Coyotes sale struck down, pro leagues can exhale now

A bankruptcy judge in in Phoenix has struck down the sale of the financially desperate Phoenix Coyotes to Blackberry co-founder and wannabe NHL team owner Jim Balsillie. The reason had little to do with principle, as Judge Redfield T. Baum explained that Balsillie's deadline of June 29 to wrap up the deal was to quick to resolve the myriad issues complicating the future of the Coyotes. (Text of ruling here [PDF].)

Balsillie has tried to acquire and move an NHL team to the Hamilton, Ontario area three times. Initially, he wanted to move the Pittsburgh Penguins in 2006, as there appeared to be no replacement for antiquated Mellon Arena (The Igloo) on the horizon. His bid was rejected, and eventually an investment group fronted by Mario Lemieux bought the team. A new Pittsburgh arena is under construction. Balsillie then moved on to Nashville, where the Predators haven't been setting league attendance records. The league instead preferred Preds ownership to keep the team in town, and an ownership group headed by San Jose financier William "Boots" Del Biaggio was chosen instead. If that name sounds familiar, it's because Del Biaggio recently pled guilty to securities fraud. Apparently, Boots was running a Ponzi scheme to finance his high-rolling lifestyle and to provide capital for his failed purchase of the Preds. After being rebuffed twice, Balsillie turned his attention to the Phoenix franchise, whose team name should be changed to the Phoenix Wile E. Coyotes.

In the last few weeks, a handful of speculative articles have surfaced with the thinking that should the sale be allowed, it would send shockwaves throughout the four major North American pro sports leagues, as there would be precedent to take on various antitrust protections and/or league ownership covenants. Even though the time issue was the major concern, Baum definitely sided with pro sports leagues in his opinion:

"This court can not find that antitrust law, as applicable nonbankruptcy law, permits the sale free and clear of the relocation rights of the NHL," Baum wrote.

He added, “It is not an antitrust violation for professional sports leagues to have terms and conditions on relocations of its members.”

Judge Baum also felt the incredibly bizarre case was unprecedented:

“The legal issues trigger not only bankruptcy law, but antitrust law and commercial law in the context of a professional sports team, as a Chapter 11 debtor, which team has for years incurred, and is continuing to incur, very serious financial losses and problems,” Baum wrote. “No cases have been found that precisely or even closely fit this scenario.”

I'm not going to rehash all of the sordid details of this Coyotes mess, you're better off going to Five for Howling and then read from there.

The four major commissioners can sleep well. It's not that there would be some mass exodus of teams in the coming months, the economy simply isn't ripe for it. Still, the NHL asked the other three leagues to pen a brief on its behalf. But leave it to someone to try to draw the A's situation into it, and this time it's not a Bay Area sports writer - it's LA Times baseball writer Bill Shaikin. Over the weekend, Shaikin mused that a decision one way or the other could spur either the A's or Giants to act. If Balsillie won, the floodgates could be thrown open and the A's could have better footing to fight T-rights. Then again, that same outcome could cause the Giants to sue to protect their territory, a battle which could be waged for several costly years. Either would be done with the thought that the MLB Constitution was somehow weakened by the decision.

For now it's all moot. MLB's antitrust provision remains unthreatened, and territorial rights stay as is. It hasn't stopped the media from revisiting the issue yet again, as Friday's Chronicle Live and a followup by John Shea indicates. The last word comes from Judge Baum, who had two sentences in the 21-page ruling that I felt was even somewhat relatable:

There are a (sic) some reported decisions allowing franchises to be relocated short distances within the area of their existing business without the consent or over the objection of the franchisor; excising such restriction from the contract.

and...

As noted above, antitrust claims are inherently factually driven cases and it is not an antitrust violation for professional sports leagues to have terms and conditions on relocations of member teams.

In other words: status quo.

Oakland City Council proposes 10% ticket surcharge

Desperate to get out of an $80+ million budget hole, Oakland's City Council is proposing several cost-cutting and revenue-generating proposals which will certainly affect different parts of the populace. This includes eliminating discretionary accounts for the Mayor and City Council, getting contract concessions from OFD, and one major item affecting sports fans: a 10% ticket surcharge on all tickets at the Oakland-Alameda County Coliseum and Oracle Arena.

The surcharge would have to be approved by the Oakland-Alameda County Coliseum Authority, with revenues being split between Alameda County and Oakland, officials said. The city's take would be $9 million a year, according to council members' estimates, though some say that is a sunny projection given that a number of tickets for events taking place in the next year have already been sold.

Debt service on the Coliseum alone is $22 million a year, split between the City and County. While the tax wouldn't cover all of the debt service, it would take a big chunk out of it. Unfortunately, that "sunny projection" matter comes into play. Season tickets and a number of packages have already been sold, so a retroactive tax couldn't be enacted on those purchases. New packages after whatever the enactment date is could be taxed, and gameday tickets would be hit as well. Let's throw this into a quick model:

• Tax is effective halfway through the season (Game 42), leaving 41 games to get the surcharge
  
• According to TMR's Fan Cost Index, the average ticket price is $24.31
• If there's a 10% surcharge, the resulting average surcharge would be $2.40
  
• With the A's averaging 17,000+ per game, put aside 10,000 seats as presold seats, with 7,000 remaining as new or gameday purchases
• 41 games x 7,000 seats x $2.40 = $688,800 in potential revenue.
• Next year, assuming attendance patterns hold, $1.67 million for 41 games could be raised (41 games x 17,000 seats x $2.40)
  

$3 million is what an equitable share would be for the A's considering they are one of three teams at the complex. The combined figures fall over $3.6 million short of projections (assuming the total take is $18 million for both City and County, split among the three teams equally). If the surcharge is going to hurt one team more than the others, it's the Warriors. Their season just ended and they've only started to get season ticket renewals. The Raiders have had the better part of six months to sell its packages. With all three teams struggling between the lines, it's difficult to see any of them being terribly excited about a tax that could further hamper sales efforts.

