01.29.13
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Dodgers to become first $500 million franchise

You’re saying, “No that’s not right. Didn’t the Dodgers sell for $2.3 billion last year?” That’s absolutely right. What the headline is referring to is $500 million in annual revenue. That’s all thanks to the deal the team has signed with Time Warner to create Sportsnet LA. The new regional sports network is set to launch with the 2014 season, so for now the Dodgers will have to limp along with Fox Sports. Sportsnet LA will give the Dodgers at least $280 million per year. The deal will run 25 years and provide the Dodgers with control over the network’s programming.

To understand what this means for the franchise and baseball as a whole, let’s look at how the new TV money will fit into the team’s revenue picture.

  • $84 million in national revenue (much of it from new national TV contracts)
  • $150 million in tickets and parking (based on 3.5 million total attendance)
  • ~$30 million in additional local revenue (radio, sponsorships)
  • $280 million from Sportsnet LA

Final estimate for 2014: $544 million. That will absolutely blow the Yankees, the longtime standard bearer, out of the water. There’s only so much the team can do to affect payroll because of luxury tax implications. Still, it’s an impressive haul that has to keep Larry Baer and company awake at night. There’s nothing the Giants can do to get within shouting distance of that figure unless they cut ties with Comcast and start their own RSN.

As much as the Giants owners may cry foul, one man who isn’t is Lew Wolff. When asked by USA Today’s Bob Nightengale to comment on the Dodgers’ coming windfall, Wolff sounded circumspect:

“I don’t know the details of the (TV) deal,” Oakland Athletics owner Lew Wolff told USA TODAY Sports, “but it’s a magnificent transition in the respect of the value of baseball. I’m hoping that when good things happen, all ships rise.”

Even if the Dodgers are required to share their entire revenue, Wolff says he is not concerned about the gulf between small and large-market clubs.

“That’s always going to happen,” Wolff said “but the Yankees haven’t’ hurt baseball, in my opinion.

“They’ve made us a lot more valuable.”

Can’t hate the player or the game, I suppose.

Pending league approval of the deal, the one matter that remains is the impact of revenue sharing. A bankruptcy court ruled that the value of any TV contract subject to revenue sharing is only $84 million, not $280-320 million. MLB argues that all of the Sportsnet LA money is subject to sharing. With the revenue sharing formula set up as a sliding scale to hit big revenue teams harder, the potential impact to the league and the have-not teams could be huge. Take that $544 million figure above and remove central revenue. Under MLB’s formula, the Dodgers would have to share ~40% of $460 million, or $184 million. If the bankruptcy court ruling stands, the team would have to share 40% of $164 million, or $65.6 million. That’s a difference of $118.4 million. Now consider that the total value of funds redistributed in 2012 via revenue sharing and the luxury tax is estimated to be $400 million. That means the Dodgers alone would bump the pool by almost 30%.

And if you’re Lew Wolff and your franchise can continue to receive revenue sharing through at least 2016 while there is no new stadium, the A’s annual revenue sharing receipt could go up by at least $10 million. Without selling a ticket, A’s 2014 revenue could be in the neighborhood of $140 million – though much of that would come at the end of the year, applicable to the following year. No wonder Wolff’s supportive. It helps the bottom line and inflates franchise value, leaving a franchise sales price of $500 million in the dust. Who’s in a hurry to build a ballpark now? Then again, it’s not certain where the A’s will play after this season…

01.27.13
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FanFest grows, elbow room still scarce

When the A’s released the map for this year’s FanFest, I was curious as to how traffic would flow in the expanded footprint. Last year, the event was held entirely inside Oracle Arena. The stage was placed on the event floor, with queues at the corners for autographs and other lines along the concourses for photos, the World Series trophies, and other attractions. This time around, the A’s utilized parts of the stadium and the whole of Champions Plaza (between the venues) to create more queueing space. Did it work?

