By Neil deMause
After a week of bitter wrangling, A's owner Lew Wolff and Oakland city officials finally agreed on a new lease last week, after Wolff threatened to move the team if he didn't get one. The A's are now committed to playing in Oakland for another 10 years -- unless Wolff decides he wants to leave sooner, in which case he can, or Oakland decides to kick him out to make room for the Raiders, which they can.
Let's try this again, shall we?
As discussed last week, Wolff and local elected officials were headed for a showdown over the team's lease, which expires after 2015 and which both sides wanted to extend -- though city officials wanted any new lease to require Wolff to commit to building a new stadium in Oakland, while Wolff wanted out clauses allowing him to leave early if the Raiders wanted to tear down the Coliseum for a new football stadium, or he got a better offer, or the farmers' market ran out of kale. After the first attempt at having the joint city-county Coliseum authority vote on the lease ended in chaos when city officials showed their displeasure with Wolff's latest offer by refusing to show up, another vote was scheduled for last Thursday.
The breakthrough, such as it was, came late last Wednesday night, when Wolff sent city officials an email declaring that MLB commissioner Bud Selig had ruled that if the lease wasn't approved, "we will immediately be allowed to seek a temporary or permanent location outside the city of Oakland." Faced with this threat, city officials caved, voting to allow the authority to approve Wolff's version of the new lease. (Though on Monday there was speculation that the city council still might try to "tweak" the lease, something that Wolff previously indicated he would not stand for.)
It doesn't take much to see through Wolff's threat as a bluff -- or, as White Sox owner Jerry Reinsdorf famously called it after his own stadium-shakedown trip to Tampa Bay, a "savvy negotiator creates leverage." Not only did the A's owner not have to name names in his late-night missive as to where he intended to abscond to, but the threat itself made little sense. Any MLB owner is authorized to "seek" a new home at any time (except for the Rays, whose lease bars them from even thinking about such a thing), and Selig has no power to approve an actual move by his lonesome, since relocations require the approval of three-quarters of all baseball owners.
Still, as leverage it worked just fine. And best of all from Wolff's perspective, this promises to be the threat that keeps on giving. Not only is he allowed to break his new lease if Oakland and the Raiders come to an agreement to raze the Coliseum, but starting in 2018, he can depart at any time by paying off the remainder of his rent, which at most will be about $11.5 million (or about 0.3 Cespedes). With options like that, it can only be a matter of time before Wolff starts demanding another shrubbery, especially since brandishing the move-threat saber is a proven winner.
Should it be, though? The swift capitulation of the Oakland council meant that neither Wolff nor Selig ever had to answer any questions about where else the A's would go -- which was probably a great relief to them, given the range of options:
San Jose: This is, hands down, the best relocation option for Wolff, with a wealthy population, promises of a lucrative cable deal, and the ability to keep a large chunk of his existing fan base to boot. Or it would be, if not for the teensy little problem that MLB assigned San Jose's territorial rights to the Giants back during Bob Lurie's attempts to move to the South Bay in the early 1990s, and has shown no inclination to press the magic reset button. The city of San Jose still has an antitrust suit in process that could conceivably change matters -- it lost its first round last fall, but should have an appeals ruling later this year -- but that's less a Plan B for Wolff than a lottery ticket.
Portland, Charlotte, San Antonio, Sacramento, etc.: Every time there's an MLB team unhappy with its current situation, speculation gears up around what could be called the MLB Lite cities, those big enough to be on the cusp of big-league status without ever having landed an MLB team. Portland was on the short list for the Montreal Expos before stadium plans there flopped, Charlotte has been floated for the Rays, the Marlins visited San Antonio (as well as Portland and Charlotte) during their stadium extortion tour, and Sacramento is forever being linked to the A's thanks to their Triple-A team being located there. (Though possibly not for long.)
The problem with all these cities, aside from none having stadium plans that are any further along than Oakland's, is that they're relatively puny by MLB standards. Sacramento, at number No. 20 among U.S. cities, is the largest TV market of the lot, with Portland (No. 22), Charlotte (No. 25), and San Antonio (No. 36) trailing behind. (And Sacramento looks less promising when you consider that its NBA franchise is limiting the number of luxury suites at its new arena because "we have zero Fortune 1000 companies.") Any of these cities could possibly be a marginal baseball market -- the two smallest current MLB markets are Milwaukee (No. 34) and Cincinnati (No. 35) -- but they all pale in comparison beside even a slice of the Bay Area, which nearly has more TV households than Sacramento and Portland combined. Trading a substandard stadium and uncertain hopes for a new one in Oakland for no stadium at all, and few hopes of a new one in a smaller market sounds great when you're playing lease hardball, less so when you consider how many zeroes would be missing from your next cable deal.
