Let’s start with my final post from yesterday’s live updates on the Nevada legislature’s special session on a Las Vegas stadium for the Oakland A’s, because I think that summed things up pretty well:
After staying in recess all day, the assembly voted to:
- increase the community benefits fund from $1.5 million to $2 million
- make sure the person in charge of it has lived in Clark County for at least five years
- other, even less momentous things
Hot take:
tl;dr: One deck chair rearranged, slightly. https://t.co/X8vXM9wmHL
— Field of Schemes (@fieldofschemes) June 15, 2023
There’s still a chance that the senate rejects this for some incomprehensible reason, but given that the assembly speaker says he expects this to be wrapped up tonight, presumably not. So we’re back to where we were at the top of this post: Nevada is offering [A’s owner] John Fisher $600 million toward a stadium, and it’s up to him to see if he can make the rest of the financing work. You may now resume your chanting.
The senate indeed passed the re-amended bill last night. The bill will now head to Gov. Joe Lombardo, who will certainly sign it since signing it was the whole point of the last week of madness. And Fisher’s maybe-not-entirely-intentional dice roll on Las Vegas will have paid off.
At that point, it will be about seeing what Fisher does with the car now that he’s caught it. While the $600 million or so value of the A’s deal will be among the largest MLB stadium subsidies ever — behind only the New York Yankees ($1.2 billion) and Miami Marlins ($900 million), I believe — this will still leave him spending around $1 billion of his own money to build a 30,000-seat domed stadium in the nation’s 40th-largest media market, which is not necessarily a recipe for success, at least not more success than he could have had in Oakland if he’d tried to sell tickets. Yes, the A’s will probably get a permanent spot at the MLB revenue-sharing table now, especially given league rules that let teams deduct stadium costs from revenue for the purposes of calculating who’s eligible; at least until the cable bubble collapses, that’s worth around $60 million a year, which should go a long way toward making Fisher’s stadium bond payments. But he’s still going to be trying to sell tickets in baseball’s smallest market, so at best maybe he can hope to be the new Pittsburgh Pirates: Turning a profit, sure, but mostly by farming league subsidies while playing in a stadium with the public taking on a large share of the costs.
(Fisher, at least, only has to worry about selling tickets to anyone, even if it’s tourists who already happen to be in Las Vegas and want to check out a ballgame. Getting people to come to Vegas just because they want to see a ballgame, which is what will matter to the Nevada economy, is pretty much hopeless, as Berry College economist E.F. Stephenson looked at Vegas hotel stays during Golden Knights games and found that there is zero increase when the Knights are playing.)
All this, one might think, would be enough to make other MLB owners think twice about voting to approve the A’s move to Vegas, since they’ll only be allowing Fisher to help himself to a larger slice of their TV revenue pie. Except for two things: 1) Commissioner Rob Manfred has already endorsed the relocation, which isn’t something his 29 other bosses would let him do if they were opposed; and 2) the other owners at this point seem to have their eyes on the bigger prize of expansion fees, and they’ve promised not to expand until Fisher and Tampa Bay Rays owner Stu Sternberg have new stadium deals. So sending $60 million a year Fisher’s way might be a reasonable price to pay for them.
It’s a bizarre and unlikely set of circumstances, but the upshot is the same for A’s fans, who after years of watching Fisher and that guy who wrote Moneyball sell off his best players every couple of seasons now get to become the first city to lose its baseball team to a smaller market since the Brooklyn Dodgers and New York Giants moved to California in 1958. (The Seattle Pilots moving to Milwaukee are a possible exception, but I’m still trying to find solid 1970 media market rankings.) Will Oakland now have a shot at an expansion team? What will even happen to East Bay territorial rights — if the Giants get them, will they have to pay for them? Will Rep. Barbara Lee really make any headway with her “Moneyball Act” to require MLB provide Oakland with compensation, on pain of the repeal of baseball’s antitrust exemption? Many, many questions still to answer, but the big one is resolved: Finding a friendly governor willing to rush a last-minute stadium subsidy bill through a legislature via political gamesmanship can work for baseball teams, at least as well as it does for the NFL and other non-sporty industries.
