Update 2/24: I’ll put this up one more time, and that’s it. Thanks for your support. Please see below this post for new content.
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We’ve talked a lot in the past year about how the Maloof family is broke and can’t do anything on their own, whether it’s funding their piece of a downtown arena or sell anymore pieces of the Kings without losing control of the franchise. Travel west along I-80, and you can see that Oakland and the Raiders are in the same situation. Oakland has had to rob Peter to pay Paul for the Raiders study, and the prospects for the Coliseum are bleak without some extremely creative (and probably public) financing. Al Davis had his estate structured so that his son Mark could keep control of the Raiders, but the Raiders can’t sell additional shares of the club without giving up control. Overextended as they all are, they’re still under the gun to come up with a future stadium solution that works for both parties, while not adding significantly to either party’s debt load.
That puts the Oakland/Alameda County and the Raiders in very tense dance over how much each side will pay to create an anchor for Coliseum City. Make no mistake, both sides will have to pay something, starting at $100 million depending on how extensive the project will be. If there’s a new stadium, especially one with a retractable roof, up to $200 million could be provided by the NFL. If it’s a redone Coliseum, the NFL will offer significantly less. It’s all based on the scale of the project.
$143.75 million from City of Charlotte/Mecklenburg County via a 1% food and beverage tax hike (47%)
$62.5 million from North Carolina (20%, pending state approval)
The actual improvements will cost $250 million, the rest will cover the establishment of a maintenance fund, costs associated with staging City/County events, and other gameday expenses such as traffic control. The stadium, which was privately built by Panthers owner Jerry Richardson, will not get any major structural changes such as the addition or elimination of seating decks. Accessibility will be improved by the addition of escalators. Video boards will be replaced. Obviously those items won’t cost $250 million by themselves, so there will be other buildouts elsewhere in the stadium. Perhaps they’ll expand concourses, build field suites, or create additional premium spaces inside the stadium. BofA Stadium still ranks as excellent in terms of design, sightlines, and amenities, so the new improvements may be what Richardson wants to make the venue a viable future Super Bowl candidate. The Panthers would be guaranteed to stay and additional 15 years if the deal is approved and improvements completed.
Sidebar: It was the enormous success of the Panthers’ initial PSL plan that helped sell the 1995 Coliseum renovation plans to Oakland/Alameda County and Al Davis. The Panthers paid for their entire stadium with PSLs and other private sources, with the City only providing a cheap land lease. Where the East Bay went wrong was in severely overestimating demand.
Earlier this morning, Andy Dolich spoke with the Rise Guys about the Raiders’ tarp news and the prospects of Coliseum City. While he continues to believe that the best place for the A’s and Raiders is the Coliseum, his vision has shifted a bit. In 2010 he talked about a new multipurpose stadium with “technology” that could accommodate both teams. Now he prefers a separate ballpark at the complex and a refurbished Coliseum, which he estimated to cost $300-400 million. My immediate response:
Dolich thinks that Raiders refurb would cost $300-400 million. I think that’s way too low. $500 mil to start + existing Mt Davis debt.
Considering what’s budgeted for the Panthers and the Bills, does anyone think a $300-400 million budget as realistic for what the Raiders and the NFL would want? Frankly, I think that by the time everything got going, $500 million may be undershooting it by quite a bit. Dolich also thinks the Diridon ballpark cost could rise to $600-700 million based on additional costs to get the site ready. I tend to disagree with that, though if this saga keeps dragging on $600 million is an easy reach. Even if the land is free, why would two-thirds of a larger football stadium cost half as much as a nearly half-capacity ballpark?
Also, consider that we explored a Coliseum refurb on this blog back in 2008. It would’ve involved gutting the original bowl and replacing it with a new West stand and a single deck of seats along each end zone.
Colors denote different seating decks or phases of development
The project as described back then would’ve taken two full NFL seasons and about 18 months to complete, with the Raiders playing in a 47,000-seat temporary configuration while construction work progressed, similar to their 1995 season at the Coliseum. Complicating matters is that Lew Wolff wants an out clause in his five-year lease extension request if the Raiders begin this very type of project. That makes sense, since there’s no way the stadium could host baseball during this period.
