This is an archived version of a Field of Schemes article. Comments on this page are closed. To find the current version of the article with updated comments, click here.
February 07, 2011
A's to have to pay off S.J. Giants for move?
If you're a subscriber to the San Jose/Silicon Valley Business Journal (and who isn't?), you can read their article today on how the Oakland A's could have to pay a territorial rights fee to the San Jose
A's Giants on top of whatever they pay to the San Francisco Giants if they want to relocate to San Jose. If you're not a subscriber, you can read the newballpark.org summary here.
The upshot: The San Jose single-A team could demand a payout of about $4 million, according to Stanford economist Roger Noll, on top of $20-30 million that the parent club would be in line for. If that's all that's at stake, then it's hard to see why it's such a holdup — even $34 million wouldn't be a whole lot of money when you're talking about a $461 million stadium — but maybe Giants owner Bill Neukom disagrees with Noll about the asking price.
Speaking of Noll, I spoke with him last week for this article about revenue sharing, and he expressed the opinion that the Giants would make out just as well as the A's in an Oakland-to-San Jose franchise shift, given that they'd effectively gain the East Bay market in exchange for the South Bay. (You can drive from the East Bay to San Jose to see a baseball game, but you really don't want to, especially at rush hour.) I'm less sure of this — if the East Bay is such a great market compared to the South Bay, why is A's owner Lew Wolff so eager to abandon it? — but Noll is one of the smartest sports economists in the country, so it's certainly a point worth considering.
And in any case, Noll agrees that Neukom still isn't going to give away territorial rights cheaply, just because he doesn't have to, and he knows that Wolff wants them. So as I said two weeks ago, unless Bud Selig is willing to lock both sides in a room and not let them out until they've agreed on a number, this isn't likely to get settled anytime soon.
@Neil- Traffic in the morning goes from East Bay to San Jose as everyone works in Silicon Valley where all the good jobs are in the Bay Area.
In the evening going from the East Bay to San Jose is in fact "reverse commute". San Jose people have always had issues getting to A's games in Oakland as that is where traffic flows to.
San Francisco is actually easier because I-280 North is clear the whole way from SJ to SF. Despite SF being further away.
Oakland to SF is brutal at night because of having to pay toll and cross the bridge.
San Jose makes more sense as then all the South Bay and the East Bay can attend games much easier as 5 different freeways intersect in Downtown SJ.(101, 280, 680, 87, and 880).
Victory Court in Oakland has one freeway passing by it (880) and it is murder at all times getting through there.
I am stunned Selig has not announced San Jose has the choice and go all the way with it.....It is obvious something is wrong and I think it is because he does not have the votes from the other owners.
I think everyone figured the A's would have to pay off the SJ Giants. What's really a surprise from this article is that the A's won't require that the little Giants leave the area.
Why buy the cow when you can get the milk for free? The Giants are dong just that because of the location of AT&T Park. All you have to do is watch the downtown SF BART stations with all of the East Bay Giants fans disembarking on their way to every game. The Giants have in effect stolen East Bay customers (some of whom actually moved from SF to the East Bay suburbs) without encroaching upon the territory.
Why do you think the A's want to put some distance between themselves and the Giants. The Giants are already the de facto team of the east bay if what games people go to, what people wear and what people watch on TV are any indication.
The reality of the matter, is the Stadium issues involving the cities of Los Angeles, San Diego, San Francisco, San Jose & Santa Clara, and the A's, Raiders, 49ers, Chargers & Vikings are coming to a head, and like musical chairs, someone will get caught with no chair after Jerry Brown & the Teacher's Union are done. I bet on Oakland (Losing BOTH of their teams), San Diego losing the Chargers, and the A's getting retracted.
San Jose and Oakland are so close (30 miles?) that I really can't see the A's gaining or losing all that many fans by a move to San Jose. Yeah, it'll be easy for Giants fans in San Jose to switch, but they won't.
I think you're considering the wrong city here, though. It's the two large Central Valley towns, Sacramento and Stockton, I'd be worried about. On a good day, I can get to Oakland Arena in about 90 minutes; going to San Jose would be a pain.
On balance, though, I really think it's close to a wash for the A's. But since I'm a Giants fan who lives in the central valley, I really don't care. The only move that'd bug me would be if the A's moved to Sacramento, in which case I probably wouldn't be able to see the Giants on TV any more.
That's weird that the MLB A's would have to pay off the single-A A's, though. Doesn't the MLB team own the single-A team? Isn't that just taking money out of your left pocket and putting it into your right?
