New MLB CBA should help spark new A’s stadium, but maybe not why you think

Of all the small changes in the new MLB collective bargaining agreement agreed on last week (which include the end of our long national World Series home-field nightmare), one that’s getting a bunch of attention is the decision to phase out the Oakland A’s exemption that’s allowed them to be the only team to collect revenue-sharing checks despite playing in a big market. The upshot, according to most sportswriters, is that this should turn up the heat on the A’s to build a new stadium:

Q. Sure, losing $35 million is one thing, but spending $800 million or likely much more to build a privately financed stadium is in a whole other category. Why does this force the A’s hands?

A. In absolute terms, it can’t. But the A’s want and need a new stadium and its revenue generating potential, so this is a strong push in this direction. Both executive vice president Billy Beane and general manager David Forst have talked about a future in which they can dial up the payroll to fit a new stadium.

That’s … not wrong, but wrongish. The implication here is that now that the A’s won’t be cashing annual revenue-sharing checks from the rest of the league no matter how crappy their balance sheet is, they’ll have to turn a profit some other way, so time to finally get cracking on that new stadium that’ll open up the money taps!

But that’s not how sports team owners think, or at least not how they should think if they’re remotely rational economic actors. (Which they probably aren’t entirely, but let’s overlook that for the moment.) If a new stadium is going to bring in more money than it costs to build, then you’re going to do it regardless of how much money you’re currently getting from other sources; and if a new stadium is going to be a money-loser, it’s not going to help you either way.

Where the new revenue-sharing rules can change the game is in how they effect marginal tax rates. Think about it this way: If you’re considering making an investment — moving to a new city, buying a car that allows you to commute to a new job, getting an advanced degree — and trying to figure out if the extra income it will allow you is worth it, the first thing you need to know is how much your net income will change after taxes, deductions, etc. So if you’ll be earning an extra $10,000 a year, but your bank balance will only change by $6,000, that’s a 40% marginal tax rate. (We can call it this regardless of whether it’s actual extra taxes you’re paying, or, say, credits you’re no longer eligible for.)

So back to the A’s. In past years, as an exempted “small market” team under MLB’s two-tier revenue sharing system, they’ve been subject to the leaguewide 34% tax on each new dollar earned, plus a 14% “performance factor” tax where both the size of the tax and the size of the benefit is based on how much money your team brings in (or fails to). (the effective marginal tax rate impact of this is largely the same regardless of whether you’re a high-revenue team or a low-revenue team, since either you’re paying out more and more into revenue sharing as your revenue rises, or you’re receiving less and less in checks, or both.) The new system eliminates the performance factor sliding-scale tax and replaces it with more flat tax — while the math is complicated, it won’t change things drastically in terms of how much of each new dollar the A’s get to keep.

What will have a significant effect is eliminating the huge penalty the A’s were previously going to face for building a new stadium. Before, a new stadium was going to make the team ineligible for any revenue-sharing checks at all, since it would kick them into the “big market” bracket; now, with the checks already shutting off, there’s no disincentive to go ahead and build. Getting rid of this penalty — a “benefit cliff,” in economic terms — should make building a new stadium a lot more alluring to the A’s owners, which is no doubt a big reason why MLB took this measure. (Though also probably because some owners were just sick of giving the A’s any money when they weren’t spending it — though that remains a problem with some other teams that remain designated “small market.”)

In other words, while losing that $35 million a year should be a huge incentive for building a new stadium, it’s not actually the loss of the money that matters, but rather taking away the threat of losing the money if they built a new stadium. MLB could just as easily have incentivized Lew Wolff and Co. by saying, “Hey, you’re small market either way, go ahead and replicate the Miami Marlins if you feel like it,” and it would have done largely the same thing.

If all that is too much math to swallow on a Monday morning — it’s almost too much for me — just hold on to the takeaway that the A’s might be building a new stadium soon with largely private money, though there’s still concerns they may try to make a grab for public land. Just also remember that revenue sharing works in mysterious ways, so what’s sauce for the A’s may not be sauce for, say, the Arizona Diamondbacks.