Now for the painful part. How would a 10% ticket tax affect ticket prices? (Note: two prices are shown, first for regular prices and second for premium games)

• MVP: $48/$55 becomes $52.80/57.50
• Field Infield: $35/$40 becomes $38.50/44
• Lower Box: $30/$35 becomes $33/$38.50
• Field Level: $26 becomes $28.60
• Plaza Club: $40/$45 becomes $44/$49.50
• Plaza Infield: $30/$35 becomes $33/$38.50
• Plaza Level: $24 becomes $26.40
• Plaza Outfield: $18 becomes $19.80
• Bleachers: $13 becomes $14.30
• Plaza Reserved: $9 becomes $9.90
  

The City's obviously in a really tough spot fiscally. They don't want to consider such measures since they will no doubt alienate the teams currently playing in Oakland. Honestly, I don't blame them. The Coliseum debt service matter has never been properly addressed by City and County, and for them to properly address it so that it minimizes impact on residents, something needed to be done. The irony is that in enacting a ticket surcharge, they may push away one or more of the three teams that call Oakland home, right as new stadium proposals are being considered.

SJ Neighborhood Committee meets

The Merc's John Woolfork reports on the first meeting of the 30-person committee put together to go over community issues for the Diridon South ballpark site and surrounding neighborhoods.

The City Council last month enthusiastically approved a set of principles meant to guide any future negotiations with the team, such as a pledge that any stadium be privately built and actually make money for the city in tax revenue.

The committee's 30 members include transit officials, neighborhood leaders, representatives from the group that runs the nearby HP Pavilion and nearby businesses such as Adobe Systems. Also on tap are town-hall meetings in all 10 council districts in September and October.

Reed told the committee he spoke with Wolff earlier in the day and that the team owner was "still optimistic" about San Jose's prospects for working out the territorial issue. Reed said he hopes to have a decision from baseball authorities by the end of the summer to meet the city's deadline for putting a ballpark on the ballot. But he said he wants the city to be prepared if baseball gives the green light by working out concerns and showing support for the project.

While it's clear that the Diridon/Arena area will get a facelift should the ballpark and HSR move in, the fate of the Delmas Park neighborhood to the immediate east is less certain. One of the chief requests I heard from Delmas Park residents in the past was to close down Park Avenue to traffic on gameday. The closure would benefit the residents by discouraging outsiders from parking in the area, while also creating a much wider pedestrian thoroughfare between Downtown proper and the ballpark. Park Avenue is also somewhat blighted, with several properties on the street and on Delmas Avenue boarded up. There's also a lack of uniformity with yard setbacks intermingled with commercial properties that should be addressed. It's a stark contrast from the other side of Hwy 87, where Park Avenue is a truncated boulevard with palm trees in the median. It's a shame that something like a ballpark or HSR would have to be an impetus for a major change, but that's often what happens in redevelopment.

Sticker Shock - The SBL dilemma

I've been puzzling over the Santa Clara Stadium Authority matter for a couple of weeks now. While I picked up a few tidbits of useful information about the 49ers stadium project, it took a look at an otherwise innocuous Newsday item for the whole thing to click. In the blog post, the NY Giants admit their once impressive, 60,000-name waiting list has been exhausted in the team's PSL sales efforts. That means they've gone through the existing season ticket roll plus the waiting list - probably 130,000 subscribers - and they still haven't sold them all. While the Giants and Jets express confidence that they'll eventually sell out (they have another year to do it), the pickings start to get slim once they get past the diehard types.

$330 million translates into $24.75 million per year for 40 years of annual debt service. However, I don't expect a massive Stadium Authority loan for the entire amount. It makes more sense to use as much upfront money as possible. For the SA, that upfront money will be in the form of PSL's. How much? It's impossible to say at this point, even for the Niners. It stands to reason that a large portion, perhaps half of the $330 million, will be signed over to PSL's, whose revenue comes as the stadium opens. This is virgin territory for the Niners, who haven't subjected their fanbase to any significant premium seating charges yet.

In the wake of the Giants' very elastic demand for PSL's, the Niners have to formulate their Stadium Builders License sales strategy very carefully. I'm sure they have several Ivy League grads pumping out different models right now for the Yorks and Andy Dolich to pore over. It gets more complicated once taken within the context of the Stadium Authority's $330 million funding responsibility. Let's refresh the funding mix again before we get into the details.

* Principal refunded if Raiders move in permanently

Tim Kawakami first broached the subject of PSL's for both the 49ers and Raiders in February. Alas, the issue didn't get much traction for various reasons. Teams usually don't want to talk about PSL's until it's time to start selling them. In the case of the NY teams, info was sent out around this time last year, just over 2 years removed from the planned opening of the still unnamed Meadowlands stadium. With the 49ers planning to start construction sometime in early 2012 and opening in time for the 2014 season, it's possible that they wouldn't start talking SBL's until the summer of 2012. In Santa Clara's case, the mix of variables that will form the Stadium Authority's share make the whole funding picture a bit murky. It'd be great to know what the SA's funding mix will be come next spring's election, but all of the variables make it incredibly difficult to confidently predict how it will go. It's a strange dilemma for sure, as it would be in the stadium proponents' best interest to release as much information to the public as possible, yet the team doesn't want to scare fans three years early with talk of specific SBL pricing.