Let’s say that a refurb could be capped at $500 million. The breakdown of costs by party could look like this:
$200 million from Oakland/Alameda County (Coliseum Authority)
$200 million from Raiders
$100 million from NFL
The Coliseum Authority could get their piece from land leases, new stadium taxes, or other sources. However, they have factor in the remaining $100 million of debt on Mt. Davis since it affects City and County budgets every year ($20 million annual subsidy). The Raiders and the NFL could work together to sell new PSLs, naming rights, etc.
The NFL has two, maybe three $200 million slots in its G-4 program for new stadia, one already claimed by 49ers. Another could be the Vikings or Falcons. In theirs and the Raiders’ cases, the teams have to at least match the NFL spend, which means that they have to come up with $200 million of their own. The 49ers came up with closer to $800 million, though much of that is money borrowed through the quasi-governmental Santa Clara Stadium Authority. Chances are that the Coliseum City stadium project would borrow through the Coliseum Authority.
Oakland pols will want as much private funds going into the project as possible, but the Raiders will be wary of digging themselves too deep a hole. That stands to reason because of poor suite and club seat sales over the years, along with mediocre season ticket rolls. There’s been a lot of talk about Oakland not requiring a vote, none about how much it’s willing to invest besides land and infrastructure improvements. Unfortunately for Oakland, land and infrastructure only gets you in the door these days. How much skin will each side put into the game? The answer won’t be known without a (hopefully public) discussion about what it’ll take to make Coliseum City happen.
The San Jose Earthquakes are set to start building their 18,000-seat, $60 million soccer specific stadium on February 26, according to the Silicon Valley Business Journal’s Lauren Hepler. That comes four months after the venue’s world record groundbreaking ceremony.
Shovels set in the dirt prior to the October groundbreaking ceremony
The timing of the start of construction will give the Quakes roughly one year to complete the stadium. Major League Soccer’s regular season runs from the beginning of March until the end of December. The Quakes will want to do at least one preseason game that attracts as large a crowd as possible and another smaller event that it can use as a dry run. Plus there are those always fun “group flushing” tests and other tasks that need to be completed to properly test the facility’s readiness. A web cam will be placed at the site for fans to monitor construction progress.
Some smaller minor league ballparks have been built in a year or less, so it’s possible that the Quakes stadium can be finished in a year. By doing the bulk of the major work during the dry months, the last three winter months should be fine for buttoning up the building. Devcon, the same company working on the 49ers stadium in Santa Clara (along with Turner Construction), has long been tied to this project. If the progress in Santa Clara is any indicator, the Quakes’ new digs should proceed at a rapid pace. By comparison, Houston’s 22,000-seat BBVA Compass Stadium took 15 months to build, forcing the zombie-Quakes/Dynamo to play on the road for two months.
It’s funny that a stadium that will be about one-quarter the size of the 49ers’ stadium will also take 40% of the time to build. The Quakes stadium will be a far less complex building, with a single ground level concourse underneath the seating bowl. A long wait for the inordinately patient Earthquakes fanbase is nearing its end.
This week the Raiders released a seating map for their 2013 season. The startling revelation from this release is that the Mount Davis upper deck seats have been completely eliminated, as have the outer sections of the original third deck.
Sections for sale do not include the outer 4 sections of the original upper deck or the newer Mt. Davis sections
A look at 2012 attendance sheds some light on what the Raiders’ motivation may be. While the first two home games were considered sellouts (for blackout purposes, not complete sellouts), attendance dropped off quickly as an unappealing group of non-division opponents accompanied a six-game slide into irrelevance. Whatever goodwill was earned during the “Oakland Loves Its Sports Teams” rally was squandered by Thanksgiving, with many fans already looking forward to 2013 when the team was forgotten locally as the 49ers continued their surge into the playoffs.