It will be interesting to see how expansion plays out. MLS expansion and NFL replacing 20 year old stadiums has vacuumed up billions of dollars in places that would seem to be a fit for baseball. Is Nashville or Charlotte going to be in a position to offer big money?
MLB and NBA screwed up expansion big time.
NBA has been very slow and allowed for NHL teams to become very popular in the two most likely expansion cities (Seattle and Vegas).
MLB allowed for MLS to suck up stadium money and real estate, and gain a foothold in cities like Nashville, Charlotte, Portland and Austin. All so they could get this stadium deal in Vegas, that’s really not that much of a benefit for MLB and only seems to help an owner that none of the other owners particularly like.
It’s highly unlikely that a returning Sonics club would see any reduction in interest or ticket demand from the hockey team’s presence.
The owners of VGK and SK have marketed their clubs very well and demand is very high for their ‘product’. What has yet to be determined is what the residual demand will be when these teams have been in place for a decade or more and fans no longer see them as the new cool thing.
I agree with you on the real estate though. I’m not in favour of public subsidies for private businesses at all, but if you are going to build a public building to house sports it makes sense to build one that has the highest and best use. That is pretty much always an arena and not a baseball, football or soccer stadium – especially the latter two as they are used much much less frequently.
The NBA doesn’t worry about competing with the NHL. The NBA doesn’t even really have to care nearly as much about attendance or making sure every one of its teams is competitive.
It’s doing much better on TV and is headed to a massive TV deal. It has a massive international reach.
If and when it returns to Seattle and puts a team in Vegas, it will do just fine there, at least the first few seasons. For reasons I will never understand, lots of people, especially rich people and the younger demographic advertisers want, love the NBA, no matter how boring it actually is.
The NBA has not made it easy – or maybe even possible – for expansion teams to be competitive the last few times they’ve done it. That’s a big reason why the Grizzlies flopped so quickly.
It remains to be seen in the NBA does that again or if it follows the NHL’s recent experience and actually makes it possible for its expansion teams to be any good.
That was a smart move by the NHL. If Vegas or Seattle had to wait six or seven years to even make the playoffs, local interest would wane pretty quickly and they would never get another chance to make a first impression.
But maybe the NBA doesn’t care about that.
Had the NBA been more interested in expansion, the SuperSonics could have had their own arena. The Vegas team would be looking at a facility on the strip instead of 4 miles south of Mandalay Bay.
Big picture I’m not sure it matters much, but in terms of marketing, it’s very different being the only winter sport in town to having to share things.
I think the new Sonics will do great, but their fanbase is very different then in 2008. It’s wealthier, more tech-y, probably moved there from somewhere else. The city’s sports scene is also vastly different. MLS didn’t exist; the Seahawks were a mid NFL franchise, hockey was on no one’s radar.
I also don’t think just existing will be enough for the Sonics or Las Vegas _____s- they need to be entertaining, not necessarily winners but they’ll be entering very saturated sports markets.
Show us the clause in the NBA bylaws that states Seattle is entitled to an NBA club.
The Grizzlies failed in western Canada but are thriving in Memphis, which happens to be a good basketball town. The club that used to be the SuperSonics are not only established in Oklahoma City, their presence has hurt college basketball in the Sooner State.
Representative Lee’s Bill is not going to become Law. Why? There are plenty of teams, schools and states and cities opposed to it. Some to be honest need to move ( such as the Coyotes), while others are simply being greedy.
I’m going on the presumption that when the franchise has actually moved to Las Vegas that it will be keeping the “Athletics” name. Is there anything that would prevent the team from changing it to something new if it wanted to?
Likewise with the current team uniform colours. Free to change if so desired?
The smarter move would be to rebrand. No one in Las Vegas cares about the history of the Athletics, it’s not like the Raiders where they sell over 40% of their season tickets to long time
fans in California.
