11.17.11
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News for 11/17/11 (Post Owners Meetings Edition)

Time for a recap of the owners meetings.

  • The Astros will be in the American League West starting in 2013. Next up: Figuring out the details of the scheduling format. Despite the grousing from many about the change, a few columnists have written in favor of the move, including ESPN’s Jayson Stark and Danny Knobler of CBS Sports. Newly approved owner Jim Crane was required to accept the move to the AL as a condition of his approval. Crane was unanimously approved.
  • Stark also considers how another change, the addition of two more wild-card teams, could affect the annual playoff chase and divisional races.
  • MLB and the MLBPA have agreed to a five-year CBA. Ken Rosenthal reports that an announcement will occur on Monday.
  • Larry Baer was approved as the “control person” representing the San Francisco Giants at future owners meetings. There may have been more recent instances of this, but one high-profile one I clearly remember is Paul Beeston when he became CEO of the Toronto Blue Jays. Howard Lincoln also performs a similar duty on behalf of Nintendo for the Seattle Mariners.
  • The Los Angeles Dodgers saga continues, with pre-screening for prospective bidders scheduled to begin soon. That’s a good thing, because as Forbes’ Mike Ozanian reports, the Dodgers are saddled with a whopping $555 million in debt. Another lawsuit has been filed by Frank McCourt against Fox for allegedly trying to “interfere with the sale of the Dodgers and their assets in bankruptcy.”
  • Nothing on the A’s front, though there are murmurs of something happening in January. Maybe. The wait continues.

In other news…

  • The outlook for the NBA is not good. Dwyane Wade and most of the players rank-and-file believe the 2011-12 season can be saved (as they should since they’re losing paychecks from here on out). Meanwhile, former players union executive director Charles Grantham joined Kareem Abdul-Jabbar and Magic Johnson in voicing their opinion that the players should have taken the last “50%” deal.
  • NHL players are looking at what’s happening in the NBA very carefully, since hockey’s CBA will end next September.
  • Starting Friday, the Florida Marlins will no longer exist. They will be known forevermore as the Miami Marlins.
  • I haven’t posted much on the Minnesota Vikings’ stadium push, simply because it doesn’t seem to have any real momentum or money behind it. The team remains focused on the Arden Hills munitions site in suburban Ramsey County, whereas the City of Minneapolis has sites within city limits.
  • CSN Bay Area’s Nick Rosano has an update on the San Jose Earthquakes’ stadium plans. A permit hearing should be held soon. I’ll attend it if I can.
  • Santa Clara approved the $10 million expenditure for pre-construction work at the 49ers stadium site. $6 million will actually be loaned by the team.
  • MLB is commissioning a study on the economic impact of Miller Park now that the ballpark is well-established and past its honeymoon period. The study will be done by the University of Wisconsin-Milwaukee’s Institute for Survey and Policy Research. The same group did a study shortly after the opening of Miller Park which fell under heavy criticism. The study is due in the spring and could provide ammunition for either pro or anti-ballpark groups in San Jose (yes, I know that the anti-ballpark folks will trot out a Cato Institute study). Since the study is being commissioned by MLB, I expect it to be somewhat baseball-friendly, though not as much as the previous one.
  • The Financial Times has a Moneyball article featuring both Billy Beane and Michael Lewis. It’s a good read and serves as a nice epilogue to the book and movie. There’s also a discussion of the article at AN.
  • A new article by Carol Rosen of the Almaden Resident (a Silicon Valley Community Newspaper) examines the pro and anti San Jose ballpark factions and their stances.

That’s all for now.

11.15.11
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Running log of Owners Meetings news

We’ll be checking the Twitter and the interwebs for any and all news coming out of the owners meetings, which start today. If you see anything new, post it to the comments and we’ll add it to the post in short order.