2012 Raiders Home Attendance
The stated football capacity of the Coliseum 63,132 64,200according to the Raiders, already the second (or fifth) smallest stadium in the NFL. If Mt. Davis and the ends of the original upper deck are removed, the new capacity should will be 51,000 53,250, with Mt. Davis accounting for some 10,000 seats by itself. While this would increase the team’s chances of hitting every game’s blackout target, if the NFL approves this change it’s tantamount to admitting that those seats are unsellable, at least while the team remains mediocre. CSN’s Paul Gutierrez notes that there was only one home blackout in 2012 because of the Raiders’ use of the 85% rule, so blackouts may not the issue. Instead, the Raiders may be eschewing the 85% plan altogether, because it somewhat disincentivizes sales above the 85% mark of regular, non-club seats. Per the CBA, revenue from marginal sales above the 85% mark had to be split evenly between the Raiders and the visiting team. If the Raiders presell a ton of the best seats to Raider fans and not invading fans, they might be able to boost the home crowd feel even as fewer seats are available. That was certainly the case for the A’s at the end of the 2012 season and in the postseason.
HNTB, the firm that architected the Coliseum renovation in 1995, was commissioned by the Chargers to examine deficiencies at Qualcomm Stadium compared to other newer stadia. Interestingly, the study included the Coliseum, even though the Coliseum is less than half new. Included in the study was a measurement of the highest, farthest seat at the 50-yard line for each stadium. That seat on Mt. Davis is 336 feet from the 50, the farthest of the 10 venues in the comparison. While the same seat on the opposite side of the field was not measured, given what is known about the bowl that seat is probably 100 feet closer.
If there’s a winner in this, it’s the LA firm that Lew Wolff contracts to remove and replace the A’s tarps every season. Looks like they’ll be getting a new customer right quick. Fans also get very inexpensive seats in the process. Wolff himself is probably feeling rather victorious today. Losers? 11th hour or walkup ticket buyers. There will be a much smaller inventory for the secondary market, which in recent years had tickets on Mt. Davis for less than $10 on StubHub.
Raider fan, what do you think about this? Good/bad move? An admission that the team will be terrible? Sound off below.
Think about it. Barely over a year from now, a crew will assemble at Candlestick Point and take down the venerable, unlovable, frequently renamed Candlestick Park. Developer Lennar wants the land clear to redevelop as soon as possible, and that means reducing the drafty concrete bowl to dust. The 49ers’ Santa Clara stadium is moving forward by leaps and bounds, setting aside doubts about its readiness for the 2014 NFL season. As with most big demolition jobs, the ‘Stick’s destruction will have a ceremony for 49ers and Giants fans to remember the old stadium. The Giants moved over a decade ago and haven’t looked back, the 49ers appear to be doing the same in moving two counties south.
There’s time for a proper eulogy when the event actually occurs. For now, let’s look at the events that led up to this point.
It’s easy to forget that in 1997, the Eddie DeBartolo, Jr.-led 49ers proposed a new stadium flanked by a shopping mall and a massive garage (9,000+ spaces) at the ‘Stick. It’s all a very 90’s vision, with a large amount of public financing via sales tax increment, a grossly underestimated construction cost ($200 million added within a year), voting irregularities, and a new outlet mall designed to complement existing SF shopping districts such as Union Square. Voters approved the $100 million set aside for the plan, which languished for years as the 90’s dot-com boom went bust and DeBartolo was caught bribing former Louisiana governor Edwin Edwards $400,000 for a casino license. (Edwards, who is also infamous for his “live boy, dead girl” quote, has a reality show starting this month featuring him and his new wife, who is 50 years his junior.)
The 49ers’ Candlestick replacement/mall plan was oh-so-90’s
Even as the plan withered and died when DeBartolo’s less spendthrifty sister and brother-in-law took over the team, the $100 million remained there if someone, anyone was interested in taking over redevelopment of Candlestick Point. So when the team started talking with Santa Clara about building a stadium near the team’s headquarters, SF Mayor Gavin Newsom had the plan dusted off and brought in mega-developer Lennar to give it an update. Lennar moved the stadium site from Candlestick Point to Bayview/Hunters Point, dropped the mall idea, and replaced it with various income-level housing developments and an office park. A carveout for the stadium with a green parking lot was envisioned as a fallback plan just in case Santa Clara fell through. Voters in 2007 (10 years after Eddie D’s plan) approved the Lennar plan. The 49ers remained lukewarm to the stadium because of costs to cleanup contaminated land and the cost of a short bridge to bring vehicular traffic from the Candlestick side to the Bayview. Things only got worse when the stadium was pitched as the anchor for a future Summer Olympics hosting effort, the complexity and uncertainty of the bidding process scaring off the 49ers and the league.
