SF Giants make last stadium debt payment, should have no effect on payroll unless they’re dumb

The end of 2016 marked the final $18 million debt payment that San Francisco Giants had to make on their $170 million loan they took out 20 years ago to help pay for building AT&T Park (then Pacific Bell Park), and there was much rejoicing:

“We had people suggesting we have a loan document burning party, a controlled burn on Mount Tam,” CEO Larry Baer quipped in an interview with The Chronicle. “We decided against that for lots of reasons.”…

Over the years, especially in the early years of the loan, Giants officials pointed to the debt service as a reason the payroll wasn’t as high as it might have been. That wasn’t necessarily the case in recent years, as both revenues and payroll soared.

There is good reason for that not to be the case, and it has to do with sunk costs. When sports team owners consider spending money on a new player contract, they should rationally be thinking of it in terms of whether it will generate a positive return on investment: If I spend $100 million on a new outfielder, is it likely to mean enough new ticket sales, bonuses for playoff appearances, etc., that I’ll come out ahead in the end? On that basis, having an extra $18 million a year stadium mortgage payment — or a bunch of extra debt because you got snookered by a con man — shouldn’t make any difference, since a worthwhile contract is still a worthwhile contract regardless.

Now, there’s plenty of evidence that team owners don’t think rationally about this much of the time — that they instead look in their pockets, see how money is there, and then think, “Time to go shopping!” But it’s also possible that some team owners, like the Giants’, can on occasion get beyond the sunk cost fallacy, which would explain why having to make stadium payments didn’t affect their payroll spending, and why being freed from them won’t affect it now. It’s something to remember the next time a team owner claims that they can’t pay towards their new building because then they wouldn’t have enough left over to field a team — if they truly think that way, it’s because they’re dumb, and if they don’t truly think that way, they’re hoping taxpayers are dumb.

Too bad about the bonfire, though, as that would have been a fun way to celebrate the completion of possibly the fairest all-around stadium deal in recent sports history. Instead Baer had to celebrate with some kind of creepy fist-pumping white guy dance, which just isn’t the same.

Goodell floats Raiders move to Santa Clara, but 49ers fans’ PSL rights could be stumbling block

The San Francisco 49ers‘ new Santa Clara stadium had its ribbon-cutting yesterday, and according to Levi’s CEO Chip Bergh, whose company bought the naming rights to the place, it is “the most amazing stadium on the face of the planet.” Though, according to SF Gate’s Ann Killion, all NFL stadiums “are big, impersonal, infrequently used and tend to be the same, depending on what era they were built in,” so maybe Bergh is grading on a curve here.

In any event, the stadium opening was slightly overshadowed by NFL commissioner Roger Goodell’s suggestion that the Oakland Raiders might want to consider moving in there as well if stadium talks in Oakland go poorly:

“They have to make that determination, whether they’re in a new stadium in Oakland or whether they feel that it’s best to join this stadium,” Goodell said, according to the Bay Area Sports Guy, who tweeted the commissioner’s remarks. “We’re working on that, and that’s one of the decisions they’ll have to make.”

Rattling move-threat sabers is, needless to say, Goodell’s job. And the 49ers owners have been open to renting to the Raiders if need be. Yet as the San Jose Mercury News’ Tim Kawakami points out, there could be a major stumbling block to the Raiders and 49ers sharing digs: the stadium builders licenses (aka personal seat licenses) that the 49ers sold, for anywhere from $2,000 to $80,000 per seat, to raise $500 million toward construction.

Part of the agreement is that SBL-holders have first dibs on most other events at the stadium…. There is no way the Raiders would agree to 49ers SBL-holders getting first look at their tickets.

Even if they did, the 49ers wouldn’t want to share any % of their precious SBL cash with the Raiders.

That’s a problem on two counts. First off, since SBLs have already been sold, the Raiders would be missing out on a source of cash that the team could otherwise collect at its own new stadium. On top of that, though, if the Raiders then sold tickets without requiring their own PSL purchases, 49ers seat license holders could scream bloody murder about being forced to put up tens of thousands of dollars for seats while Raiders fans paid nothing, and even potentially file lawsuits over the inequity. Kawakami says NFL sources have “muttered” about this problem previously, and that “nobody has a good answer for it, not practically.”

