01 September 2007

What's it worth to you?

The commish traveled to Miami and the Twin Cities this week to visit stadium projects in two very different stages. On Tuesday he talked sites with Miami pols. The Orange Bowl appears to be the main candidate because it's now available with the coming departure of the Hurricanes. A downtown site, if it can be acquired, may be preferable. Sun-Sentinel columnist Dave Hyde suggested that the Marlins use the revenue sharing money they're pocketing to bridge the financing gap, an idea I put forth many moons ago. Yesterday, Selig attended the Twins' groundbreaking ceremony. There's even a nice feel good photo of Selig and Twins owner Carl Pohlad clutching hands. I wonder if they were laughing about that $3 million loan Selig received from Pohlad many many moons ago.

In both of these cases, someone - pols, voters, or both - decided that it would be worthwhile to use public money to finance a large portion of the project. In California, we've recently shown that we have a hardline position when it concerns stadium financing. Because of this we've had a few facilities built largely if not entirely with private funds (AT&T Park, Staples Center, Stanford Stadium) and a few more that are outmoded and need to be either replaced or torn down (Monster Park, McAfee Coliseum, San Diego Sports Arena)

Numerous journalists and economists have praised California's privately-financed projects as responsible and potentially trendsetting. While AT&T Park hasn't resulted in a spate of privately-financed venues, at least some markets have responded by getting better deals for themselves, often with municipalities providing only infrastructure changes (Gillette Stadium) or less public funds (New Busch Stadium). The ballpark and ancillary development at Cisco Field are to be privately financed but additional infrastructure costs are unknown.

We in the Bay Area can pat ourselves on the back for being steadfast, but conversely does our lack of willingness to fund these projects indicate that we are somehow lesser sports fans? In the Houston and Philadelphia markets, broad legislation was passed to build billions of dollars worth of new venues. No amount of hearty Bronx activism could stop the new Yankee Stadium from getting tax-free bonds and from devouring public parkland. Those markets are generally considered more sports-crazy than ours. Some would phrase our stance as "having our priorities straight," which is mostly true. But doesn't that undervalue what it means to have a major sports franchise in your town?

The A's annual revenue is around $150 million. That isn't much compared to other local businesses, even in the city of Fremont alone:
  • SYNNEX: $6 billion
  • Logitech: $2 billion
  • Lam Research: $1.6 billion
  • Wal-Mart (2 Fremont stores only): estimated $110 million
  • Costco: estimated $115 million per store
  • Fremont Bank (private): $45 million
  • Typical chain supermarket: $14 million
  • AuctionDrop: $6 million
In addition, NUMMI produces some 400,000 cars per year or about $8 billion worth of vehicles, plus parts and other manufacturing operations. So it's not as if the A's are turning Fremont into an economic powerhouse, Fremont already was in its own modest way.

Then again, not too many focus on a single store's performance when analyzing a company, so why should the A's be treated differently? The Oakland Athletics Baseball Company is merely part of a $5 billion enterprise. The team is guaranteed to get coverage for at least 45 seconds in every local late newscast. Local papers devote impressive amounts of resources to team coverage. Dedicated websites give the team enviable amounts of coverage. Charitable endeavors from the team and individual players tend to be more impressive and high-profile than those from "similarly sized" companies.

The impact the A's make on the community is much larger than what a $150 million (revenue) company would make, but smaller than a multibillion dollar, industry-leading plant. How, then, can we quantify what the A's mean to their home city? Marketing consultants try to paint it in terms of the amount of positive exposure a team gives to its city. Economists use multiplier effects to map out investment and consumption associated with teams. None of these things properly account for the average fan who, during an A's road trip, rushes home to catch a 4:05 PM (7:05 PM ET) game on TV with a cold one in hand. That fan may not live in the team's city, could be hundreds if not thousands of miles away. But that fan, in his love of the team, could be curious about the city the team calls home. He might decide, "I'd like to visit this place" or "Maybe I'll go to school near there." Or he may already live there and decide that all other things being equal, he'd like to raise his family there and take his kids to games. All because of a ball team. All for the love of a game. That bond falls into the "quality of life" category. A price can't be placed on it.