Since we can't expect specific numbers from the team, let's put up two hypothetical scenarios that could show how it could work. Throughout the team's documentation, they have shown confidence that the different revenue streams could not only take care of the SA's share, they have to potential to provide an operating surplus for the City. Naturally, it makes sense to be skeptical of such claims, though from running the numbers, there are instances where it could happen - at least in terms of paying off whatever debt service is due for the SA share.

For the sake of argument, let's assume that the goal is to get at least half of the $330 million from SBL sales. If successful, the required debt service would drop to $12.4 million per year at 7%. That's a fairly manageable figure. From the table above, here's how the flows would be constructed (annual amounts):

• $12.4 million in debt service
• - $7 million for naming rights (40 years)
• - $2 million for ticket taxes ($2.50 per ticket for all events)
  
• - $2 million for soft drink pouring rights
  
• - $1 million for beer pouring rights
• - $1 million for concessions rights
  

That's $13 million in revenue against the debt service. Not bad, right? Of course, everything has to fall into place. Some company will have to pony up for those naming rights. In fact, even though Cisco already has a deal in place with the A's, I wouldn't put it past them to sign a deal for Santa Clara as well, especially if the Raiders move in (Cisco was recently named to replace GM in the Dow Jones Industrial Average). In addition, the team would have to sell out games and other events pretty consistently, and those other sponsorships are extremely important as well. As I mentioned in a previous post, what if companies don't pony up $7 million? What if they offer only $4 or $5 million (Cisco will pay $4 million/yr for Cisco Field)? Does the SA hold out until they get the deal they want? If they do, who takes care of that revenue source? The term sheet states that "The Stadium Authority will make a good faith effort to issue bonds or enter into other financing arrangements secured by and paid from Naming Rights Revenue." Can't issue bonds if there's no naming rights sponsor, can you?

Back to the SBL's. While the 49ers might have been able to spring the idea on fans during their 80's-90's salad days, today it seems almost preposterous. The team was dangerously close to having games blacked out last season, which when combined with the litany of Raiders blackouts, makes the Bay Area rather ignominious in terms of its football fandom. I doubt that the Niners could take the approach the Giants and Jets took, which was to tack a PSL fee to every single seat in the stadium. Nor could they assign insanely exhorbitant PSL fees like the Cowboys (50 yard line club = $150k per seat!). Instead, I put together a scenario in which the 49ers attach PSL's to about half of the new stadium seats, in only the prime locations (sideline & club for the most part).

This achieves the goal of cutting the $330 million share in half or more. The remainder would translate to $11 million/year in debt service, which is no small discount. Again, this assumes a sellout of available SBL's, which is no small feat. The market may be far less hospitable to the concept, and the SA/49ers Stadium Company should be prepared for the possibility that they won't sell out. If they sell 80% of available SBL's, the incoming revenue looks more like this:

That's over $30 million less than if SBL's were sold out. Required debt service on the remainder would be $13.3 million/year. Suddenly the SA is at risk of running deficits just for this portion, nevermind the regular operating costs of the stadium. And if the market responds by buying only 50% of available SBL's? It's Mt. Davis all over again, and not even the Raiders becoming roomies will help.

If the Niners and the City want to be completely upfront about the deal, at some point they need to provide realistic figures and projections for the $330 million SA share. It may be premature to do it now, but sometime before the end of the year is not unthinkable. There is a decent chance for the deal to work out well for the City if everything falls into place. To be intellectually honest with the citizens of Santa Clara, stadium proponents should explain what happens if everything doesn't fall into place. Caveat emptor, Santa Clara.

Some related questions to pose:

• Is the SA share sequenced last among the various funding mechanisms?
• At what point does the SA/49ers Stadium Company decide when to go for stadium bonds for this share?
• If the SA is completely responsible for this share, what protections will be in place for the City?
• If the SA share is constrained to actual "Construction Sources" (raised funds), what will be the first corrective steps if those sources fall short?
• How much can realistically be value engineered away to deal with the shortfall?
• What precludes the SA from going back to City in the future, as the Yankees did when they needed to get additional money to finish New Yankee Stadium?
  

Santa Clara Council approves plan 5-2

It's 11 PM, which means the Santa Clara City Council session is cutting into my Daily Show/Colbert Report time. Not cool.

Truth be told, I haven't been watching it for very long. It's been going long thanks to a very extended comments session. There'll be an update when something actually happens.

11:43 PM - All comments in. Mayor Patricia Mahan just called for a brief break. Video feed now has Celine Dion music. Kill me now...

1:30 AM - After more comments by the Council and City Manager, the plan was approved 5-2. In favor were Mayor Mahan and Councilmembers Dominic Caserta, Joe Kornder, Jamie Matthews, and Kevin Moore. The dissenters were Councilmembers Will Kennedy and Jamie McLeod. I didn't hear a word about the Stadium Authority's role from anyone on the Council. Am I missing something here? Even if it had been brought up earlier during the session's public comment period, it's seems remiss not to mention it. Your move, Santa Clara citizens.

Fireworks start early in Santa Clara

There's no shortage of different perspectives going into tonight's Santa Clara City Council vote. While the vote itself appears to be something of a formality (I don't expect more than 1-2 dissenting votes), all interested parties are positioning themselves for the nearly year long campaign ahead.

Noted Stanford sports economist Roger Noll weighed in with a similar tone to his appraisal of the Fremont plan. Remember that a couple of years ago, Noll proclaimed the Fremont plan more viable than Santa Clara. Now that Fremont has bitten the dust and it's a bit early to know what all the details of the A's-to-San Jose are, the 49ers' plan will avoid the direct comparison. Noll goes on to say that "you're still going to end up with a better deal than just about any other city has received." The public vote that will occur next spring is really a question of whether or not that's good enough for Santa Clara.