  • As expected, Jim Crane will be approved as the new owner of the Houston Astros. What’s not certain is the discount on the $680 million purchase price he’ll get for agreeing to move the franchise to the American League. SI’s Jon Heyman reports the discount at $50 million, USA Today’s Bob Nightengale has it at $80 million.
  • MLB Trade Rumors has an item from Joel Sherman of the New York Post indicating that Type B free agent compensation will be eliminated starting this offseason. Changes to Type A free agent compensation may start next offseason.
  • CBA discussions appear to be ongoing, according to Fox Sports. The MLBPA has even postponed internal meetings to focus entirely on the CBA.
  • According to the Chronicle’s Susan Slusser, the A’s are not pursuing oft-injured OF Grady Sizemore, citing their continued stance of not looking at free agents while the stadium issue is up in the air.
  • Added 11/16 9:15 AM – Buster Olney (ESPN Insider req’d) again writes about the A’s being held hostage by the stadium situation, and an impending fire sale. [Sorry, I’m not an Insider so I didn’t read the full article either.]
  • Added 11/16 10:35 AM – SI’s Jon Heyman reports that Crane’s discount will be $65 million, MLB owners paying $35 million and Drayton McLane paying $30 million. He also noted that there is some opposition from AL West clubs, but Crane will be approved regardless. Does this set a standard for compensation to the Giants?
  • Added 11/16 6:35 PM – The Dodgers and Frank McCourt are suing TV rights holder Fox for allegedly trying to “interfere with the sale of the Dodgers and their assets in bankruptcy.” McCourt claims that not allowing bidding on a future TV contract could adversely affect the sale price of the franchise. Fox states that it holds an exclusive negotiating period starting next year for the next contract, and that McCourt’s attempt to sell the rights now is a breach of that agreement. MLB is staying neutral in the matter. This issue is not expected to delay the eventual sale of the Dodgers.
  • Added 11/16 6:50 PM – ESPN reports that Jim Crane was, in fact, required to move the Astros to the American League as a condition of the franchise sale. Vote scheduled for Thursday morning.
  • Added 11/16 10:50 PM – The Chronicle’s Henry Schulman reports that Larry Baer was interviewed by baseball’s executive committee today, which sets up his approval as managing partner – er, “control person” – of the Giants.
  • Added 11/17 9:40 AM – Two additional wild card teams have been added to the playoffs. Wild card teams in each league will probably play each other in a one-game playoff, with each winner playing the division winner with the best record.
  • Added 11/17 11:00 AM – Jim Crane was unanimously approved as the new owner of the Houston Astros.
  • Added 11/17 2:00 PM – Baer was approved as control person, meaning he represents the Giants at the owners meetings without having a controlling ownership stake. Baer is also CEO of the Giants.

Non-owners meeting link: SJSU Political Science professor and TV political analyst Larry Gerston has a short piece at NBC Bay Area about the debate over San Jose giving a land discount to the A’s, and the greater question of subsidies for private parties.

Another NOML: The Trib’s Angela Woodall reports that Oakland’s parcel tax Measure I, meant to replenish funding for city services, failed 62-38 via mail-in vote yesterday.

More as it comes.

11.13.11
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Weekend Merc items about A’s, 49ers + Gas pipeline info

Nothing new on the A’s front, whether it’s the Merc’s Internal Affairs folks reading something into the oft-linked column by the NY Daily News’ Bill Madden, or a throwaway, unattributable line by Gary Radnich. When IA reached out to Lew Wolff, he told them he has not gotten any approval to move the franchise to San Jose, definitive or tacit.

Over in Santa Clara, the City Council is set to approve $10 million for what it terms pre-construction work: site clearing, movement of utilities, etc. Since there is nothing but pavement at the site this shouldn’t be a big deal. Whatever controversy was stirred up about the stadium site’s proximity to a branch of the Hetch Hetchy pipeline has rightly disappeared. A PG&E gas transmission pipeline also runs through the Great America theme park proper, not the stadium site, so there should be no problem there. While the $10 million is a decent amount of money, it’s a drop in the bucket compared to the total cost of the new stadium, which has not yet been fully financed and still has many questions about the Stadium Authority’s ability to get that funding (as long as the stadium remains a one-horse town). The detail in the article seems to belie the 49ers’ suggestions that they could open the stadium by the 2014 season. To understand what it would take, let’s plot how everything would have to work:

  • The article notes that the pre-construction phase will take five months starting in January.
  • Sometime in that five months, funding sources for at least the initial major phases of construction would have to be lined up.
  • Groundbreaking (not the “soft” form discussed in the article) would have to occur no later than May-July to make a September 2014 opening. This allows for minimal slack in the schedule.
  • Unlike the A’s plan for Cisco Field having limited finished or air-conditioned space, the 49ers stadium is expected to have a large amount of finished space because of its role as an extension of the Santa Clara Convention Center. That should make the project take a little longer to complete, though it shouldn’t affect the ability of the 49ers to host games there.

That said, the project continues to advertise a 2015 opening.

Speaking of gas pipelines, the issue of pipeline safety has gotten much greater attention since the San Bruno disaster over a year ago. For my own edification, I took a look at where the gas pipelines run relative to current and proposed stadium sites.

