How long before Commissioner Selig's term expires?
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Friday, May 14, 2004

Vacation Time

I'll be away on vacation (or, as I think of it, gathering material for the other side of my site) from tonight through Saturday, May 22. Will update the site when I can, but the updates will be less frequent than usual, especially when I'm around here.

If you see something interesting while I'm incommunicado, post it in the Comments to this message.

When I return, I'll be hosting a chat on at 8:00 PM EDT Monday, May 24. Look forward to hearing from you then!

Portland Sweetens Its Pot

Portland has cobbled together a package of taxes and fees that city officials say would cover $340 million of the $350 million cost of a new major league stadium. The package includes:

Income taxes on players and team officials: High enough to cover $125 million of stadium bonds.

Ticket taxes: A 10% admissions tax, enough to cover $75 million of bonds.

Concessions and merchandise tax: An 8% tax on goods sold at the stadium, estimated to cover another $25 million of bonds.

Stadium district: $75 million -- "a big, still somewhat amorphous chunk, where the city hopes to collect revenue from businesses within a half-mile or so from the stadium."

Miscellaneous: $40 million from charter seat licenses, tax increment financing and local improvement districts.

Sounds great in theory...but everything hinges on acceptance of these optimistic revenue estimates. The club owner (or, conceivably, another private entity) would be responsible for making up any shortfalls between the revenue generated from these taxes and the money needed for debt service, as well as for covering any construction overruns. Those are potentially huge contingenties liability which are likely to worry prospective owners, and MLB, more than if Portland had simply requested the owner pay $X toward the cost of the ballpark.
Lamping Is Busy Marketing Ballpark Naming Rights

Naming the St. Louis Cardinals' new ballpark may not be as simple as asking the club's former owner for a large check. The St. Louis Post-Dispatch quotes Cardinals president Mark Lamping: "We're actively marketing the naming rights to companies, both locally and outside the city, and hope to have a deal concluded by the end of the year."

Anheuser-Busch, which already has agreed to a multi-year marketing campaign in the new ballpark, remains the most obvious candidate. Anyone else would not only have to outbid the country's largest brewer for the ballpark in its hometown, but would have to overcome the near-automatic association of the Cardinals with the Busch name.
Vegas Stadium Funding Still Unclear

Nevada baseball promoters are scrambling to come up with public money for use in stadium construction. MLB wants local taxpayers to pay 2/3 the cost of any new stadium, but none of Las Vegas' proposals would come close to generating the $300 million that ratio would suggest.

Stadium supporters have talked about using tax increment financing, but it may not even be available. The proposed stadium would be adjacent to the Las Vegas Strip, behind Bally's and Paris Las Vegas, but the state law authorizing Clark County's redevelopment authority says that TIFs are intended for "blighted areas." In a masterpiece of understatement, the Las Vegas Sun acknowledges, "The Strip, however, is not generally considered a decaying urban neighborhood."


Thursday, May 13, 2004

Red Sox Dodged a Bullet

My May column for Boston Baseball, in which I discuss Boston native Frank McCourt's undercapitalized acquisition of the Los Angeles Dodgers, and the challenge he faces in his local market from Anaheim's Arte Moreno.


Wednesday, May 12, 2004

Vegas' Field of Dreams Won't Come Cheap

Las Vegas may have just taken itself out of serious contention for the relocated Expos. The Las Vegas Sun reports that the local baseball backers want the public to pay some of the estimated $450-$500 million cost of a proposed 40,000-seat, retractable-roofed stadium, possibly through a bond issue to be repaid from taxes on tickets, concessions and parking.

Under state law, any public contribution requires the approval of the Nevada legislature. That, in turn, would require a special session of the legislature, which couldn't possibly meet and approve such a tax before Las Vegas's final proposal to MLB is due on Friday. Without a firm stadium financing plan in place before the owners vote, Las Vegas would appear to have little chance for the Expos -- though both Las Vegas and Portland, Oregon are casting covetous eyes at the Oakland Athletics.
District Said to Be In Front for Expos

The Washington Times picks up and runs with a comment made by John Alevizos, the man who wanted to move the Expos to Connecticut. Alevizos says that Jerry Reinsdorf told him that MLB's relocation committee had narrowed the potential destinations for the Expos to Washington, Las Vegas and Monterrey, Mexico, and that Washington was the front-runner. A spokesman for Reinsdorf denied that he had identified Washington as the favorite.

