Where was the money in San Jose before Earthquakes moved? By Robert Wagman SoccerTimes ( http://www.soccertimes.com/wagman/2005/dec20.htm ) December 20, 2005 Excerpts: Since Major League Soccer and the Anschutz Entertainment Group announced last week that the San Jose Earthquakes would be relocated to Houston, following a fruitless three-year search for a new home in the Bay Area, suddenly, groups, left and right, have come forward to say they are willing to throw big money behind bringing an MLS expansion team to the area by 2007. This is nonsense! If this money was really available, the Earthquakes would never have moved. Now, with the former Earthquakes in Houston, San Jose city officials have announced a willingness to offer up to $80 million to attract another MLS franchise. According to the proposal, about $30 million would be spent to acquire land for a soccer-specific stadium, some $36 million would go toward a share of the stadium construction cost and another $14 million would be made available for operating subsidies while the stadium was under construction. "We looked at it and felt the future of soccer looked positive and bright, and worthy of the City Council taking a look at it and deciding whether they want to support this level of investment,'' said Paul Krutko, the city's director of economic development. That, of course, is the catch. The City Council has not approved the deal. It is probably not likely it will, either, because there is another slight catch. No one has any idea where the money might be coming from... Bottom line -- the San Jose deal isn't going to happen and MLS knows it. By the way, the Major League Baseball's Oakland A's have added a bit of comedy relief to the whole picture by putting out a news release saying they would just love to own an MLS expansion team. This, of course, was a bit of news to MLS. The catch -- while San Jose was building a new venue for this expansion MLS club, why not throw in another $800 million or so and build a stadium for the A's so they can get the heck out of Oakland. Lewis Wolff is the managing partner of the A's ownership group, which includes billionaire investor John Fisher, that purchased the team on April 1. Major League Baseball has long ruled that the San Francisco Giants have territorial rights to San Jose. Possibly, as part of a pact to bring soccer back to San Jose and the Bay Area, a little end run could be made around this rule to bring a baseball team with it.
Just a test if you know anything. Do you know why Major League Baseball ruled that the San Francisco Giants have territorial rights to San Jose?
I wouldn't bother with Wagman. In June he reported that the sale to Club America was a done deal. The main ignored fact is the obstacles that AEG put in front of any local deal. Also, he says that the A's press release came as news to MLS. Garber mentioned the A's interest the day before the press release.
I think the Giants were granted territorial rights to entice them to Build Pac Bell Park. Not sure though.
Major League Baseball redefined the teams’ territories as the county and surrounding counties in which they operated. In New York (where the Yankees and Mets play), Chicago (home to the Cubs and White Sox), and Los Angeles (Dodgers and Angels), the organizations opted to share all of their surrounding counties. But in the Bay Area, the Giants and A’s had a split. The Giants were given San Francisco, San Mateo, Santa Clara, Santa Cruz, Monterey, and Marin Counties. The A’s got Alameda and Contra Costa. http://www.thewavemag.com/pagegen.php?pagename=article&articleid=25264 You see, good general managers, like Beane and Sabean, are creative and look for a win-win. They would easily handle territorial rights – the rule that allows the Giants to stop another Major League Baseball team from locating in San Jose. They’d trade the East Bay for the South Bay. The Bay Area would be divided North-South, rather than East-West. The Giants territory would be San Francisco and Oakland. The A’s would get San Jose and points South. Beane, with his keen eye for numbers (see Money Ball), would notice that the A’s territory (Alameda and Contra Costa counties) has a population of 2.5 million people. Santa Clara County has 1.7 million people. The loss of population would be offset by the sale of luxury boxes since we have more corporations – something Beane would also notice. That would ultimately increase the A’s revenue. Beane could use the dough to sign talented players before they wonder how good they’ll look wearing Yankee pinstripes in commercials with George Steinbrenner. http://sanjoseinside.com/sji/blog/entries/lets_make_a_deal/
The Giants were granted territorial rights to Santa Clara county because they wanted to move there and didn't want it to be considered a relocation. It was granted as part of the process that led up to the two unsuccessful votes to lure them South. It remains and is now being used by the Giants to keep the A's out of the South Bay where most of their supporters currently live.
The problem is that much of the Giants' business plan and stadium financing plan is based on corporate sales and sponsorships from the South Bay. Particularly their loans they received for their privately-financed stadium were approved by the lenders because the Giants pointed to their South Bay rights and were able to convince the lenders that they would have a steady stream of income through their relationships with South Bay corporations, relationships that could be jeopardized if the South Bay corporations suddenly had a hometown baseball team. The East Bay doesn't have the corporate wealth to replace the loss of the South Bay.
I agree with this assessment of the article. If Wagman had bothered to look into, he'd see that Wolff is intentionally designing the ballpark smaller to control costs (and constrain supply). He'd also see that Wolff's isn't looking for bonds or anything like that right now. That could change, but Wolff is a dealmaker by trade and from *most* stuff I've read about him, is a realistic, fair one. San Jose hasn't positioned itself to go to the well for a huge bond issue. Besides, the city does have redevelopment money - money it's using to buy up the properties. They're going to put the land out there for Wolff or whomever to develop. Beyond improved infrastructure (parking garages and traffic controls), there's little else. Remember that it's an election year, and the mayoral candidates have to be very careful about what they back.
Splitting hairs. His bottom line is still valid. The doc/deal is just a fig leaf for MLS and Garber's collective hard-on for Houston. Its never going to happen. Even if the money were and the team hadnt been moved there it wouldn't have been passed in a vote. No-one is going to vote for that deal now there's no team. You might not like Wagman but that article is only pointing out the obvious.
There is also a new concern that is not mentioned in those news articles. Sacramento is the AAA home of the A's franchise. San Jose is the A home of the San Jose Giants. Moving the A's into San Jose would compete with their fan base in the South Bay, while taking the East Bay, towards Davis, and surrounding areas, would put the Giant's territory into the area of the Sacramento RiverCats.
No, it's not splitting hairs. He's just a nerd sitting behind a computer screen and coming to his own conclusions, not based on talking to any of the pertinent parties. That's fine. But that's not reporting, it's not journalism — it's blogging. So he has no more insight into any of this than probably 20 screen names we could come up with in about 5 minutes.
Yep, this article has nothing to add. Just a step above (or below) Ray Ratto. I do agree with the general point about money coming out of the City of San Jose's general fund. I don't see that happening, especially with the voter approval element thrown in.
Agreed. My objection, along with several other parts of the article: "What's silly about all this is that had this deal been offered to AEG in the last three years as it searched high and low for just such an arrangement, the team would never have been moved." "Searched high and low?" Kiss my tuchas.