  • Oakland Coliseum Complex: A small pipeline spur runs across the Nimitz to Oracle Arena. It’s likely that this was done specifically to service the complex’s gas needs.
  • Victory Court: Pipeline adjacent to land running along UPRR tracks. Another pipeline branch runs along Fallon Street and Victory Court. This makes sense for a company that extensively uses gas in its business like Peerless Coffee, not sure how it benefits other area businesses.
  • Candlestick Park: No pipeline in the immediate area.
  • AT&T Park: No pipeline in the immediate area.
  • HP Pavilion: No pipeline in the immediate area.
  • Diridon South: No pipeline in the immediate area.

It may seem like a minor detail, but the cost and time required to relocate a transmission pipeline is a big deal. As we have seen in the aftermath of the San Bruno tragedy, there’s no excuse for cutting corners.

11.11.11
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Don’t expect major news next week

Last week I suggested that the Dodgers’ situation would take the A’s off the agenda for next week’s owners’ meetings. The closer we get to the sessions, the more I suspect that this is correct. The one thing that might have allowed the A’s to be brought up next week would’ve been an early CBA announcement, but none has happened as of yet. So it’s A) CBA, B) Dodgers, C) Astros, plus whatever committee stuff is on the agenda. Unless a miracle happens, the A’s will not be up for discussion at all.

That’s bad news for many fans hoping that a resolution to the A’s situation would allow the front office to start building next season’s team in earnest. If Billy Beane and Lew Wolff hold fast to their “no spending while in limbo” stance, the December GM meetings will come and go with little movement. Of course, there’s no stopping Beane from making moves well after the GM meetings (the Swisher trade was in January 2008), and regardless of stadium/site news the team were not expected to be a player for any big free agents. Instead, they’ll make the usual arbitration deadline offers for guys like Coco Crisp and Josh Willingham, and scoop up whatever picks they can when those two are signed by other teams.

This week I’ve seen frequent references to a Bill Madden article at the NY Daily News from last weekend. Here’s Madden’s scoop:

Are the Oakland A’s finally about to know the way to San Jose?

According to baseball insiders, the reason A’s co-owner Lew Wolff, the L.A.-based real-estate developer and close personal Selig ally, is not going to be a bidder in the Frank McCourt Dodger auction (as had been frequently speculated) is because the commissioner has given him tacit assurance that his effort to move the A’s to a new stadium in San Jose is eventually going to be approved.

Once Selig completes his major accomplishment of ridding the game and liberating the Dodgers of McCourt – which hopefully will be before Opening Day – he can turn his attention to the A’s, who have been waiting more than two years for his relocation study committee to deliver its report on San Jose and the San Francisco Giants’ territorial rights there.

Again, Wolff wasn’t going to be caught up in the Dodgers’ bidding process because A) he’s fully committed to the San Jose project and the A’s, and B) the fact that the Dodgers will be sold through an auction means that the team will go to the highest bidder instead of a deal orchestrated by Bud Selig. Note that Madden doesn’t say when Wolff will be granted San Jose, only that it’ll happen after the Dodgers sale is wrapped up. The next logical time for a decision to be made would be the next owners’ meetings, which are usually in mid-January. With several major issues presumably off the table, the A’s plight could finally get the attention it deserves. It’s also possible that the Giants’ managing partner discussion will come up at that point, making the possibility of both coming into play simultaneously that much more acute. The Dodgers probably won’t come up again because with the number of parties expected to bid on the Dodgers, I doubt the prescreening process will be finished by then. It would make more sense for the owners to approve the ownership change in May, as they did with the Rangers last year.

Maybe I’ll be wrong on this. Everything I’m reading and hearing points to events moving in that oh-so-deliberate fashion for the green-and-gold heroes. The quick acceleration of the Dodgers situation – which I’m sad to admit is more important from a business standpoint for MLB – makes it absolutely imperative that Selig addresses them first.

11.10.11
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Redevelopment Hearing 11/10/11

The following is purely my observations and reporting. By no means am I a legal expert of any kind.

Proceedings today were short and sweet, so that and the court’s ban on electronic devices made it impossible for me to liveblog. Not to worry for those interested in the redevelopment saga, as I took fairly copious notes.

