01 April 2009

"I claim this city for Mother SF!"

The gloves are out. The line in the sand has been drawn. Honestly, I'm hoping for a Hamilton-Burr duel. Then again, maybe not. Andrew Baggarly reported today that the San Francisco Giants have just purchased a 25% stake in their high-A little brothers, the San Jose Giants.

The Giants will claim one of four seats on the San Jose club's board; if they agree to purchase a controlling interest, they would occupy three of five board seats.

Industry sources pegged the value of San Jose's franchise at $7-10 million, making the Giants' investment worth an estimated $2-3 million.

San Jose officials are not amused with the Johnny-come-lately appearance of the mothership's

Reaction from San Jose city leaders was not warm. Mayor Chuck Reed will not participate in Thursday's event at Municipal Stadium, according to an aide.

Councilman Sam Liccardo, a big-league-ballpark booster who has been meeting with community leaders to draft a pitch for the A's, was blunt about the Giants' move, calling the timing "notable."

"The only time I see pitchers from the Giants in San Jose is when they're on a rehab assignment," he said. "And this pitch looks like an attempt to rehabilitate a San Francisco ballclub's image in San Jose.

"Everyone's assumption is that this is a plea to the commissioner, and I don't think it changes anyone's mind in the end."

San Jose is a bit upset because the Muni renovations, which the City and the SJ Giants have been arguing about for years, could've been made more complete had the mothership lended a hand.

This move is not about reinforcing the Giants' major league territorial rights. It is about C-A-S-H. It looks like the baseball equivalent of flipping a house. Look at it this way. When a public company, like
recent example Genentech, faces a takeover, the interested buyer (Roche) has to pay a premium over the prevailing market share price. In Genentech's case, the premium was 16%.

I've mentioned this in passing, but I'll say it again: Both the SF and SJ Giants would need to be compensated if the A's moved to San Jose. Obviously the terms would be different for each team. The parent team's $2-3 million investment could yield $1 million or more if they played their cards right, not including the costs associated with moving the team to a smaller market - say the North Bay, for instance. Should they raise their stake to the 55% controlling interest, they'd get even more.

Who'd figure out the compensation? I'm guessing the blue ribbon committee that's sorting out the East Bay situation. Smart move, Neukom. Smart move.


Anonymous said...


To me it really does sound like considering all the drama that's been going on, that it really is more about the Giants t-rights than it is about C-A-S-H.

It's only obvious that they would make such a strategic move on their end in the wake of all that's been happening.

I say regardless of their motive...good move and more power to them.

Anonymous said...

I disagree with ML. This was ill-timed and ill-conceived. This only shows that Giant's ownership are acting in bad-faith.

Moreover, this is not a done deal. MLB has to approve this. Interesting problem for MLB.

Bad faith example, for all of these years the Giants have been "deeply rooted" in San Jose, Municipal Stadium has 2 toilets and 5 shower heads for 40+ players and coaches. Give me a break.

Very bad timing and this "deal" should be put on hold until the "Committee" let's us see their report, errr, draft's their report.

One final note, we are about to see a barage of letters and resolutions coming from Santa Clara County government and political leaders. None of which will bode well for the Giants' ownership. Let the flood gates open.

ML is going to be busy posting all of the upcoming correspondence.

Anonymous said...

I've always found it insulting that they give San Jose the A-ball team while Fresno has the AAA team. That just indicates the Giants lack of commitment to Santa Clara County.

jeepers said...

It's good that the Giants are finally being heard on this subject. Quite frankly, I think the Peninsula/Silicon Valley fan is a quite natural split from the "East Bay and beyond" crowd, regardless of the corporate dollars. I think Oakland's management stands a fair chance of winning a battle of Bay area minds with the Giants, if their stadium is better than Pac Bell Park (not to mention, their prices).

Paul said...

How about it, Giants? Tell us why you should have the right to deny major league baseball to San Jose and be allowed to treat us as a minor league outpost? Tell us why this is moral and just.

We're waiting.

As I mentioned in the other thread - at last December's San Jose Downtown Christmas Parade, the A's had two or three players participating. The Giants sent that mascot that looks like an overgrown rat.

Marine Layer said...

Minor league T-rights have no bearing on major league T-rights except in terms of compensation. MiLB, not MLB, has to approve the ownership change. That will be a slam dunk.

I'd love to see an argument on how this bolsters the Giants' T-rights. This move only proves their historic indifference if not negligence on their part. Reminds me of Microsoft's antitrust battles during the 90's. Who was the lead counsel for MS back then? Oh right...

One other thing - the SJ Giants' lease runs through 2013.

Anonymous said...