Lennar’s Candlestick/Bayview/Hunter’s Point redevelopment plan
Newsom tried to “warn Santa Clara” not to tie up public funds on the stadium, while State Senator Carole Migden wrote SB 49, a Hail Mary of a bill designed to prevent teams from moving within 90 miles of their current home (within territory). That bill, like the stadium mall plan, went nowhere, leaving SF with no leverage and a still-uncertain plan to keep the team in town. The 49ers and the NFL went on the offensive in Santa Clara, went door-to-door to sell their stadium, and got voter approval in 2010. Since then it’s been all details such as the EIR process and a couple of NIMBY-related lawsuits, bringing everyone to last year’s groundbreaking ceremony and the impressively fast construction work since then.
A footnote to this story is the presence of one Fred Blackwell. Blackwell served as the SF Redevelopment Agency’s Executive Director from 2007 until 2011, then jumped across the bay to take Oakland’s Assistant City Administrator job (also redevelopment). While Mission Bay had most of SF’s redevelopment focus over the past decade or so, the ongoing state of affairs in the southeast part of the city always made it a target area. Mission Bay was always the one with real economic promise. Still, Blackwell oversaw much of the debate between Lennar, SF’s Board of Supervisors, and community groups all looking out for various interests and generally not getting very far very quickly. Eventually, the project’s EIR totaled 7,700 pages and Lennar shelled out millions to nonprofits in the name of affordable housing and other community benefits.
Blackwell may feel he’s in a similar position to 2007. During last month’s Coliseum Authority meeting, it was revealed that the Raiders and the NFL really just want to focus on a simple stadium, not the broad vision that the City of Oakland is considering. Like the scope creep that helped sink the SF stadium concept, a wide ranging and ultimately very complex redevelopment scheme in East Oakland may make it difficult for the Raiders to commit to staying if the vision remains fuzzy and exponentially more difficult to pull off than a stadium-only plan.
It’s easy to see why the Raiders want to narrow their scope. They’re not making claims of a renaissance in East Oakland. The last thing the team or league wants is to see the stadium jeopardized by a dependency on another component of which it has little or no control.
Getting the two visions (one is effectively a subset of the other) together will not be easy. A look at the pattern of NFL stadium development over the past 20 years shows that few have been part of any kind of urban renewal plan, unlike ballparks or arenas. With the limited number of football games in a season, this makes sense. The notable exception to this rule has been Lucas Oil Stadium in Indianapolis, which is not part of any redevelopment scheme, but rather an expansion of an existing convention center footprint. The Atlanta Falcons want to move to a site closer to the Georgia World Congress Center for a similar purpose. In Oakland, the stadium may have a retractable dome, which would inflate its cost significantly but also provide greater flexibility to hold different types of events. Even with ballparks, urban renewal is not a given. The St. Louis Cardinals’ Ballpark Village is finally starting construction nearly a decade after Busch Stadium opened.
Can Blackwell and Oakland pols pull together all of the resources, the financing, and the political will to execute a vision that’s projected to be twice as expensive as the scaled down Lennar-Bayview plan? Not even mighty SF could prevent the 49ers from escaping all of the craziness. It would be hard to blame the Raiders for following a similar, simpler path.
A lot to go over in this edition. Thanks to all who have been contributing. The response has been excellent so far, I hope it continues. I have a couple of surprises in store for you generous folks.
Update 2/5 12:00 PM – Sacramento Mayor Kevin Johnson had yet another press conference to give an update on the Kings/arena effort. The big takeaway is that there is not yet an announcement on a big money equity group. That may happen next week, in conjunction with the City submitting its arena plan to the NBA. Meanwhile, billionaire Ron Burkle looms larger than ever, as he has emerged as a potential bidder for AEG. Keep in mind that Burkle would have to partner with private equity to buy AEG. It would make sense for Mayor Johnson and Sacramento if Burkle, Mastrov, and silent money were to come in on a package deal for the team and arena, similar to Guggenheim Partners’ overwhelming bid for the Dodgers.
