for even a brief period, as the document lays out all manner of league and team business, in conjunction with the CBA. The most recent version dates back to 2005, as part of the Expos’ move contraction-and-expansion to DC. It outlines everything from banal matters such as the timing of the owners meetings to how the leagues and divisions are constructed, and pertinent to our ongoing discussion, club operating territories. You’d think that the document would at least be amended to include the Astros’ switch to the American League West. Right?

Then again, if the league is operating without a Constitution, does it mean that there’s a loophole? If there is no binding Constitution then are territories no longer assigned? I doubt it, there’s too much at stake. The New York teams aren’t going to allow Stuart Sternberg that kind of loophole to move the Rays. Prior to the gag order, the Giants pointed to the Constitution every chance they got to back up their T-rights claims. You think they’d let the document lapse? Even if there technically isn’t a Constitution, the clubs are certainly operating within the spirit of the legacy document, which is probably good enough for a judge. The Lodge is the Lodge is the Lodge, after all. Now, if MLB intentionally let the document expire so that no one can point to the constraints of T-rights, then we’ve just devolved into anarchy within the Lodge. Which probably isn’t a bad thing.

In all likelihood, MLB does have a new Constitution and simply needs to produce it. Issue rendered moot.

7. Where does Oakland fit into all of this?

Oakland is not a party to the lawsuit. That’s just as well, since there’s a good chance San Jose will fail and the A’s will have no choice but to deal with the East Bay. The “tail-between-legs” scenario is what they’ve been hoping for all along, not that they’re presenting realistic options should that happen (remember Victory Court?). The real problem for Oakland is simple: no one’s fighting over Oakland. The clubs are fighting over San Jose, and they’d fight over San Francisco if it came to that. No one outside of the Oakland-only holdouts and Larry Baer is talking about Oakland as anything more than a short-term solution. Have you heard any other owners talk about Oakland in terms of a permanent home for the A’s? Of course not, because it isn’t even entering their minds. The only thing helping Oakland at the moment is each owner’s self-interest. In this scenario Oakland is the safety school of cities, the girl from work you go out with because she’s accessible. And that’s what really hurts. Whether the neglect is benign (Coliseum deterioration, deprioritizing the A’s) or more “sinister” (ownership motivations), Oakland’s status as a baseball town is at best tentative. If San Jose comes out of this with the A’s, no other existing teams are going to start looking to Oakland as a viable MLB home. Expansion is out of the question. The best Oakland could hope for is a minor league club of some sort, either AAA (Pacific Coast League) or high-A (California League). If Oakland is truly afforded the opportunity to keep the A’s, they’ll be ransomed like many other cities have been. MLB will bring in the consultants (just like Miami) to say that a franchise there isn’t viable without a publicly-financed stadium. Then what?

Other observations:
Exhibit 3 in the filing is the CSL-written economic impact report commissioned by San Jose in 2009. Normally we roll our eyes at how these things are written, because they’re designed to convince mayors and city councils, not judges. The use of such a document against baseball is more than a little ironic.

During the first press conference, Cotchett trotted out the SVLG letter and list of companies as signed-on supporters of the lawsuit. He quickly backtracked on that. The letter is Exhibit 2.

—–

As I finished this post the plane descended over the Peninsula. I saw the lights on at AT&T Park while Candlestick Park sat silent and lonely. I wanted to get a good look at the Coliseum, but the view across the bay was obscured by a scratched up plane window and the encroaching marine layer. We landed at SJC and the plane was held on the tarmac because a computer malfunction at Southwest Airlines’ headquarters kept all other planes at their respective gates. How appropriate, I thought.

06.18.13
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San Jose City Council votes to sue MLB (4 PM Update includes press releases, links)

PDF of the lawsuit filing

It’s on.

More from ABC 7:

So, the city has hired Peninsula attorney Joe Cotchett to file a lawsuit. “This is all about economics. And, you have a city like San Jose, the tenth largest city in the United States, cannot get a baseball club. I can name you other cities that are pulling for San Jose for the same reason. They want the right and the chance to bring a baseball team to their city, their county, whatever it might be,” he said.