The entry gate was moved from Oracle Arena to the Plaza between the stadium and arena

The entry gate was moved from Oracle Arena to the Plaza between the stadium and arena

For the most part, spreading the crowd out accomplished its goal. Unlike last year, the crowds were much more bearable in the afternoon, with fewer choke points along the lower concourse. But there were still huge jams in the lower club, and the lines to get autographs and the clubhouse tour easily ran 45 minutes at times. The lines are a product of the 10,000-strong crowd, and there may not be much that can be done about it. Even the upper level of the arena was used for autograph lines. In the future, it’s probably best to move the whole thing back over to the stadium side. That may be difficult for the Coliseum Authority to do because the stadium holds the only annual Northern California stop of the AMA Supercross tour. Eventually, it’s all a matter of money.

Navigation signs like this one were badly needed

Navigation signs like this one were badly needed

I arrived at the arena too late to watch the player introductions, which were reportedly quite energetic. A blogger interview session was set up to start at 1, after the regular media interview session. This time we had Bob Melvin, David Forst, and Mike Gallego. We were also supposed to have Jarrod Parker. Unfortunately he was ill. No matter, as Melvin was his engaging, confident self. Forst gave all of us some roster and draft nuggets to chew on (hint: think college players), and Gags had great anecdotes about Loma Prieta and Walt Weiss. (BTW, Gallego is my spirit animal.)

fanfest13-trophies_behind

The line for pictures with the World Series trophies was long for the entire event

One particular advantage of the stadium is that it has two clubs of 20,000 and 40,000 square feet. Even the smaller of those, the West Side Club, is bigger than the two clubs at the arena combined. The one thing the stadium doesn’t have is the auditorium-like setup with the stage and the beautiful new displays at the arena. It’s nice, not a must-have.

There will always be a scheduling conflict regarding the Supercross event as long as it’s held in the stadium. The event has to be held after the last possible home playoff game for the Raiders (seriously), but with enough time for the grounds crew to clear everything out and start planting grass for the baseball season. At the same time, the organization wants to ensure player availability for the event, which can be difficult because players start reporting to camp in mid-February (the ones that aren’t already in Arizona). That leaves about a two-week window for FanFest to be held. The Giants appear to have left Supercross behind, choosing to maximize baseball operations once their bowl game is over in December. Speaking of which, the Kraft Fight Hunger Bowl will be played in Santa Clara starting in 2015. The 49ers stadium may eventually be the best place for Supercross in the future because of fewer potential conflicts on its schedule.

Stage setup had retractable seats folded up, exposing the ice rink footprint

Arena stage setup had retractable seats folded up, exposing the ice rink footprint

The Warriors are on a 4-game roadtrip around the Great Lakes, which explains why there’s no basketball floor visible in the picture above. Also, tomorrow is a scheduled concert by the band MUSE at the arena, so the arena had to be ready for a conversion to the end-stage configuration, in which a much larger stage would occupy the “open” end. This exposes the outline of the ice rink, which extends from the permanent seats on one end to the back of the retractable sections on the stage end. The first row above the retractable sections is row 17, 15 feet or more above the ice surface. If you’re wondering how compromised that would look for hockey, there you have it. Basically, if you’re at the retractable end behind the row 17, you’ll have trouble seeing the goalie or anything happening around the net.

Overall, there was a great sense of excitement and optimism this year that wasn’t present last year. Let’s all hope there’s even more reason for people to come back for next year’s FanFest.

—-

Note – Wonder what the Coliseum looks like during a Supercross? Here’s a peek.

01.25.13
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Coliseum Authority raids scoreboard funds for Raiders study

I wasn’t able to attend this morning’s Coliseum Authority meeting. Thankfully for everyone, Steven Tavares of the East Bay Citizen was. And the story he got coming out of there was quite a doozy. The JPA approved a $1 million contract for additional studies on Coliseum City, which we figured would happen given the new pro-development makeup of the JPA board. What we didn’t see coming was just how the study would be paid for.

How the Authority will pay the $1 million in total costs for the two studies also rankled some commissioners. According to Alameda County Auditor-Controller Pat O’Connell, the Authority will “short” a $3.5 million capital improvements fund previously earmarked for a new scoreboard at O.co Coliseum. The Oakland Athletics and the Authority have been in negotiations to replace the out-of-date scoreboards, said Goodwin, and Friday’s decision may negatively impact relations with the A’s, also in search of a new ballpark.