The Giants are reportedly being less strident in their concerns about a Warriors arena at Piers 30-32 in San Francisco. The sides are hashing out their differences with the City in the middle. 2013 must mark a new era of a “kinder, gentler Giants”. [SF Chronicle/John Coté, Neal J. Riley]
The 34-minute power outage at yesterday’s Super Bowl at the Superdome is being blamed for now on monitoring equipment that tripped a breaker after sensing an anomaly. Power outages happen from time to time at sporting events depending on load, grid, and stadium. The spectacular 2011 blackout from a 49ers home game was notable. I vaguely recall an A’s game that had the lights go out in 2012, though I can’t remember if it was a home or road game. While somewhat embarrassing for New Orleans, it seems unlikely that this mishap will affect future Super Bowls in NOLA, especially if the true cause can be properly identified and fixed. [LA Times/Patrick Kevin Day | Deadspin/Barry Petchesky]
If the problem is grid-related, the Santa Clara stadium shouldn’t be hit in the same way due to built-in redundancy with multiple substations next to the stadium. Santa Clara runs its own power utility, which allows for more leeway in utility planning than if it had to work with PG&E. [SJ Mercury News/Mike Rosenberg]
Somehow the Miami Marlins continue to make out well at their new ballpark despite their mistakes. The Marlins have paid only $102 million of the $131 million they were supposed to contribute. If the full project comes in below projected cost, the remaining money that’s supposed to come from the team will be rerouted to a capital improvements fund, instead of refunding Miami and Dade County taxpayers. [Miami Herald/Charles Rabin]
MLB executive Kim Ng toured Hermosillo, Mexico’s Estadio Sonora while checking out the Caribbean Series. The 16,000-seat stadium could potentially be used as a spring training home by Arizona Diamondbacks or another team. Hermosillo is 4.5 hours south of Tucson, inland of the Gulf of California. [MLB.com/Alden Gonzalez]
Reno’s City Council approved a subsidy plan to pay off Aces Ballpark, which will keep the D-backs’ AAA affiliate in Reno for the next 30 years. The subsidy will run approximately $1 million per year. [Reno Gazette Journal/Brian Duggan]
The Scranton-Wilkes Barre Railriders (AAA-Yankees) are moving into their completely rebuilt ballpark, PNC Field, after a year of barnstorming. [Scranton Times Tribune/Jim Lockwood]
A Mesa-based service organization called the Hohokams (natch) has long had a contract to provide manpower at Hohokam Stadium during spring training. As the Cubs complete work at their new park, no deal has been made for the new ballpark. [Arizona Republic/Editorial Board]
El Paso Union Depot
El Paso’s upcoming Populous-designed AAA ballpark will take stylistic cues from the city’s historic Union Depot train station. The ballpark, which will replace the not-that-old City Hall, is expected to open in time for the 2014 season. Meanwhile, a legal challenge to the $50 million deal has caused the city to halt an effort to issue bonds for the stadium. [El Paso Times/Cindy Ramirez, Zahira Torres]
A 100-feet-deep sinkhole found at the Birmingham Barons’ new ballpark site has put a snag in construction. Apparently sinkholes are quite common throughout Birmingham. [AL.com/Joseph D. Bryant]
Henderson, NV is suing developer Chris Milam and others over an alleged bait-and-switch scheme that involved 480 acres of land that was meant to be used for a stadium complex. Instead, Milam may be looking to build housing on the land. The City is suing to prevent that from happening based on the very low land sale price furnished to Milam. Caught up in all of this is former Bureau of Land Management director Bob Abbey, who signed off on the deal. [Las Vegas Review Journal/Alan Snel]
Last week I realized something. If I’m going to put some news out into the world, I better make sure the site can handle it. I’ve been in the process of evaluating different providers, and I found that I should have some headroom to handle large bursts of traffic should it come this way. There are other things I need to cover too such as caching, which will be part of the ongoing work here.