Manfred says he hopes for A’s stadium site plan soon; Laney College fields could be option

MLB commissioner Rob Manfred said a bunch of stuff yesterday about the Oakland A’s stadium plans, none of it earth-shaking, but here you go:

  • “I hope the first piece of news will be a decision as to which site will be the focus of their effort to get their plan and finances together.” That sounds like A’s owner Lew Wolff is going to pick a site first and then figure out how to pay for a stadium, which is kind of what’s been assumed all along. But anyway, now we know Manfred assumes it, too.
  • “The Mayor in Oakland has made it clear to me that baseball is her first priority. She would like to keep both teams, but baseball is her first priority. And I think that’s a good spot for baseball to be in.” This could mean that Mayor Libby Schaaf is in “don’t let the door hit you on the way out” mode with the Raiders (which would make sense, as Raiders owner Mark Davis is so far the one asking for a lot more public money for a stadium that would be in use about 12% as often), or it could mean that she tells all the sports team owners that they’re her favorite.
  • “I do believe that John Fisher and Lew Wolff are committed to the idea that they need to get something done in Oakland. I’ve told them. They understand that it is my strong preference that the team stay in Oakland.” Fisher and Wolff have said for years that they want to stay in the Bay Area (though they would include San Jose, which isn’t an option given the territorial rights squabble with the Giants), and sports league commissioners always say that they’d rather see teams stay put, even if only as a veiled threat. But it can be a true sentiment and a threat all at once — that’s the beauty of the move-threat game.

Meanwhile, the San Jose Mercury News (citing “a source close to the A’s”) says that a previously unreported site could be in play for the A’s: a parcel near Laney College off Lake Merritt, which I’m guessing refers to this:

screen-shot-2016-10-11-at-8-34-54-am

(The Merc News report says that “one plan at Laney would call for the college to tear down some of their relatively new athletics facilities.”)

That would be a tight squeeze — here’s an overhead view of the current Oakland Coliseum site at the same scale:

screen-shot-2016-10-11-at-8-35-19-amBut, hey, I’m an avowed fan of baseball stadiums in constrained spaces, since it can require designers to come up with interesting solutions and not just create a giant shopping mall with a ballfield in the middle. Laney College is owned by the local public community college district, so there would certainly be concerns about Fisher and Wolff paying fair market value for the site, but … you know, let’s cross this bridge when we come to it.

Fun fact: The Laney College site is also the where the Raiders played in the mid-’60s while the Coliseum was being built, at a temporary facility called Frank Youell Field. (Okay, fun if you’re into American Football League trivia. Are you saying you’re not? I thought so.)

Oakland offered $167m for Coliseum land, rejects bid because Raiders still might want it

Speaking of selling stadiums, turns out somebody does want to buy the Oakland Coliseum, so long as it comes with all the land that it (and the neighboring Oracle Arena) sits on:

A group of investors with ties to NFL Hall of Famer Ronnie Lott is offering to purchase the Coliseum land with the hopes of keeping the Raiders in Oakland, according to a letter the group’s attorney sent to local officials last week…

The group proposes purchasing the Coliseum land — which includes Oracle Arena and other nearby properties — for $167.3 million, which accounts for bond obligations owed and prepayment penalties. The plan includes upgrading and replacing the site’s sewer and septic systems, which infamously have backed up during games, spewing raw sewage into dugouts and team clubhouses.

Note that Lott, who previously expressed an interest in developing the Coliseum site with a new Raiders stadium included, isn’t actually involved in the bid, though some of his partners are. The front man for the land bid appears to be Martin J. Greenberg, who is co-founder of the National Sports Law Institute at Marquette University Law School, which is just weird, but I guess everybody in the stadium world is tempted to jump in and be part of the game at some point.

Oakland Mayor Libby Schaaf immediately rejected the bid, though it’s not immediately clear whether this was because she felt it was too low a price for 120 acres of downtown (well, sort of downtown) Oakland land, or because she doesn’t want to piss off Raiders owner Mark Davis and A’s owner Lew Wolff, each of whom would rather develop the land themselves. Schaaf told the East Bay Express:

“We did not recommend consideration of this offer at this time,” the mayor said. “We remain committed to a team-centered development. We want the Raiders and the NFL at the center of this future site.”

There are so many players here and so much potential jockeying for leverage that it’s hard to tell who’s trying to put one over on whom at any given point, but at least, unlike in Phoenix, there are actually some people who want the stadium land in Oakland. Actually wanting to pay for building a stadium without getting a cheap deal on development rights is another thing, but hey, baby steps!