Montreal: Since the move of the Expos to Washington in 2005, there has been only one major North American market without a major-league baseball team, and that's Montreal, which if it were in the U.S. would be ahead of Seattle and Minneapolis. And the city did nearly sell out two exhibition games between the Jays and Mets this March, and Warren Cromartie is really really excited about getting a team back someday. Unfortunately, MLB deliberately slammed the door on Montreal when it moved the Expos, plus the city also has probably the only stadium standing that Lew Wolff would rather play in less than the Oakland Coliseum, and attempts to build a new one for the Expos went nowhere fast. Montreal should get another baseball team eventually, but it's hardly a ready-made move threat for a team like the A's.
New York: Yes, now we're getting silly. But it's worth pointing out: If you're going to consider San Jose as a place for the A's to move, why not New York City as well, which similarly has no stadium and is in the designated territory of another team, but which is absolutely bursting with rich people. If San Jose's lawsuit really does succeed in tearing down MLB control over franchise territories -- and not just in getting MLB owners to let the A's move to the South Bay in exchange for dropping the suit before things get to that point, which seems slightly more possible -- then there would be nothing stopping Wolff from heading east and building himself a stadium in Williamsburg, at least if half a dozen other teams didn't get there first.
That list is, to put it mildly, not a lot of great options, and is no doubt a big part of why the A's are still in Oakland 16 years after former owners Steve Schott and Ken Hofmann first started talking about moving them. Playing second fiddle to the Giants at a stadium built for football and then rebuilt even more for football may not be ideal, but the team is still making money, winning games and swinging prospects-for-veterans deadline deals like the big boys, and the East Bay is gentrifying at a dizzying clip. So really, things could be worse.
Aside from the San Jose suit, in fact, the only other wild card that could force an A's decision sooner than later is the fate of the Raiders, whose owner, Mark Davis, has publicly declared that the Coliseum site isn't big enough for both baseball and football. (There are plans that insist otherwise, but in any event there probably isn't enough money to build twin stadiums in Oakland, so let's ignore this question for the moment.) Hanging over Oakland's collective head is the prospect of the Raiders leaving without a new stadium of their own, and angry Raiders fans are a lot scarier than the prospect of angry A's fans.
Moreover, the Raiders seemingly have a ready-made relocation target: Los Angeles, which has been vacant NFL territory ever since the Raiders and Rams departed in 1995, and which, you may have heard, has a certain tendency to boost franchise values into the stratosphere. True, it doesn't have a new stadium either (neither the L.A. Coliseum nor the Rose Bowl would be a long-term solution), but in terms of market size, it blows even the Bay Area out of the water.
Funny thing about the NFL, though: Market size doesn't quite operate like it does for other sports, thanks to the lack of local cable deals -- football teams can happily survive in relatively tiny markets like Buffalo (No. 52) or Green Bay (No. 70) so long as they get a cut of the national TV contracts. That also means that the advantage of playing in a big market is substantially lessened for NFL owners compared to those in other sports.
How lessened? To find out, I ran a linear regression analysis comparing Forbes team values for MLB and the NFL, and the corresponding Nielsen market sizes. (Accuracy of the numbers depend on how much you trust Forbes, Nielsen and my Excel skills, so take this as a rough guesstimate.) According to these numbers, the value of market size in baseball -- in other words, the amount of extra value added by being in a bigger market -- is more than double that for football. As a result, if Lew Wolff were able to overcome the opposition of the Dodgers and Angels and move the A's to L.A., they would be expected to appreciate by more than $500 million (or if you count Oakland as only a fraction of the Bay Area market, as much as $800 million); for the Raiders, the value bump would be more like $270-425 million.
That's not chump change, but when you consider that the two leading stadium plans in L.A. would require a team owner to not only spend hundreds of millions of dollars of his own money but possibly give up a chunk of equity in the team as well, it starts looking like a slim payoff. Which is, no doubt, a big part of why the Raiders are still in Oakland.
None of which is going to stop Wolff or Davis from threatening, or city officials from reacting out of fear of being accused of losing one of Oakland's teams. Next time, though, they might want to consider holding out a bit longer -- after all, when you fold too quickly, you don't force the guy across the table to show his cards.
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Neil deMause is a Brooklyn-based journalist who has covered sports economics for Slate, the Village Voice, Baseball Prospectus and a bunch of other places you wouldn't remember. He runs the stadium news website Field of Schemes, and co-authored the book of the same name.