Wednesday, May 5, 2010

Why N.J. cannot get a Major League Baseball team

WEDNESDAY, 05 MAY 2010 12:45


Major League Baseball Commissioner Bud Selig has a committee trying to figure out whether Oakland A's owner Lew Wolff can move his team from Oakland to San Jose, if San Jose can find the money and is able to build a mostly publicly-financed baseball stadium. The committee has not figured out, as of yet, if they know the way to San Jose but there will be an answer some day. What happens in Northern California should have no immediate impact on New Jersey. But as it stands now, neither San Jose nor northern New Jersey can be the home of a major league baseball team.

The areas are in other team's territories and Major League Baseball, thanks to an antitrust exemption, can just say no to anyone who wants to put a team in San Jose or East Rutherford, New Jersey. There is no proposal at the present time to attract a Major League team to New Jersey although when then Baseball Commissioner Peter Ueberroth opened the door to possible expansion in 1987, New Jersey had a presentation ready. New Jersey also tried to attract George Steinbrenner's interest and get him to move the Yankees across the Hudson in the 1990s.

There are two owners of Major League Baseball teams who have serious doubts about the revenue production capabilities of their present stadiums. Wolff in Oakland and Stuart Sternberg in St. Petersburg.

Wolff has failed in getting a "stadium-village" for his A's and a real estate in Oakland and in Fremont, which is about 20 miles south on the I-880 of the team's present home at the Oakland Coliseum. In St. Petersburg, Tampa Rays ownership, which includes Managing General Partner Stuart Sternberg of Rye, New York is looking for a new stadium in either St. Petersburg or Tampa.

There was a rumor, which was just a rumor, that Rays ownership thought about moving the Rays to Connecticut. There is one other major fly in the ointment though. The Rays' lease with the St. Petersburg stadium ends in 2027.

Both Wolff and Sternberg are trying to work out an arrangement to remain in their present markets. Wolff can get out of his lease within a few years in Oakland as he signed a short-term agreement to keep his team at the Coliseum through 2013. Here is the problem that Wolff faces and a problem that New Jersey would face if someone in the state decided to go after a Major League Baseball team.

Major League Baseball assigns territories to teams. The San Francisco Giants ownership has the San Jose/Santa Clara County territory which is more than 40 miles south of the Giants China Basin ballpark. The Oakland Coliseum is considerably closer to San Francisco and is accessible by the Bay Area Rapid Transit and is not far down the I-880 from the Bay Area Bridge. San Jose became Giants territory in the 1990s when the team attempted to get a stadium built in the South Bay's most populous city. Neither San Jose nor Santa Clara voters had any interest in paying for a Giants stadium and turned down ballpark referendums. Despite the no votes, MLB has not changed the Giants' territorial claim.

Major League Baseball does not live by the same antitrust laws as normal businesses because the Supreme Court of the United States in 1922 ruled that baseball was a game and not a business and gave the "game" an antitrust exemption which still applies to areas like territories and television. Wolff is blocked from even thinking about crossing the Santa Clara County line because that would be crossing his baseball brothers. Wolff tried to get as close as he could to San Jose and Santa Clara and not upsetting the Giants ownership by trying to relocate to Fremont.

Now Wolff is openly talking to San Jose despite the fact that Giants ownership will not cede the territory and Giants ownership through a subsidiary, the San Jose Giants — the California League Class A Giants affiliate — is trying to block San Jose from building a stadium. Giants ownership has a one-quarter interest in the San Jose Giants.

Wolff's Oakland A's are struggling drawing people this year. Oakland does not have the corporate crowd that fills the Giants China Basin stadium. Santa Clara residents might send Major League Baseball is big wakeup call on June 8 by going against national trends and voting to spend public money to build a football stadium for the San Francisco 49ers to show the Giants, MLB and the city of San Francisco that they are fed up with the Giants territorial claims and to stick it to San Francisco city officials and San Francisco Giants ownership by "stealing" or "poaching" the 49ers. Santa Clara is willing to invest hundreds of millions of dollars in the stadium.

San Jose is the Silicone Valley and somehow both MLB and the Giants are convinced that money headed up the 101 Freeway to San Francisco will shift to a San Jose baseball team which would have a crippling affect on the Giants. The San Francisco baseball team is one hour away from San Jose; Oakland is across the Bay and is accessible by mass transit.

Wolff doesn't seem to want to sue Major League Baseball and challenge the antitrust exemption. Wolff shares the Oakland Coliseum with the NFL's Raiders and Raiders owner Al Davis did sue the NFL in the 1980s when the league interfered with his negotiations with the Coliseum for a lease extension and then tried to block the Raiders' move to Los Angeles.

Davis won.

In 1984, San Diego Clippers owner Donald Sterling thumbed his nose at NBA officials and moved his franchise to Los Angeles without league consent. He was fined $100 million for the move. Sterling sued the league. The two parties settled. Sterling stayed in LA and paid the NBA a $6 million fine.

