Maury Brown, who has been writing about the business of baseball almost as long as whatever I’ve been doing here, yesterday got ahold of … let’s just call them “some numbers” for now and circle back to that, regarding the Oakland A’s. In particular, he got hold of some numbers reputing to show how much money the A’s have lost in recent years, something he set out to use to test A’s owner John Fisher’s contention that he’s losing $40 million this year in Oakland and so desperately needs to move to Las Vegas.
Brown’s conclusions, which he wrote up for Forbes’ website:
- The A’s are currently “projected” to “lose $39.322 million in cash flow” this year, up from $7.76 million last year, thanks largely to an increase in operating expenses from $190.195 million to $225.012 million. If you’re wondering how a team’s expenses can go up by $35 million in a year where its player payroll was the lowest in the league, Brown said that the “industry insider” who provided the numbers said it was “likely due to having to fill holes in the front office staff after laying off staff during the pandemic” — something that, as Marc Normandin noted to me, sounds like an unlikely amount to spend on front office hires for “the team that put a couple of tiny cubes of chicken with some sliced bell pepper on a tortilla and called it a taco.”
- The A’s are getting $68 million in local TV money in 2023. They will not do that well in Las Vegas, if “local TV” is even still a thing if and when they get there.
- The team’s main disadvantage right now is revenue-sharing money, which it didn’t get any of in 2020 or 2021, and is only getting $9.2 million of in 2022 and $27 million in 2023, thanks to a revised revenue-sharing plan in the latest collective bargaining agreement. (More on that in a minute, too.) The A’s were limited to 50% of their normal share in 2023, meaning they would have gotten a $54 million revenue-sharing check — on top of about $59 million in shared national TV money — if they were playing to empty houses anywhere but Oakland.
There are some major caveats here, some of which Brown acknowledges, first and foremost being: WTF are these numbers, anyway? Brown tells FoS he got the info on condition that he not share any screenshots or charts, which makes it hard to confirm exactly what the “insider” — elsewhere called a “high-placed baseball industry insider with intimate knowledge of the finances,” which doesn’t narrow it down much — was sharing with him, and whether it represents legitimate bookkeeping or figures that have been polished to make them look more in line with Fisher’s claims. (Brown writes that the numbers “might best be described as ‘executive summary’ in nature for investor purposes,” but doesn’t make clear if this was an actual investor prospectus or just like one. I asked, he ducked the question, probably because he agreed not to divulge too much.)
For starters, it’s probably best to treat the $39 million loss figure as speculative: The team-value-estimation side of Forbes editorial, don’t forget, previously estimated that the A’s turned a $62 million profit in 2022, by dint of collecting national TV checks while not employing anyone recognizable as a major-league player. It’s just way too easy to cook the books in terms of final profit and loss, whether it’s by charging yourself a consulting fee for negotiating your own cable deal or some of the fancy depreciation tricks that owners have been using for decades. So while it’s certainly possible that the A’s can show a $39 million loss under generally accepted accounting principles, that doesn’t mean that it’s necessarily a loss loss.
The revenue-sharing numbers, though, are pretty inarguable, and Brown says they were key (or his source says they were key) to Fisher’s decision to flee to Vegas: “The A’s believe they need revenue sharing to survive.” And here’s where we get into weird-ass internal MLB and MLBPA politics.
The whole point of revenue sharing, as the name implies, is to share revenue. Going back to early in the 20th century, visiting MLB teams have gotten a cut of their richer competitors’ ticket sales, on the grounds that it’s really hard for the Yankees to sell tickets to see them play against an empty dugout; in more recent years that’s been expanded to shared TV money and eventually straight-up cutting checks from the higher-revenue teams to the lower-revenue ones. As a way to ensure that the Yankees don’t end up being able to outspend the Royals ten times over because they have ten times the revenue, it’s worked fine.
As a way to ensure that the Yankees don’t outspend the Royals anyway, it’s been pretty much a disaster. To see why, just look at the A’s, who for 20 years have been ditching players as soon as they get expensive, on the grounds that it’s more profitable to put a minimum wage team on the field and keep on collecting revenue-sharing checks. They’re not the only team that does it — the Miami Marlins have turned it virtually into a governing credo — but they’re maybe the most annoying, since they play in the 4th-biggest market in baseball and yet are collecting checks meant to prop up small-market teams.