“What’s the message we’re sending to the A’s?” Goodwin asked. According to staff, the A’s estimate the costs of the scoreboards to be $4 million. “Well, it better cost closer to $2.5 million, if we do what we’re about to do,” countered Haggerty. The alternative, said O’Connell, would be to ask the Alameda County Board of Supervisors and Oakland City Council for addition funds, a move likely unpopular on both fronts.

Maybe the shortfall will force the JPA to buy used. Whether that’s enough to get improvements or not, it’s a clear indicator that the East Bay is going forward on Coliseum City, cost uncertainty and other tenant issues be damned.

Worse, the retractable roof concept appears to have gained traction, even though it will surely inflate the project’s price tag. Assistant City Administrator Fred Blackwell was careful to note that all three current tenants would get new venues under the plan, though as usual, how that would all come together was not articulated. Even the Raiders are not a given in terms of paying for their part of the study, as the NFL and team are fashioning their own – for a stadium only with little ancillary development.

Doesn’t this seem like a lot of flailing right now? This is despite having the project under consideration for the better part of three years. Many in Oakland are quite convinced that this is the vision for the city’s future. What of the teams? Aren’t they supposed to be partners in this? Aren’t they paying the freight? Apparently that doesn’t matter, not as long as one great redevelopment plan remains out there for someone to stake their political career to.

01.25.13
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Final 2013 Regular Season Schedule Released

If you have longed for the return the 1:05 Saturday game, your prayers have been answered. The 2013 home schedule for the A’s has, by my count, 25 1:05 PM start times, 10 of those on Saturdays. Last season there were only 16 weekend 1:05 starts. I’ve assembled the schedule into various download formats, which are available in the left sidebar towards the bottom.

A couple of changes occurred along the way to finalizing the schedule. The A’s and Giants switched their home-and-home halves of their 4-game interleague set, with the A’s half now coming first and the Giants’ half last. There are a few other quirks.

  • Another Saturday afternoon start against the Halos is set for 12:05 PM instead of 1:05. The game is on July 27.
  • The A’s head to Boston in late April, and none of the games in that weekday series will start later than 3:35 PT. Keep that in mind if you’re planning to listen on the radio during your afternoon commute.
  • With the Astros now in the division, you can nearly double the amount of 5 PM evening start times in division. In addition, in the summer Houston isn’t forced to have mostly 5:35 games like the Rangers because the Astros have a dome, so there will be more 11:10 AM getaway games than you’d expect in Arlington.

Other than that, there’s little out of the ordinary. National Opening Night is on March 31, an Rangers-Astros game in Houston.

 

01.24.13
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A list

This is a list of new venues that have opened for the four major pro sports since the launch of this blog in March 2005.

new_venues

Almost eight years have elapsed since this website was launched. The table illustrates how much has been accomplished in that time.

On a related note: For some reason the day counter had disappeared from the sidebar. It has triumphantly returned.

Go about your day.

01.23.13
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Baer softens stance, new San Jose rumor emerges

Earlier today, Giants CEO Larry Baer was on the MLB Network show Clubhouse Confidential, reflecting on World Championships and Barry Bonds, when he spoke briefly about the A’s and their continuing ballpark problem. A couple of sharp observers were watching closely, including KCBS’s Joe Salvatore.

Fangraphs’ Wendy Thurm also picked up on this, and I was quick to reply:

I later qualified things:

So here’s what I know. Remember how Bud Selig imposed a gag order on both ownership groups going back over a year ago? That went part and parcel with the Commish bringing (forcing?) both parties to the table. Over the past couple of weeks I’ve heard from multiple sources that Selig apparently has other team owners lined up and ready to approve a move to San Jose. The remaining issue is, naturally, compensation to the Giants. Effectively, we can consider the battle half over for the pro-San Jose forces. Getting Giants ownership to back down from their no-negotiation stance is a major development. That said, determining proper compensation for the rights to the South Bay is not expected to be a picnic. Prior to this latest set of rumors, I had heard that the Giants were seeking $200 million or more to cede San Jose. In keeping with the A’s giving away the South Bay in the first place 20 years ago, A’s ownership wanted to keep the payment as close to $0 as possible. With such a huge gap, it’s hard to know what number would be mutually acceptable for both parties. They may be subject to binding arbitration, which is sometimes the case when settling team-team or team-league disputes.

