It turns out that MLB commissioner Rob Manfred didn’t only express optimism about a Tampa Bay Rays stadium deal and pessimism about an Oakland A’s one during his Friday appearance on Chris Russo’s SiriusXM show. Reports the San Francisco Chronicle:
In a weekend radio interview, Manfred said for the first time he would waive a relocation fee to make it easier for Fisher to leave Oakland.
Whoa! That … sounds familiar, actually?
Major League Baseball doesn’t plan to charge the Oakland Athletics a relocation fee if the team moves to Las Vegas — a rare accommodation that shows the league is concerned about the team’s ability to find a viable home, The Post has learned…
It has been speculated that if the A’s left Oakland, the team’s home of 54 years, they might need to pay a relocation fee as high as $1 billion. But MLB held its owners meeting earlier this month and a relocation fee was not discussed in an open session, sources said.
That was from the New York Post back in June, and was based on unnamed sources, so yeah, sure, I guess this is the first time Manfred has said it out loud in public. But the idea that there was some $1 billion relocation fee that was being waived by the league for the A’s to move to Vegas didn’t make sense at the time, as I wrote then:
The notion that A’s owner John Fisher would move from the 6th-largest market in the U.S. to the 40th and pay $1 billion for the privilege of doing so was always extremely silly, so the idea that this is money he’s now being absolved of paying is bizarre — unless you take it as Manfred, or at least some A’s-friendly functionary deep in MLB’s offices who can claim to have “knowledge of the situation,” wanting to do Fisher a solid in his move threats with Oakland as a key vote on the use of port land approaches, which is probably what this is.
And it’s probably still that: University of San Francisco sports economics professor Daniel Rascher told the Chronicle that this “may be cheap talk from the commissioner” to “unclog the slow process of getting shovels in the ground.” Yes, handing Las Vegas to the A’s would mean forgoing any expansion fees if Vegas were to eventually get a brand-new team — but then, those expansion fees are meant as much to cover the loss of income to other owners by dividing the league revenue pie into thinner slices as anything else.
Anyway, the Commissioner Rule still applies: Don’t take anything they say 100% seriously, because they are primarily PR figureheads who work for the owners, not for the sport. One day a commissioner will hold a press conference and nobody will come, but that day is not this week.
Just so I’m clear:
MLB expansion fees are to “cover the loss of income to other owners by dividing the league revenue pie into thinner slices,” but MLS expansion fees are a Ponzi scheme.
Got it.
That is correct. In order for it to cover thinner pie slices, there needs to be a measurable pie.
I thought pie is/are/was/were irrational???
Can you split an anti-pi(e)?
Raiders I/II rulings suggest that sports leagues are entitled to calculate relocation fees based on the value of the new market less the value of the old market (which is being “surrendered” back to the league, in theory).
In this example, a relocation fee of $0 is entirely justified. I don’t know that any league would actually refund money to an owner dumb enough to move from a large and reasonably wealthy market to a much smaller one where a significant percentage of the workforce makes minimum wage (or less)… but a premium of $0 seems perfectly reasonable to me.
It has always been curious to me that most leagues set expansion fees as a fixed number not dependent on the market being accessed. Buying an expansion NBA team for Seattle or Montreal or a second team in Chicago, for example, is a lot different than buying one for Charlotte, Salt Lake or New Orleans. Or Greensboro.
Still, a fool and his money…
I thought it was the other way around. When the Rams and Raiders moved from LA to St. Louis and Oakland in ’95, both paid relocation fees because moving to smaller markets meant less TV money for the entire league (or at least that was the rationale stated at the time).
Relocation fees are all about “How much can we extract as tribute from this owner for letting him have his way?” All else is just spin.
I don’t think there was ever any “real rationale” for relocation fee assessments Brian. The two cases Al Davis and the NFL fought had the effect of enshrining the concept of a sports league notionally owning “all markets currently occupied or not”, which was something that had not previously been a thing (at least outside of league offices, which claimed to have always fervently believed it). These cases – directly or indirectly – also established sports cartels as effectively being a single entity with many franchise operators (like McDonalds) rather than a collection of affiliated individual businesses (Prior to 1994/5, most sports logos and other IP were listed as property of the individual teams… post… they were mostly transferred to central ownership in the league’s hands).
You may recall public pronouncements about leagues restricting the movement of franchises as ‘anticapitalist’ or ‘an attempt by McDonalds to prevent a Burger King from opening across the street’… to which the league’s answer was akin to ‘it’s more like one McDonalds preventing another from opening across the street’.
There are legitimate costs involved to leagues in having franchises move (from league borne rebranding and marketing costs to travel arrangements for visiting teams etc), but it is very hard to imagine that these could total more than a couple of million dollars (and probably a great deal less).
There is also no evidence that the move from LA to Oakland and St. Louis meant one dollar less in TV money. Did any of the NFL’s network partners demand their contracts be reopened and the rights fees lowered? Not that I recall….
On the flip side, Davis received $225m (or “up to” as the bond issue legislation claimed at the time) in improvements to the stadium…ok, changes to the stadium… when he had been offered about $150m if he built at Hollywood park but would have to accept a second team, and pay $20-50m himself.
The Rams received a $280m domed stadium in Stl, of course.
Even if we could come up with some formula that calculates an amount of TV revenue notionally “lost” by moving two teams back to former markets that were much smaller than LA, we’d also have to calculate the future marketing/subsidy value of the Oakland and St. Louis stadium deals (both of which required far less of team ownership than any possible LA stadium would have) to the NFL, as well as any net benefit in viewership GAINED as a result of the LA market becoming blackout free.
I have never seen a single piece of evidence that the Rams and Raiders leaving Orange County/LA resulted in lower NFL viewership or merchandise sales in the LA area.
Raiders to LV sort of made sense. The Raiders have a national fan base and given only 8 regular season home games anyway, one could imagine people traveling to Vegas for a game or two or three a year.
The As to Vegas though makes little sense to me. Why go and watch a bunch of games in the summer heat?
As Neil has discussed, where an NFL team is based doesn’t matter much. There aren’t many home games and the TV money is national/international.
As long as it can fill it’s luxury suites, it’s a viable market. More or less.
That’s not true in baseball.