You may remember the five-part Lew Wolff interview from 2011 (Part 5). If you havent read it, do so. This blog format allows for the kind of expansive interview on display there that isn’t possible in a tightly edited form of media such as print. I know that you come here for expansive coverage, and I do my best to deliver it. To ensure that this work continues, I’m asking for donations, just as I did for the Wolff interview.
I’m asking for $10 or more, if you can afford it. The donations will help pay for ongoing site costs, travel expenses for meetings in Oakland, San Jose, San Francisco, and elsewhere. There’s a donate link to the left which will get you to PayPal. This worked quite well before, so I’m going with the same method this time around. This is not a request that I expect to make more than on an annual basis.
What will you get? Well, let me explain a few things. A handful of you know that I’ve been working on a book based on this blog. The book will not simply be a reprinting of articles. It will be fully chronological narrative of everything that has happened, going as far back as the early Finley and Haas eras. This book can’t be finished until some decision is rendered regarding the A’s future in Oakland and the Bay Area, which has frustrated me to some degree.
Until that’s all squared away, I’d like to offer a digest version of all of the important articles on this blog. It will include all of the analysis and opinion pieces written from 2005 to the present. News recaps will not be included. I’ve already been organizing all of this information for the purposes of the long book, so editing it for what I’ll call the blog archive is a relatively trivial matter. The blog archive won’t be ready this week, but I promise that it’ll be ready early during spring training. Included will be a preface, which won’t be posted on the blog. Like last time, I’ll provide a ZIP file containing multiple formats (PDF, ePub, Mobi for Kindle). If you’re interested, I may provide the archive organized by topic or in chronological order or both. I’m open to suggestions. I’m also exploring Apple’s iBooks format, though that’s probably for something else down the road which may involve a Kickstarter campaign or something similar…
Anyway, I appreciate your support and readership all these years. I’ll try not to blow a gasket putting together the archive, so that the tome gets to you as soon as possible.
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Regards,
M.L.
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P.S. – I should warn you that having written 1,700+ posts here, and the average length of each post being 500 words, even if I pull out a lot of the chaff the archive could look downright encyclopedic. That would preclude any chance of an actual print volume, though I suppose no one’s stopping you from printing parts of the PDF out. As I get closer to finishing the editing, I’ll provide an update on the length. Look at it this way: if you’re paying by the word, it’s CHEAP.
NBC Bay Area reported last night that somehow, the City of Santa Clara hasn’t completed planning for how to make football games work in concert with operations and Mineta San Jose International Airport. The FAA has made a Determination of No Hazard for the stadium, based on building height and sufficient clearances, even though some light standards will be slightly higher than FAA mandates. However, this only works when the weather is good, and the two runways at SJC are used for takeoffs to the north and landings from the south. When the weather gets bad or fog comes in, the airport flips the script and the landing approach comes in directly over the 49ers’ stadium site. If you flew in and out of SJC during the stormy recent November and December, you probably got a good glimpse of this. I did over Thanksgiving.
Yellow line extending from Mineta San Jose International Airport’s 30R runway runs directly over 49ers stadium site (shown as a parking lot). Image from Google Earth
When bad weather forces this change, jets landing at SJC tend to loop around the West Valley (Cupertino/Mountain View) before making a 180 turn to land on 30L or 30R, the two commercial runways at the airport. During good weather, planes taking off to the north usually make a sharp easterly turn before heading east or south. Assuming that those planes are in good mechanical condition, takeoffs don’t operate that close to the stadium site. Even flights going directly north to Portland or Seattle tend to go east and loop around until they get to the right altitude before going north. It’s when planes in low altitude fly into SJC from the north that the stadium’s location becomes an issue.
Is this a big deal? Sure it is. San Jose and Mineta Airport are used to this to an extent, as the regular approach to SJC has jets constantly flying almost directly over HP Pavilion and directly over several tallish buildings in downtown. That’s what happens when the airport is built in the middle of the city. It’s convenient, but it brings its own set of issues. Comparatively, the approaches to SFO and OAK are over water, though SFO-bound planes coming from the east often turn north close to the Santa Clara stadium site. Even the Diridon ballpark site came under scrutiny because it’s close to the approach, especially the general aviation runway (non-commercial).