A 2009 study found that a new ballpark for the A’s could pump $130 million a year into the San Jose economy. And, San Jose’s mayor has hinted in the past that he’s considered legal action, but the city has always deferred to the principal owner of the A’s — Lew Wolff.

The City has been talking to Cotchett for a while about prepping the lawsuit. I had also heard that Cotchett may be taking this case pro bono, but I can’t confirm that at the moment. Correction: Cotchett is taking the case on a contingency basis. Cotchett has a ton of experience with antitrust suits and sports, representing the Raiders and the NFL at different times.

The Merc’s John Woolfork also has an article with a primer.

And then there’s this.

The podcast of the Cotchett interview is available here.

—–

San Jose Mayor Chuck Reed’s office put out the lawsuit press release:

For Immediate Release:

June 18, 2013

Contact:

Michelle McGurk, Office of Mayor Reed

(408) 535-4840 or (408) 655-7332 (cell)

 

City Council Unanimously Authorizes Lawsuit to Allow A’s to Move to San Jose

San Jose, Calif. – The City of San Jose has filed legal action in federal court to eliminate the territorial restrictions that Major League Baseball has used to keep the A’s from moving to San Jose. The complaint was authorized by the City Council during closed session this morning.

“For more than four years, the City of San Jose has made an exhaustive effort to work with Major League Baseball to resolve any concerns about our city’s capacity to host a major league ballclub,” Mayor Chuck Reed said. “During that time, it has become abundantly clear that Major League Baseball prefers to use territorial restrictions as an excuse to restrict commerce and prevent the Athletics from relocating to San Jose. This restriction is costing San Jose residents millions of dollars in new annual tax revenues that could go towards funding more police officers, firefighters, libraries, gang prevention efforts, road repairs and other critical city services.”

The Oakland Athletics ownership group has expressed a desire to construct a new privately-financed and privately-operated ballpark in Downtown San Jose. While the City of San Jose has worked with the Athletics to facilitate the construction of a new ballpark, their efforts have been stalled by the San Francisco Giants’ claim of “territorial rights” to Santa Clara County. In 2009, MLB Commissioner Bud Selig appointed a special blue ribbon committee to analyze the Athletics’ options for a new ballpark. But after four years, there still has been no decision on whether the Athletics can relocate to San Jose.

According to an independent economic analysis report conducted by Conventions Sports & Leisure International, a new major league ballpark in Downtown San Jose would generate significant benefits, including:

$5 million per year in new tax revenues to the City and other local governments;
$130 million per year in total net new economic output; and
Nearly 1000 new full and part-time jobs.

San Jose has entered into an option agreement with the Athletics Investment Group, LLC, the California limited partnership that owns and operates the Oakland A’s, to purchase property for a ballpark in Downtown San Jose. According to the suit, Major League Baseball is interfering with this contract by refusing to allow the Oakland A’s Club to locate to the City of San Jose. San Jose seeks to restore competition among and between the clubs and their partners by ending MLB’s collusive agreements. The lawsuit outlines several practices that have resulted in an unreasonable restraint on competition, in violation of federal and California law, and constitute unlawful, unfair, and/or fraudulent business practices under California law, including violation of California’s Unfair Competition Law, Tortious Interference with Contractual Advantage, and Tortious Interference with Prospective Economic Advantage, and for violation of the federal Sherman Act, and violation of California’s Cartwright Act.

The City of San Jose is being represented in this case by attorney Joseph W. Cotchett and the firm of Cotchett, Pitre & McCarthy LLP. The firm is working on contingency.

Additional Resources:

Legal Action filed June 18, 2013: http://www.sanjoseca.gov/DocumentCenter/View/18492.
Economic Impact Analysis: http://www.sjredevelopment.org/ballpark/EI_Report_09022009.pdf
Ballpark archive, including renderings: http://www.sjredevelopment.org/ballpark.htm.