The case is S194861, California Redevelopment Association et al. v. Matosantos et al., or more succinctly, Redevelopment v. State of California. You may remember that the state’s summer budget battle largely hinged on the fate of redevelopment agencies, as they would be tapped over the next few years to patch a gaping hole in the state budget. The previous November, Brown was elected along with Proposition 22, a piece of legislation designed to prohibit raids on RDAs. The case is based on the idea that the twin bills passed in the Legislature, ABX26 and ABX27, violated Proposition 22 and Article 16 of the State Constitution, and thus should be struck down.

A little background is in order. In short, ABX26 bans additional borrowing or bonding by RDAs retroactive to the beginning of the year. It outlines how payments are to be made to the State or local school districts (if cities choose to use that alternative). ABX26 prohibits additional functioning of any RDA if payments to the state/school districts are not made. ABX27 explains how RDAs or successor agencies are to function if payments are met. The program ABX27 details is called the Voluntary Alternative Redevelopment Plan.

Representing the CRA was Steven Mayer, a director at SF law firm Howard Rice. He faced two opponents, Ross Moody from the State Attorney General and James Williams from the Santa Clara County General Counsel. (After oral arguments were done, Mr. Williams’ mother stood behind me in the “device check” line, beaming with pride. Her son did a good job, BTW.)

As the petitioner’s counsel, Mayer was up both first and last. Despite the term “oral arguments,” the session doesn’t allow for big sweeping speeches by either party. Instead, the lawyers were peppered with questions by the seven justices. Immediately, Justice Joyce Kennard framed the argument in a question, asking Mayer if the case was basically the State and Schools vs. Redevelopment Agencies. Mayer didn’t answer the question directly, instead saying, “That is the effect” of the legislation. He went on to claim that the “vice” of the twin props is not that they dissolve RDAs, it’s that it transfers money to the state. Moreover, there are corner cases or gray areas in which the City (or County) loaned money to its RDA. Those types of debts aren’t guaranteed, which puts some cities, especially ones with large RDAs, at special risk. Moody’s rebuttal was that the cities who made such loans should have known how risky such transfers were and that they wouldn’t necessarily be protected. Most redevelopment-related financing is done via bonds backed by tax increment, so it’s easy to see how the money was raised, if not how it was spent. Loans from a municipality to an RDA don’t have such backing. Moody pointed to the fact that ABX26 has language that allows for “all enforceable agreements will be discharged.”

A major sticking point between the two parties was how the two bills functioned together. Moody and Williams argued that the two laws could be enacted separately. Williams actually argued for ABX26 to be upheld and ABX27 to be struck down, which would effectively kill RDAs dead. Mayer considered ABX26 a life-or-death matter for RDAs and argued for it to be struck down, while ABX27 could be upheld and RDAs could continue to exist, albeit in a somewhat neutered form. Moody spoke in favor of both being upheld. There were several questions from the Justices trying to get at whether the two laws are separate or, as Mayer put it, “joined at the hip”. Deciding that may be key to both laws’ eventual fate.

Complicating matters is Mayer’s admission that 90% of RDAs throughout California are getting ready to make payments in compliance with the new laws should they be upheld. As I’ve been reported throughout the summer, many cities are fighting the laws through the CRA lawsuit while hedging their bets by setting aside money for payments.

At the heart of the matter is the constitutionality of the laws. Mayer argued that because of the combination of redevelopment being enshrined in the Constitution and the effects of Propositions 1A and 22, the state was not authorized to either raid RDAs or kill them. Moody argued that redevelopment was enacted by statue in 1945, and only the power to raise funds via tax increment was enshrined in the Constitution in 1952. That’s an important distinction to make as it’s the difference between having the Legistature pass a bill and the public approving it via referendum. Therefore, the ability to create and run RDAs was created by statute and could be taken away by statute (ABX26/27). The Justices, perhaps looking for a third way, asked Moody if cities could have special tax imposed for redevelopment projects upon voter approval. Moody replied that this could happen.

All in all, I came away from the hearing with a much better understanding of the issues and what’s at stake for all parties. The fact that a lawyer representing Santa Clara County was present was no accident. The City of San Jose is a party in this lawsuit, and it only stands to reason that the County, which has had a contentious relationship with the City for years (if not decades), took up the fight as well. Discussion outside the courtroom centered around the timing of the Justices’ decision, which could be as early as mid-December. Regardless of the actual decision, that would be the best timing since it would allow the State and municipalities to plot their course with at least some advance notice. If the decision came in January, around the time of the first payment due date, the whole thing could become highly chaotic. That’s the last thing California and its cities and counties need.