I wouldn't count on the A's getting contracted. One the MLBPA won't allow it, and two they're one of the founding franchises of the AL, three of the stadiums under consideration in California theirs isn't as tied into Brown's dealings as say the Chargers stadium). But I suspect you are correct that musical chairs is about to be played with several teams in California. The A's will be moving to San Jose sooner, or out of California later (if San Jose doesn't materialize). The Chargers are probably already promised to LA if their stadium gets built, and the Kings will be moving to one of the many potential existing or future arenas available around the country.
Mike, the MLB A's wouldn't be paying off the minor league A's, they'd be paying off the Single-A Advanced San Jose Giants. The A's Single A Advanced team is the Stockton Ports. As for worrying about the central valley, I don't think the MLB teams are all that concerned about the central valley to be honest. Yes they show the teams on TV to you guys, but you're well outside the area they realistically expect to draw from night after night.
Selig is giving Oakland the time to assemble the site because MLB is going to subsidize the stadium.
Otherwise with Lew Wolff stating he cannot build privately in Oakland due to a lack of corporate base why would Selig let Oakland go through the motions?
If MLB were to subsidize the Oakland ballpark itself ($250-$300M) that would be $8M-$10M each owner and they would avoid dealing with the Giants.
Selig cannot be this dumb to sit around if he knows Oakland will never pan out.
I know it has never been done before as MLB wants handouts from the taxpayers but in this case what other conclusion is there?
Selig must know he will get MLB to subsidize the ballpark and the Giants will be stuck thinking we now have ATT Park-East Bay 10 miles from us with us getting zero $$ in return.
The Giants will be infuriated to see MLB subsidize the A's when they were forced to build privately years ago....It would be a fitting end to all of this.
At this point I am sure the Giants will with open arms negotiate the release of Santa Clara County to the A's with one caveat...It will be too late.
It is the only explanation as otherwise San Jose is so far ahead in the process and is such a better city to build in. Why wait?
You wait simply because there is no guarantee San Jose is ready. Until they've held a vote on it SJ, while atractive, is still just theoretical. If SJ holds a vote and is 100% ready to go, Selig will act. Until they he doesn't want to nor does he have to.
@Dan- What happens once San Jose has all the land ready? They have everything else done and the rest of the land is coming soon.
The answer is "nothing". Unless the Giants have a business reason to give up San Jose they will not at all costs.
They know Oakland and the A's have been at odds for years and they want them to rot in the Coliseum or have the A's leave the Bay Area.
If Selig can get Oakland to get the land together and the EIR then he can hold the Giants hostage and have them sell their T-Rights at the lowest price possible.
Otherwise if the Giants because of their greed force MLB to subsidize the A's they will forever alienate all the owners.
The other owners will say "Take the money and run, otherwise like you we will have to pay $8M-$10M each on a handout to the A's and we will forever hate you for it."
Is that what the Giants want? No, and they will be infuriated to see A's get a handout when they were forced to build privately years ago...But they are the reason why the A's aren't in San Jose already.
This whole mess is the Giants fault and they deserve to get screwed at the end.
This has been Selig's plan all along but he did not take into account RDA's being eliminated by Jerry Brown....that is a not so small problem.
Sid, MLB will not subsidize the A's. They've never subsidized a team, and they certainly won't start for the A's. Particularly as long as Selig is commissioner. Remember he doesn't want a team and Oakland, never has wanted a team in Oakland, and he definitely won't pay to keep one there.
As for San Jose, just because they have the land doesn't mean it's a go. They'll still want to hold a vote.
I'm with Dan on the MLB subsidizing the A's thing: It won't happen. Maybe they'd extend Wolff a loan or something, but he doesn't need capital, he needs revenues.
That said, I think the notion that Selig was hoping for Oakland to come and rescue him from the Wolff-Neukom stalemate is likely correct. MLB as a whole probably doesn't care whether the A's end up with a new stadium in Oakland or San Jose or Walla Walla - they just want them to have new digs, paid for by somebody else. And if Wolff could say to Neukom, "Fine, if you won't let us go to San Jose we'll build in Oakland," then the leverage is on the other foot.
Assuming that Oakland can build him a stadium, though, which at this point looks pretty dubious.
There is no way that MLB will subsidize a Stadium for Oakland (They certainly did not for Washington DC, and do not want to establish a precedent of doing that). The San Jose Mercury News has a great article on the future of the A's... "Andrew Zimbalist, a professor of economics and baseball expert at Smith College, said he has no inside knowledge of the MLB committee's process, though he guesses it has come to an end and "that the matter is pointing toward San Jose."
"It's pretty clear that Oakland is not going to work out for the A's," he said, because so much time and energy has been spent studying options there"...........