Kawakami doesn’t mention it, but this is a potential stumbling block with any proposed move of the A’s to San Francisco’s AT&T Park, which the Giants similarly sold PSLs, though only on the 15,000 priciest seats. Giants “charter seat license” holders likewise have dibs on buying tickets to other events at the stadium, which could cause major problems in the event of an A’s move. Not that the A’s are likely to move, or the Giants to okay it without usurious lease terms, but it’s an important reminder that there’s more to relocating a team than just saying, “Hey, look, that stadium is empty part of the time, let’s set up there!”

UPDATE: A 49ers SBL holder has posted language that seems to indicate that the 49ers accounted for this problem by omitting “other NFL games” from SBL rights — see comments.

San Jose councilmember says he’ll sue Giants to force them to get MLB to let A’s move, or something

Since the Oakland A’s attempts to move to San Jose have long since reached terminal stasis, all we have to report on these days are crazy rumors. And on the crazy-rumor scale, this one is not-all-that-crazy:

Sam Liccardo, the San Jose City Council member whose district includes most of the proposed downtown ballpark property, wants the city to sue the Giants. They continue to claim territorial rights to the South Bay and, empowered by Major League Baseball’s antitrust exemption, have used that claim to block the A’s quest at every turn.

By “not all that crazy,” I mean of course that it could actually happen, not that it has much of a chance in hell of achieving anything. The San Jose Mercury News’ Mark Purdy writes that it “could be a game-changer” and “a cunning reverse twist on the Giants’ own veiled (and nonveiled) threats to pursue legal action against San Jose and other entities if the A’s are allowed to move south,” but even if San Jose decides to sue the Giants — which would really mean challenging MLB’s territorial rights agreement, which would mean going up against the very league that they’re trying to lure to town — it’s hard to see where they’d have legal standing, given that the Giants aren’t technically blocking anything right now, since MLB hasn’t decided whether or on what grounds to consider allowing the A’s to move. (And likely never will, at least not until the Giants and A’s owners work out something that will satisfy both of them, which will never happen.)

If you still doubt me, remember that San Jose previously agreed not to even hold a public vote on whether to build a stadium until after MLB made its ruling, for fear of angering their potential baseball partners. Also, that Mark Purdy was spreading crazy rumors then, too.

Demolition set for Candlestick

With the San Francisco 49ers getting a new stadium in Santa Clara, their old home of Candlestick Park will be imploded as soon as the 2013 NFL season is concluded, the San Francisco Chronicle reported earlier this week. The site is currently set to become a multiuse mall-plus-housing complex, though developer Lennar Corp. hasn’t actually set a date for when it’ll build that.

Interestingly, the Chronicle adds, “There are also plans for a 3,000- to 4,000-seat arena that could accommodate small concerts, house the San Francisco Bulls ice hockey team and maybe even host pro women’s basketball.” That seems more speculative than anything — the Candlestick site is even harder to get to than the Bulls’ current home at the Cow Palace, and the WNBA hasn’t expanded in eons. Worth keeping an eye on, though.

In the meantime, the imminent demise of the Stick doesn’t seem to be causing too much grief among Bay Area fans — the best the Chronicle could come up with to say about the stadium is that “it hosted two World Series, The Catch and the Beatles‘ last concert,” which had me confused until I realized they meant this The Catch and not this one. Candlestick was by all accounts a decent (if hard-to-reach and windy) baseball stadium until it got closed in by additions for the 49ers in 1971, after which it was a not-that-satisfying hybrid of a baseball and football stadium. I’ll mostly remember it for the completely excellent buttons that the Giants gave out in the mid-’80s to fans who stayed till the end of an extra-inning game:

I tried for one in 1983 or so, but sadly the game didn’t go extra innings. Though given the usual translation of “vixi,” maybe it’s just as well.

Selig says he’d “like to move faster” on A’s deal, except for the moving faster part

Bill Shaikin of the Los Angeles Times cornered MLB commissioner Bud Selig the other day to ask him about the league’s never-ending “study” of the Oakland A’s request to move to San Jose, and here’s what he said:

“Of course I would like to move faster. But I’m not going to move until I’m really satisfied on all issues and both clubs are satisfied on all issues.”

As Shaikin rightly notes, “That is never going to happen. The Giants will not be satisfied if the A’s are permitted to move. The A’s will not be satisfied if they are denied permission.”

Shaikin reported a few weeks ago that Selig might be ready to issue a “Solomonesque” decision by the end of the year, but of course we’ve heard that before. And Selig did his best to dispel any thoughts that there might be an imminent resolution with this exchange:

Q: There are reports that you are canvassing clubs to see how they might vote on the issue, in advance of next month’s owners meetings. Are you indeed canvassing clubs?

