When last we left off at the end of yesterday’s Oakland city council hearing on the A’s owners’ stadium proposal, we were here:
Oakland council votes 6-1 (one abstention) to approve the revised term sheet. Now up to Fisher and Kaval to determine what mixture of move threats and olive branches to offer over the next couple of months.
— Field of Schemes (@fieldofschemes) July 20, 2021
The slightly longer version of that: The council voted for its own version of a stadium finance plan, the one released on Friday that included $495 million in tax kickbacks from a Howard Terminal tax district, but not the additional $360 million in future property taxes from an adjacent parcel that A’s owner John Fisher and team president Dave Kaval were seeking. Councilmember Rebecca Kaplan did mention that the missing money could eventually be sought from state or federal coffers — presumably as a stupid infrastructure request — but her memo on the subject didn’t provide any details of how that would work.
Kaval, for his part, told the council that “voting ‘yes’ on something that we don’t agree with, or that we don’t have consensus around, is not an effective path forward. And so I really wanna work with the council to see how we can get something that we agree to voted on before the [summer] recess, as opposed to voting on something that doesn’t work for our side.” Following the hearing, he demurred on what the team would do next, telling NBC Bay Area:
“We were disappointed that the City Council didn’t vote ‘yes’ on our proposal. So we’re taking some time in understanding exactly what they voted ‘yes’ on. Many of the provisions we had never seen before.
“But we’re going to analyze those things, see how they compare either positively or negatively with our term sheet and really dig into that in a thoughtful way, really caucus with Major League Baseball and get back to all parties with appropriate next steps.”
This left it to MLB commissioner Rob Manfred to play mumble-mouthed bad cop:
“For the last four years at my request and urging, the Athletics have invested significant resources and have made a major commitment to their community in the hopes of remaining as Oakland’s only major professional sports franchise. We are disappointed the City Council chose to vote on a proposal to which the A’s had not agreed. We will immediately begin conversations with the A’s to chart a path forward for the Club.”
What happens next is impossible to say, but pretty easy to guess: Kaval’s job now is to see what more he can extract from a city — ideally Oakland, since it’s bigger and is already in for $495 million, but if he can get an offer from Vegas or Henderson or Summerlin, that’s leverage if nothing else. To do so, he needs to turn up his nose at Oakland’s plan, but not cut off communication entirely, because you can’t get a bigger ransom if you kill the hostage; Kaval’s statement about getting back to “all parties” certainly indicates that he’s not walking away from the table, and his suggestion of extending talks through the council’s summer recess, which starts August 1, would seem to be an attempt to provide the least possible wiggle room as a carrot to accompany the move-threat stick.
While lots of coverage is presenting this as a big step backwards for Fisher’s stadium plans, Kaval actually got a lot done this past month: For the price of a few flights to Vegas, he got city officials to promise him $495 million in tax money to pay for infrastructure work, which is no small thing. And if $360 million seems like a large gap to fill, keep in mind: One, it’s an arbitrary number (there would be nothing stopping Fisher from deciding to accept, say, $260 million if that’s all that can be scrounged up); and two, there are lots of places to find money, whether it’s via federal infrastructure spending or additional tax breaks or who knows what. This is a world where the Minnesota legislature found a giant pile of money for the Vikings and then when that didn’t work they found another pile of money to replace it, so there are always options, assuming local elected officials are willing to ante up.
The Oakland council, in fact, may be the least of Kaval’s worries. Even that $495 million would require the approval of Alameda County, and the county isn’t even going to vote on it until October, and then it’s uncertain to approve it. Plus, while California law allows cities to create Infrastructure Financing Districts without a public vote, selling bonds based on IFD-diverted tax money absolutely does require a vote — and without bonds, there’s no way Oakland could use the future taxes to finance present-day road and infrastructure projects.
So, even if both Kaval and the council scored points in their own way in the first round, there’s a lot still to be determined here, and a lot of haggling left to go. One of the Oakland councilmembers — I think council president Nikki Fortunato Bas, but I don’t remember and you can’t make me go back and check — closed out the meeting by saying things were “heading into the 8th inning”; if that’s so, then it’s the 8th inning of a tie ballgame, so be prepared to stick around for a while if neither side can score a decisive blow. Be prepared for “Are the Oakland A’s moving to Las Vegas?” be as unanswerable a question as “Did the Oakland A’s win the World Series in 2002?” for at least a while longer:
Well … did they?
Neil, I seems the whole point of this is the ball rolling with Oakland. They are probably going to burn bridges with potential extortion partners very quickly because they are going to expect some kind of commitment and not have any patience for being used. This is MLB not the NFL or NBA. They best hope this happen before the Alameda County vote because you can kiss whatever leverage they have now goodbye. I can see Alameda county saying “that 485 million is really nice, it be a shame if something happened to it, oh how is that Vegas, Portland thing working out”. Back to square one for Kaval and A’s this time no extortion partners.