Gabe Paul Jr., head of northern Virginia's relocation bid, said no one from MLB had told him that his area had been eliminated from consideration. He also declined to say where a northern Virginia club would play, since all of the leading sites have encountered considerable local opposition.
Miami-Dade Gives Blessing to Marlins Park at Orange Bowl

By an 8-3 vote, the Miami-Dade County Commissioners have joined the Miami City Commission in endorsing a new ballpark for the Marlins southwest of the Orange Bowl. The vote doesn't come with any more money, though, and the project remains $30 million short of the optimistically-estimated $367 million cost of a retractable-roofed home for the Marlins.


Tuesday, May 11, 2004

Now I'm a Shill for MLB!

My cretinous correspondent from the pension suit thinks he has me figured out. On the Web site created to drum up support for the dismissed action, he writes:

"You can see from his article on the pension plight that he did not do his homeowrk and only wrote these two ill-informed articles to curry favor with MLB. Assuming he is a wannabe friend of the MLB attorneys (the real MLB attorneys, not ones who hide behind a hardrive), this hanger-on, this outsider is trying so hard to be recognized and get in the good graces of MLB that he will stoop to calling peers an "embarrassment to the legal profession" even though this lawsuit not only has merit, but the presiding Judge said the alums were morally in the right. He not only writes, but tells anybody who cares to listen that the pension lawsuit is a joke, the attorneys for the alumni are a joke, and that the alumni are tantamount to beggars looking for an undeserved handout. All this to be chummy with real MLB attorneys, guys with class like Rob Manfred.
I think I struck a nerve...
Ballpark Vending Policies Throw Fans, Workers a Curve

Neil deMause's Field of Schemes site alerted me to this story from the San Diego Union-Tribune. Sportservice, which has concession rights at San Diego's Petco Park, Cincinnati's Great American Ballpark and other venues, is increasingly replacing ballpark vendor employees with volunteers recruited from local charities:

For routine counter work and everyday ballpark fare, however, the company is aggressively recruiting local charities and nonprofit groups to perform jobs normally done by part-time seasonal employees, with the groups getting a share of the revenue. About one in five Petco Park concession workers are volunteers from churches, scout troops, cheerleading squads and other clubs.

Groups are told they can rack up $110,000 per season. But to earn that much, an organization would have to staff a stand for at least 60 games and sell $1 million worth of beer, pretzels and other snacks. Each game is a six-hour commitment and each group must provide its own insurance.
Fans aren't happy: concession lines are longer because the volunteers take longer to do everything. The local health department casts a skeptical eye: the volunteers don't have the same training in the requirements of commercial food preparation. Blue-collar workers are furious: the volunteers are taking jobs that they would otherwise use to supplement their income. And the practice makes a mockery of the job-creation promises so often used to justify public funding of stadiums.
MLB Drug-Testing Programs Move to Olympic-Certified Laboratories

MLB and the MLBPA have agreed to transfer administration of their drug-testing program to a lab certified by the World Anti-Doping Agency, the INRS-Institut Armand-Frappier Research Center of Montreal. In MLB's press release, Rob Manfred and Gene Orza say nice things about the WADA, but never mention the biggest benefit of switching to this particular lab.

That benefit? The use of a Canadian lab will ensure that all of the 2004 drug testing samples are stored beyond the reach of U.S. prosecutors and grand juries, eliminating the possibility that last month's seizure will be repeated. This was no accident -- MLB chose to have its minor-league testing administered by the WADA-appropved testing program at UCLA, which could certainly have handled the major leaguers' specimens, too.
Colangelo No Longer Only One Calling Financial Shots

Paola Boivin of the Arizona Republic writes that Arizona Diamondbacks owner Jerry Colangelo now shares decisionmaking authority with the four new investors who invested $99 million in the club this spring.