The remaining issue is one of timing. Lew Wolff has been pushing out a San Jose ballpark opening date, first to 2016 and now 2018. Unless there’s some newfound sense of urgency on his part, he’s probably in no hurry to pay money for something he won’t be able to claim for several years. He’s probably not willing to make a huge lump sum payment for the privilege either. Then there’s this upcoming season, which is the last at the Coliseum without a new lease extension, and there have been no real talks about an extension to date other than Wolff’s request for a five-year deal. So there has to be determination of when to make an announcement that doesn’t impact the A’s finances and their status in Oakland in the interim. For those and related reasons, no one should expect an announcement anytime soon. Chronicle beat writer Susan Slusser checked in with Lew Wolff and another source, and got this out of the owner:

If it happens for real, we won’t hear about it until it’s all done, approved by the owners and Selig. Until then, keep dreaming.

—

Added: A transcribed snippet of the Larry Baer-Brian Kenny interview:

KENNY: What’s the club’s view on the Oakland A’s attempt to go to San Jose?

BAER: Our view is that it’s really up to the commissioner and the baseball processes. We’re not involved talking about it. It’s really something that the commissioner has to sort out. Obviously the A’s need a new ballpark and we hope that they get one.

—

Note: Clubhouse Confidential is on MLB Network today at 4:30 and 9:30 PM.

01.23.13
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Oakland City Council session briefly upstaged by Coliseum JPA-related vote

So there I was Tuesday night, home sick with the flu instead of at my weekly Pub Trivia night. I figured that I’d keep an eye on the Oakland City Council session, because the debate regarding the William Bratton hiring was expected to be thick and fierce. To my surprise, the discourse was more civil and less disruptive (measured in degrees) than many #oakmtg sessions, As I write this, the meeting is still going on and there remains a large number of speaker cards, meaning the session may easily run past 1:30 AM.

There was one item of tangential interest to the crowd that reads this blog on the meeting’s agenda. That was the appointment of two City Council members to the Coliseum JPA’s 8-person Board of Commissioners. Former Councilperson Ignacio De La Fuente was the Chair until last weekend, while the other seat representing the City Council on the board is currently held by Desley Brooks. Larry Reid, who has previously served on the Board, was appointed without a hitch. That was no big deal because Reid is replacing De La Fuente. Brooks, on the other hand, had expected to remain in her capacity on the Board but was cast aside in favor of Rebecca Kaplan. After a motion was made to nominate Kaplan, a full 30 people came up to speak in support of Brooks. Many spoke about Brooks’ record supporting the black community. The Twitterverse blew up with jokes about Brooks, her colleagues in the Council, and the rather personal, catty, tense nature that the proceedings transformed into.

Brooks has been out of favor with Council President Pat Kernighan, who has the power to make appointments such as this one. A major criticism of Brooks that emanated from the debate (though not from the Council members themselves) was that Brooks’ abrasiveness makes her difficult to work with. Being an outsider to Oakland politics, I can’t substantiate that claim, or the undercurrent of corruption taint that follows Brooks. But there is some level of agreement within that Brooks’ attitude was an issue despite her legion of supporters. As an alternative, Kaplan’s more congenial nature was meant to improve working conditions inside the board. I guess.

Eventually the Council voted 7-0 to approve Reid and 6-1 to approve Kaplan, with Brooks being the dissenter on the Kaplan vote and Reid absent for both votes. The discussion leading up to those votes shed some light on the struggles in the JPA and the problems the City has having the $20 million annual subsidy for the JPA as the City’s albatross. In defending herself, Brooks noted that she brought AEG in to replace SMG. She mentioned that her focus has been to reduce the drain that the sports complex has on the City, even if that means forgoing certain opportunities that might come its way. For instance, remember how there was talk about having a WNBA team play in Oakland, especially after the Sacramento Monarchs franchise folded? Brooks argued that hosting a team would’ve cost $35,000 per game that the City didn’t have. That translates to $600,000 for a full season of games, plus whatever nominal costs would be associated with prepping the arena to host a team. (Obviously there’s more to having a WNBA team in Oakland, but we’re focusing solely on hosting the games right now.)