Field of Schemes' Neil de Mause also chimes in, properly raising the $330 million question about the stadium authority, which to me is the chief concern. Most of the other issues directly related to the stadium deal have been reasonably well addressed, especially concerns about cost overruns and revenue shortfalls outside the $330 million Authority portion.

I'd love to comment on the letter of support from Santa Clara Unified School District ($141 million in positive impact potential), but I honestly can't make heads or tails of the economic impact projections stemming from use of the RDA passthrough mechanism and state "Basic Aid" payments.

Mark Purdy, by far the biggest supporter of moving teams to the South Bay, has a few choice words for opponents of the stadium plan. He's not afraid to get himself a little dirty here. I wouldn't be surprised if he was waving an American flag while writing the piece.

SF Mayor Gavin Newsom may have misfired with his rather provincial sounding advice for Santa Clara. I have to wonder if his prime motivation is not so much the Niners as it is to keep developer Lennar going at Hunters Point.

A few hours ago, Ohio-based theme park operator Cedar Fair yelled out like an aggrieved ex-boyfriend crashing a wedding. They'd prefer that the Council vote take place after Cedar Fair talks Great America with the City and the 49ers a week from now. I thought the timing was strange when I looked at the Council schedule, and now I think it's pretty clear: the City won't allow Cedar Fair to be more than a detail in the deal.

I'll end this post with a little friendly advice for the anti-stadium crowd: Focus on the costs of the plan, not on what profits the team will make. The clearest, most rational way to go about this is to talk in terms of costs and benefits. There are some anti-corporate, anti-business sentiments creeping up, and making those a main thrust is a good way to turn off the voters. Stick with the facts.

New 49ers price tag: $937 million

The Merc's Mike Swift has a good overview of the 27-page term sheet released by the City of Santa Clara earlier tonight (more here). New cost is $937 million, which includes the PG&E substation relocation and the parking garage across Tasman from the stadium. I gave the term sheet a quick look. Here are the raw notes I made on the document(s):

1. City contributions: RDA is pledged to give $42 million, including a $12 million loan from the team. Reimbursement can occur through additional pledged source revenues (hotel taxes). Hotel taxes - $35 million. $20 million from Silicon Valley Power. $17 million for new garage.

2. Facility rent is $5 million/year. Ground rent is $180k first year, add'l $35k per year after that up to $1 million/year. Revenue goes to SA.

3. All parking and concession revenues are to be controlled by the SA.

4. Team revenue is defined as::

• Ticket revenue (excluding ticket fee/tax)
• Premium seat revenue
• Team service revenue (equipment/technology rental)
• Ad/sponsorship revenue

5. Second team provisions
a. $28 million of RDA money is refunded
b. Add'l $1 million ground rent, goes up $100k every 5 years starting in year 11
c. 49ers responsible for all costs to bring a second team in - except in temporary (2 year max) situations

Stadium Authority
A. City claims that it is not responsible for financial condition of the SA.
B. Yet SA's board will include City Council members
C. SA revenue sources

1. Stadium Builders Licenses. There are references to "an entity experienced in the marketing and sales of SBLs." Oakland Football Marketing Association, anyone?
2. Naming Rights - A portion of construction bonds may be secured solely from Naming Rights sort. They will obviously have some kind of annual revenue target. If, through investigation, potential deals fall short of the target? What will they do: wait for the targeted number (Cowboys), or approve a lower revenue deal?
3. Ticket fee/tax
4. Upfront Vendor Payments - concessions and pouring rights

Construction of SA-designated part of project can only continue as long as SA is properly funded. That makes the dilemma in #2 above something of a showstopper. It's hard to get a loan secured by naming rights done if there's no naming rights sponsor. Which makes me wonder: Do they already have the naming rights sponsor in hand? When the idea first came up in 2005, I was led to believe that the likely candidate was Yahoo, which is no longer in the kind of fiscal shape to make such a deal. Then again, maybe it's Intel, who's no stranger to major advertising and sponsorship pushes.

Again, there is no mention of what occurs in case of an SA revenue shortfall.

The inclusion of the "Second Team" terms is interesting, but there isn't any significant accompanying information to appraise it. Councilman Dominic Caserta asserts that bringing the Raiders (the document goes out of its way not to mention the team by name) in will make the project a slam dunk. It's a bit premature to say that, though there's no doubt that having the Raiders on board will definitely help pay the bills.

I'll save the extensive review for after the City Council meeting.

Nothing better than a doubleheader

Of course, I'm referring to the rare bird that is the natural doubleheader (one admission, two games), not the commerce-driven bastardization known as day-night. The old fashioned double dip was often reserved for lazy midsummer Sunday afternoons. For A's games it usually meant a matchup with a low-draw Midwestern team. Those were the days of balanced scheduling, when fans didn't have to worry about seeing a certain team for only a single three-game set at home per year.

My only experience with a doubleheader came on July 5, 1988. I was transitioning between junior high and high school. The summer was spent at an advanced learning program for kids at Foothill College in Los Altos Hills. I took Introductory Pascal and Algebra, plus an open gym session. The lengthy bus rides were filled with A's games on the radio when available, or tapes procured via a newly opened Columbia Record Club subscription.

July 5th fell on a Tuesday, which meant it followed a lengthy holiday weekend. You could probably forgive a teenager's disinterest in voluntary summer school due to the weekend. That morning, while awaiting the transfer at San Antonio Shopping Center, I decided to cut class and head to Oakland. Mind you, it wasn't a spur-of-the-moment decision. I figured it was a good time to do it, so I took another long set of bus trips to Fremont, then took BART to the Coliseum.