—–

And now, MLB’s response:

FOR IMMEDIATE RELEASE – June 18, 2013

MAJOR LEAGUE BASEBALL STATEMENT

Major League Baseball Executive Vice President for Economics & League Affairs Rob Manfred issued the following statement in response to the lawsuit filed by the City of San Jose today:

“In considering the issues related to the Oakland Athletics, Major League Baseball has acted in the best interests of our fans, our communities and the league. The lawsuit is an unfounded attack on the fundamental structures of a professional sports league. It is regrettable that the city has resorted to litigation that has no basis in law or in fact.”

———-

Additional comments from San Jose Councilmembers, who unanimously voted to approve the lawsuit:

Xavier Campos, Councilmember, District Five: “The Mayor and City Council want to send Major League Baseball a clear message that the future home for the Athletics is in San José. The new ballpark will draw more fans and generate additional revenues, and create jobs during the construction phase of the project as well as permanent jobs well into the future. It’s a win for San José and it’s a win for Major League Baseball.”

Kansen Chu, Councilmember, District Four: “I am disappointed Major League Baseball has prevented the A’s from moving to San José. Winning this lawsuit not only will provide a great economic impact for the City of San José but will also benefit Major League Baseball.”

Rose Herrera, Councilmember, District 8: “This is the right step to take on behalf of our residents to get the baseball team that we deserve.”

Ash Kalra, Councilmember, District 2: “Major League Baseball has given the city of San Jose no other option but to turn to the judicial system to have our concerns heard and this matter resolved. The lack of response from Major League Baseball has been extremely disrespectful to the efforts our city and community have made in creating an attractive environment for the Athletics, particularly since the team’s ownership agrees that San Jose, the Capital of Silicon Valley, is the ideal location for their great organization.”

Johnny Khamis, Councilmember, District 10: “I supported filing the lawsuit against Major League Baseball today because San Jose deserves economic justice.”

Sam Liccardo, Councilmember, District 3, “Our Downtown hotels, restaurants, shops, cafes, and clubs and their workers will benefit the tens of thousands of people attending each game at a Major League ballpark,” said Councilmember Sam Liccardo, who represents the Downtown. “Independent experts put the total economic impact at $130 million a year. But the wait staff and cooks at our local restaurants can tell you about the real impact professional sports have on a large-city economy. When the Sharks play, Downtown is packed with patrons. We expect an even bigger impact with baseball.”

Pierluigi Oliverio, Councilmember, District 6: “As the Councilmember representing the majority of the land where a future ballpark would be built, I support taking this action today. San Jose residents need resolution now. We have waited for four painful years, and the area surrounding the future stadium has languished due to years of indecision. In addition to Downtown, surrounding neighborhood business districts like The Alameda and West San Carlos will benefit from the economic revitalization that a major league ballpark will bring to the Diridon Station area.”

Donald Rocha, Councilmember, District 9: “Today’s legal action is hopefully the first step in a process which will bring the City, Major League Baseball, the Giants and the A’s to the table. I firmly believe that there is an opportunity for a positive outcome for all parties, and for too long we’ve all been so focused on our own best interests that we haven’t pursued that conversation.”

———-

Further reading, if you’re interested:

Commentary later tonight.

06.12.13
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The power of Selig compels you

Allan H. "Bud" Selig, at your disservice

Allan H. “Bud” Selig, at your disservice

Well, not you, Gentle Reader. Lew Wolff and Larry Baer, to be specific. Both respective team head honchos were interviewed on The Game as part of the Newsmakers week of sitdowns with owners. Baer talked mostly about the Giants’ franchise, but was also asked (by Bucher & Towny) about their apparent cockblocking of venue efforts by both the A’s (San Jose) and the Warriors (Piers 30/32). Baer indicated vague support for both teams’ efforts, but would not comment further on what that meant.

Then on Tuesday, Lew Wolff had an absolute disaster of an interview, one where he hesitated, fumbled, and dodged. By the end, everyone including the interviewers were clearly frustrated, Wolff even half-jokingly saying that he wanted the A’s PR department to get him out of the interview.