Who was the Oakland politician most gung-ho about bringing in a WNBA team? Kaplan. Who’s pushing Coliseum City the hardest? Kaplan. When it was Kaplan’s turn to speak on her nomination, she didn’t hesitate to bring up Coliseum City’s potential, though she qualified her words a little by saying that it wasn’t solely “about the sports (teams)”, it was as much about redeveloping an area that long needs it. As we all know by now, redevelopment as an institution has been blown up by Governor Brown, with mostly small-scale efforts like affordable housing left as available project types for cities to work on.

Just like that, two of the councilmembers who could be considered more skeptical of the sports-as-savior strategy (IDLF, Brooks) were replaced by two who are all for it (Kaplan, Reid). None of this means that anything substantial will happen with Coliseum City anytime soon. It’s still going to cost billions of dollars to pull off and will require commitments from at the very least the Raiders to have any shot of happening. However, if developers or AEG wanted a sign that things could go more smoothly on the political front for them, this is it.

The WNBA team idea, which has receded from consciousness in the Bay Area over time, sounds like a very good project for Oakland and its business community to pick up. A franchise is worth somewhere in the $10 million range, less than MLS. Player salaries are affordable. The schedule runs during the NBA’s offseason, so there are no date conflicts at Oracle Arena. Plus there’s the advantage of the Bay Area as something of a hotbed for women’s basketball, thanks to the stalwart Stanford program and a recently powerful Cal program. It’s achievable, doesn’t require ridiculous amounts of resources from the business community, and as has been demonstrated in Seattle, a franchise can survive and even thrive when its NBA brother leaves town. That’s not to say that Oakland should give up on the A’s/Raiders or even the Warriors. Far from it. It would show that Oakland and the East Bay can coalesce to get a team that the community can rally around. Even Mayor Quan has referred to that possibility. It’s kind of hard to know if Oakland is capable of big successes if it doesn’t have small ones to build upon, and its biggest success were decades ago. If you want a test case, well, there it is. Seize it.

01.21.13
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News for 1/21/13

Update 11:00 PM – Tomorrow at 2 PM Mayor Johnson will hold a press conference where further plans to keep the Kings in Sacramento will be unveiled, possibly including the disclosure of one or more assembled bidding groups for the the franchise.

NorCal has it pretty good these days in terms of sports. Unless you’re a Raider fan. Or the Kings fan. About the Kings…