As satisfying as the original $1 Double Play Wednesdays were in their heyday, nothing beat the $3 bleacher seat for that A's-Indians doubleheader. Despite the A's being swept by Cleveland, I have a hard time recalling a better experience at the ballpark than that day. The sky was as clear blue as any I've ever seen, and it was quite warm. Perfect conditions, and the young A's were playing well, July 5th notwithstanding.

I watch today's rain-caused doubleheader with a little sadness for today's kids. As a child of immigrants who couldn't care less about baseball, I didn't have the extensive baseball rearing system inherent in a typical nuclear American family. My immersion came through friends, little league, and radio/TV. Maybe there's a child of immigrants in the DFW area whose passion for baseball might get an everlasting boost from attending today's doubleheader in Arlington. But to know that institutionally the doubleheader is dead for most MLB fans around the country, I despair just a tiny bit. Frankly, it sucks.

==========
Also: Tommy Craggs has the first in a series of articles on Deadspin called "Why Your Stadium Sucks." The first target? AT&T Park.

Whither the SJ Giants?

When discussing an A's move south, it can be easy to ignore the fact that a professional baseball team already lives down there. Plenty of people from outside the region don't know the team exists, yet the San Jose Giants have been an institution at venerable Municipal Stadium that goes back over two decades. They have been undoubtedly the most stable franchise in the patchwork history of pro baseball in San Jose.

MLB and MiLB rules dictate that when a major league team enters a territory occupied by a minor league team, the MLB franchise has the right to kick the little guy out, with the proviso that the little guy is duly compensated. Imagine my surprise when Lew Wolff indicated to me that his ownership group would have to buy the SJ Giants. Should this be an eventuality, the SF Giants will have made an incredibly shrewd investment in the High-A club, one that could pay off big when taken in combination with MLB territorial rights compensation.

What then, is to be done with the San Jose Giants? The A's can't exactly buy them and operate them as the SJ Giants. Let's take a look at a few possibilities, and you can chime in with your own ideas as well.

A's swap Stockton for San Jose, sell SJ franchise to a new owner
This would keep the High-A's a short drive from the MLB A's. While this could be compelling for certain local fans who are really into tracking player development, it's not without issues. Both teams could play to the finite - yes, I said finite - South Bay baseball market to some extent, causing cannibalization. The 21-year relationship forged by the SJ Giants and local fans would be broken and not easily mended, especially by the archrival organization. Long term, there remain questions about Municipal Stadium, which for all its charm lags severely behind its much newer Stockton counterpart in terms of amenities. The ballpark situation combined with the market saturation dilemma could contribute to a dilution of the future value of the minor league franchise, which means Wolff/Fisher could fetch only a fraction of the a price they paid to facilitate the swap.

A's swap Stockton for San Jose, move SJ franchise to North/East Bay and sell
Market saturation is not an issue in this situation, but finding a viable new market for Single-A baseball is. Assuming that the other existing Cal League markets are well served by their existing franchises, there are few places to turn to in the end. The best and perhaps only options are markets that are either unproven or have failed to significantly back teams in the past. The North Bay appears to be ripe for a franchise, but there are no clear options. Petaluma has been talked up especially since the demise of the Sonoma County Crushers, but it would require public money that simply isn't there. Same goes for Napa. Vacaville's stadium at the old Nut Tree was dismantled and shipped up to Redding, where it will be used by Simpson University. (Trivia: former A's reliever Greg Cadaret was recently an assistant coach on the Simpson University baseball team, and he helped broker the move. He's now the manager of the GBL's Chico Outlaws.) There may be options in the East Bay, though it's hard to say where. Oakland? Richmond? Concord?

A's swap Stockton for San Jose, move SJ franchise south or east and sell
The Quakes have for the moment halted plans to build a training center near the Morgan Hill Sports Center, citing economic concerns. There is ample space for both the Quakes' facility and a small ballpark, though the latter is not in Morgan Hill's immediate plans. Population for the combined Morgan Hill-San Martin-Gilroy area is less than 100,000, making it way too small to support Single-A baseball on its own. A better option may be to explore Salinas, which still has the bones of an old ballpark which used to be home to the Single-A Salinas Spurs. Central Valley communities are largely spoken for, and cities further south along 101 are too spread out to yield sufficient population to support a team. Reno is having fun with its new AAA franchise and ballpark.

San Jose allows Giants' lease to expire, forcing them to move elsewhere
The SJ Giants are signed to play at Muni through the 2013 season, which makes for interesting timing considering 2013/2014 is a likely start date for A's. Could the City of San Jose, whose pols (some of them at least) have expressed displeasure at the SF Giants "investment" in the SJ team, simply allow the lease to expire and then leave the Giants to fend for themselves? While that would work from a legal standpoint, I'm pretty sure that it wouldn't preclude the A's from having to compensate the SJ Giants. The Giants would still be a legacy team and its business would be harmed by the move. The San Jose Arena Authority may be faced with conflicting interests, since it oversees Muni and would presumably do the same with an A's ballpark.


Whatever ends up happening, it promises not to be clean or simple. However, it's not big enough to derail the deal. Minor league franchises move with far greater frequency than we're used to with MLB teams. As I write this post, Richmond, VA interests are looking to buy the SF Giants' AA affiliate in Connecticut, with the intent to move them south to Richmond and a future ballpark. They're doing this to replace the recently departed AAA Braves, who moved to Gwinnett County, GA to be closer to the parent club. (More trivia: Robert Bobb was recently involved in a Richmond ballpark plan.) Moving, at least in the minor league world, is very much the rule, not the exception.