11.09.11
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News for 11/09/11

Tomorrow morning I’ll be in SF to check out oral arguments for the State vs. Redevelopment case. If I can liveblog it, I will.

The regular media (SFGate, Merc, MLB.com, KGO) covered yesterday’s proceedings fairly well, though I’m surprised there wasn’t a bigger mention of the discussion about the referendum requirement. No matter, the San Jose City Council formalized the requirement by amending the motion just before passing it. Still, I don’t think this is the last of the referendum discussion.

There’s other news on the ballpark/stadium front:

  • The Royals may or may not have agreement in place to sell the naming rights to venerable Kauffman Stadium.
  • Rangers Ballpark in Arlington is undergoing $12 million in renovations, including a major revamp of the area behind centerfield. Changes will include relocation of the suboptimally located visitor’s bullpen, the addition of an indoor club and several concession stands.
  • The University of Washington’s Husky Stadium just started a massive $250 million renovation project. The track will be removed, the field dropped four feet, and more seats will be added close to the field, similar to the changes at the LA Memorial Coliseum. In addition, new locker room and training facilities will be added, as well as premium seating options. Like the $321 million Cal Memorial Stadium renovations, these will be largely dependent on donations for funding. The Huskies will play next season at CenturyLink Field (formerly Qwest Field).
  • The Populous architect overseeing the 2022 Qatar World Cup project believes that the venues will not need air conditioning. The goal is to make the venues carbon neutral, something that made the winning Qatar bid attractive. A company called Arup Associates has a demo of the technology in place at a 500-seat stadium, though you could naturally be skeptical about the ability of the tech to scale to a venue with 100 times the spectators.
  • The Sacramento Bee’s Marcos Breton wonders what the ongoing NBA lockout means for the local arena effort.
  • A report on NPR’s Morning Edition goes over the economic impact of the lockout.
  • A’s naming rights sponsor Cisco Systems (Nasdaq: CSCO) beat the Street today, which may signal an upswing for the networking giant. The stock was down during the regular session but up in after hours trading.

That’s all for now.

11.08.11
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San Jose City Council Session 11/08/11 Liveblog

Turnout is better than most Council sessions, but that’s not saying much. I expect at least a dozen speakers. The livestream can be found here.

Council Chambers as of 1:45 PM. Ceremonial items are first up, agenda item should be taken up at approximately 2 PM.

2:00 PM – Mayor Chuck Reed is giving his best sales pitch in his plain-spoken, Midwestern way. Effectively, he’s saying that in exchange for the land, San Jose is getting $7 million for the land and $1.5 million per year for the general fund. (There’s a slide explaining this, I’ll put it up when I get the chance.)

Mayor Reed's support slide explaining the economic impact of the ballpark on San Jose

2:10 – SJ’s Director of Economic Development Kim Walesh is further talking economic impact, states that ballpark is 3X that of 49ers stadium. (I am not in support or opposition to this statement, I just think it should be taken with a grain of salt.)

2:17 – Another staff member points out that A) Proceeds of land sale cannot go to the General Fund, and B) There are no sale or development opportunities for the land in the near future.

2:20 – Public comments are being taken first, then questions from the Council. Baseball San Jose principal Michael Mulcahy is first in support, followed by new Silicon Valley Chamber CEO Matthew Mahood. Arguments in favor are as much about economic growth as they are baseball.

2:23 – A lawyer representing Stand for San Jose is up next, saying that EIR and S-EIR are inadequate. A 65-page comment letter is being submitted.

2:25 – Rose Garden and Shasta/Hanchett neighborhood group representatives decry the use of public funds for the project. Argument is that “you can’t short sell bonded public land.”

2:28 – Another speaker with a short slide show, followed by Marc Morris, who says the whole thing is a bad deal.

I should point out that the anti-ballpark speakers are getting a smattering of applause.

2:33 – Neil Struthers of the South Bay Building and Construction Trades Council speaks in support, followed by Scott Knies of the San Jose Downtown Association, also in support. Those are the last public comments.

2:38 – SJ legal is responding in part to the comment letter by the Stand for San Jose lawyers, disagreeing with many of the conclusions made within the letter. Interestingly, the letter mentions Victory Court as an alternative site. I agree! How’s that coming along? Where’s the EIR?

2:42 – Councilman Sam Liccardo speaks first, obviously in favor of the ballpark and land deal. So does colleague Pete Constant. Constant addresses the matter of using these public funds for city services instead of the ballpark: “If we could, we would.” (Kind of a shaky argument there given the circumstances of redevelopment.) Cites the Arena as proof positive of economic impact of sports (which in the Sharks case is difficult to argue against).