Wolff’s prior-held opinions on Oakland and San Jose were repeated, but it took only 30 seconds for Wolff to give the first of an endless stream of “No Comment” responses to many of the solid, pointed questions that were aimed his way. “No Comment” has come about because of the gag order imposed by Bud Selig over Wolff and Baer, who had been previously sniping and using the media to their own ends at regular intervals.

Beyond the ongoing rejection of Oakland having any viable sites, Wolff also repeated the mantra that he has been guided to put baseball first, team second. That means no antagonistic PR battles or lawsuits, no waging the territorial rights war. What it also means is that the A’s will continue to be in limbo, at Selig’s and The Lodge’s behest, until Selig or his successor deems the A’s dilemma important enough to resolve in a meaningful way. Lew has always painted himself as a go-along-to-get-along guy, even if the scope of that philosophy is limited to baseball and alienates A’s fans everywhere, along with friends in the South Bay.

Lew is clearly grateful to Bud for bringing him into the Lodge, that much is clear. Thing is, now that he’s in, it’s hard to get him out. Besides the ownership group or individual partners going into bankruptcy (no sign of that happening), there’s little anyone can do in The Lodge or outside it to force anyone out. Lew knows this and has tried to work the process (calling for a vote, etc.) to no avail. It wouldn’t hurt to fight for the franchise instead of always taking one for The Lodge, as is happening now. If the idea is to curry favor with the other owners for something down the road, there’s no indication of such a deal.

I think we’re seeing a repeat of what happened with the 49ers and the Yorks, where Dr. York spent a few years fumbling around as the head before handing the job over to the more media-savvy Jed York. Lew’s son Keith Wolff has had his hands full taking care of the Earthquakes stadium, and may be wary of absorbing the arrows anew with the A’s after having completed an arduous, albeit smaller, task for the soccer franchise. Nevertheless, if Keith is up to it, he’s the guy to smooth things over. Even then, nothing can actually be smoothed over until Selig provides better answers and more information. As the team gets further into the season and off-season without an inked extension for whatever length, this is only going to get weirder and uglier. And as long as the gag order is in place, there will be no point in having additional interviews like Tuesday’s.

05.30.13
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Is your city disrespected? Nobody cares.

After Tuesday’s Game 2 of the Bay Bridge Series, CBS Sports national baseball writer Jon Heyman jostled the hornets nest that is the Oakland faithful with this tweet:

That brought a furious wave of replies, including some by current A’s players such as reliever Sean Doolittle.

Of course, numerous fans came to the defense of the Coliseum, citing certain sightlines that are better than at AT&T Park (only a few) and the more raucous crowd. I tried to sum up the general sentiment with this tweet:

Now let’s set the table for the discussion to follow. This is Newballpark.org, after all.

  • The Coliseum is, in fact, outdated and a replacement is needed for the long-term viability and competitiveness of the franchise.
  • The long-time, hardcore fanbase has stayed loyal thanks to not being priced out of attending games, despite ownership’s general indifference towards them.
  • Attracting casual fans to games is difficult unless the team is playing extremely well (sometimes) or the opponent is a good draw (Yankees, Giants, Red Sox).
  • The experience of attending a game is not luxurious in the slightest, but it can be very energetic and entertaining.
  • Fans debating about the future of the Athletics mostly squabble over the site of the next A’s home, whether it’s in Oakland, San Jose, or elsewhere in the Bay Area.

Heyman’s uninformed opinion is sadly reflective of much of the East Coast (Northeast) media, which still holds onto the notion that in the Bay Area, San Francisco is “The City” and everything else is a satellite orbiting around it.

Nevermind that Oakland has undergone significant upheaval over the last several decades, or that San Jose has grown to become larger than SF. San Jose remains sleepy and banal, Oakland dangerous and difficult. It takes more than a generation or two to shake a reputation, especially when there are forces at work to maintain certain aspects of that rep (crime, politics, growth policies).