The Oakland Athletics of Las Vegas
That was actually the plan when they tried the move to Fremont. No way was Fremont going to get top billing. Just like Anaheim or Santa Clara.
Actually it would’ve been the San Jose Athletics of Fremont. Wolff said it himself back during that go around. Would’ve made sense: SJ larger, wealthier city than Oakland and much closer to Fremont. And the Giants could’ve done NOTHING about it. Considering where we’re now at, wish it would’ve happened..
I know Fremont is still in Alameda county (at least I think I know that…) and not Santa Clara, but wouldn’t that move still have required the approval of the Giants?
I know they needed 75% of other owners to approve anyway and they weren’t going to get that (which is why San Jose sued MLB – see Whyte ruling) so it’s a bit moot.
There is significant merit to the rebranding idea, Brawley.
Not only would it be the ‘fresh start’ that Fisher and co are looking for (and maybe even an opportunity to lose or obscure some of his own horrendous conduct as owner of the Athletics franchise… at least for people who don’t look too closely at the details when a shiny new team arrives…), but for MLB it would also be an inducement to prospective expansion owners for Oakland.
As with the Browns II in Cleveland, you aren’t just buying a generic team you are buying the history as well.
Now, it’s not like the A’s history in Oakland goes back to the latter part of the 1800s, but the franchise itself is historic (*and eminently portable, as that history shows!)
Oakland’s relationship with Fisher was permanently broken. If MLB was not prepared to compel him to sell to one of the many people who were interested in owning the Oakland A’s, this might be the best option all round.
Why would MLB owners vote down Vegas at this point?! To FORCE Fisher to spend and lose his @ss in Oakland?! I know a majority of folks are portraying Fisher as the villain in this saga, but the reality has been for a long time that Oakland is no longer viewed as a major league caliber city. There’s a reason why the Warriors and Raiders left for greener pastures elsewhere: Oakland’s politics, lack of corporate support, disposable income of it’s citizens and (unfortunately) perception as a crime-ridden city. They were never going to make Howard Terminal (a terrible location from the get go!) a reality! In fact, I believe Fisher/the A’s proposing HT as their preferred ballpark site was their way of saying “We’re done here in Oakland! What are our options outside of here MLB?”. And no, Oakland will not be a MLB expansion candidate for the reasons I listed above. If MLB ever decides to come back to the Bay Area they will go for the sure money of $an Jose/$ilicon Valley and skim the %$#@! giants some compensation for their BS territory. For now: viva las vegas..
Travesty how this whole thing has unfolded; citizens & baseball fans of the the A’s deserve better as do the players. Fisher leveraging Vegas tax payers to lure his charity-addicted club to the desert, abandoning greater potential in the Bay Area should never have happened. Yet here we are. Can’t see myself going to a Vegas game. And wouldn’t Montreal-to-Washington DC via San Juan not also qualify?
Maybe — Canadian and U.S. media market calculations aren’t directly comparable. D.C. certainly has more baseball TV viewers than Montreal did.
Yeah, it’s sad Montreal lost the Expos – especially the way they lost them – but it never made sense for DC not to have an MLB team. Among the reasons they didn’t were abject racism and Peter Angelos.
Fisher is not “losing his a$$” in Oakland. The A’s are one of the more profitable MLB franchises even with less than 10,000 fans in the stadium.
History has shown that when he/Wolff spent a reasonable amount on players, attendance was in the 21-24k range (and often better when they spent wisely on players rather than foolishly).
I don’t understand how you can say Oakland is “doing nothing” when they have offered $500m-$775m in funding for a new stadium (depending on what you include as stadium funding and what you consider as coming from Oakland vs a transfer from other agencies).
That’s more than Vegas is offering.
Fisher is absolutely the villain here. He is turning down more money from a larger market to leave for a smaller amount in a smaller market. He is also going to have to compete with many more sports and non-sports entertainment options in Vegas than he does in Oakland.
So at best he can be portrayed as villain/idiot.
I agree that HT was improbable from the git go, nothing but a way to look like they really were going to give Oakland a try. The Coliseum site was a reasonable option that the A’s said was not at all reasonable.