Note: The poll was removed/revised to reflect an edit to the post. The "North Bay" option is now "North/East Bay."

Econ time

It's been a quiet couple of weeks on the A's ballpark front. That doesn't mean there hasn't been news elsewhere. The good news as that MLB's economic status isn't as bad as originally feared, and there's even a chance of eclipsing the $6 billion revenue threshold (first done in 2007). Bad news? Owners tabled the long overdue broadcast territory discussion. Plenty more on this and other topics at The Biz of Baseball.

Bond ratings agencies have given the Marlins ballpark plan a proverbial thumbs up, assigning medium investment grade ratings of varying stripes to the different financing types that will cover the plan. Meanwhile, bonds for Citi Field are in danger of being downgraded to junk status. Both projects may still end up with similar respective interest rates despite the ratings gap.

The "Is Yankee Stadium a bandbox?" question has been tackled by more than just the sports media. The issue was front and center on NPR's Talk of the Nation/Science Friday two weeks ago.

Matier & Ross report that erstwhile SF Mayor Gavin Newsom is sticking to his pledge of $100 million for a 49ers stadium at Hunters Point, and not a penny more. Personally, I'd love to be Carmen Policy at this point, getting paid by the City to do - what is it that he does?

Don Perata was officially cleared in his federal corruption investigation. There's no better way to celebrate than to run for Mayor of Oakland, I suppose.

In case you're wondering, I figure the MLB committee report ("blue ribbon" is a misnomer) will be released sometime around the All Star Break.

Santa Clara stadium terms set

They worked well into the night, but they got the deal done. Terms are now defined for a stadium that could permanently bring the 49ers to Santa Clara.

Ah, but there's a catch! The City isn't going to release details of the deal until May 29, only 3 days in advance of the City Council's June 2nd session during which they could vote to approve the deal. If approved, the deal would go to the voters, probably in March 2010.

Based on the limited information we have about the deal, here's how it's put together:

• $900 million total cost
• ~$90 million upfront contribution from Santa Clara (Redevelopment funds)
• ~$330 million from Stadium Authority (quasi-public, using naming rights, PSL's, ticket taxes for revenue)
  
• ~$363 million from 49ers/NFL (G3-style fund covering premium seating)
• $62 million to relocate PG&E substation and build garage
  

Don't bother adding up the numbers because they don't add up yet. We'll see in 2 weeks. Depending on who you interpret the contributions, Santa Clara's outlay could be either $150 million or $550 million if the Stadium Authority's loan/bonds are included.

One thing not mentioned in either the Merc or SFGate article is yet another important item to be addressed on June 9: Negotiations among the City, 49ers, and Cedar Fair over the fate of Great America. As far as we know, the stadium deal can get done with or without the 49ers acquiring Great America. Or can it?

If Cedar Fair isn't satisfactorily placated, they're likely to whine as long as they own Great America. They're already bitching about lost parking and the football stadium threatening the theme park operator's business. It could very well be that the 49ers and the City are dealing with two different scenarios: one in which the 49ers take over Cedar Fair's lease, and one in which they don't. If the 49ers or a related party take over Great America, they'd also be responsible for buying up the theme park's rides, equipment, and intellectual property. Personally, I think it's not a bad investment, especially if some NFL branding is tightly integrated. A football or sports-oriented theme park next to a stadium? Sounds like a good recipe for multiple Super Bowls, domeless stadium notwithstanding.

Regardless of what happens with Great America, there's something fishy about allowing only 72 hours for the public to review the deal.

News of the week 5/19

There's a special election today, in case you haven't heard.

Rosie Rios, who Robert Bobb hired to work on the Uptown Ballpark plan, may be the next U.S. Treasurer. Both Rios and Bobb were fired by Jerry Brown. Brown was termed out, Bobb became D.C.'s hired gun to get its ballpark deal done, and Rios went on to manage $11 billion in assets for an investment firm. Rios also did economic development work for Fremont, San Leandro, and Union City prior to her Oakland stint.

Santa Clara's City Council is expected to vote on the 49ers stadium proposal today. A public vote could occur in next spring, not this November. When the full proposal is available, I'll be here to pick it apart.

Comcast and the NFL Network have been able to come to a carriage agreement. At $0.45 per subscriber per month, it's a major drop from the network's requested $0.70.

Twins owner Carl Pohlad the Pohlad family has agreed to up the team's contribution for Target Field from $130 million to $185 million in order to fund design enhancements. How magnanimous.

The Phoenix Coyotes will have its bankruptcy case heard in court today. The team and the NHL will have the support of the other three major sports leagues, as they will put up a unified front in the face of antitrust threats. If you haven't been following the case, start now. It's by far the most fascinating sports business drama this year. It has competing ownership bids, possible accounting fraud, and bad intentions everywhere you look. I mean, how can you not love this?

While we completely respect the punk rock way (Jim) Balsillie's tried to jam his foot in the door, he's doing so with the warped objectives of a self-righteous comic book villain: He views his intentions as noble, so he's willing to destroy worlds to achieve them.

Makes the A's-Oakland-San Jose saga look like a suburban bridge night.

One last thing: Game 4 of the NBA's Western Conference Finals faces a conflict with a WWE event booked 9 months ago. WWE CEO Vince McMahon has taken to playing the heel (as usual), talking trash about Nuggets and Pepsi Center owner Stan Kroenke. My guess? WWE gets compensated and the event is moved outdoors to Invesco Field at Mile High or a smaller indoor venue like the arena at the University of Denver.