2:47 – Councilwoman Madison Nguyen supports with a caveat: she asks if the referendum is necessary. Mayor Reed and City Attorney John Doyle say that it is, though Doyle says that it’s ultimately the City Council’s call. (Could be extremely controversial if there’s no vote.) Nguyen explains that she believes the public deserves the final say.

2:50 – Councilwoman Rose Herrera echoes something Liccardo said (paraphrasing), “You don’t come across $500 million privately funded projects everyday.”

2:51 – Councilman Donald Rocha (recently elected) asks about additional community use beyond the 10 days per year specified in the option agreement. Doyle responds that City kept a suite at the arena, but that was because it was publicly funded. It would be different at a privately financed ballpark. (The lack of built-out space/square footage at the ballpark may make this harder to negotiate as well.)

2:55 – Councilwoman Nancy Pyle reiterates that redevelopment proceeds can’t be used for city services or employee benefits. Asks about 1 year as opposed to 2 year option. OED staff says that 1 year was not long enough (!), 2 years is more reasonable. (Could that mean that the decision is that much further off in the distance?)

2:57 – Councilman Ash Kalra asks if City has received any indication from baseball that it will accelerate its process if City does. Reed says that owners meetings next week may decide, or meetings in January, etc. Doyle says that fate of redevelopment is also a factor. Doyle explains how funds are used, explained that $1 million has been spent on relocation costs. Staff reinforces notion that per option agreement, A’s cannot use land for anything other than a ballpark.

3:10 – Council is still trying to clarify the need for a referendum. Liccardo says that it’s still entirely up to the council. (Seems like they’re going back-and-forth between CYA and “Is it safe?”)

3:11 – Councilman Xavier Campos talks about continuing the history of the A’s and the benefit of that, even though he’s a Giants fan.

3:12 – Liccardo emphasizes that if option is not exercised, City keeps $200k and land.

3:13 – Reed bookends the Council statements with a closing argument in favor. Expresses desire not to have land sit idle for 10 years as a parking lot. Thanks Lew Wolff for the opportunity.

3:15 – Motion to approve option agreement passes 10-1 in favor. Councilman Pierluigi Oliverio, who I recall did not speak on the matter, is opposed.

That’s it for now.

11.07.11
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SJ City Council to consider land deal on Tuesday

Update 10:25 PM – Not surprisingly, the Merc’s editorial board has come out in favor of the land deal.

Procedurally, the approval of the land deal to complete the Diridon ballpark site should be a slam dunk, considering the SJDDA (which approved it in the first place) and the City Council are effectively one and the same. Still, since tomorrow’s City Council session will be a public affair, there should be a mix of voices pushing to persuade/dissuade the Council. In particular, I wonder if any/many of the Occupy San Jose protesters will attend, since they will be in close proximity. Far be it for me to expect fireworks at a San Jose City Council session, but I’ll be attending anyway. The session will be at 1:30 PM at Council Chambers.

City has also posted the agenda for the session and an all-important memo containing the details (PDF) of the deal. Some of the finer points:

  • The issue at hand is the approval of an option agreement (end of memo), in which terms are laid out for the A’s to purchase the land. That’s not the end of it, because a formal purchase agreement will have to be drawn up within 90 days of execution of the option agreement.
  • Quoting from the memo directly here: “The Redevelopment Agency paid approximately $25,160,000 for acquisition and relocation costs for the entire ballpark site.” That’s a bit misleading, because the land being sold does not include the parcels that are yet to be purchased to complete the ballpark site.
  • Colliers International estimated that the entire value of the site is $38,250,000 if for its “highest and best uses”. Appraised solely for a ballpark use, the land is worth only $19,100,000. Back when Diridon was first discussed in 2005, the market value of the entire Diridon site was probably close to $70 million. If they had purchased the PG&E substation and the land fronting Los Gatos Creek, the cost would’ve soared over $100 million easily.
  • Purchase price of the site for AIG (yes, that’s the “Athletics Investment Group” if you haven’t been watching local broadcast disclaimers) is $6.975,227, or 36.5% of the appraised value, and does not include the already public land within the site (Montgomery and Otterson Streets).
  • AIG’s option to purchase the site is for two years ($50,000), with the possibility of an additional year ($25,000).

This is the only item on the afternoon session agenda, which should allow for a lengthy discussion and comment period. Baseball San Jose put out a letter on its blog providing talking points on the deal.

