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December 28, 2011

Magowan: A's not moving to San Jose

More speculation today on a possible Oakland A's move to San Jose, only this time with something that last weekend's Twitter-driven story didn't have: an actual named source. Peter Magowan, the former managing partner of the San Francisco Giants (and still minority owner), tells the San Francisco Chronicle's Susan Slusser that his team isn't going to give up territorial rights to the South Bay without a fight, and he doesn't expect MLB commissioner Bud Selig to try to force one:

"I'd be amazed that, with all the public reassurances we've received from Bud Selig over the years, he would change his mind on this matter," Magowan said. "He's a man of his word, a man of integrity, and he has been clear and direct in the past about reaffirming our territorial rights. It's hard to see how he would not be bound by what he's said, as many times as he has been on the record in support of those rights."

Of course, Magowan is an interested party, so he's likely putting spin on this just as whoever has been talking up the A's side has been. Still, it doesn't seem like a sign that the Giants and A's owners are set to shake hands and cut a deal — and as even Wolff admits, Selig's M.O. is to wait until he can find an agreement that all owners are happy with. And speaking of Wolff, he also tells Slusser that he doesn't know why someone said he's "confident" of getting approval of a San Jose move:
"I haven't heard anything. It's all up to the commissioner. We'll follow whatever he says."

The best hope for Wolff at this point is that Selig is working behind the scenes with the other 28 MLB owners to raise a collection to buy out the Giants' territorial rights to San Jose, leaving everybody happy (except for any owners who don't want to pay to help the A's compete against them). Otherwise, it's likely that all these rumors are just that: rumors being planted by both sides to try to create or stall momentum via the media. Which, given how slow a news week this is, this would be a perfect time for ... but Wolff and Magowan couldn't possibly know that, right?

COMMENTS

Not really news. No one thought that this was going to end with a nice handshake agreement the same way the same way the Giants acquired the rights in the first place. This is going to be forced on them by the other owners. Either via a high enough payoff that the Giants relent. Or via an overturn of the rights by the owners and the Giants get what they get. Or via binding arbitration. One way or another though it does appear it's going to happen as the Blue Ribbon Panel allegedly has suggested. Only questions are how long will it take, via what route, and how much will it cost the A's/MLB to make the Giants somewhat happier. But the San Jose A's do appear to be an inevitability.

Posted by Dan on December 28, 2011 01:40 PM

Lew Wolff has been a terrible owner of the Oakland Athletics franchise. I wouldn't be surprised if MLB were not already lining up candidates to purchase the team.

Posted by azephan on December 28, 2011 02:08 PM

Doubtful. There is no one who has the 900 million needed to buy the A's and build them an Oakland ballpark.

Posted by Dan on December 28, 2011 03:31 PM

Yup- a terrible owner is willing to spend 500M of his own money so that the A's can stay in the Bay Area in a new ballpark- how horrible!

Posted by SanJoseA's on December 28, 2011 03:37 PM

Before we put in Lew Wolff for sainthood, I'd like to see the "deal" that causes him to put in "500 million" of his own money.

Most of your rich chaps don't have half a billion in cash lying around in savings accounts, so I'd like to know how he's going to put that together. Property guys like Wolff are usually "rich" in asset valuation, not cash--the same set of affairs that made everyone think that Frank McCourt was JD Rockefeller, when his total sum of riches seem to have been a parking deck in South Boston.

My personal guess is that Wolff as an MLS guy will repeat the usual scam of getting extra free public land to sell or develop at great profit in return for a "reduced price" stadium, and then count his rent or taxes (or both) as a part of his "contribution" to construction costs. Either will lead him to be lionized by the sports pages crowd as a hero, when in fact both have huge opportunity costs for the taxpayer.

Posted by GDub on December 28, 2011 03:50 PM

Not what happened in San Francisco GDub, what makes you think San Jose will be different?

Posted by Dan on December 28, 2011 05:16 PM

San Fran was a great model to emulate and so was J.K. Cooke Stadium in Maryland. But when you consider a "modern" stadium seems to have tripled in cost in the last 10 years, can private money still come through for two stadia in the Bay Area, even considering its wealth?

I'm not criticizing Wolff yet--I'm just saying people are embracing his "offer" without really knowing what it is. His "free" MLS stadium hasn't been paid for in cash but rather through some somewhat speculative projections for his adjoining development projects.

Posted by GDub on December 28, 2011 05:32 PM

Another interesting note regarding the A's stadium (and indeed AEG's LA stadium and new San Diego's new Chargers downtown stadium as well). The California Supreme Court is going to rule on redevelopment tomorrow morning. One of the options they can elect would kill redevelopment entirely, one would return it to the status quo it existed at about a year ago, and the third option would allow agencies to buy into continuing to operate at a reduced level. The first option might impact San Jose, but it would definitely end any hope of a ballpark in Oakland.

Posted by Dan on December 28, 2011 05:40 PM

More of the same Bay Area lunacy, it just goes 'round and 'round and 'round...
a's (as in daze) fans conveniently forget, it's not just territorial rights involved here, it's also the relocation of a strong and profitable minor league franchise and the indemnification of the franchise owners - the gi-ants.

Posted by Paul W. on December 28, 2011 07:58 PM

Translation - "we want a larger ownership percentage of the mega-RSN that's coming down the line".

All kidding aside, even though they paid nothing for those territorial rights to San Jose, they paid almost all of the costs on their waterfront stadium based on the fact that they had a highly lucrative monopoly over the South Bay that would keep the stadium full (and the lease payments made) in good times and bad.

I always thought that nothing would happen in San Jose until the stadium was paid off, so the timing looks about right.