Those annoyed have included both other owners (who hate sending checks to anyone, but especially big-market failsons) and players, who grew tired of the A’s not even deigning to bid on players they could have used to win games, thus depressing salaries. So in a fit of pique in the 2016 CBA, the teams and the union made it so that the teams in the largest markets would be ineligible for revenue sharing, no matter how pathetic their revenue was, on the grounds that if you can’t get people to show up to games in the nation’s fourth-biggest metropolis, you’re not even trying. The A’s revenue share was phased out over several years, hitting zero in 2020.
The new CBA agreed to in 2022, though, phased the A’s revenue sharing back in — but with a catch. If the team didn’t have a Bay Area stadium deal in place by 2024, it would see its checks cut off again.
John Fisher is a lot of things, and stupid is probably one of them, but $60 million a year is a huge incentive even to him. So it’s not too much of a stretch to envision this as being the scenario that’s played out over the last couple of years:
FISHER: I want my revenue sharing checks WAAAH!
MLB: Fine, just get a stadium deal done by 2024.
OAKLAND: Here’s $775 million for infrastructure, how’s that?
FISHER: But I might still lose money! WAAAH!
OAKLAND: This is literally not our problem.
FISHER: But I need a new stadium by 2024 because revenue sharing!
OAKLAND: Still literally not our problem.
FISHER: Fine! Then I’ll move to some shit-ass town where I’ll always be guaranteed revenue-sharing checks! Hello, Las Vegas!
MLB: Say what now?
OAKLAND: Don’t let the door hit ya.
FISHER: And I get $600 million in tax money, boy, Vegas really is the city where dreams come true! Subtract that from the $1.5 billion it’ll cost to build a stadium, and I’ll only be left having to pay (checks abacus) um.
MLB: Say what now?
– SCENE –
This is a little oversimplified for dramatic purposes, obviously: The other owners and MLB commissioner Rob Manfred surely have understood all along what Fisher has been doing, but are supporting him because that’s what rich dudes do for each other, at least when they’re trying to extract money from somebody not in the rich dude club. But there are certainly some signs that swapping Oakland for Vegas may not exactly be at the top of MLB’s wishlist — USA Today’s Bob Nightengale cited “high-ranking executives” Sunday as saying that Oakland would be considered a leading expansion candidate, though as Normandin immediately noted this is exactly the sort of thing high-ranking baseball executives would say if they were trying to gin up more cities to compete to be a location for them to pretend to move to, we see you there, Jerry Reinsdorf. And Fisher himself has been notably reticent about finalizing plans in Vegas, even backing away from the stadium renderings he released during the stadium tax funding battle, which had the minor flaw of not being able to exist in actual Newtonian space.
One possible outcome remains that the A’s move to Vegas will go through, and will end up being the biggest lose-lose-lose in MLB history, the baseball equivalent of the Arizona Coyotes. It’s certainly tempting to root for that to happen, except of course that the people of Nevada would be out $600 million, and the people of Oakland would be without a team for an indefinite period. It’s so hard to find good schadenfreude these days.
If I was an MLB owner, I would seriously consider _charging_ the relocation fee from Oakland to Vegas, instead of waiving it.
I would then hold the relocation fee in a separate account and then pay any revenue sharing out that fund until it’s exhausted.
I think there’s a lot of advantages here. MLB owners can register their unhappiness with Fisher’s plan to move to a smaller market by charging the relocation fee instead of gifting him hundreds of millions of dollars by waiving the fee (plus the revenue sharing that would still be paid out). Fisher will still get his revenue sharing payments, albeit from money he paid upfront (for the first 10 years or so).
If Fisher says he can’t afford the relocation fee, then it underscores the economic folly of this potential move.
This reinforces my mental model that Fisher’s absolute #1 priority is cashflow, with hanging onto the intangible status of being a major-league owner as a close second. The Gap suffering a 50% dividend cut a few years ago, alongside a stock price collapse, was a huge blow. It also took them off the list of “dividend champions” that maintain an increasing annual dividend payout over decades, so only “deep-value” (or more likely “deep-speculator”) investor types are interested. Warren Buffet probably ain’t taking Fisher’s calls these days.
Likewise, the other major Fisher asset that’s gotten press coverage is North Coast timberland, and I doubt we’ll ever see any numbers about that operation made public. I’ve long been compelled to wonder if they’re carrying insurance on it, or if anyone will even write an insurance policy on it anymore. Any cashflow that comes out of there has to be hedged against the asset literally going up in smoke overnight.