That’s a nice thought, but if you look at the history of move threat extortion, the number of cities that have said “We won’t be used by you” is pretty close to zero. (San Antonio with the Marlins maybe, if you squint.)
Plus, you don’t really need an “extortion partner,” as Kaval has shown – just a Stanley Cup ticket and a selfie stick.
Yeah I bet any amount of money when the Marlins visited San Antonio, San Antonio said sure “we’ll get you darn close to a $500 million ballpark but before we talk you need to publicly declare you are done with Miami”. We know what the answer was
Funny: the Marlins attendance if they had relocated to San Antonio would’ve probably been a LOT better than it is in Miami. How’d that work out for you MLB?
It’s 2021 and there are far, FAR more important aspects of team revenue than attendance
Uhhh, ok Anon. So God awful attendance or even perhaps AAA-size MLB ballparks should be the norm from here on out; since there’s money pouring in (supposedly) from other sources? BTW, how’s the Marlins revenue machine doing down in Miami anyway? Are they now big spenders, perennial contenders even with abysmal attendance? (LOL!)
https://www.reviewjournal.com/sports/sports-columns/ed-graney/graney-as-rejection-of-oakland-shines-light-on-las-vegas-2403609/
Yep, Vegas isnt going to be used
NdM,
In terms of Oakland somehow scrounging up infrastructure funds for their HT fantasy, I don’t feel the Minnesota/Vikings saga is a good comparison. Why? Because, unlike Minneapolis/St. Paul, Oakland is not the primary city/population center of California. Your going to have San Diego, LA, $an Jo$e, SF, Sacramento and all points in between wanting some of that state/federal infrastructure pie; no way Oakland gets even close to finding a mythical pile of money worth $260-360 million!
One thing lost on everyone during this saga is why the A’s needed $850 million in public subsidies in the first place. Basically, without it MLB/A’s doesnt work in Oakland: the difficulty of building at HT, the massive ingress/egress issues involved, and the lack of corporate support/disposable income in the immediate Oakland area (compared to $J, SF). Without it, the A’s go back to the drawing board, yet again.
Someone is sore this morning from yesterdays turn of events.. (LOL!)
Bingo. This is why the A’s are as good as gone. Oakland pols have gone so insane they’ll never let Howard Terminal happen. Without it, there’s no point staying in Oakland now that RSN money is swiftly evaporating.
Evaporating? Hardly.
https://www.sportspromedia.com/news/milwaukee-brewers-local-tv-rights-2021-fox-sports-sinclair-bally-rsn
Come on, Neil! The Brewers are the quintessential example of MY argument. They got $0 cash in that deal! The “increase from $20 million” per year is all based on equity in a channel that A) is losing subscribers at a high rate, and B) is on course to get gobbled up as part of a nationalization of local MLB broadcasts.
The deal is, Sinclair played hardball with the Brewers and Manfred had to come in and threaten SGBI with said nationalization. The “increase from $20 million” per year was done at a valuation of Bally Sports Wisconsin which has no chance of being reached in the near future.
I’ll grant you, if cord-cutting ceases and if Comcast and DirecTV are able to poach competing MVPD subs by dangling local MLB telecasts, then yes; the Oakland market will be a heck of a lot more attractive than Las Vegas, Nashville, et al. I don’t see that happening. And if cord-cutting accelerates (a real possibility IMO, whenever the next economic downturn occurs), MLB’s local broadcast nationalization idea will gain steam and likely cause a dramatic leveling of the playing field between market sizes.
“Local broadcast nationalization” is a long way from happening, if only because so many teams are on long-term deals. And cord-cutting or no, it’s not very likely that the Steinbrenners are going to put up with taking the same cut of combined local TV revenues as the Royals, since they know that a lot more people are watching the Yankees, specifically because their fan base can draw from 10x the population.
If we do get to the point where MLB TV finances work like the NFL’s, then sure, the A’s might move to Las Vegas someday. We are nowhere near that becoming even a twinkle in Rob Manfred’s eye.
Neil, I totally agree that the Yanks and a few others will get special deals whenever local MLB broadcast nationalization happens. I question whether the Oakland market will get terms significantly more favorable than Las Vegas, Portland, et al.
I think the real reason the A’s would prefer Oakland is because the Howard Terminal site has magnificent upside. It’s obviously not worth the risk under the deal the Oakland city council proposed, but the A’s owners have to keep trying until it truly dies. My point is, given the prevailing political winds in Oakland and the academic & media bubble in which their city council resides, I will be shocked if the A’s get the kind of risk moderation they need to stay in town.
I honestly can’t tell if this is hyperbolic parody or if you’re being serious.