The one thing I haven't seen yet is how they will game this thing to force a 50.1% yes vote in San Jose on the funding. You KNOW that's coming.

Posted by Greg on December 28, 2011 11:25 PM

The minor league franchise's value is under 10 million. Chump change in the grand scheme and a complete non-factor.

Posted by Dan on December 28, 2011 11:31 PM

bet it'll be a stumbling block for the el-cheap-o a's (as in a daze)

Posted by paul W. on December 29, 2011 07:42 AM

Paul, they'll be coming up with 450-500 million for the ballpark, plus between 50-100 million as a payoff for the Giants regarding their territorial privilege. As I said, the 10 million for the little Giants won't even be a blip on the radar.

Posted by Dan on December 29, 2011 11:36 AM

Yeah, moving the San Jose Giants isn't an issue. It's the big-league Giants' territorial rights payoff that's the big question mark. I still don't see where Wolff gets the money for that *and* to build a stadium *and* to keep all these 19-year-olds he keeps trading for once they reach the majors, but I'm willing to believe it if I see it.

Posted by Neil deMause on December 29, 2011 11:46 AM

Neil, bit of info you might be interested in. Redevelopment Agencies are now dead in California. The CA Supreme Ct just upheld AB 26 which kills redevelopment and overturned AB 27 which would have allowed agencies that paid the state to continue operating despite AB 26. Which puts a big crimp in San Diego's Chargers stadium plan and all but kills Escondido and Oakland's stadium plans. It could potentially impact AEG's LA stadium as well. Santa Clara and San Jose's plans remain intact due to existing contracts which are allowed to be completed.

Posted by Dan on December 29, 2011 01:39 PM

Well, there are other ways to fund stadiums than RDAs, as other states have shown. But yes, this makes those projects way more dicey, at least unless the legislature decides to pass a new law next summer after seeing its "pay us and we'll let you live" plan get nullified by the courts.

And if San Jose is grandfathered in and Oakland isn't, it should give Wolff more leverage with Selig to get a San Jose deal approved now.

Posted by Neil deMause on December 29, 2011 01:53 PM

Yeah as far as the A's to San Jose goes this is great news. Oakland's plan was entirely dependent on the 250 million their redevelopment agency had earmarked to buy the land and improve the infrastructure around the Victory Court site or to improve the infrastructure around the Coliseum site for their pie in the sky "Coliseum City" concept. The A's now have a huge bit of leverage in trying to induce San Jose to happen (since Oakland won't). Also would seem to be a boost for the idea of the Raiders moving to either Santa Clara or the LA stadium (which I just was informed is unaffected by this decision).

Posted by Dan on December 29, 2011 02:14 PM

"if San Jose is grandfathered in" -- that is exactly the crux of the lawsuit against the City of San Jose by Stand for San Jose about the option agreement to sell (the City owned part of) the land at a huge discount. Irrespective of what you think of that organization, the lawsuit has merits as a monkey wrench (as noted before).

Posted by DiridonStadiumNo on December 29, 2011 02:29 PM

"City owned land" -- my typo, it is actually *publicly* owned land no matter what. The City Council c.q. RDA board c.q. DDA board transferred it from the RDA to the DDA in order to save it from the RDA implosion that was finalized with the court ruling today. Note that the San Jose RDA was one of the parties in the lawsuit. Now the question is, is Brown getting the RDA/DDA land since at the Council meeting they did not want to use the word "encumbered" for the Option Agreement.

Posted by DiridonStadiumNo on December 29, 2011 02:34 PM

Maybe. Legally speaking the DDA is not an RDA and thus should not be covered by the implosion of the RDA's. And existing contracts and agreements were slated to be upheld. So the DDA and their agreements with Wolff should be grandfathered in. I'm sure someone will object to it, most likely the Giants (via their puppet group "Stand for San Jose" which really has no interest in San Jose's welfare but rather the Giants and San Francisco's). That is unless MLB tells the Giants to back down which they very well may do, particularly once they officially strip the Giants of their territorial privileges.

Posted by Dan on December 29, 2011 03:26 PM

dan, i'll believe the a's (daze) dollar promises when they write the checks that clear, talk/promises are cheap - not unlike the history of this ownership group.

Posted by paul W. on December 30, 2011 03:10 PM

@Paul- yup- giants share your theory- that's why they are doing everything they can to keep the A's out of SJ- if LW cant do ir than why fight it..ok... Whatever you say Paul....and who is in a daze....

Posted by SanJoseA's on December 31, 2011 02:43 AM

The payoff to the Giants will not come from the A's but from MLB itself.

This has all been caused by an error in the MLB system and Wally Haas' severe generosity. When the leagues combined in 1993 the entire market should have been shared but the Giants "slyly" pocketed the rights as Haas was trying to sell anyways and did not care....he was a Saint but a bad business man.

The other 2-team markets are all shared for a simple reason.....to make sure franchise values are at its highest for each team.

Example: If the Yankees owned Manhattan, the Mets franchise value would go down as it would not be baked into their market value. By sharing Manhattan it allows both teams to maximize market value and avoid a market imbalance between the teams.

What we have in the Bay Area is a market imbalance tilted towards the Giants. The A's are suffering in value in a big market because the Giants own 3/4 of it.

Rich counties such as Santa Clara, San Mateo, Marin are not baked into the A's market value hence they are one of the lowest valued franchises in MLB.

Selig has no choice but to allow the A's move to San Jose at this point.

Once the A's start playing in San Jose the entire market will become shared to maximize value for both teams.

Then arbitration will be used to give the Giants some money that they obviously do not deserve from the other owners.

My theory does have some logic to it..

Posted by SBSJ on December 31, 2011 02:50 AM

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