11.06.11
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CBA Talk: Cost certainty is a four-letter word

After another 8-hour marathon negotiating session, the NBA and NBPA again found themselves without any kind of agreement for a new CBA. This time, Commissioner David Stern also threw down the gauntlet, leaving the owners’ newest offer on the table for the players to stew over until the close of business Wednesday. If the players don’t accept the offer, the league will pull the deal and offer something measurably worse. First, let’s go over the basic tenets of the league’s offer.

  • League offers 49-51% “band” of BRI (defined league revenue) to players. This is essentially the same as the 50% offered to the players previously, but with a few wrinkles. The base offer is 50% to players, plus 1% annually set aside to fund retired player benefits. The 50% share would be dependent on the league reaching an unspecified BRI level, probably $4 billion. Any amount over that threshold would be split 57-43 in favor of the players, up to a total cumulative BRI split of 51% for the players. Running the numbers, for the players to reach 51% the league would have to beat the $4B revenue projection by $666 million, or 16.67%. That led NBPA president Derek Fisher to characterize the 51% figure as “impossible” to attain. In a move reminiscent of the NHL’s CBA, the players would be limited to 49% of BRI if BRI were significantly lower than the projection (also by an unspecified amount).
  • Escalating Luxury Tax. The previous dollar-for-dollar tax would be transformed into a much more punitive tax, starting at $1.50 per dollar over the tax threshold for the first $5 million over, then $1.75 for the next $5 million, $2.50 for the next $5 million, and $3.25 for the next five million. In addition, a “double tax” would be assessed at either $1 (league) or $0.50 (union) for teams who pay the tax three out of five years.
  • Variable Mid-level exception. There would actually be two definitions of the exception. For teams not over the luxury tax threshold, they’d be able to pay $3-4 million for 3-4 years. Teams over the threshold would only be able to pay $2.5 million for up to two years. There’s also some talk of having the maximum length of a MLE contract vary from season to season. This is clearly the most confusing part of the discussions and may be in flux, so expect some corrections in a few hours.
  • Sign-and-trade modifications. Luxury taxpayers would no longer have the ability to do sign-and-trade deals. If a team is over the cap and tax threshold and wanted a marquee free agent, they could work out a trade with that player’s previous team by having the previous team sign him for a lengthy max deal, then trade him immediately to the desired team for a mix of other players and draft picks.
  • Offer valid until close of business Wednesday (November 9).

Those five tenets were suggested by federal mediator George Cohen, and subsequently adopted by the league. A sixth item involving higher shared revenues for teams who don’t trigger the luxury taxes was not approved. For their part, the players aren’t backing off their request for 52.5% of BRI, though Fisher seemed to be somewhat amenable to 51% if it were a truly achievable number.

The Wednesday ultimatum sort of acts as a mini Doomsday, since the NBA will offer less if no deal is reached and it will probably cancel games in December. Any hopes of being able to play a full 82-game schedule in 2011-12 would be dashed. And there’s the growing possibility that the union will take a page out of the NFLPA’s playbook by calling for the union to decertify and an antitrust lawsuit against the NBA.

BRI for the 2010-11 season was $3.8 billion, which was up from 2009-10’s $3.65 billion, so it’s not hard to see the $4 B target as achievable. That’s where both sides are getting the “$40 million equals 1%” argument from. The players got 57% of BRI in the previous agreement, so a drop to 52.5% or 50% is a major concession. The problem for the players is that there’s a huge difference between the economy back when the last two CBAs were ratified and today’s economy. The NFL accomplished a major pullback in its negotiations with its players. The NHL is looking at the NBA talks with great interest, and is rumored to be pushing for a major pullback as well. MLB has no guaranteed payout to players as it has no salary cap or floor, but it regularly pays less than 50% to its players. The new trend for the four major North American sports is for the player-league split to drop to between 48% and 52%, depending on how revenue is defined. It’s quickly becoming a matter of bargaining against the other leagues, perhaps more than it is about preserving or changing existing agreements.