None of these buildings provide the kind and scale of target as the Santa Clara stadium, which on gamedays will regularly hold 70,000 including workers. This will be amped up even higher for an upcoming Super Bowl, when the number of people in the immediate area could approach 100,000.
The early rains we had this season are somewhat unusual for the Bay Area, since we’re used to getting our heaviest rain from late January through March. It just goes to show that on a seasonal and monthly basis, it can be difficult to tell what will happen. The El Niño/La Niña phenomenon can be a contributor. Months out from Super Bowl XLV at Cowboys Stadium, no one was predicted the sleet and freezing rain conditions that beset the Metroplex. While early February could be great weather (mid 50’s, sunny) for Super Bowl XLIX or one of those NBC-flexed Sunday Night games, chances are high that bad weather will force a change to air traffic control. I don’t doubt that a practical plan will be developed to deal with that situation, but it’s a lot of juggling and adds an aspect of uncertainty that isn’t present at other NFL stadium sites, let alone Super Bowl sites. Let’s hope, for everyone’s sake, that everyone’s on their P’s and Q’s when games are played during the rain or fog. A lot more than division standings or a trophy will be at stake.
A three-man arbitration panel ruled today in favor of the St. Louis Rams over the City/County of St. Louis, setting the stage for what will be either a major public payout for a renovated/new stadium or the Rams leaving Missouri altogether.
Last year, the Rams and the public agency (St. Louis Convention and Visitors Commission) that runs the Edward Jones Dome presented different cases for what renovations would be required to make the Dome “top tier”, per the stadium’s lease. The Rams pushed to rebuild the roof and two-thirds of the stadium, a project that would cost up to $700 million. The agency’s offer was $128 million. Given the age of the facility and the number of new ones that have been built since, it only makes sense that the arbitration panel would rule in favor of the Rams. The St. Louis CVC now has 30 days to decide if it wants to go through with the renovations as specified by the Rams, or allow the lease to become year-to-year after the 2015 NFL season.
The ruling notes that for the Dome to be considered top tier, individual components of the stadium and the stadium as a whole would have to be among the top eight (quarter) in the league. The ruling doesn’t specify which stadia are top tier, but it’s not difficult to figure which ones would qualify in terms of amenities and fan experience:
Cowboys Stadium (2009)
MetLife Stadium (2010)
Lucas Oil Stadium (2008)
University of Phoenix Stadium (2006)
Reliant Stadium (2002)
Mercedes Benz Superdome (1975, renovated 2006 and 2011)
Ford Field (2002)
CenturyLink Field (2002)
This list could soon include the stadia for the 49ers and Vikings, raising the bar for the CVC in the process. The final determination date of top tier is March 1, 2015. Although the Rams are asking for lot, the simple fact of the matter is that they could’ve asked for more, like a fully retractable roof or Texas-sized scoreboards. Chances are, they would’ve been awarded it. That said, the ruling is pretty clear that what the Rams are asking for would propel “The Ed” to top tier status:
The Panel finds and concludes that The RAMS 2012 Plans will produce a First Tier stadium and that the CVC 2012 Plans will not. That is the Award of this Panel. There is no reason for the Panel to produce its own plan.
That last part is important, as it gives the Rams all of the leverage in future negotiations, should they choose to negotiate. The panel notes that it was left with a clear choice between one set of plans that would bring the stadium to top tier status and one that wouldn’t. One wonders if CVC had made a more accommodating offer, whether that would have been deemed acceptable by the panel.
The political phase comes next, and it promises to be juicy. There seems to be little public support for the cost and scope of renovations the Rams are asking for. In addition, the Cardinals could file a protest, considering that Busch Stadium was largely paid for with private dollars. The panel previously denied a CVC claim that the Rams pay for 49% of the project cost.