The four, Canadian cable TV moneyman J.C. Royer and software magnates Ken Kendrick, Dale Jensen and Mike Chipman, have joined Colangelo on a five-man ownership group. Colangelo remains CEO and chairman, but the other four have the right to buy him out. Jensen insists they're all on the same page:

"Honestly, really not much has changed or will change. We're all great baseball fans, but we'll rely on our experts. I see our payroll staying about where it is now.

"But we also know we can't deficit-finance this thing."
Complicating that effort, the Diamondbacks owe $170 million in deferred salaries.

O's Have Budget Concerns

The Washington Times has obtained an April 29 memo from John Angelos, son of Orioles owner Peter Angelos, in which he asked the club's business/administration, communications, corporate sales and sponsorship, sales and fan services and ballpark operations departments to review operations and propose budget cuts of 10-20%.

Thom Loverro speculates that Angelos may be positioning to sell the club after MLB announces the Expos' destination. One scenario has the Expos moving to Washington, with Angelos receiving a one-time compensation payment of approximately $50 million and then selling the Orioles.
Expos Not Coming

This headline will be repeated several times over the next two or three months. It debuts in the Hartford Courant, which reports that to no one's surprise but his, John Alevizos' proposal to move the Expos to central Connecticut has been rejected by MLB.

"Jerry Reinsdorf told me the committee didn't believe the region of Central Connecticut had a large enough metropolitan trade area [to support a team]," Alevizos said Monday. "Frankly, I find that a bit ridiculous."
Alevizos had fantasized that the Expos might move to a 34,000-seat stadium to be constructed along I-91 in Wallingford, Connecticut. Wallingford is about 15 miles north of New Haven, 25 miles south of Hartford.
Fans Hold Baseball to a Different Standard

Richard Sandomir of the New York Times compares the Spider-Man promotion to what other sports do routinely:

Baseball is held to a higher standard than other sports. It can slap signs on every wall, but it cannot sell on-base logos without an outcry. The National Hockey League has let teams paint corporate logos on their ice for more than a decade without being viewed as a greedy sellout.

Golfers, tennis players and bowlers wear apparel festooned with logos meant to be seen by fans, and Nascar will put a sponsor's name on virtually anything.

Sandomir also notes that MLB "is not considered by sports business experts to be as sophisticated a marketer as the NFL," and quotes Denver sports marketer Dean Bonham's summary of how MLB mishandled the situation:

If I were going to put ads on bases, I would have employed a strategy that is best defined as 'crawl, walk, run,'" said Dean Bonham, a sports marketer based in Denver. Placing Spider-Man ads on bases, he added, "was like going from being sound asleep to a full sprint."

Yanks to Borrow $225 Million

No, not to finance midseason acquisitions -- to refinance debt from the now-dissolving YankeeNets partnership at a lower rate.

According to Bloomberg News, the refinancing will include a $50 million letter of credit and a $175 million term loan that's expected to be syndicated to investors at about 3.75%. The loan will primarily be secured by the assets of the YES Network, with the club itself providing additional collateral.
Spider-Man Idea Was Way Off Base

Hal Bodley of USA Today criticizes the aborted Spider-Man promotion -- then unaccountably gives Bud Selig credit for killing it:

Within 24 hours, Selig pulled the plug. His reputation and sacred regard for baseball remained intact. He got caught in the web, but quickly found his way out.
In fact, as Richard Sandomir of the New York Times reported last week, Columbia Pictures, not Selig, pulled the plug:

Columbia, which is releasing the "Spider-Man 2" movie on June 30, had monitored polls on and AOL yesterday showing that fans were overwhelmingly against the idea of commercial endorsements on bases during the games, Geoffrey Ammer, president of worldwide marketing for the Columbia TriStar Motion Picture Group, said.

"Fans were saying, 'Whoa!' " he said.