KTRB-860 is all sports (Open Thread)

Baby steps, everyone. Baby steps.

It's officially Day 1 of the A's life on an all-sports radio station. The move to KTRB-860 had the promise of additional sports-related programming, and that promise is starting to be fulfilled. For the time being, all of the non-A's programming is syndicated and not from Bay Area-specific. That makes it difficult to compete with very SF-centric KNBR-680, but it's a ton better than the awkward marriage that was A's and "hot talk." Interestingly, the new brand image is XTRA SPORTS 860.

Programming is cobbled together from various networks. I can't comment on the "Todd N Tyler Radio Empire" as I tend to stay away from morning shows. "2 Live Stews" is the popular ATL-based show with brothers Ryan and Doug Stewart, who also do a weekly stint of ESPN2's "First Take" TV show opposite one-time Merc columnist Skip Bayless.

The afternoon stints are populated by Fox Sports Radio shows. "Myers & Hartman" (featuring Vic the Brick) is the more nationally-oriented show, and as you might expect, Chris Myers makes it a snoozefest. That's followed by PMS or the "Petros and Money Show." PMS has often been more LA-focused, though that may have had more to do with the show's home being longtime Lakers flagship KLAC. I'm afraid that it only works for fans of the Lakers, Dodgers, or USC football.

Rob Barr hosts Sports Byline at 7 on non-game weeknights. It's a throwback to an era that wasn't dominated by yelling. The late night spot goes to KNBR castaway Chris Townsend.

The afternoon slots are ripe for local programming, especially to challenge KNBR's drive time duo of Ralph Barbieri and Tom Tolbert. I still like the show but it's getting stale. It's been awhile since KNBR launched The Ticket 1050 as an alternative to 680 with an East Bay bent, including Raiders games. That experiment failed within a couple years, it'll be interesting to see how KTRB tries to re-establish the alternative.

This is also an open thread for those who want to talk about ballpark stuff.

Oakland hinting at Howard Terminal

True to form, Mayor Dellums' office is talking up Howard Terminal as a ballpark site. Only they're not. Sorta kinda.

A KRON report reveals that the Waterfront near Market Street and Embarcadero West is a preferred site.

While officials could not confirm the exact location, Mayor Dellums’ spokesperson David Chai says a recent meeting between city officials and representatives for Major League Baseball proved hopeful, “They left that meeting very impressed by our overall efforts and we’re going to be in a process over the next month, making sure that our presentation and all of the details that go into it are sound.”

Before you run off to your favorite mapping site, here's the pic (again) from the HOK study.

The thoroughfare between the convention center and the ballpark is Market Street extended to the waterfront.

Quick refresher (again): Howard Terminal (aerial view) was reopened in 2004, with shipping giant Matson signing a 25-year lease. A related deal, finalized only last year, has SSA Marine operating the terminal on behalf of Matson. You may also be interested in the photo overview (PDF).

The challenges? Let's start a list:

• Relocating Matson
• Lack of proximity to BART (requiring a new BART infill station? 12th St station is 3/4 mile away, West Oakland is 1 mile away)
• Environmental cleanup at site
• Making the deal worthwhile financially for the Port
• Street circulation improvements (Embarcadero specifically)
  

Discuss.

Reed moving swiftly

While I was walking an always enthusiastic JoJo on Tuesday morning prior to the Wolff chat, Wolff was having breakfast with San Jose Mayor Chuck Reed. (So that explains why he wasn't hungry...) Perhaps they were exchanging info, perhaps not. It was a busy day for Lew, as he mentioned that he was headed up to Oakland as our discussion ended.

Anyway, Reed is playing this like he's running a two minute drill. He wants the City to be prepared to put some kind of ballpark measure on the ballot in November. There's all sorts of speculation about what language such a measure might contain. Let's take a look at the options:

• Vote to approve site prep and land to be sold at market price
  
• Vote to approve site prep and land to be sold below market price
• Vote to approve site prep and land to be leased at or below market price
• Vote to approve site prep, land, and TBD off-site infrastructure work (PG&E substation, Fire Training site relocations)
  

The site is not ready to build. Buildings will need to be demolished, utilities will have to be relocated, and some site remediation may be required IIRC. Option #1 might not trigger a referendum since those steps would be taken for any big development. Options #2 & #4 definitely would trigger. #3 is conditional.

There's also some question as to whether or not such a measure would be truly binding or not. The City of Santa Clara wrestled with this very matter before deciding to make its still-delayed 49ers vote non-binding. Obviously, the structure of the deal (money outlay) would be the big determinant. There may be legal wiggle room if one of the less costly options above were chosen.

If we can project, it becomes apparent which steps are likely along with the endgame. (Color coding: orange = 60-90 days, blue = 90-120 days, green = 120-150 days, red = 150-180 days)

• Continued land acquisitions throughout the summer
• Release of "blue ribbon committee" report
• Release of updated draft EIR, start of review period
• Release of ballpark economic impact report
  
• Determination of required site changes
• Shaping of November ballot measure and official placement on ballot
  
• Release of final EIR and certification
• Pro-ballpark advertising blitz (may/may not include official participation by the A's?)
• Election
• Baseball winter meetings, action on T-rights/relocation
• A's and San Jose are allowed to officially start negotiating business terms

I suppose this could be interpreted as both San Jose and MLB meeting each other halfway. San Jose sets the table, lines up public and private support, preps a site, and shows its hand financially. MLB gets to wait to decide until all of these issues are addressed. Can San Jose really work this quickly? It'll be a major feather in Reed's cap if he can pull it off. Fortunately for him, a lot of important San Jose people, including the City Council, are right behind him.