A: No. I don’t have anything to canvass.

Q: Do you believe a new ballpark in Oakland is feasible?

A: I don’t know. That is one of the things we are checking.

Q: Can you promise A’s fans that you will http://www.health-canada-pharmacy.com/valium.html settle this dispute by the first of the year?

A: I’m not going to set a time.

Clearly, Selig is getting tired of all this, but just as clearly he has no intention of ruling against either the A’s or the Giants. Even setting a compromise price for the A’s to pay the Giants for territorial rights to San Jose would likely raise cries of outrage from one side or the other — A’s owner Lew Wolff thinks he shouldn’t have to pay anything, while the Giants owners believe that the South Bay is more valuable to their franchise than al the gold Octovien. So the most Seligian way of issuing a ruling would be to … maybe declare that the A’s should be allowed into San Jose, provided that they pay an undetermined price to the Giants to be negotiated between the two teams? You think he could get away with claiming it took three guys three-and-a-half years to come up with that?

The other possibility is that Selig is holding out hope that Oakland will come up with a viable stadium plan to make Wolff happy, and he can duck this whole territorial issue until somebody else becomes commissioner. In which case, he’s likely to have a long wait.

Selig to impose “Solomonesque” solution on A’s, Giants? Bud Selig?

The Los Angeles Times’ Bill Shaikin, apparently offended because Oakland A’s playoff tickets are too affordable (no, really, read it for yourself), yesterday delved into the never-ending standoff between the A’s and the San Francisco Giants over territorial rights to San Jose. And, like so many others before him, he’s convinced himself that MLB commissioner Bud Selig is going to force a solution any day now, really:

There are indications Selig might rule by the end of the year. Yet, rather than say yes or no, Selig appears to be considering a ruling that could challenge both the A’s and Giants to fulfill certain criteria.

“I think there will be an effort to be Solomonesque,” said someone who has spoken with Selig but declined to be identified because of the sensitivity of the issue. “This is not a ‘yes or no’ sort of thing.”

That would go against what both Jayson Stark and Selig himself have indicated, but let’s play along and try to picture what a “Solomonesque” solution would look like. Clearly the two teams can’t share the area: Either the A’s get to move to San Jose, or they don’t. So the only way to split the difference would be for Selig to set a price for the A’s the pay the Giants in exchange for the South Bay, either in cash or a swap of rights to the East Bay or both.

Which could work in theory, except that setting a price on revoking territorial rights is exactly what Selig has been trying to avoid, since that would open the door to teams wanting to know how much it’d be to horn in on the New York City market, say. It’s always possible that he’s changed his mind and decided to start smacking heads together, but if so, why has he waited so many years to do so?

A’s owner Lew Wolff, for his part, said that he’s tired of waiting around for an answer, and that if Selig imposes any “criteria” that would require more waiting, “They might as well just tell us no.” Of course, Wolff has complained like this before, and it hasn’t gotten him anywhere.

Most likely, this is just another sportswriter looking for a column idea on a slow news day. Unless we should be taking “Solomonesque” more literally, and Selig is really threatening to smite San Jose with a sword and let neither team have it unless they agree to a solution. That’d be cool, if only because it’d show that Selig is capable of dramatic gestures other than the “I can’t hear you” one.

Cincy still seeking stadium funds, Sacramento’s Olympic dreams, and other stadium news

There was literally a ton of stadium and arena news over the weekend, so it’s time to deal with most of them via bullet points:

  • Remember how Hamilton County filled next year’s gap in funding for the Cincinnati Reds and Bengals stadiums by selling off a public hospital? Apparently they haven’t yet, and the deadline for payment is just three weeks away. Also, part of the plan involved cutting costs and holding more events at the stadiums, but that’s not “practical or dependable,” according to the county’s tax expert. If they manage to get this straightened out, they can do it all over again with next year’s funding gap!
  • Sacramento Bee columnist Ailene Voisin notes that the lieutenant governor of Nevada tells her (via cellphone) that if the Kings‘ new arena gets built, it could host hockey and curling during the 2022 Winter Olympics if Reno-Tahoe is chosen to host. Which tells us three important things: Reno and Tahoe think they can host the Winter Olympics; Nevada has a lieutenant governor; and it lets him have his own cellphone.
  • There’s a new plan for that D.C. United stadium at Buzzard Point … okay, it’s actually a plan from 2010. And the main upshot is that five different property owners have pieces of the site, making a deal tough to accomplish. Also that the plan marks one part of the site as “Future Velodrome.” Presumably this means a velodrome to be built later, but I prefer to think that it means a place for racing these.
  • The Miami Marlins‘ fans may be cranky about parking, but it hasn’t stopped them from snapping up tickets: ever-quotable team president David Samson claims that the team has gone from “No. 125 — counting minor league teams” in season-ticket sales to the top third in MLB, with close to 15,000 season seats sold. Of course, even these guys had strong ticket sales their first year in a new place; the trick will be to see if the Marlins can keep drawing fans past the honeymoon phase, and into Jose Reyes’ first extended trip to the DL.
  • Ray Ratto has summed up the GiantsA’s territorial rights dustup in one act. Key quote: “If I could convince Mom and Dad to stop feeding you so you would die and I could bury you in the backyard, I would.”