Major League Baseball did not move a team between 1971 and 2004. The Washington Senators left the nation's capital for Arlington, Texas in 1972. A number of attempted franchise shifts failed for various reasons including San Diego going to Washington in 1974, the Giants to Toronto in 1976, Oakland to Denver in 1979. A number of teams looked at moving to Tampa including the Giants, Seattle Mariners, George W. Bush's Texas Rangers and the Minnesota Twins. Minnesota ownership nearly sold the team to Greensboro, North Carolina interests in the late 1990s if a stadium became available in that North Carolina city. Voters turned down a Greensboro stadium in 1998.

It is not easy to move a team to open markets like Tampa was before 1995, like Denver before 1991, like Washington between 1972 and 2004. What chance does San Jose have? What chance does New Jersey or Connecticut have?

New Jersey may have the right stuff for a Major League Baseball team. In 2000, Major League Baseball had big names like Paul Volcker, the former Chairman of the Federal Reserve, Richard C. Levin, the Yale University President, the former Senate Majority Leader George Mitchell and media personality George Will, a former political operative and college professor who won a Pulitzer Prize for commentary in 1977, analyze baseball's financial condition.

The "Blue Ribbon Panel" on baseball economics left the door open for franchise relocation to places like northern New Jersey and Washington despite the presence of teams in the vicinity. New Jersey or Connecticut have a major revenue stream that is currently untapped. Cablevision's Madison Square Garden network has little summer programming of note that would draw in potential viewers since the Yankees formed the YES Network and the Mets, along with Time Warner and Comcast, started SNY. There probably is more than $60 million on the table waiting for a third New York City area team.

New York City is still the financial capital of the United States. The city once had three baseball teams - the Yankees, the Giants and the Brooklyn Dodgers. Walter O'Malley took his Dodgers to Los Angeles in 1957 although he kicked the tires and his Dodgers played seven games at Roosevelt Stadium in Jersey City, N.J. in 1956 and 1957. O'Malley used Jersey City as leverage in his bid to get New York to spring for a new stadium for his Dodgers. Giants owner Horace Stoneham seemed more determined to move his team from upper Manhattan out of the New York area than O'Malley ... with Minneapolis one of his choices.

With the population, the corporate wealth and television monies available, New York City or northern New Jersey would be ripe for a failing franchise. But New Jersey is blocked (as Connecticut would be) because both the Yankees and Mets would nix any move into their territories and the Philadelphia Phillies ownership would probably object to a third New York area team if it was placed in New Jersey. (The Philadelphia Flyers got a million dollars from John McMullen when he bought the Colorado Rockies NHL team and move his newly acquired team into the Meadowlands in 1982).

In Oakland, Wolff has Comcast's TV money, but he lacks corporate support. San Jose wants to build a stadium and Oakland is back in the game.

There are three essentials to running a successful franchise whether it is in Major League Baseball, the National Hockey League or the National Basketball Association or even Major League Soccer. Government support is an absolute necessity in terms of building a facility. Government can build the place with taxpayers' dollars or give substantial tax breaks and incentives (as the Giants/Jets stadium entity is receiving at the Meadowlands) to owners to build their own plants. The federal government regulates Cable TV where billions are made by sports franchises and separates the Yankees, Mets, Angels, Red Sox, Phillies and Mariners from the rest of baseball and corporate support. Corporates can take 50 cents off the dollar in buying luxury boxes, club seats for business purposes.

Wolff already shares the market with the Giants in the Bay Area and cannot get his foot in the door in San Jose. If Sternberg was looking at the New York City area, he would get a door slammed in his face. Sternberg is not seeking a New York area facility and is concentrating on getting a place built in Tampa. The lease in St. Pete has a long way to go but as the late John McMullen once said, a contract is just a piece of paper.

Major League Baseball moved the financially troubled and ownerless Montreal Expos into Washington after the 2004 season once MLB secured a commitment from the city that it would build a state-of-the-art baseball facility. Remember McMullen's comment.

A contract is just a piece of paper.

Washington is about 40 miles from Baltimore and was a part of the Peter Angelos' Baltimore Orioles territory. MLB worked out a deal with Angelos which gave him a regional cable TV network, the Mid Atlantic Sports Network, as a partial payment for the Washington team which "invaded" his territory. That agreement might work in Wolff's favor and could be used by someone in New Jersey if that someone decided that New Jersey and Major League Baseball are perfect together.

The owners of the Seattle SuperSonics took their NBA team to Oklahoma City with two years left on their contract in Seattle to use the publicly financed and refinanced facility for their basketball team. Clayton Bennett reached a financial agreement with Seattle and left. But Bennett had the NBA Commissioner David Stern's blessing. Bruce Ratner is taking the Nets from the Meadowlands to Newark for the next two years with New Jersey's approval along with Stern.

New Jersey had the right stuff for Major League Baseball in 2000 according to Volcker, Levin, Mitchell and Will. The state could not go after the Montreal Expos franchise when it was up for sale in 2002, 2003 and 2004 because of the antitrust exemption. That is why people who want a Major League Baseball team in New Jersey should be paying close attention to Wolff's actions in Oakland and San Jose and what Selig's committee rules.

The door to Major League Baseball in New Jersey could all of a sudden open.

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