Oakland A’s co-owner to visit possible waterfront stadium site, everyone gets all excited

Oakland Mayor Libby Schaaf may be one of the Gang of Four mayors taking a hard line on stadium subsidies, but that doesn’t mean she can’t try to help the Oakland A’s owners by showing them properties they could buy with their own money. A’s co-owner John Fisher (and possibly co-owner Lew Wolff’s son and stadium point man Keith) will reportedly tour the Howard Terminal site today along with Port of Oakland officials to see if it can be made to work for a new A’s stadium.

This is only one of several sites the A’s owners are looking at, and they still prefer to stay at the Oakland Coliseum site, and really just going to kick the tires isn’t much of a commitment. But since Howard Terminal has been one of the alternate sites that has gotten more attention, this is getting lots of press attention today. Personally, wake me when somebody has a financial plan.

MLB commissioner says he’s “committed” to Oakland, doesn’t know how to haggle

MLB commissioner Rob Manfred said a bunch of stuff about the A’s future in Oakland at the All-Star Game last night, and sounded more like a realtor trying to talk up the city as an investment property than a sports league commissioner trying to play hardball on a stadium demand:

“I am committed to Oakland as a major league site,” he told the Baseball Writers’ Association of America on Tuesday. “I think that if we were to leave Oakland, I think 10 years from now we would be more likely than not looking backwards saying we made a mistake.”…

“I think that Oakland is more likely than not to be a better market five years from now than it is today,” Manfred said. “So I certainly have not given up on Oakland.”

That’s all probably true, especially since Oakland is increasingly looking like the next Brooklyn, at least in terms of getting spillover gentrification from the super-wealthy district one bridge away. It’s a terrible way to create leverage, though — any hardball negotiating can now be met with “Yeah, well, your commissioner said you’re not leaving regardless” — and is only likely to stiffen Oakland officials’ already stiff resolve not to offer A’s owner Lew Wolff any public money to help with construction or land acquisition or anything else he might ask for.

Of course, it’s entirely possible that Wolff isn’t looking for any of that — he seems to be happy if he can just get the rights to build a stadium on the Coliseum site instead of the Raiders — and that Manfred knows it, which is why he’s saying such nice things at a time when it’s more traditional to talk about how a city is a tough market, and really needs up to step up to the plate, etc. Either that, or it’s just further evidence that Manfred is really bad at this whole blackmail thing.

Unpaid Forbes writer says Oakland stadium deal imminent, then hurriedly backspaces over it

So this is weird: Last Saturday, according to a report on SBNation’s Oakland Raiders blog, sports agent Leigh Steinberg wrote on Forbes’ we’ll-let-just-about-anyone-post-here-for-free site that Oakland Mayor Libby Schaaf was close to announcing a deal for new stadiums for the Raiders and A’s:

The A’s have threatened to go to San Jose, the Warriors to San Francisco, and the Raiders to multiple locals. This would have a devastating impact on the morale and economic climate of Oakland. Now, there appears to be an opening, under the leadership of Mayor Libby Schaaf, to innovatively revitalize Oakland and solve the needs of all three teams. Mayor Schaaf is expected to make a dramatic announcement regarding the Raiders situation early next week.​

That’s not what it says now if you go to the actual Forbes site, though, where that last sentence about the “dramatic announcement” has been deleted.

No explanation or acknowledgment of the change appears on either Forbes or SBNation, not even in comments (yes, I read through an SBNation comments section, this is what I do for you folks), so no way to tell whether somebody at Schaaf’s office called up Steinberg (or Forbes, if they bother editing their unpaid contributors) to say “knock that off” or if he just thought better of alleging things that weren’t going to happen. There are still two days left in the week, so I suppose Schaaf might yet surprise us all with news that Mark Davis has found $500 million under the sofa cushions and Lew Wolff has agreed to build a stadium elsewhere than the Coliseum site. I wouldn’t be holding your breath, though.

MLB commissioner: A’s owner hasn’t told me yet where I want his team to play

When you’re a major league sports commissioner, saying pretty much anything about anything is going to make headlines. So when MLB commissioner Rob Manfred said this yesterday on the Oakland A’s stadium situation:

“The differentiation between the Coliseum site and a site that’s maybe downtown, that’s a local issue. That’s for the A’s to sort out. I really do feel that the degree of influence that we should exercise in the process should be related to telling the club that we’d like them to stay in the market they are.”