Subsequently, Columbia asked baseball to take the signs on the bases out of the deal
According to Bodley, Selig had personally opposed the Spider-Man campaign:

The day of the announcement, Selig told me he wasn't thrilled with the promotion but tried to defend it. I told him he was wrong, and his response was silence. He says he reluctantly agreed to the promotion because he has tremendous respect for his executives, including Jacqueline Parkes, MLB's marketing and advertising vice president.
I'll let Bud have the last word here:

"I'm always interested in some of the critics. I don't mind concerns being raised by fans and others who care for the game, but it's the public demagoguery that aggravates me."

Fan Mail

One of the players most active in pursuing their frivolous lawsuit for pension benefits has written me. I'll spare him the embarrassment of posting his name, but here's what he thinks about me and my writing:

bored to death tonight which automatically made me think of your writing. i guess i won't need a sominex tonight.i think i might have made a comment on one of your articles on former players pensions,boy things are really getting bad if i'm wasting my time that way. good night dougie, make sure your mom tucks you in.

Oh well...

Monday, May 10, 2004

Does Ballpark Revenue Buy Better Players?

Clemson economics professor Skip Sauer, who runs The Sports Economist Weblog, asks the question most important to fans, and other residents, asked to finance a new ballpark -- whether the club's owner will in fact use the added revenue to improve the club.

"[W]ill these revenues be spent on increasing the team's talent? Economics implies they will only if the new stadium increases the revenues from winning additional games. If this effect is absent - i.e. if nicer accommodations and a more competitive team are not complements - then a profit maximizing owner will just pocket the cash and the composition of the team will be unchanged."

To answer the question, Sauer links to a new paper [.PDF link] by Jahn Hakes and Chris Clapp that discusses the "honeymoon effect" of a new ballpark. Hakes and Clapp find that new ballparks produce a 1/3 jump in attendance during the first year at the new facility, but also conclude:

"Contrary to expectations, there is no systematic interaction between new venues and team performance upon attendance or stadium revenues. This noncomplementarity implies that a profit-maximizing team owner would not use a new stadium's revenue stream to increase quality of play."

Craig Depken of the University of Texas-Arlington has looked at the related issue of what happens to the money clubs receive when they sell naming rights. His conclusion: "The owners are putting the difference in their pockets."

Sternberg Buys 48% of Rays

An investor group headed by Stuart Sternberg of Rye, New York has acquired 48% of the Tampa Bay Devil Rays from five of the club's general partners. Don't get your hopes up, Devil Rays fans (I know you're out there...) -- Vince Naimoli, who owns 16.7% of the club, remains in full operating control.
Angel of an Owner

The latest in a long series of laudatory biographies of Angels owner Arte Moreno, this one from Newsday. Thrill to the accounts of actual fans!

"He would walk all these aisles, which was really odd," Angels fan Paul Brar said. "And he wouldn't be attended by anybody. And he'd come up and introduce himself to you."

"He'll sit down right next to you!" exclaimed an usher requesting anonymity.

"It's like normal people!" said 54-year-old Angels fan Miguel Rodriguez from nearby Wilmington. "Doesn't feel like he's rich. Sometimes he sits down right there" - Rodriguez pointed to chairs just behind the lower stands - "and he talks to people, and drinks one beer."


Sunday, May 09, 2004

Now with Permalinks!

Blogger's newly-upgraded software fixed one of the worst weaknesses of the old version: its inability to create true permalinks to older posts. I've activated the new permalink feature and republished the entire blog with the new links. If you've linked to me before, check to see if the link still works.

Stadium Cost Is a Matter of Quality

John Hunt of The Oregonian tries to answer the question:

"If the Oregon Stadium Campaign's stadium finance plan really is within 10 percent to 15 percent of its $350 million project goal, then why not just get the thing done for $300 million to $315 million?"