  • Around the end of the AFC Championship Game, a flurry of reports from national sources had the purchase/sale agreement between the Maloofs and the Hansen-Ballmer group sewn up, with the paperwork being submitted as early as tonight. The price hasn’t budged from the oft-discussed figure: a $525 million valuation with the Hansen-Ballmer group paying for a 65% majority share, or $341.25 million. One new wrinkle is the Maloofs’ demand of a non-refundable $30 million deposit, which sounds like either pure desperation on the buyers’/sellers’ part or a sign that the move will be rubber stamped with it reaches the NBA’s Board of Governors. The remaining 35% of minority shares have not been arranged to be sold in any way except for a 7% chunk that will be sold in a bankruptcy proceeding. For their part, Sacramento Mayor Kevin Johnson and forces in Cowtown continue to work towards providing a counteroffer. It’s unclear if that counteroffer will get more than a cursory look. [Pro Basketball Talk/Aaron Bruski | ESPN/Marc Stein]
  • In the latest Matier & Ross column, there’s an item about John Fisher attending a Warriors game courtside with W’s owner Joe Lacob. “That prompted one East Bay mover and shaker to speculate that a deal might be in the offing for Lacob to buy the A’s,” a notion that was summarily shut down by Lew Wolff. Hmmm, who could that East Bay mover and shaker be? Perhaps someone who is working as a consultant for the Warriors to move the team to SF? Grasping at straws, anyone? [SF Chronicle/Matier & Ross]
  • Lew Wolff spoke at the Silicon Valley Business Journal’s Economic Forecast breakfast on Thursday. SVBJ had one choice quote from Wolff, “I want people in LA to say ‘the one place in California I want to build is San Jose.’ ” Wolff also joked, “Next time I’ll take on the pyramids instead of baseball.” Nonsense, Lew. You just have to be more of a dick to the other owners to get your way. [Silicon Valley Business Journal/Shana Lynch]
  • A little-reported story on this blog has ended rather quietly. That would be the ballad of Charlotte lawyer Jerry Reese, who filed lawsuit after lawsuit against the City of Charlotte and Mecklenburg County to prevent a AAA ballpark from being built there. Reese’s reasoning was that any such deal would impair the market’s ability to get a major league stadium deal done. After a judge threatened sanctions, Reese agreed to settle and drop all lawsuits, including those related to a AAA ballpark under construction in Uptown Charlotte. Charlotte is considered a somewhat overextended market for MLB to begin with so it’s hard to take such an effort seriously, but you can’t blame Reese for trying. [Charlotte Observer/Gary L. Wright]
  • No surprise that the Chargers will stay in San Diego at least through the 2013 season. Better to wait until the AEG sale happens (or doesn’t). [NFL.com/Dan Hanzus]
  • Cleveland Browns Stadium will now be known as “FirstEnergy Stadium, Home of the Cleveland Browns”. Poetic. [Cleveland Plain Dealer/Tom Reed]
  • The 49ers may hold off on selling naming rights to their stadium until the proper deal comes in. With all of the advance money coming in, they can afford to wait. One thing they don’t have compared to another unnamed stadium, Cowboys Stadium, is the sheer number of events held annually that can help draw enough attention for a company to justify the naming rights fee. I imagine that the 49ers will get a naming rights deal done before Super Bowl L in 2016, the better for a bidder to take advantage as MetLife will prior to Super Bowl XLVIII. [SF Chronicle/Matier & Ross]
  • One stadium is getting rid of its naming rights sponsor, Sporting Park in Kansas City, KS. They’re distancing themselves from Livestrong for obvious reasons. One not-so-obvious reason: the MLS All-Star Game will be held there this year. No need for a tarnished brand to represent the league in that manner. [Reuters/Simon Evans]
  • The Cubs have unveiled plans for their massive renovation of Wrigley Field. Besides the oft-reported newer, larger clubhouses, there will also be two large club areas behind the plate, expanded concourse areas throughout, and a patio in the left field corner. One new deal point is that the Ricketts family is willing to pay for the $300 million themselves as long as the City of Chicago/Cook County doesn’t start placing a bunch of restrictions on what the club can/can’t do at Wrigley. More night games, anyone? [Bleacher Nation]
  • Sports economist Andrew Zimbalist considers downtown Tampa the best place for a Rays ballpark. That won’t make the keep-em-in-St. Pete-crowd happy. [Tampa Bay Times/Stephen Nohlgren]
  • One community in Florida is having a tough time figuring out what to do with a stadium-related sales tax once the stadium is paid off. [Florida Today/Matt Reed]
  • It seems that the only way to introduce a new stadium concept in Las Vegas is to make it bigger and more ostentatious than the previous concepts. The UNLV Now concept has a $800-900 million cost attached to it. That seems very Vegas to me. The new wrinkle: a 100-yard long video screen stretched along one of the sidelines. Why put seats in the best place you could have a video screen there instead? [Las Vegas Sun/Ray Brewer]
  • The Oilers and the City of Edmonton are reportedly close to a new arena deal. Oilers ownership backed off a $6 million/year subsidy demand, which was a major sticking point previously. Instead, the team will be asking for more direct subsidies upfront. [Edmonton Journal/Marty Klinkenberg]
  • As the Kings prepare to leave their home of 25 years, another former Kings home may be up for demolition. That home is Kemper Arena, which was barely a decade old when the Kings moved from Kansas City to Sacramento in 1985. An effort is underway to save Kemper, spearheaded by the namesake’s descendants. Kemper Arena hosted the 1988 Final Four, numerous “home” games for the Kansas Jayhawks basketball team, and most ignominiously, the 1999 WWF event Over The Edge, during which Owen Hart plummeted 70 feet to his death from a malfunctioning harness. [KCTV-5/Chris Oberholtz]
  • According the Milken Institute, the South Bay is the #1 economic market in the country. SF/Peninsula is 36th, while the East Bay is 155th, below Vallejo-Fairfield and Fresno. Milken seems to attribute much a market’s economic power to its tech proliferation, which might penalize the East Bay, but if you look at the rankings, it doesn’t. [Milken Institute]
  • It what has to be considered your classic Friday afternoon bad news dump maneuver, Clorox announced that it’s selling its headquarters building in downtown Oakland for $110 million. The buyer is real estate firm Westcore Properties. Westcore is leasing back more than half of the building to Clorox, though the length of the lease was not disclosed. The news comes several months after Clorox relocated much of its R&D staff to Pleasanton. Now I can understand Clorox not wanting to deal with the overhead of being a landlord, and the company runs quite lean with a small cash position. But whenever you hear about similar sell/leaseback deals, they usually aren’t good. A similar deal was reported that very same day by Sony when the tech giant announced that it was selling its midtown Manhattan headquarters for $1.1 billion. The Maloofs sold and leased back ARCO Arena because they were low on cash. In other words, no one’s celebrating about this. [Oakland Tribune/George Avalos | Financial Times/Michiyo Nakamoto]