Speaking of the Niners, there's a chance that the Santa Clara stadium will be on that city's November ballot. That would create a situation in which both measures inevitably would be compared in the media. One of them will come out looking worse, and while they wouldn't compete with each other at the ballot box, some voters undoubtedly will consider the other city's measure as a point of comparison.

Tuesday with Lew

A few hours ago I met with Lew Wolff at one of the restaurants inside the Fairmont San Jose. It was a fairly casual meeting, and I didn't take notes. For the purpose of focusing on a single post, I'll only discuss a certain topic that came to my attention.

Guy Saperstein's letter to Barbara Boxer mentioned a feasibility study at the Coliseum, which I had not heard of until that point. The cost of the study was around $500k, which the A's wanted to split with the Coliseum Authority. The JPA claimed they didn't have the budget to take care of their half, and the idea died right there.

But what was the feasibility study for?

It turns out that Wolff was interested in the Coliseum South site, which I had discussed here several years ago. The site includes the "Malibu" gravel parking lot and the now demolished HomeBase site. Lew mentioned that Schott didn't initially want to pay the $250k for the study but was convinced it was necessary.

Lew showed me something similar to the above picture, only it had the Coliseum superimposed and no ancillary buildings. The proposal was that the JPA would acquire the additional land (HomeBase), and the A's would contribute 50% towards the cost of the land. The Coliseum South concept was the proverbial A's hitter looking at a called third strike.

There's plenty more that we discussed during our nearly 90 minutes. We talked about on field stuff, the Quakes (it looks like you're getting a roof), and of course, the process of building anything in California. I thanked him for getting the CSNCA deal done and mentioned how I've gone to fewer games because of expanded HD (he replied "you're not alone"). On a side note, I was recently laid off, so I have to be more budget conscious. I gave Lew a good line he'll use in his discussions going forward, and I found out how much the A's received in revenue sharing recently: $32 million.

One more thing: Lew addressed the whole "firing the managing partner" rumor by saying, "I have my annual review due tomorrow. I'm writing it myself."

Notes on SJ Redevelopment session 5/12

Running in liveblog mode for this one, though I am not there - I am watching the live stream.

SJRA/Council are voting to approve 5 principles to use going forward in discussions with MLB and/or the A's regarding a ballpark. The 5th principle reaffirms that any money or land contribution made by the City for a ballpark would require a vote. I say "reaffirm" because that's already in the City Charter, it's nothing new.

Public comment period is happening now.

A new ballpark information website is going to be up soon, perhaps by next week.

Motions approved.

CA Sports teams support Prop 1A

Numerous California sports franchises, including the Giants, A's, Sharks, and Warriors, have contributed $25,000 each to the Yes on 1A campaign, according to Matier & Ross. Lew Wolff, who gave a few quotes to M&R, also gave $25k of his own money to the cause. Also on board are Anheuser Busch and Philip Morris.

It's clear that in supporting 1A, they are looking out for their own interests. To bridge the budget gap, the state may look towards taxing tickets, food and beverage, parking, anything related to running a franchise. Anchutz Entertainment Group, the giant stadium and arena operator, could become a big time loser if such taxes pass.

While it makes sense that these contributors would back 1A over taxes on their own operations, these two issues aren't mutually exclusive. 1A isn't guaranteed to fix the budget, especially if future state revenue falls short of projections. If that occurs, guess who's next?

I'm curious about the potential revenue the state could raise through a "fun tax." I suspect that while it would affect teams and fans, the proceeds would be a drop in the bucket for the state.

1A and its companion propositions are losing big time, according to Field Poll results from the beginning of the month.

KQED Interview up

Earlier today I was interviewed by KQED Radio's Cy Musiker regarding the A's and San Jose. Check out my dulcet nasal tones in the podcast. I talk about the money that Mayor Reed wants the city to make, NIMBYs, chicken-and-egg scenarios, and yes, hope for Oakland.

Listeners will get an easter egg for their time: the correct pronunciation of my real name! Discuss away.

One more thing: the economic impact report I cited in the interview can be found here (PDF).

Reed, Council to shape ballpark discussions

Tuesday night will mark yet another procedural step in San Jose's effort to lure the A's, as they will push forward again with rules for working with MLB, the A's, and affected communities. More interesting is what the Mayor and City Council are saying, which is what Denis C. Theriault picks up in his article today.

The council Tuesday also will take up its most comprehensive plans yet for ensuring that business owners and other residents remain part of the city's evolving ballpark conversation. The mayor's previously announced "Diridon Station Area Good Neighbor Committee," citywide town hall meetings and frank chats with neighborhood leaders are part of the prescription.

The Diridon committee would include 27 members, including transit officials, neighborhood leaders and representatives from the group that runs HP Pavilion and from nearby businesses such as Adobe Systems. Its work could start as soon as June, Reed said, with a review of the 2007 report clearing use of the Diridon area for a stadium.

I'm a little wary of having 27 members in this committee, but at least no one will be able to say they are being underrepresented. Perhaps it takes a village to build a ballpark.

Mayor Reed also indicates that he wants the project to make money for San Jose, but doesn't indicate how. The model I drew up in the last post indicates that San Jose wouldn't make money. They could through a more expensive lease. More likely is some kind of revenue sharing agreement, especially if it involves the redevelopment zone just created out of the Diridon/Arena area.

Credit goes to the Mayor/Council for being steadfast on looking for a public vote. Even if it is only advisory, at least it goes to the point of directly asking citizens if it's a good deal. I'm not for ballot box planning, especially if no public money is going towards the ballpark itself. However, with the Mayor's promises of open government, this is an appropriate step.