I don't know if it's a good move on the Giants part. However, I do think it's a telling move. Mr. Neukom suddenly appears nervous and is attempting to shore up his TR's claim. They must not be all that iron clad if he feels that this move is a necessary one. Point being, he's angered the SJ political machine with this little endeavor. That can't be very wise at this stage of the game. The battle lines are forming up! It's going to be exciting for the next few months for A's fans!

daveinsm said...

"One other thing - the SJ Giants' lease runs through 2013."

the timing can't be more impeccable.

Cisco Fields opens in Aril 2014.

Tony D. said...

Kind of along the lines of what anon 7:03 stated.

There's a silver lining to this development: the MLB Giants are most likely preparing themselves to cede Santa Clara County/San Jose to the A's. And while the move may be viewed as "smart," they better be careful and not force their hand to much. Heck, Selig and MLB might take those rights WITHOUT compensation if it's viewed they're playing hardball with the A's/SJ. Again, smart/money-making move, but don't go to far.

As for the Lil Giants: I don't care how much percentage the MLB Giants own, I don't care who they send down here for fanfests, and I don't care if they show the Lil Giants on CSNBA. The bottom line is that they're still a Single A franchise playing in a 4,000 seat ballpark; a relic of when San Jose was a small suburb of SF. San Jose is a Major League city now, not minor league!

Anonymous said...

Total compensation will be a combination of items---if the blue ribbon commission is as disgusted as most south bay fans are by the Giants effort than what is added into one place can be subtracted from another--

I also believe that it is up to Wolff to make the call about whether or not to leave the SJ Giants play where they are---let 'em stay and lets watch Nuekom's franchise value decline-he will have no problem selling out the A's ballpark so the risk seems minimal to me

gojohn10 said...

If the Single A Giants are set up for a big payday, why would they sell to a portion of the team to the big league club? I feel like I'm missing something here (which happens quite often).

Marine Layer said...

gojohn10, I'm thinking there's some sort of quid pro quo at work. Any move to anywhere else in the Bay Area will require some amount of ramp-up since there are no A-ready stadia. The parent team can share in the costs.

It's not that different from the A's-Sharks partnership in the Quakes. The Sharks put in a similar amount to what the Giants just invested. The expected quid pro quo is that the Sharks and their venue management company will run the Quakes' new stadium.

Anonymous said...

Wow, great timing with the lease expiration. If San Jose just lets the lease expire the Lil' Giants won't have to be compensated a red cent and Neukom's out a couple Mil.

Zonis said...

Hypothetically, could a Minor League team move into the Oakland Coliseum?

For example, when the Giants AAA team's lease expires, couldn't they hypoethically move to the Coliseum? Seems extremely unlikely that the A's two California teams, Rivercats and Ports, will leave their locations, as both have pretty new stadiums (Stockton newer) and the Rivercats are making a lot of money in Sacramento for a Triple A team.

Yeah, it might be a "step down" for Oakland to have a Minor League team, but on the other hand, if they can get an AAA team there, it is still a tenant. They can even rename themselves the Oakland Oaks and go for nastalgia value.

Anonymous said...

This is going to come down to a few parties in the end: the A's, SF Giants, SJ Giants, MLB ownership (through Selig) and the city of San Jose. Neukom had 1 of 5 chairs at that negotiating table. Now he has 2. I don't think there's anything more to this than that. He's putting himself in position to leverage a better deal.

Anonymous said...

Not to get off topic but just read that SC and the '9ers expect to announce a deal this week---tell me that the blue ribbon group isn't taking notice as to how this SF team can move down to Santa Clara County without all the bs that that the Giants are creating for the A's---makes the MLB circus look a little ridiculous in all honesty-

Be very cool to add the NFL and MLB to join our incredible Sharks and Earthquakes in the valley--

Mike Headley said...

I think Neukom sees the writing on the wall... they will lose SJ. He's doing what he can so the SFG can earn a little bit off of it.

gojohn10: Most minor league clubs are not owned by their 'parent' major league clubs. If I were a minor league club, I'd love to have some investment from the parent to show that they are dedicated to us. I think over the long term that is more valuable than the one time compensation. Also, the major league club has more cash to upgrade the facilities, put on a better show off the field, and perhaps to weather the current economic storm.

And the more that I read about this territory thing, the more I think MLB should just give the entire Bay Area to both teams. They aren't limited to which sponsors they can deal with by territory, why limit what marketing they can do by it? It's not like there aren't fans of both teams all over the bay. I think it would be best for fans on both teams.

Jeffrey said...

So, say the Lil Giants moved to Vacaville and played at the Nut Tree... isn't there already a minor league stadium there? Or wasn't there? Wouldn't that make a move relatively cheap?

Marine Layer said...

The former Travis Credit Union Park was sold to Simpson University in Redding for use by the school's baseball team. I don't think the move has been completed yet.