More as it comes. One quick viewing note: on most cable/satellite systems, NHL Center Ice is doing a free preview through the end of the month. Check your local provider.

01.18.13
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No please, really, take your time Oakland

The Coliseum Authority released its agenda for the upcoming January 25th meeting. On the agenda is a procedural item of voting a new Chair and Vice-Chair. The other item, 6b, involves the following:

6b. Resolution of the Oakland Alameda County Coliseum Authority:
1. Waiving Competition and Authorizing Staff To Negotiate One or More Professional Services Contracts to Conduct

Studies for Site Planning and Development Scenarios, and to Create Estimates Of Building Budget And Profit And Loss Statements, For a Potential New Stadium and Related Development on Land Currently Owned By The Authority That Lies Within the Coliseum City Specific Plan Area, for a Total Amount Not To Exceed $500,000; and

2. Authorizing Staff To Competitively Procure and Negotiate One or More Professional Services Contracts to Conduct Studies of Revenue Potential and Market Demand From a Potential New Stadium and Related Development on Land Currently Owned By The Authority That Lies Within The Coliseum City Specific Plan Area, for a Total Amount Not To Exceed $500,000; and

3. Authorizing the Chair of the Oakland Alameda County Coliseum Authority to Execute Contracts for Services With Selected Consultants Without Returning to the Authority Board; and

4. Amending the Authority’s Budget to Allocate up to $1,000,000 in Available Oakland Alameda County Coliseum Authority Funding For These Purposes

Woah there, wait a second. Is the JPA really saying that it still has studies to complete? It needs to do financial projections and a development plan? And it’s executing this now without competitive bidding? You have got to be kidding me. This stuff was supposed to be done by now. Funding for Coliseum City was authorized in February 2010, almost three years ago. This is supposed to be the easy part.

Now, maybe the upshot is that the Raiders and JPA came to an agreement on a lease extension, allowing these funds to be freed up. But if anyone from the East Bay is looking for signs of progress soon, this certainly won’t help. At this rate the 49ers will have been at their Santa Clara stadium 7-10 years before anything gets built in Oakland. Also, note that the resolution says stadium in singular form. Will there be a two-stadium alternative, as some pols believe is the best option? Or are they talking about another multipurpose stadium? I can’t wait. Actually, I guess I can. I have no choice.

I suppose these “additional” studies can be completed by the end of the year. In a week full of unbelievable BS news in the sports world, this ranks up there, at least locally. Suspiciously, the JPA’s annual financials have not yet been released. They probably won’t show much in the way of funds spent on Coliseum City so far. This is so disappointing, and yet, par for the course. No wonder the Warriors plowed their own path. They can’t trust the JPA to make anything happen in a timely manner.

01.18.13
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David Stern’s Reverse Solomon

As much as I enjoy much of the drama in the Kings-Sacramento-Seattle love triangle, even I don’t want to bog down this blog with daily updates on the situation. If a deal is signed, the Maloofs apply for the move, or something happens in April when the NBA’s Board of Governors is set to meet, I’ll write about it. Until then, the Kings issue is best relegated to the weekly newswrap.

However, I’ll take this story in a different direction. There’s a solution on the horizon, one that can satisfy all parties: the Maloofs, Chris Hansen, Mayor KJ and Sacramento civic leaders alike. It all starts and ends with two old guys who spent a couple of years in St. Louis.