Bottom-line, I cannot escape the conclusion that Fisher and family are doing everything they can to cling to the billionaire bracket. Selling the team would comfortably keep them there, but also be a public loss of status and admission of failure that Fisher can’t abide. There’s no rational, skilled investment professional at work here; it doesn’t matter that all his alternative ballpark schemes don’t make any business sense.
MLB has spent years complaining about being passed by as America’s pastime. I feel like one of the few who’s still willing to count baseball as my favorite sport, but even if I were inclined to continue paying attention after the A’s leave Oakland, I wouldn’t be able to trust MLB’s future stewardship of the sport if they keep letting absolute clowns like Fisher and Sternberg in Tampa Bay show up to play ball.
The Giants play in the 4th largest market, drawing from all 9 Bay Area counties.
The A’s mostly draw from Alameda and Contra Costa counties. I’ve been an A’s fan since they got to Oakland, their draw in the other 7 counties is negligible.
A sale of the team or expansion doesn’t address the home field being almost 60 years old, with a host of issues. Isn’t the Coliseum the only MLB stadium not purpose built for baseball?
I’m not seeing Howard Terminal as the answer. How is a stadium with no BART or freeway access, much less parking, combined with the expected spike in ticket and concession prices a selling point to people who aren’t already fans?
When the face of ownership tells prospective fans to not come to the ballpark because its such a dump, and they do just that, spending their entertainment dollars elsewhere, well, what does one expect?
Tropicana Field was not purpose-built for baseball, but has been renovated over time so that it is more baseball-friendly.
But it was originally a multi-purpose facility and, in fact, has held a lot of diverse events in its history. I guess it just depends on whether “built” includes “renovated.”
SkyDome was built as multipurpose as well.
Growing up in the 70s and 80s, we took it for granted that baseball and football shared a stadium.
But the Coliseum will likely end up being the *last* facility used for MLB and the NFL.
The Skydome was built to be multipurpose but the Argos don’t play there any more and the Bills experiment there failed.
Thanks y’all for the gentle correction.
Somehow, between brain and post, the “still in use” was omitted, and wasn’t fully accurate anyway.
If new ownership comes in I doubt the path to a new stadium will be that difficult. Many names have been mentioned as potential suitors for either the A’s or an expansion team if the current idiot moves his team to a micromarket just to maintain his billionaire welfare payments.
I agree HT was never the answer, but I don’t blame the A’s for attempting it given that the city expressed their desire to include a ballpark as some sort of catalyst. It was a stupid pipe dream that was based on flawed vision, woefully poor estimates and incompetent planning (on the part of both the city and Fisher). It should be abandoned and remembered for what it is: pure folly.
An owner not named Fisher who is willing to put up a significant contribution toward a stadium on the coliseum site (which Fisher does not own or control, contrary to his legion of media accolytes’ claims, and may not even have an option to purchase any longer) will face significantly less opposition.
If it were me (and it ain’t), I’d look at building what they planned for Cisco Field adjacent to the water (more or less) on the current site. From the 1970s on the A’s have “needed” 30-35,000 seats. One could make the argument they’d be better off at 32,000 than 35-38k as well.
I don’t think anyone truly believes that the coliseum is still suitable (certainly post Raiders renovation) for modern major league baseball. Giving Fisher more than 100% of what he needs to build a facility should not even be a consideration though. If he can’t pony up at least half the cost himself, he shouldn’t be an MLB owner.
Isn’t ownership of the Coliseum/Arena jointly owned by the City and the A’s?
Supposedly the A’s still have the option to purchase Alameda County’s 50% interest in the Coliseum site, but there’s been no confirmation that option was ever exercised. Exercise was likely contingent, on the A’s end, on finalization of the Howard Terminal plan. During Kaval’s tenure, they’ve only ever spoken about the Coliseum as mixed-use redevelopment to put money in Fisher’s pocket; they’ve always played it as the absolute last option for a ballpark site, even though that stance makes no sense to anybody else.
Yes, as Ian says, Fisher’s company put a deposit down on the county’s share of the site. They have not, as yet, exercised that option or paid for the land. I was not able to find out how much the deposit was or what conditions are precedent (typically options have a fixed expiry date, but no information has been released on the agreement Failson Inc has to acquire the land nor what, exactly, they are acquiring). The County has only stated that “Certain funds required to allow the agreement to proceed” had been deposited, and that no further steps have been taken since.