It’s true that Oakland’s reputation is bad, but I think Oakland’s liberal politics plays a big role in this. The Nevada politicians will likely pay no price for this. In Oakland, I think they would have.
Oakland’s finances aren’t in great shape, and putting a ballpark over things like affordable housing could have effectively be used against them by an opponent. Except for some late, desperate comments from the Mayor, there were few signs Oakland pols were willing to go all in to keep the A’s.
$500-$775 million seems like a pretty good sign to me. Who else was offering Fisher that much?
The ex-Mayor Libby Schaaf was all in. So were a lot of State pols which is where a lot of the money came from. While most of the money the A’s wanted was there, the Council did push back on community benefits at one of the key votes.
All I’m saying is there was strong public opposition in Oakland to spending money on the A’s. The Oakland pols were aware of that and most of them weren’t hyping the deal as happens in many other locales.
I personally talked with a few of them. The impression I got was that they just wanted all of this to go away without having to dole out any money.
How “liberal” is it when you gift “X” Millions & look the other way with environmental regulations, to appease Fabric Fauntleroy’s childhood dream of being a land baron ?
oooo! that nickname is totally going to stick…
It’s relative. Oakland was arguably not as friendly as many other cities are (i.e. LV/Nevada).
Oakland was, to a degree, very friendly & then backed off.
It’s NV/CC/LV’s fate to deal with the heat. I wish them luck.
There are certainly no heroes here, but dumping on Oakland as a city and giving FIsher a pass is a bad take. The city and county were hardly the only parties in play at the Coliseum. Two out of three team owners occupying the site were either too cash-poor or too risk-averse (or both!) to get anything done on their own, and Lacob was right to jump on Mission Bay as it had clear momentum, 20 years after base realignment and closure made SF waterfront redevelopment a necessity. (Which was its own saga, considering how long it took to get UCSF and the surrounding neighborhood in place.) Placing 100% of the blame on local politicians for not breaking a logjam that incompetent owners were also responsible for is a bad reading of the situation.
Fisher’s #1 motivation, especially in the last few years, is to diversify and de-risk his investment portfolio. That’s why Howard Terminal was meant to be such a huge project, that also demanded he absorb the Coliseum land as well. He wanted to pivot even harder into real estate. Now, if revenue sharing holds and he can negotiate a favorable debt structure to maintain permanent positive cashflow, he’s really only accomplished the de-risking. Vegas is a Pyrrhic victory for him, the upside for him and for the league is limited. He’s a junior partner at best in developing the surrounding real estate, Vegas is eventually going to run into hard population limits, and MLB may not want to be so tight with gaming interests forever. The money’s there now, but a Black Sox 2.0 scandal is not unimaginable. I’m not saying that the owners will vote the move down over any of these considerations, as they certainly won’t. But that doesn’t mean it’s a smart move either. When the history books are written, I think they will contrast the recent rule changes against this slapdash, hurried move to Vegas to show how MLB worked against itself in preventing the sport’s further decline.
Sheng Thao may have had her own ulterior motives — she’ll certainly be able to regale every Democratic fundraiser from now on with the heroic tale of how she ran that Republican ghoul FIsher out of town — but I have respect for her for putting her foot down and ending negotiations with such a selfish, bad-faith partner. It’d be nice if it was the first step in changing how the sports leagues approach business, but that humbling is still a ways off.
Excellent summary.
“I have respect for her for putting her foot down …” I certainly agree with that.
I wasn’t ‘blaming’ the pols. If anything, I compliment them for not giving Fisher everything he asked for as we see happen way too much these days.
Perfect analysis! Thank you for the rationalism. At four different locations on the east bay fishers main goal was three parts: new stadium, retail space, and importantly real estate development of housing, condos for sale in the Interior Bay. It would’ve put the gold in the green and gold. Moving to Vegas means he relinquishes that last goal. He will only get two parts, the stadium and retail space , i.e. a pyrrhic victory. A place on the Vegas strip is good, selling hundreds of homes at incredible mark up in the most expensive real estate market is better.