What’s that, you say? There’s no NBA team in St. Louis? Well, that’s absolutely correct. There hasn’t been a NBA franchise in St. Louis since the A’s moved to Oakland. The St. Louis Hawks moved to Atlanta and never looked back. The only other pro basketball team that has graced the city since is the ABA Spirits of St. Louis, whose two-year stint in the Gateway City was marked more by off-the-court actions than on-court.

That’s because when the ABA merged with the NBA, Spirits team owners Ozzie and Daniel Silna pulled off one of the greatest deals in the history of pro sports, one that continues to benefit the Silnas and haunt David Stern to this day. As several ABA franchises such as the Baltimore Claws and Virginia Squires sputtered to the end, other franchises that were in better financial shape were under consideration to be brought in as new NBA franchises. Eventually, the NBA decided it would accept only four teams into the league: Denver, Indiana, San Antonio, and the New York Nets. It was the culmination of several years of lawsuits, threats, and strife for both leagues as the NBA was struggling with huge image problems. Two teams remained to be dealt with, the Spirits and the Kentucky Colonels, long regarded as the most stable franchise in the ABA. The Chicago Bulls had NBA rights to Artis Gilmore, and they wanted him so badly that they blocked the Colonels from being included in the merger. The NBA paid $3.3 million to Colonels owner John Y. Brown, Jr. to fold the franchise. Soon after the merger, Brown, who owned KFC prior to getting into the pro hoops business, bought the Buffalo Braves and later swapped that for the Boston Celtics.

Ozzie and Daniel were a different story. Instead of taking the $3.3 million payout, they chose to take only $2.2 million and a 1/7th share of national TV revenues for the 4 merged teams in perpetuity. Back in the mid-70’s, no one knew how big the NBA would be. It was common for playoff games and even the finals to be broadcast on tape delay. The Silnas’ prescience became legendary as the league took off only a few years later with Magic-Bird and then soared to unimaginable heights with Michael Jordan. Ever since, the brothers have been getting a 4/7ths team share of national TV money, which has grown exponentially since 1976. In recent years that 4/7ths share has meant around $17 million every year for doing absolutely nothing. It’s the height of rent-seeking, and the crazy thing is that last September, they filed suit to get even more! Now they want cable and international TV dollars, claiming that they lost everything during the Bernie Madoff scandal. No settlement has yet been reached between the Silna brothers and the NBA.

This is where the Kings come in. We know that the franchise’s value has been inflated because of the sale talk and the Maloofs’ financial liabilities. It’s a situation in which one city will come out the winner of the franchise, while the loser may get a “promise” of an expansion team down the road. When it comes to expansion, leagues tend to be hazy on their promises, especially when the leagues don’t really need the cash (like the NBA) and owners naturally don’t want to slice off another piece if they can help it. Yet there’s an interest in getting rid of the Silnas, who have long been a thorn in Stern’s side. Some kind of buyout would also help the 4 former ABA teams, since they’d be on a level playing field in terms of national TV money. 3 of the 4 franchises are in small/mid-markets, so this is no joke.

While the Kings will be sold in a straightforward transaction, the “losing” city’s prospective ownership group can pay an expansion fee, which thanks to Kings-related inflation, should be $500 million. Take some of that money ($200-250 million) and give it to Silnas and their lawyer, while splitting the rest up 29 ways (new Kings owners not included). The other teams would get a one-time $8.6 million-$10.9 million infusion, and future TV money would be split 31 ways instead of 30.57 ways inequitably. The downside is that all other shared revenues would also be split 31 ways, but that’s limited to merchandise and other non-TV sources (not tickets). The Silna brothers walk away with a quarter billion dollars, Stern fixes that nagging legacy problem, and fanbases in Seattle and Sacramento are happy. The NBA would do well to solve this problem before TV contracts come up for renewal after the 2014-15 season. By acting now, owners will have complete cost controls and expanded revenue sharing throughout the life of the CBA.

Funny thing to point out – the total combined national TV revenue for the ESPN/ABC/TNT deals is $930 million annually. It’s quite a coincidence that the total splits into 31 neat, $30 million shares. The solution only works if the Silnas are interested in a big lump sum payout, which they have rebuffed twice already. A quarter billion dollars, however, may be an offer they can’t refuse.