The site itself is a little weird. It has operated under a municipal/county Joint Powers Authority agreement since the mid 1960s. To the best of my knowledge, there is no ‘share structure’ that could be sold or otherwise transferred. Both parties to the agreement share costs and theoretically share any net revenue (there isn’t any. Alameda has said in years past that they have to feed the best $10-12m every year, not counting the lost tax revenue the site might generate if it wasn’t effectively exempt. Oakland’s bill will be at least as high, while Fisher fails to even pay the required amounts into the maintenance fund as he is contractually obligated to do).
As a Joint Powers agreement/authority is one struck between two governmental and/or regulatory agencies, it is not clear to me if or how a private business entity could acquire the portion owned or controlled by one of the parties without the consent of the other, nor whether this parcel of land has a single title, multiple titles or whether a publicly owned corporation (something novel like StadCorp) might have been created to hold ownership (I’m told that never happened and the JPA was all that ever existed). Regardless, for Fisher and his shell company to gain ownership or control of the site, an actual title or titles would have to exist which he would purchase.
I believe someone stated on this forum that the site is now fully within the city of Oakland’s corporate limits (so, in theory, but for the JPA, the county has no actual responsibility for the site and could simply ‘give’ it to Oakland). It isn’t clear to me if this has always been the case and Alameda just agreed to share costs on the sports site as a goodwill gesture or whether they at one time owned or administered part of the site themselves.
Regardless, Fisher bought an option. I would strongly suspect that there were two main conditions to that option:
1 – he pays Alameda county the $85m he promised for their share. And
2 – that he is able to successfully negotiate the purchase of Oakland’s share of the site as well.
Condition 1 would be very much contingent on condition 2.
But who can really tell? As Neil says, the only concrete evidence we really have is that he is pretty stupid. And his big time assistant (Kaval) has not proven to be the strategic genius Fisher had hoped.
It’s hard to get good help these days, I guess…
When the Coliseum was new in the 1970s and the A’s won 3 World Series in a row it was awesome. The view of the hills was unique until Al Davis got Oakland to convert the Coliseum into a football stadium. Why the other 29 MLB owners can’t force the Giants to share Santa Clara County, or find a location in Alameda or Contra Costa Counties is a mystery.
God Dammit.
I knew that so-called Possum wasn’t on the up and up when I saw it wandering around the stinkin’ coliseum with what I thought was a plastic cup. Now I know it was a real glass and he (?) was using it to listen in on private conversations through the (rat infested) walls of that dump.
Do you know how many times I have told Fisher not to repeat everything I say over the phone out loud before answering?
No, you don’t. You can’t. Unless you are the Possum. You aren’t are you? We’ve had the elite info miners from the central office on this for some time and we haven’t been able to establish his identity. Or even if he is a he.
And now this. Well, another fine mess that assclown halfwit GAPstooge has gotten us into. Reminds me of the time we agreed to a clause in the CBA that says we can’t collude against the players – either alone or in combination.
What the hell even is that? I asked the lawyers and they said they didn’t know. Yet there it is. Screw you, Dawson.
Anyway, here we are again. About to approve a move of a team from a long suffering market where people actually like baseball (even the low-A brand the Athletics are playing these days… say that reminds me of a couple of Charlie Finley stories… nevermind we don’t have time for that now this is serious business) to a shithole where nobody gives a damn about anything and most of the money is held by a small group of people who aren’t interested in giving us any of it. Except the Politicians. You can always count on them to surrender before the fight even starts.
Well, I have had enough of this. It’s bad enough that we have been carrying this idiot for almost two decades now. I mean on one hand who doesn’t love a patsy, right? He’d rather be paid a couple of million to lose 100 games than actually try to win. And when he accidentally started winning, turns out he really made more money than he was doing by losing. Like Burgundy said, if you ain’t first, yer last. And Fisher is certainly determined to not be first.
Still, baseball has always needed the St. Louis Browns. I mean sure, we have the Marlins. But they might accidentally be good this year too. So we need a new Browns. Whatever. Vegas sucks and they won’t get 10,000 out to the games after the third year. Maybe even the second because JF will continue to hold payroll as low as possible to pocket the RS money.
And the guys I have to get to vote for this are going to be paying that money. I don’t get paid for this shit.
Do you know how much Goodell makes? Yeah, and he’s a clown. All he has to do is bungle questions about severe brain damage once a year and hug the #1 draft pick every summer. What BS. And here I am sweating blood over every single letter in a 2 page 1 sentence press release directed at the city of Oakland. Of course they want to fire Fisher. I want to fire Fisher too. So do all the other owners.
And all this because of an O’Possum. You’ve done it now pal. We are coming for you. And be we I mean our lawyers, obviously.