A look back at Frank Deford’s 1968 Sports Illustrated article shows that things haven’t changed that much in terms of perception from the outside. It was during that era that the other Bay Area cities started to puff out their own chests and brandish their own civic pride. That pride led to Bob Nahas getting the Coliseum complex built. It also fomented a backlash against SF, according to late Warriors owner Franklin Mieuli:

“Now, everybody’s thinking is reversed. People feel they must swallow local pride to come to San Francisco. Or they’re indignant. You know, ‘Why the hell should I have to go to San Francisco?’ People come from halfway around the world, breathless, to get to San Francisco, and the people around here are annoyed if they have to go 15 minutes.”

After 45 years, much of the country and the world doesn’t know about this, and more importantly, they don’t care. New York and Chicago have had more than a century to build rivalries among boroughs or along north-south divides, and there’s plenty of documented historical support to back them. Allowing the Warriors and Seals to carry the generic “California” or “Golden State” monikers only steeled Oakland’s collective resolve. Defenders of cities can scream to the high heavens about their town being disrespected. Most casual observers have little empathy when other issues take greater import. Outsiders don’t know that these days, the only true satellites of SF are the Peninsula and Marin County.

Yet the lion’s share of tourist attractions and cultural resources remain in SF. Since the 60’s Silicon Valley become America’s (and the world’s) tech capital, and Napa Valley became the American focal point of the wine industry. Tract homes replaced farms and fields. Ever-growing freeway systems and disorganized public transit systems were built to meet citizens’ needs.

During the decade from 1972 to 1981, Oakland teams won six championships: 3 by the A’s, 2 by the Raiders, and 1 by the Warriors. None really changed much for Oakland as a city, though it did solidify the teams’ fanbases to various degrees. Even when Al Davis took the Raiders to LA, Oakland officials plotted for years to lure him back – and they eventually did.

Oakland has garnered exactly one title since Al left and none since he returned. If the point of having teams winning championships is to build civic pride, the luck hasn’t been on Oakland’s side. Is there anything that can be done to correct long-held misconceptions? Probably not – at least not immediately. Civic leaders can try to build a ballpark or arena downtown, and most have used forms of redevelopment to remake rundown parts of their cities, often with mixed results. Sure, there’s a nice ballpark in Cleveland, but it’s still in Cleveland. The new ballpark in Miami has done little to change the prevailing notion that it isn’t a baseball town. Phoenix has both a ballpark and arena, but outside of events at those venues people would rather go to Scottsdale.

Al Davis, in the 60’s light years ahead of his peers and others in terms of strategizing football, proved sagelike when it came to thinking about cities in the Deford article.

“Haven’t we passed the point of who is Oakland and what is Oakland?” he asks. “Too many people are still living on local color. They can’t see past the Golden Gate. They keep telling me: ‘Hey, we showed those 49ers.’ I have to say, ‘Look, can we show Green Bay? They’re the epitome of football. Green Bay, not San Francisco.’ “

Then again, what happens when the champion IS San Francisco?

—

P.S. As for the Coliseum, I figure I’ve written about it ceaselessly for 8 years. The issue is really up to MLB at this point. Does the Lodge want to force “progress” via a new ballpark that will inevitably price out many of the fans who currently are a big part of the A’s image? Is the status quo fine for now until whatever form progress takes is fully formed? And who will foot the bill for the Coliseum’s replacement? The bitter truth is that MLB doesn’t care much for the $12 fan, preferring to kick them to the upper deck corners where The Lodge thinks they belong. If someone protests, The Lodge can simply point out that the A’s pull in $30+ million a year in welfare and that Oakland fans should be grateful they still have a team within city limits. Progress, however it comes, will satisfy some and alienate just as many. Unreserved bleachers will become $20 reserved seats. Tailgating opportunities will be reduced. Section 317 will be much higher. At the same time there will be myriad improvements. A beautiful field throughout the whole season. Less foul territory (the most spun thing among A’s fans ever). Facilities that will make marquee players want to stay or sign as free agents. Functional scoreboards. Better food on the concourses. I have seen these things, I have experienced them, and they are good. In the end, it’s as much a choice for fans as it is for MLB. If we’re priced out of the seats that we currently have, how do we react? Do we swallow the higher prices? Go to fewer games? Pick worse sections? There is a price for all cities to be major league. In one way or another, everyone pays for it.