Every week lost in the 2011-12 NBA season translates to $100 million lost in game revenue, including tickets, other arena revenue, and broadcasting revenue. Over the span of ten years, which is the preferred CBA length for both NBA and NBPA, a few hundred million is not that much to lose compared to the impact of losing 2.5% of BRI over the course of ten years ($1+ billion). The league may see this as a test of the union’s collective will. Some want to play ASAP, others want to go the decertification route. It’s getting to the point that several weeks of games (and thus paychecks) will be lost and unsalvageable. There’s no guarantee that by holding out, the players will end up with a better deal. It didn’t work for the NHL players, and it didn’t work for the NFL players. MLB and the MLBPA must be laughing at their counterparts. Their biggest bone of contention is fixed slotting for first round draft picks, which the players union considers its own miniature form of salary cap. Somehow both sides have convinced the players that the lack of a salary cap/floor/guarantee is best for all concerned, despite the players getting less combined than their counterparts. But they get the biggest, longest individual contracts with most guaranteed years. While baseball’s business model does little for broad competitiveness among teams, it generally works for the players in terms of meritocracy and tenure. That’s hard to argue with when the other leagues have so much trouble arguing over details.

11.03.11
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Buster Olney is not all sunshine and roses

During this afternoon’s installment of The Drive with Brandon Tierney and Eric Davis, ESPN’s Buster Olney showed up for a segment on baseball and hot stove action. Among the talk of free agents was a discussion between the three about the state of your Oakland Athletics. As with the Wolff interviews, I’ve taken the time to transcribe the 5+ minute discussion. This time I won’t provide any commentary. I’ll leave that to you in the comments. Keep in mind that this was Tierney and Davis asking Olney on his opinion about the franchise, so do not take it as gospel. Instead, consider it simply as the view of a prominent national baseball writer who is not known for mincing words. Also, remember that Olney’s musing last year got the ball rolling on the Wolff-to-Dodgers rumor. That’s how powerful his word is.

Without further ado:

Davis: Things are just dire. They’re a mess over in Oakland.

Olney: Terrible.

Davis: It’s horrible over there. What do you hear that they’re willing to do in baseball to help this club?

Olney: Well, the Athletics continue to be strung along with the hope that they’ll eventually end up with a ballpark in San Jose. Here’s the thing. They started that Blue Ribbon panel 2 1/2 years ago, that’s 1 1/2 years longer than it took the Warren Commission to issue its report on the Kennedy assassination.

Davis/Tierney: *chuckle*

Olney: The bottom line is that they haven’t gotten any kind of traction from MLB. Now the Dodger situation is getting settled. The labor agreement is getting settled. Maybe at some point soon the Athletics – who to me right now have less hope than any organization in baseball – they are rotting. Maybe if those things get settled out that’s when you’ll see MLB go to the Giants and say, “Look, we need to talk. We need to figure out a way where you get the Oakland territory and Oakland gets San Jose.”  That way they can have a future. Right now the Athletics have no future and that’s why Josh Willingham is leaving and their other free agents are leaving, and they’re really not going to step in and do anything about it because their future is so uncertain.

Tierney: I’ll tell you. It is sad and I think you lay it out well. Willingham, there’s no doubt that he’s gone. DeJesus, Matsui, Coco Crisp. I guess the question is besides Jemile Weeks and Pennington who do we even know on the team next season?

Olney: And the pitchers.

Tierney: Yeah.

Olney: The problem is now though is that let’s say that midway through next year baseball stepped in and said, “Guess what? You get a stadium in San Jose.” All these pitchers they developed, the Trevor Cahills, the Brett Andersons, Gio Gonzalez. By the time they actually break ground and make progress and starting building that park those guys are going to be trade bait.

Tierney: That’s true.

Olney: They’re gonna have to move them out of there because they’re not gonna keep them around, and they’re not gonna sign them to long term deals. It’s really a sad situation.

Tierney: …Lew Wolff, where does he rank in terms of wealth amongst owners? I’m just trying to connect the dots here.

Olney: He’s got wealth – and I’ve always believed this – for example, when people rip the fans in Tampa Bay for not going seeing the Rays. My feeling is those people who live there, they made that decision based on their information. And I don’t blame them. If they don’t think it’s convenient, they don’t think it’s attractive, they’re not obligated to watch their games. I think in the same realm I don’t think Lew Wolff is obligated to pour his money down a hole. The history of Oakland Athletics, whether anyone likes it or not, they cannot draw there. They didn’t draw there with Reggie Jackson. They didn’t draw there with the late Billy Martin’s teams. They didn’t draw there for the Dennis Eckersley teams, the Tony LaRussa teams. They don’t draw now. I think you’ve got a lot of history which tells you that site and that place is a loser if you’re the Oakland Athletics.

Tierney: Wow. *laughs* That is just desperation mode.

Other than personal attacks, anything in that discussion is fair game in the comments. Keep it clean.

Have a nice weekend, everyone?