I am glad someone else said that before I was forced to. I guess it’s possible that when aliens invade/the robots take over one of their demands will be that MLB nationalises all RSNs.
I don’t know enough about our soon to arrive reptilian/machine overlords to know their thoughts on the socialization of professional sports revenue streams (I mean, at least as far as the member franchises go). But it seems to me that should be relatively far down their list of demands.
I’m a little confused as to why Las Vegas would care if it’s being used, which has been something brought up here (not by Neil) the last few days. “Being used” for visits costs LV area politicians nothing and gets them headlines that they can use to show they’re being proactive in aggressively pursuing economic development (I’m not advocating for that point but that’s obviously how they spin it). Vegas isn’t where it was a decade ago where they were desperate for a major league team of some sort; they have two already and no one’s really clamoring for a third they just are the most (only?) logical region to use for an extortion threat, so if it turns out Oakland caves, I don’t see how that hurts anyone in Las Vegas in the slightest.
San Antonio was a different deal – they want a second major franchise bad and were willing to pay for one, so yes they were mad when they realized Loria wasn’t serious about moving anywhere.
As to the meeting yesterday, I thought it was interesting. Beforehand I thought the most likely thing was that the willingness to “haggle over price” would lead to the A’s getting their money which was the entire point of asking for the “shoot for the moon” number they started with, so that it would get countered by a lower but still high number they could grudgingly accept. The impression I got from yesterday’s meeting, and I could be totally wrong, was of a council that wanted to ostensibly vote in favor of something while knowing it will kill the deal. They can say they did all they could, approved $400 million and were abandoned by greedy owners. I think either the A’s are gone or their bluff was called, and while it wasn’t a total rebuke it was more of a rebuke than we usually see in these situations. Just my two cents.
Vegas has to know the someone getting $500 million (which would probably pay for a new park in Pittsburgh or Cleveland) in public funds and is “leaving the door open” in a market where YOU pay $ 1 billion to get into cannot possibly be serious. If anyone is paying attention ( I doubt many people are) they are going to say you are really looking silly there Mr./Mrs. Pol
I happen to agree with you that the City knows the A’s will not accept. Why? Here is just one reason: There is no guarantee that the Federal Government will give Oakland the necessary money towards the project, and thus the $400m may be a fantasy number designed to take the heat off of politicians and on to “Greedy owners” when and if the A’s join the raiders and Warriors out of town.
If we have truly come to the point where a (more or less penniless) host city offering a baseball team one half billion dollars in subsidy to remain in that city is “mailing it in” then I think we have to all take our hats off to the sports cartels.
I would argue that Oakland has offered far more than should be necessary to bribe the A’s into staying, and almost certainly far more than they can actually afford to provide.
Secondly, at the moment the franchise has exactly zero dollars on offer from any other location they are permitted to look at moving to.
Could someone else see Oakland’s offer as the stalking horse (Kaval certainly does) and attempt to better it? Maybe, but it is not clear to me who might do that and how their offer of $550m or more in a smaller market will be better.
Painting the offer of half a billion dollars subsidy as a weak effort is an unusual position to take if you are anyone but Fisher or his Director of Extortion (I can’t remember his actual title but it’s something like that isn’t it?)
BTW, if Oakland can draw up TIF lines around a stadium and claim “$495 million in taxpayer monies!”, why can’t Vegas? I’m sure Vegas/Clark County pols have the ability to draw lines on a map and offer up a sizable subsidy for the A’s. “$495, $500?!..do I hear $550 million?!!”
Difference is there’s not an equivalent business zone in the Las Vegas area.
The Cashman site is close to downtown, but there’s no chance a TIF would be allowed anywhere near there or the strip.
Summerlin is controlled by Hughes Corp and they would be perfectly content to stick with the minor league situation they have as opposed to spending the amount of money needed to build a MLB stadium.
And Henderson is so spread out and too far from the strip to make it anywhere near an attractive spot for a stadium.
They can certainly draw up a TIF/CRL/BRZ zone if they wish, Antonio. But many (maybe most) don’t ever generate the kinds of revenues that their proponents “project”.
This usually leads to redrawing the zone much larger, and thus incorporating businesses and other properties that not only do not benefit from the impending construction project but may actually be hurt by it (I am aware of several of these that are more or less local to me).
Naturally, these tend to be businesses that were in place long before the project for which the district was created… so they are paying a surcharge to fund a local business that effectively competes with them.
And we all know what happens when, no matter how massively the TIF district is redrawn, revenues still fall short of the amount needed to actually pay for the development it was created for: The general fund is used to cover the shortfall.
This means that everyone in the municipal district pays for the new business the TIF was supposed to not only cover but shower the municipality with new money from.
Business owners who also live in the district, of course, pay twice. Then again, by default so do their customers…