Fisher is unequivocally the villain here. The A’s own half (in equity terms, not acreage) of the Coliseum site, which is already entitled for the construction of a new stadium and has been for years. They bought Alameda County’s half of the site.
Fisher wanted to moved the team out of Oakland. Full stop.
If they had committed to building a new stadium of the north lot of the Coliseum site, the city of Oakland most likely would have ended up being willing to give the team a sweetheart deal on their half of the site for development into a very large mixed use district. This has been the most logical course of action overall for the past nearly 2 decades that this circus has been going on, and only become more obviously once the Raiders left and Warriors went back to SF — no competing teams that want a piece of the site.
The Giabts have proven this model can work, with even less direct or indirect public subsidy. It’s exactly what they’re doing with their Mission Rock development across the cove from the stadium.
Now if I’m Oakland, I would never approve the team (i.e. Fisher) get anything out of developing the Coliseum site. Find a way to forge them to give up their share and work to find some other public and/or private entity to do that.
Neil, what is your take on the relocation fee issue at this point?
If we assume that the move is all but a done deal barring the MLB vote to approve, is Fisher going to have to pay his fellow owners to get to Vegas while surrendering Oakland/east bay?
This seems like a financially questionable move for Fisher (as Davis’ move to Vegas did given the debt he took on… turds of a feather etc). And at least part of the reason he is moving appears to be that he can continue to farm the MLB welfare system for $50-60m annually.
I know you’ve said “somebody” is going to occupy the last slot on the welfare card so it’s more or less revenue neutral to the league as a whole, but it has to be maddening to the other owners that one of their number is moving from a large enough market that he wouldn’t qualify to a smaller one where he would… and doing so for less local stadium subsidy money than he had in his old location.
This is farming the subsidy in it’s purest sense.
The other owners could vote down the relocation application of course. Or they could look at it as an opportunity for expansion money from a new Oakland owner at some point. Either way they could best show Fisher how they feel about his antics (and bad math) by imposing a significant relocation fee.
Will they?
Manfred has already hinted that MLB would waive any relocation fee for Las Vegas. Though for all we know, they could be planning to charge the Giants for giving them the East Bay territory in exchange.
Your logic on encouraging Fisher to farm revenue-sharing subsidies is spot-on, and I would think at least some owners would raise it under normal circumstances. But if Manfred and Fisher can sell this as “get this done and a Rays stadium and we can start seeing how many billionaires out there will pay us a $3 billion expansion fee,” then maybe the other owners won’t sweat that $60m a year.
If a second Bay Area team is going to happen, I think San Jose is the much better choice. Much more disposable income down there and it is a good 50 miles from Pac Bell Park. Don’t know how that figures into the territorial rights issue.
Eh, hold that thought.
If they can’t get BART to Diridon Station, what makes anyone think that some magical lollipop field is going to suddenly appear out of the vapor in the South Bay.
Lew Wolff actually took significant steps to making something happen in SJ. I think it could have happened if the Giants and MLB wouldn’t have said no.
I don’t know the exact figures but Silicon Valley is a big, well off area.
BART to Milpitas then transfer to VTA rail to get to the stadium for now or at least until BART gets to downtown SJ
I don’t understand some of the logic on this from the owners’ perspective. So the Dodgers, Angels, Padres, and D-Backs all lose some broadcast territory if the A’s go to Vegas. The Giants might lose some too (Reno), because they already have overlapping media rights everywhere the A’s do now. How are you going to forcibly charge the Giants for territorial rights to the East Bay that mean nothing? Again, they already have media rights there. And then you’re going g to take away Reno as a broadcast area for them and take away Vegas as a broadcast area for LA/LA/SD/AZ and not compensate them for it in any meaningful way.
Just makes no sense to me.
The Padres aren’t concerned about Las Vegas because it’s not in-market for their new pop-up TV channel. (The one launched with the help of MLB after a bankrupt RSN stopped paying for local TV rights.)
Seems like the Giants would do well to put a Triple A team in Oakland. Guess they would need a stadium and maybe buy the TV rights.