There’s (still) an easy solution to this mess: one that keeps the A’s in the uber-massive Bay Area market and insures they are REVENUE CONTRIBUTORS to MLB! But (again) it would involve MLB finally growing a pair and not being the dumbest league on the planet! TWO revenue contributing, financially successful MLB teams in the Bay Area separated by 40 miles: imagine that!..
No one wants to make the hell drive to BFE San Jose to watch a game. Stop stealing people’s teams.
I would say there are several solutions, Antonio. But yes, that could be one of them.
As you and I have discussed before, I really thought a Fremont move might be the magic bullet (not necessarily the spot they picked, but somewhere still in Alameda county and not in the territory MLB has, IMO, wrongly assigned to the Giants).
But, as is always the case with this organization, ownership completely and hamfistedly screwed it up. And here we are.
I find it interesting that MLB will not intervene on territorial rights on behalf of the A’s and against the Giants (despite there being considerable reason to do so given the history of the Haas family’s control of that region). But they did force a deal on Angelos when they moved the Expos to Washington (albeit a pretty favourable one for the Orioles), and certainly seem intent on doing the same to several teams when they cut Las Vegas (and who knows how much other territory) out of the existing TV markets of several teams.
I think it is very much up to MLB how they allot their ‘territories’. That’s what an antitrust exemption (among other things) gets you. But it is odd that they can hang their hat on the “inviolate” nature of those rules with respect to Oakland and San Francisco while very much violating them at will elsewhere.
As Orwell said, it would seem that some pigs are more equal than others.
One difference between the A’s and Nats situations is that the Nats were only infringing on the Orioles’ *TV rights territory*, while a San Jose A’s would be infringing on the Giants’ *exclusivity territory* where no other teams can locate. (In both cases as decreed by MLB.) I expect that if the A’s do move to Vegas, MLB will similarly impose a settlement with the teams that currently hold Vegas TV rights.
Why those two rights systems are treated differently, hell if I know. Maybe some powerful owners are terrified of more teams showing up at their doorstep to compete with them, but aren’t bothered as much by losing a slice of TV territory so long as they’re richly compensated? Where’s John Helyar when you need him?
The MLB owners of the big market teams seem to think they’ve somehow earned the right to have such a big market because Freedom.
But when the free market encourages another team to locate nearby, they want to be compensated.
Neil:
I wonder if you are familiar with the history of the Haas family’s efforts to get a stadium built while they owned the A’s?
If so could you give us a coles notes version of it?
The internet was not really a thing for practically all the time Walter Haas owned the club, so information wasn’t easy to come by in those days (and has not been recorded the way modern news is, at least not in a way that is easily accessible to the public).
I do recall Walter Haas saying he tried and tried… but I don’t know any of the details of what was offered by either party or whether they ever got close to a deal. I am assuming all the plans involved building in the parking lot at the current site?
Thanks.
I’m not really, that was before my time as well. My sense was always that Haas’s main strategy was “wait for the Giants to move somewhere and then seize control of the whole Bay Area, confident that Jose Canseco and Mark McGwire will always be enough to sustain a dynasty.”
The needle Fisher & Kaval are trying to thread is ridiculous. They need a stadium deal by January or they lose revenue sharing. A Vegas stadium might be done by 2028, but the publicly traded companies that control the Tropicana site say that demolition likely won’t happen until 2025, meaning construction might take until 2029. Their lease is up after the 2024 season BUT more importantly, they have this crazy $60+ per year local tv deal in Oakland that doesn’t expire until 2033. So until a vegas stadium is completed it behooves them to play in the Bay Area.
Meanwhile, their move takes Vegas out of the running as an expansion team. Both Nashville mayoral candidates are in the record saying they won’t publicly fund an MLB park (obviously that can change).
I really don’t understand why the other owners put up with this nonsense. Every American billionaire is buying lower division European soccer teams because there’s so few American sports franchises for sale, surely a super rich baseball fan out there would overpay a bit for the A’s.
Some of them are buying upper-division European soccer teams.
Have the A’s and Giants ever drawn well at the same time? Just because the market is big doesn’t mean it can support 2 teams
In the early years of Pac bell- giants were selling out, but the A’s were competitive and very much in the middle of pack when it came to MLB attendance.
When the Giants played at the Stick- their attendance was similar to the A’s, when the team was good, they drew a respectable crowd. When they weren’t- the place was empty.
The root of your question though- the fanbases are different, the region has the money and population for 2 teams to draw well- if the teams give fans a reason to come out.