…it made headlines.

Reading between the lines a bit, this could either be Manfred sending a “we’ve had enough of this whole A’s mess, Lew Wolff is on his own” message, or more likely an indication that Wolff still hasn’t decided for sure what site he wants to push for — something he hinted at last week — so MLB will take his lead. Especially since last year, when Wolff was pushing for a new lease on the Oakland Coliseum site, Manfred said MLB would go along with the A’s contention that “the Coliseum site is the best site for a baseball stadium in Oakland.” Sports commissioners seldom let themselves forget these days who signs their checks.

Wolff to Davis: Don’t blame A’s for Raiders’ stadium headaches

Oakland A’s owner Lew Wolff responded late Friday to Raiders owner Mark Davis calling his team the “elephant in the room” (oh, I see what he did there) and saying Wolff had “tied our hands behind our back” with his ten-year lease on the Oakland Coliseum:

“The A’s signed a 10-year lease at the Coliseum because we are committed to Oakland. Mr. Davis has said he is fully committed to do a new football stadium in Oakland and there is nothing in our lease that precludes Mr. Davis and the Raiders from building on the Coliseum site. As we stated yesterday, the A’s are aggressively working with the city to evaluate venue sites in Oakland. Our efforts are fully focused on Oakland. Although the Coliseum remains the main focus of our venue efforts, we are also evaluating potential sites throughout Oakland. We are confident our efforts will continue to move forward and we will share our progress throughout the process.”

Nothing that precludes the Raiders from building a stadium except that both team owners really want development rights to the whole Coliseum site. So we’re back to being treated to “get offa my lawn” nastygram wars, which should be resolved either the minute Davis finds some other city to give him the stadium money that he’s struck out on getting from Oakland, or never, somewhere in there. Or maybe Davis and Wolff will figure out a way for them both to share the Coliseum space, and Davis will find a way to pay for a new stadium with his own money, and … yeah, I can’t really see that happening either. The best bet for both teams staying in Oakland long-term might be if Wolff picks another site, and Davis settles for a remodeled Coliseum at a more affordable price or something after the entire rest of America wakes up and decides it doesn’t want to build him a football stadium. What Vegas odds do you think I could get on that one?

Oakland sends A’s a list of ten potential stadium sites, half of which don’t totally suck

The city of Oakland has sent A’s owner Lew Wolff a 21-page report outlining ten possible alternative locations for a new stadium, only five of which it considers definitely “feasible”:

  • A USPS facility in West Oakland.
  • Howard Terminal on the Oakland waterfront.
  • Brooklyn Basin on the Oakland watefront.
  • The current site of Laney College’s stadium and playing fields.
  • A site currently occupied by Peralta College administration offices and an adjacent lumberyard.

None of these sites are without their problems — in fact, most of them have been at least considered before — but it does indicate that city officials are trying to find a possible baseball stadium site in case the existing Oakland Coliseum site ends up getting used for a Raiders football stadium (or, possibly, for some non-sports development). It’s not a bad thing as due diligence goes, though as usual the most important hurdle isn’t figuring out where to put a stadium, but figuring out how to pay for one.

MLB commish says his “preference” is keeping A’s in Oakland, decide for yourself what that means

MLB Rob Manfred gave one of his patented mumble-mouthed comments about the Oakland A’s stadium situation yesterday:

I want the A’s to stay in Oakland. It’s a very fundamental policy of baseball. We favor franchise stability. I think it is possible to get a stadium done in Oakland, and that remains my preference.

That could be a statement of commitment to building a stadium in Oakland, or it could be a veiled threat (he said Oakland is his “preference,” so that implies a Plan B, right, people?), or more likely, it could be a way of just ducking a question asked by the L.A. Times’ Bill Shaikin.

The question was actually about whether MLB would consider moving the team to San Jose now that that city’s lawsuit has crashed and burned, but there’s never been any evidence that MLB was going to force the San Francisco Giants owners to name a price for allowing the A’s to go to San Jose (deemed Giants territory, and no, I really don’t want to get into the historical reasons why, thanks), and so, yeah, no surprise here. There will likely be stronger (if not necessarily clearer) words from Manfred eventually, but if so they’ll be prompted by whatever A’s owner Lew Wolff decided to push for, not what a newspaper writer decides should be news.