Saturday, June 22, 2013

Do the A's Already Know the Way to San Jose?

The news this week that the City of San Jose had lawyered-up and filed a lawsuit charging MLB of conspiring to keep the A's from moving to San Jose couldn't be called unexpected. While A's Managing Partner (minority owner/majority spokesperson) has steadfastly denied any interest in pursuing litigation, his voice is but one of many.

San Jose City Councilman Sam Liccardo who represents the area downtown where a new ballpark would be located in March hinted that a lawsuit was in the works. He was quoted then as saying:

I'm happy to swing the hammer and pound the nail....The A's ownership wants to find an amicable solution. But for the strong desire of Lew Wolff to play nice, I would be urging my colleagues to file suit right now.

For San Jose's elected officials, luring the A's south is good business sense -- especially if, as the A's ownership has stated, the ballpark's construction is privately financed. The benefits to the A's of a new stadium seem readily apparent. How its location factors in is an emotionally charged debate that is best left for another day.

San Jose previously seemed to work in lock-step with Wolff and, in turn, MLB. The one blip of near impertinence was in 2010 when San Jose Mayor Chuck Reed proposed and then quickly withdrew a ballot measure -- needed per the city's bylaws -- to determine if public funds could be used in any manner towards the construction of a baseball stadium. The proposal, made absent baseball's approval, left MLB Commissioner Bud Selig "disappointed."

Strange Baseball

Just as baseball games get pretty strange after about 13 innings or so, so too did the issue of the A's and San Jose nearly four years in.

Some notable moments:

December 24, 2011 -- USA Today baseball reporter Bob Nightengale tweets that the A's would be granted permission by February 2012 to move to San Jose.

March 3, 2012, Bill Madden of the New York Post, reports that the A's will be denied the right to move to San Jose.

March 7-8, 2012 -- Dueling press releases by the A's and the Giants are issued. The A's deny Madden's report and say that no decision has been made while defending their right to move to San Jose. The Giants, in turn, defend their territorial rights.

February 20, 2013 -- Bill Shaikin of the Los Angeles Times reports that MLB has stipulated the conditions the A's must meet if they want to move to San Jose. MLB and the A's flatly deny the story.

March 4, 2013 -- The aforementioned hint at antitrust litigation by Liccardo occurs.

March 30, 2013 -- The San Jose Mercury News reports that Reed and Wolff spoke.

April 2, 2013 -- Reed requests meeting with MLB Commissioner Bud Selig.

April 11, 2013 -- Selig declines to meet with Reed.

June 12, 2013 -- A meeting between Reed, Wolff and A's President Michael Crowley occurs.

June 16, 2013 -- Sewage backs up into the A's and Mariners clubhouses, forcing teams to shower together in Raiders locker room.

June 18, 2013 -- While reporting on sewage issue at Coliseum, Nightengale makes a passing remark that the A's have been given conditions for moving to San Jose:

Baseball's blue-ribbon task force, formed four years ago, earlier this year presented Wolff with guidelines that could possibly make it work. 

June 18, 2013 -- San Jose sues MLB for impeding A's move to the city.

More Than Meets the Eye

A possibility, however weak or strong it may be, exists that the A's really do have a list of conditions that need to be met in order to move to San Jose. These may include provisions such as an upfront cash payment or future revenue guarantees to the Giants.

Two things to consider about the mystery terms for the A's:

1. They may be onerous enough, in terms of cost, that the team's current ownership has weighed the costs and benefits and does not feel the move is fiscally prudent. The bottom line might be that the A's will simply make more money -- at least in the short-term -- by staying in Oakland and cashing revenue checks.

2. MLB may have purposely crafted the terms to be so difficult so as to incentivize ownership to keep the team in Oakland or find and sell to a group who will.

Both scenarios are lose-lose for the A's:

If #1 is at play, the "crappy" stadium means = low payroll argument is punctured. They expose themselves as being very profitable and lose leverage in the ongoing Coliseum lease extension negotiations.

If #2 is at play, Wolff and majority owner John Fisher need to either change direction and focus on Oakland or sell to a group committed to do so such as the one headed/identified by Clorox CEO Don Knauss. The problems with both these options are readily apparent: a) Goodwill towards the team's ownership in Oakland is near rock-bottom; and b) an unanswered question is how much the rights to San Jose would increase the team's valuation: ownership could be forced to sell the club below what they believe is "true value."

What is the Real Objective?

MLB's response to San Jose's lawsuit will likely be fairly predictable: they will first assert that it is without merit and then note that their "committee" is still hard at work, making comments at this time premature.

Nearly everyone is looking at this suit as a challenge to the league's antitrust exemption, but it may actually be a Trojan Horse designed to bring into the light of day the conditions the A's must meet to move. Such a revelation would be deeply embarrassing for the A's, which makes this move all the more remarkable given the city's previously cozy relationship with the team.

Somewhere someone knows something about this issue. Here's hoping that transparency wins out. 

1 comment:

  1. The short-term profit motive has never made much sense to me. Considering Wolff's share of the franchise, if he were to pocket that proportion of the annual operating profit he'd net around $1 million a year. The Fisher family would get $7-8 million. That's chump change for these guys, less than what many of the players are getting paid, and probably well down the list of motivating factors.

    If the list is onerous, as you say, it wouldn't make sense for the lawsuit to be filed since it's likely the A's and San Jose are sharing info and SJ would know about Wolff's reservations there. We can speculate as much as we like about missing pieces of info, but the checklist and/or payoff have to rank at the top in terms of "unknown unknowns".