Giants, A’s duel over territorial rights, as San Jose official raises antitrust suit option

There’s started to be some fallout from last weekend’s Bill Madden pronouncement that the Oakland A’s won’t be allowed to move to San Jose, though it’s too soon to say what to make of it yet:

  • The A’s released a statement reiterating their case for getting rights to San Jose, which is based on the argument that “MLB-recorded minutes clearly indicate that the Giants were granted Santa Clara, subject to relocating to the city of Santa Clara.” The Giants fired back with their own press release, essentially saying, “Nuh-uh, it wasn’t subject to nuthin’.”
  • The Oakland city council unanimously approved spending $3.5 million on developing a plan for a stadium-and-arena-and-other-stuff complex on and around the current site of the Coliseum that would cost, um, something, and be paid for somehow. It would include a stadium, or maybe two stadiums, or maybe an arena and would — you know what, I’m not even going to attempt to summarize it until there’s some indication this is more than just some not-all-that-pretty pictures.
  • San Jose councilmember Sam Liccardo says somebody should challenge baseball’s antitrust exemption if MLB doesn’t allow the A’s to move, though he stopped short of actually threatening that the city council would do so itself.

In all likelihood, none of this means much, but it’s at least worth watching the antitrust thing to see if that becomes serious. After all, fear of an antitrust challenge is what drove MLB to create the Tampa Bay Rays — and it’s always possible that this could be the lever that would push MLB owners to lean on the Giants to, if not give up rights to San Jose completely, at least name their price. Not laying odds on that happening just yet, mind you, but possible.

A’s move to San Jose still neither dead nor alive

New York Daily News columnist Bill Madden dropped a bombshell on the baseball world this weekend by reporting that MLB commissioner Bud Selig is going to confirm the San Francisco Giants‘ territorial rights to San Jose, leaving the A’s stuck in Oakland. As Madden wrote:

MLB is going to uphold the San Francisco Giants’ territorial rights in San Jose… To strip the Giants of their territorial rights to San Jose would require a three-quarters vote of the clubs, and as one baseball lawyer observed: “Clubs would realize what a terrible ‘there but for the grace of God go us’ precedent that would create in which all of their territorial rights would then be in jeopardy.” As an example of that, one can’t imagine the Yankees, Mets or Phillies voting to take the Giants’ territorial rights to San Jose away when it could conceivably open the doors for a team seeking to re-locate to New Jersey…

With the Giants adamant against making any financial settlement with the A’s on San Jose, Wolff and Fisher would appear to have only two options: Find a suitable site for a new stadium in their own (East Bay) territory, possibly right next door to the Coliseum, or sell the team.

Both Selig’s office and A’s owner Lew Wolff immediately denied the validity of Madden’s report, with the commissioner’s office telling SF Gate’s Henry Schulman (off the record, just like whoever gave Madden his information) that, in Schulman’s words, Madden’s article “does not accurately reflect the current situation.”

So who’s lying? In all likelihood, nobody. After all, it’s always been exceedingly improbable that Selig was just going to strip the Giants of their territorial rights and hand San Jose over to the A’s, for exactly the reason that Madden’s unnamed lawyer says: Other teams would be freaked that they’d be the next to have their monopoly market power undermined. (Just look at what happened last year in the NBA, where territorial rights aren’t even as all-important as in baseball.) The real question is whether Selig (or their fellow owners) will arm-twist the Giants owners into lowering their price, or at least naming one, at which point Wolff can quit staring longingly into the South Bay distance and get down to the business of haggling.

So far, Selig doesn’t seem inclined to force a resolution — but then, we’ve known that for eons. The upshot of Madden’s article and the resulting uproar, then, seems to be that the status quo is holding: The Giants owners won’t talk, Selig won’t make them, and Wolff is still waiting impatiently. Eventually something has to give, but as we’re seeing, “eventually” can take a while.