Neil, I think you pretty much summed up the situation. Selig is praying Oakland gets it together so he doesn't have to go through the rigmarole of re-writing territorial rights. That said he's probably not stupid and realizes that Oakland isn't going to happen, but it's better to give Oakland the rope to hang themselves, let them do it, then go to the owners and say, "see, there's no other way, the A's need to be in San Jose." Because even IF their EIR is completed and IF they're able to buy the land, they still have no funding source for the ballpark since Wolff has publicly stated he won't be building privately in Oakland (and we all know that Wolff won't be forced to give up the team by his frat buddy.)
Dan, I think you have a bad read on the level of interest in Sac and Stockton; Sac metro is over 2 million people.
Let's put it this way: Sac was stop #1 on the trophy tour.
It's 85 miles from downtown Sac to AT&T. And for reasons I've never understood, the Giants have always been more popular than the A's, both inside and outside the Bay area, World Series win or not.
MLB fans in Sac go to either Giants or A's games, or they don't go at all.
The Giants are more popular than the A's for several very good reasons. KNBR, having their own long time radio mouthpiece has been a boon to the Giants while the A's have floated from radio station to station with no real home.
Second, KTVU and now CSNBA, same thing, the A's floated around TV stations ending up at harder to get CSNCA while the Giants had a dedicated base at KTVU and now CSNBA.
Third reason, the Giants were here first. They had a decade to foster a generation of fans who have now fostered that same love on their kids and grandkids while the A's were late to the party.
Fourth, the "San Francisco" factor. Don't ever underestimate being associated with one of the most beautiful cities on the planet vs being associated with a city that, deservedly or not, has a rep as a crime ridden dump of an industrial town (mind you that can work for you if you're a team like the Raiders, but it hasn't worked for the A's).
Fifth, the new ballpark. This is one of the ones that will be hard for the A's to overcome, even with a new ballpark. Pac Bell Park is continually rated one of the nicest parks in baseball by multiple sources. And as much as it makes me physically ill to admit this, it's likely a deserved honor. They've got the prime location and a fine ballpark in that location. The A's currently by comparison have a 1960's concrete donut in an industrial wasteland that borders on one of the more dangerous neighborhoods in California. Combine the nice park with the well timed Bonds home run bonanza in it's early days and they caught lightning in a bottle the A's can never match.
And lastly, the press. The Giants always lead the A's in every news report unless it's a bad one about someone throwing a battery at a player. Similarly in print the Giants are usually above the fold on both the front and sports pages while the A's are relegated to below the fold if they're on the front at all. The press does this because the Giants are more popular, but in doing so they're perpetuating the problem...
So there are several big reasons in a nutshell about why the A's are second class citizens of their own region and why they shall remain so even if their fortunes improve in Oakland or San Jose.
I'll echo Dan's comments about why the Giants are more popular than the A's with some recollections of growing up in Cupertino in the mid 1970's. The Giants radio broadcasts at the time were on KSFO, which could probably be heard in China. The A's radio broadcasts were on UC Berkeley's station, which people in Oakland would be lucky to hear. As a result, despite the A's winning the World Series three years in a row, I was much more of a Giants fan than an A's fan growing up.
If MLB's plan is to "threaten" to subsidize the ballpark in order to get the owners on board to force the Giants to sell San Jose to the A's at a discount.
Why do the Giants protect San Jose so much? It is because they believe there is no way Oakland can get anything done based on previous history. Therefore by blocking San Jose it forces the A's to move out of the Bay Area...simple.
Bud Selig knows full well Oakland cannot build this thing privately so he is waiting for Oakland to get something together to force the Giants hand.
Now if Selig comes to the owners and says "look, Oakland can get this done only with our help, they need a subsidy from us or a huge loan that never will be paid back".
This will turn all the owners against the Giants, forcing them to sell San Jose at a discount. This is what the Giants get for blocking the A's 20 years after they got the rights to San Jose for free from the A's.
If the Giants refuse then then Selig will call for a vote and overturn the Giants rights with them getting zero.
He is playing this out to force the Giants hand. Not to mention if MLB pays for the Oakland ballpark essentially the Giants would be competing with ATT Park-East Bay 10 miles away for fans....not good business.
Peter Magowan tried selling Santa Clara to the A's in the 90s for $$ but backed out when Mt. Davis was built in Oakland and with all the bad blood between the A's and the City he figured he could force the A's out of the Bay Area one day.
That is the same tactic Bill Neukom is using and unless Oakland can show a legitimate "threat" to get something done the Giants will never budge...Selig know this full well.