While the next decision is up to St. Louis pols, Rams owner Stan Kroenke has all the cards. Kroenke has repeatedly stated that he wants to keep the team in St. Louis, so an LA threat may not loom as large as it would for the Chargers, or even the Raiders. Still, AEG’s Farmers Field project should prove an effective stalking horse if Kroenke chooses to use it. Already there is some talk about the Rams moving to a new open air stadium, which could be located downtown or in the suburbs of St. Louis County. The Rams’ real goal may be to get a venue where they have control over all revenue streams, even if it means some sort of private contribution towards the stadium’s cost. In the end, a new stadium may be the only solution that works for both parties, since it wasn’t clear where the Rams would play while the renovations at the Dome happened (the project could take as long as three years).
The CVC uses the Dome as part of its convention facilities, and there may be a case to allow the Rams to leave for another stadium in the area because it’ll allow the CVC to open weekends that would normally be used for football games. That argument doesn’t seem to have legs, not when Indianapolis built a new stadium for the Colts and an expanded convention facility, and Atlanta is considering doing the same for the Falcons.
It’s not panic time for St. Louis Rams fans yet. But with Kroenke in such an advantageous position, no one can afford to play hardball with the man. The best they can hope is that Kroenke suddenly becomes magnanimous. Kroenke doesn’t have a track record of going all out for his teams (Rams, Denver Nuggets, Colorado Avalanche, Colorado Rapids, Arsenal), so don’t bet on him going all out for a new stadium.
In 1960, Arnold Johnson sold the A’s to Charlie Finley for $4 million ($31 million today).
In 1981, Finley sold the team to Wally Haas for $12.4 million (also about $31 million today).
Steve Schott and Ken Hofmann bought the A’s from Haas in 1995 for $95 million ($140 million in 2013), followed by Lew Wolff and John Fisher buying the franchise in 2005 for $180 million ($210 million today). If you’re looking for hockey-stick style growth, owning a pro sports franchise is a good bet.
That makes the big news this week out of Sharks camp rather eye-opening. Partners Kevin Compton and Stratton Sciavos are selling their stakes to Hasso Plattner, who has until now been the silent money in the ownership group. A reason cited was ongoing losses sustained by Sharks Sports and Entertainment, totaling $15 million during the 2011-12 season. Assuming that they’re not engaged in accounting hijinks, Compton’s and Sciavos’s individual losses (or cash calls) were probably in the $1-2 million range. While I can’t find a published net worth of either, it’s clear that neither approaches the wealth of Plattner, the SAP head (and Larry Ellison foil) who is worth $7.2 billion, more than the Giants’ Charles Johnson and Fisher combined. For Compton and Sciavos, $1 million is nothing to take lightly.
Plattner even admitted today that hockey teams don’t make money. A man of his wealth can truly own a team like the Sharks and absorb a loss without batting an eyelash. He also owns CordeValle golf course in South County (San Martin), several other golf courses in Africa and other hotels. That doesn’t mean he’ll start going crazy with free agent signings in the future, but he can afford to be less concerned about having to make cash calls when the time comes. The Sharks aren’t hurt by turnout at HP Pavilion. They’re hurt by lagging national and local TV revenues. Both of those can improve over time, but they’re definitely playing a long game, not one where a millionaire coming in might look for 8-10% annual returns. The Sharks’ lease is on the second of three five-year options, the last of which ends in a decade.
It’s that return-poor situation that probably doomed Greg Jamison, the former Sharks CEO who missed today’s deadline to assemble a group to save the Coyotes in Phoenix. That’s despite Glendale, AZ promising an eight-figure subsidy for each of the next 20 years to offset the team’s operating losses. Now that a new City Council has promised to not give away the farm for another Coyotes ownership group, speculation is rampant that the team will once again relocate. Prime candidates include the Toronto suburb of Markham, Ontario, where the City Council approved an arena last night. The favorite may well be Seattle, where an arena deal is in place and an ownership group has deep pockets, especially in the form of Microsoft CEO Steve Ballmer.
If you want to be taken seriously in the business, it’s best to have at least one multi-billionaire on your team to cover the occasional lean times and cash calls. Especially in hockey.
newballpark.org 