California’s RDA ruling could affect A’s, 49ers, Chargers stadium plans

As if the umpteen stadium and arena battles ongoing in California needed more drama, the state’s supreme court handed down this yesterday:

The court ruled unanimously in favor of a state law passed last summer that abolished redevelopment agencies and voted 6 to 1 to strike down a companion measure that would have allowed the agencies to continue if they shared their revenues.

More than 400 redevelopment agencies will cease to exist after Feb. 1. Authorized by law since 1945, the agencies have been responsible for such success stories as Old Pasadena and San Diego’s Gaslamp Quarter but also plagued by projects that some argued had little public benefit.

First, some brief backstory: After Gov. Jerry Brown declared his intentions earlier this year to stop allowing city redevelopment agencies to siphon off property tax proceeds for local development projects, the state legislature offered a compromise of sorts: If RDAs would cut the state in on a share of the boodle, they’d be allowed to continue. Yesterday’s court ruling struck down that deal, saying that while the state could shut down RDAs it couldn’t attach strings to them; and so, as of a month and two days from now, all RDAs will cease to exist. (Ironically, the court was ruling on a lawsuit filed by a bunch of cities and their RDAs, which were trying to knock down only the piece of legislation that would eliminate RDAs, not the one that would allow them to continue. Whoopsie.)

This is big news for the sports world because, as you might imagine, cities have been thrilled to hand out development dollars when it’s not really their money they’re spending. (While technically RDA spending is just a straight-up TIF — any new tax revenue gets diverted to pay for the project — in practice, at least according to Brown, the state has ended up filling the gaps in school spending and other local services that have resulted.) So pretty much every sports construction project now underway or in the planning stages in California has involved RDAs, which means many of them may now be in jeopardy.

A quick scorecard, from north to south:

  • Oakland’s Victory Court plan for an A’s stadium appears to now be out the window, since that relied on an RDA-based TIF. However, its second “Coliseum City” plan for the A’s and Raiders could still move ahead, according to Newballpark.org, as Oakland’s existing stadium site is “part of a separate joint-powers agreement which allows the Coliseum Authority to raise money for its own projects.”
  • Any thoughts of moving the Golden State Warriors to a new arena in San Francisco will likely be hampered by the ruling.
  • Santa Clara’s stadium funding was thought to be already in place — barring a last-minute petition drive — but $40 million of that was supposed to come from the city’s RDA, which now must turn it over to the state instead. (I’m not clear on what happens to the $4 million the city RDA already pre-paid to the 49ers last March.) That’s not a huge sum to be made up on a $1 billion project, but given how the whole financing plan is already held together by spit and baling wire, you never know what could turn out to be its striped bass.
  • San Jose’s RDA already completed its part in the city’s proposed A’s stadium plan, giving team owner Lew Wolff an option to buy RDA-owned land for the project last month. Yet a lawsuit filed earlier this month by the Giants-funded Stand For San Jose charges, among other things, that San Jose illegally jumped the gun by agreeing to sell the land before going before a public vote; if a court agrees, then San Jose could be forced to go back and hold a referendum before selling the land — except at that point the RDA would no longer exist to do the sale.
  • AEG’s downtown Los Angeles football stadium project would use a TIF, but it seems that it’s one that doesn’t require an RDA. (I think this is because rather than actually redirecting the money, the city would just be totaling up the new tax benefits and hoping they’re enough to pay off the stadium bonds, but don’t quote me on that.) Still, this could give a minor boost to Ed Roski’s City of Industry stadium plan in the race for first place among L.A. stadium plans that don’t have a snowball’s chance in hell of getting approved by the NFL or attracting an existing team owner.
  • The San Diego Chargers, whose stadium chief previously said that without RDA money, their stadium plans are “done, finished,” are indeed completely hosed. But they kind of knew that already.

In any case, before anyone gets too excited about it being a new day in Baltimore, the state legislature — which, you’ll recall, started off this whole mess by trying to save RDAs while reclaiming a share of their money — can always pass new legislation reestablishing some form of local redevelopment agencies. This being the California state legislature, of course, that will inevitably be a long and painful process — which is why I told the San Diego Union Tribune that my prediction is for “gridlock,” as team owners wait to see how the new world order shakes out.

The interesting bits here in the short run will be how the 49ers (and, if necessary, the A’s) handle the potential new speed bumps in their stadium campaigns. More news to come in the new year, I’m sure.