That’s not likely to happen any time soon.
The Giants already have a AAA team in Sacramento and a Single A team in San Jose. They want to maintain good relations with those markets to expand their regional appeal.
Unless something goes wrong with either of those ballparks, I doubt they’d want to alienate those fans just to bring the team a bit closer.
It might make sense for the Giants to have their AA affiliate in California rather than Richmond, Virginia where it is now, but they can’t do that because there are no AA leagues anywhere near the west coast.
The three AA leagues are the Eastern League, which the Richmond Squirrels are in, the Texas League and the Southern League and none of those leagues would accept having to travel to the other side of the continent.
The relationship with the Sacramento RiverCats is a great asset for the Giants, just as it had been for the A’s. They draw a lot of traffic from the Central Valley exurbs that will also then be interested to make the trip to SF as players get promoted.
%$#@!! THE GIANTS!!!!
It works both ways. People will be more interested in a minor league team if it has the prospects for the major league team they already support.
Ideally, every MLB and NHL team (maybe NBA too) wants its minor league affiliates to be within a few hours of the big league team because it helps marketing. They especially want their top affiliate nearby because that helps logistics – players, coaches, trainers, etc.
But geography makes it impossible for every team to be located that way. There will always be some outliers.
One way that Fisher could raise a few hundred million is to sell his stake in the Earthquakes. They’re worth $500m according to Sportico. I’m not sure how much he owns.
MLS would be wise to try to push him out. They have an opportunity now to be a much bigger deal in the Bay area but having him as their owner is going to make it much harder for them to do that.
Sell my template for new stadium + penny pinching miserly owner ?!
NEVER!
Next you’ll ask me to return the art that I looted (allegedly) when Father died, you cad !
The combined net operating income of all seven MLS teams on Forbes top 30 soccer team valuations worldwide (yes, seven, and believe me you are not more shocked than I am at that…) was still very close to a negative number.
LAFC $8m
LAG $4m
Atlanta $6m
NYCFC -$12m
DC Utd $8m
Toronto -$15m
Austin $2m
https://www.forbes.com/lists/soccer-valuations/?sh=21129a41198b
And how does Forbes factor this meagre income into it’s valuations???
The teams listed range in alleged value from about $600m to $1Bn. Would you pay north of $5bn to earn $1m annually in net income?
Man, the price of breaking even year on year just continues to skyrocket…
Nobody buys a pro sports team for the profits.
Or expects the Spanish Inquisition
MLS is a joke. Those values were probably released by the league office. They’re at least the 3rd most popular soccer league in the United States, possibly 4th. The Apple TV deal is pretty great as a viewer, but hasn’t taken off at all.
The only thing remotely true in what you wrote above is that the EPL and Liga MX are probably more popular in the US. At least from a TV perspective, since you can’t actually attend an EPL or Liga MX game in the US.
And I suppose you have not figured on what has happened or not happened with “the Apple TV deal” since Miami landed some player of note.
The Earthquakes stadium was wholly privately funded too. Just shows you how full of shit the ownership is.
68 degrees and bright sunshine at the coliseum today with Rays leading off in the first.
90 degrees and overcast in Vegas at the moment with the forecast calling for nearly triple digits this afternoon.
“Good job, Brownie!”
Hey now, you can catch Keith Urban in residence starting tomorrow !
I’m confused.
When did $380 million
become $600 million?
Amendments?
They use the lower number when they want the populace to feel good about it. The higher number includes the taxes they won’t have to pay, which still have to come out of the public coffers the other way since they won’t exist.
There’s $200m+ in property tax exemptions and entertainment tax exemptions that the A’s don’t like to count, so most media don’t count them.
Thanks guys!
I would like to congratulate the state of Nevada for solving every other problem it had. They must have the best roads and schools and public utility infrastructure anywhere.
So “somebody from Clark County has to be in charge” is pretty much straight out of Casino. I hope Kevin Pollak gets to play Fisher in “Moneyball II: Entering Las Vegas”.