Friday, March 9, 2012

2016 is the End of Revenue Sharing for A's.

MLB.com national writer Barry M. Bloom earlier this week posted piece a piece on MLB.com regarding the whole A's-Giants cat fight that contained a passage that piqued my interest:

There has been greater attention paid to issue recently on account of changes in the revenue sharing portion of the new Basic Agreement negotiated between the owners and players last year. The agreement now defines 15 major markets in MLB that no longer will be able to be receivers from the revenue sharing pool by the time the agreement expires at the end of the 2016 season.

The San Francisco Bay Area is one of those markets and the A's are one of those teams, meaning that a decision on their pending move is essential to the franchise's future financial success. If they are turned down, the A's may then begin exploring a move to another market outside the San Francisco Bay Area.


The article intimates that the A's will be cutoff, as part of one of the 15 largest markets, from revenue sharing funds after the 2016 season assuming a new collective bargaining agreement containing an extension is agreed upon. (Note that the current CBA expires post 2016, so a new agreement will be needed.)

Bloom clarified for me on Twitter (@Boomskie; @SmallMarketBall) that this is indeed the case. Here is the definitive tweet from Bloom:

@SmallMarketBall Have confirmed that A's phase in for revenue sharing lasts the length of labor deal or until '16. Doesn't extend after.

Revenue sharing is the financial lifeblood of the franchise. The A's received about $32 million in revenue sharing last season according to owner Lew Wolff. For comparison's sake that's almost half of their $66.5 million payroll in 2011. Using 2010's revenue projections from Forbes (the latest year available) total revenues were $161 million. This means that revenue sharing funds made up just about 20 percent of total revenue. One last item to consider is that Wolff recently noted that the team made a slim $370,000 after in 2012. Without revenue sharing, the A's are in deep trouble.

I found Bloom's comment extremely confusing, as I had read numerous reports that I initially thought indicated the A's would receive the funds after 2016.

Janie Mccauley, Associated Press:

Teams in the largest 15 markets will lose all of their revenue sharing in 2016, except for the low-budget A's if they are unable to build the new ballpark owner Lew Wolff is busy planning for, in San Jose or elsewhere. Wolff certainly hopes it doesn't come to his team still needing revenue sharing in five years.

Dennis O'Donnell, CBS 5

It turns out that the labor agreement also states that teams in the largest 15 markets will lose all of their revenue sharing in 2016, except for the A’s if they are unable to build the new in San Jose.

Jayson Stark, ESPN

One source tells ESPN.com the 15 teams that will be ineligible for revenue sharing by 2016 are the Yankees, Mets, Dodgers, Angels, Cubs, White Sox, Phillies, Red Sox, Rangers, Braves, Nationals, Blue Jays, Astros, Giants and A's. But there's an asterisk attached in the case of the A's. They'll be eligible until their stadium situation gets resolved -- then will join the other teams on this list. So that leaves the Astros, Nationals, Blue Jays and Braves as the teams most affected -- and most motivated to increase their revenue streams over the next few years.

Read all of these carefully though and the only thing that seems consistent is that the A's will get revenue sharing funds through the 2016 season. 2017? No more.

Again, my assumption, and I think the assumption of others, was that the A's "cut out" meant 2016 and beyond, not just through 2016. Given that the A's have to: 1) secure the territorial rights to Santa Clara County; 2) compensate the A-level San Jose Giants; 3) assemble (or have assembled) and purchase the remaining land needed for a San Jose stadium; 4) place on the ballot (via the San Jose City Council) a measure approving public funds being put towards the stadium and have it pass; 5) and actually build a stadium having the park ready by the start of 2017 is no easy feat. The team also has to wrestle with the Stand for San Jose (SF Giants backed-astroturf group threatening legal actions) and the eerily-quiet-of late anti-stadium citizen group Better Sense San Jose. Oh, also did I mention California's notorious habit of delaying projects through citizen CEQA (California Environmental Quality Act) challenges?

Let's say the team is stuck in this mess with no resolution by say 2015. (Seems impossible, but who would have thought the process would have dragged on as long as it has.) A new CBA offers an opening for, yup, you guessed it, that awful word contraction. If contraction were to occur, it might be a logical move to contract the Rays -- who have a bad stadium and a 10,000 year lease. (Note in the article I just linked to that the stadium bonds for Tropicana Field expire in 2016. With the bonds paid off, St. Petersburg has less leverage to claim monetary damages should the team break their lease.) If the A's and the Rays were wiped out, you get a 15-team NL and a 13-team AL. A logical move at this point, given that with the Astros joining the AL West in 2013 and interleague-play guaranteed every week, is the creation of a unified league or radical realignment. Modestly expanding rosters would help appease the Player's Union upset over job losses. Bill Madden, yes I know that Bill Madden of recent Bay Area ire, last year sketched this out.

Remember in Back to the Future when Marty's picture was fading out because he had altered the time-space continuum? Well, for the A's, every day that goes by without a damn decision by Bud Selig, makes the A's look a little fainter.

Addendum -- Bloom tweeted me this morning to point out that the next CBA could contain another revenue sharing cut out for the A's. This is a good point, and one I was aware of and hope in reading this article visitors don't conclude that there is no chance for an extension. However, the probability of such an extension passing muster is anyone's guess.

2 comments:

  1. So it appears the Giants are using the ruse of "territorial rights" as a stall-ball tactic to cut the A's off from revenue sharing at which point the A's would have to move out of market.

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  2. There are a couple of interesting things here. First, the Giants may indeed be simply in kill-the-clock mode with the A's by waving the T-rights flag. If the economy improves by 2016, and a new city wants a team, the Giants might make the argument that it was time for the A's to leave. The other interesting thing is that the Giants, and you can see this in one of my previous posts, claim that if the A's siphon off enough fans and dollars with a SJ stadium, that they (the Giants) will know be in need of revenue sharing. This seems really implausible, but remember under the CBA no funds would be given to the G's either. In this bizarre hypothetical world the A's have a new stadium and no need for revenue sharing and the Giants are looking for handouts. If you look at the numbers, and they all must be taken with a grain of salt, it seems minus revenue sharing the A's days in the Bay Area would be over.

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