He also reminds readers that even if Portland doesn't get the Expos, it could still be a prime destination for the Oakland Athletics, if they can't move to San Jose or get a new stadium in the East Bay.
To Survive, Brewers Desperately Need a Rally

Don Walker of the Milwaukee Journal Sentinel surveys the state of the Brewers, in the wake of the just-released financial reports. Timothy Sheehy of the Metropolitan Milwaukee Association of Commerce says that one of the most important facts didn't make it into the reports:

"When the Brewers came here in 1970, metropolitan Milwaukee was the 24th-largest metro area in the U.S. Today, we are 42nd. No other top-25 metro area has fallen like us."

One anonymous "sports finance expert" says the Brewers aren't an attractive investment, either:

"Even with their low payroll, it doesn't make any money. Attendance has been bad. It's just not where people expect it to be as a franchise. The team has been kind of beaten up. It's hard to get the fans back without rebuilding the payroll. And it's not a huge media market. A lot of really smart people are trying to make sense of this to sell this team."

I respectfully disagree. I think the Brewers' local reputation and on-field performance have bottomed out, making the club a good deal at the right price. Any new ownership group will likely start with less debt than the $133.2 million crippling the Selig team -- they'd have to, if Bud intends to enforce the debt rules. Milwaukee fans will give a fresh start to any owner not named Selig, and when they do, the Miller Park turnstiles will spin again. Most importantly, for the first time in years the Brewers have what it takes to improve the team on the cheap: a significant number of prospects (the Milwaukee organization is ranked #1 in the majors by Baseball America) who can replace the mediocrities and overpaid third-tier free agents who have been staples of recent Brewer lineups.

For this to work, though, the Brewers will have to overcome two potentially devastating, though false, impressions their current owner has spent the past decade spreading. If Milwaukee fans continue to believe that "payroll = team quality" and "small markets can't compete," Bud Selig will have done more than anyone else to kill major league baseball in his hometown.
Rookie Ballparks

Bruce Adams and Margaret Engel, authors of Fodor's Baseball Vacations, 3rd Edition : Great Family Trips to Minor League and Classic Major League Ballparks Across America, review San Diego's Petco Park and Philadelphia's Citizens Bank Park.
D.C. Stadium Costs Prove a Moving Target

Eric Fisher of the Washington Times reviews the curious history of Washington's stadium cost estimates:

" In early 1999, a ballpark at RFK Stadium was projected at $207 million, and a downtown site, then ideally Mount Vernon Square, was estimated at $330 million.

In late 2002, soon after MLB formed its relocation committee and the D.C. Council began to get engaged actively in the baseball chase, the cost range was $342 million to $542 million.

Last year, when Williams introduced the Ballpark Revenue Amendment Act of 2003, the stadium was projected to cost between $343 million and $436 million. Late in 2003, when the Banneker site emerged as a possibility, early estimates there hovered around $500 million.

Last month, Williams said a ballpark on the RFK property, financed fully with public funds, would cost $340 million."

Fisher notes that the last 10 ballparks have averaged $386 million -- and that the costs of construction in Washington, D.C. are far higher than in Cincinnati and Pittsburgh, the stadium proponents' favorite analogies.
Resolution to Twins TV Situation Leaves Victory Dark

Judd Zulgad of the Minneapolis Star Tribune offers a post-mortem on the Twins' Victory Sports Network. Victory Sports President Kevin Cattoor blames its failure on the Twins' decision to pursue a new stadium at the same time:

"I believe had we not had the ballpark issue, Victory would have been successful. There is no doubt the ballpark had a major impact on our decision to continue Victory or not. The pressure to get the games on was so great and the risk posed to the stadium bill was so great that we had to pursue other avenues."

Twins President Dave St. Peter agrees -- "Certainly as long as the ballpark legislation was pending I think cable and satellite providers had no urgency to come to the table" -- but refuses to second-guess the decision:

"Our contract was up, and Fox had no interest in a short-term agreement. We felt as though the Victory Sports model was the right thing for this organization. We just couldn't garner the carriage deals that we anticipated. . . . But this was a long-term initiative. Obviously the timing could have been better, but I don't know that we had the choice."

The Twins won't be able to try again until 2012.

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