Could New Jersey get the Tampa Bay Rays?
WEDNESDAY, 06 APRIL 2011 11:03
BY EVAN WEINER
THE BUSINESS AND POLITICS OF SPORTS
The drumbeats have been sounding about the need for a new Tampa Bay Rays baseball park for a while. The Rays franchise ownership group wants a new stadium because the American League East team needs extra revenues to keep up with the New York Yankees and the Boston Red Sox in the division and sign players to long term big money contracts.
With no new Tampa or St. Petersburg stadium plan on the horizon, there has been a suggestion that Major League Baseball will eliminate the Rays and possibly the Oakland A's (a franchise that has wandered across the country from Philadelphia to Kansas City to Oakland and never has found financial success). The contraction threat seems to coincide with the ending of the 2006 Collective Bargaining Agreement, which will happen in December. There is nothing like using contraction as a negotiating tactic to gain some leverage over the players although there is a little problem baseball will need to overcome.
The Rays iron clad stadium lease.
The Rays ownership is saddled with a lease that former owner Vince Naimoli signed prior to the team's first season in 1998. It was a 30-year-deal with St. Petersburg and the contract ends in 2027. Major League Baseball Commissioner Peter Uerberroth told St. Petersburg and Florida officials in the late 1980s don't bother building the stadium as MLB was not interested in St. Petersburg. MLB expanded to St. Petersburg and Phoenix in 1995
The latest salvo about the Rays dire financial situation comes from a writer and a magazine that Major League Baseball has constantly discredited over the years. Mike Ozanian in his Forbes Sportsmoney blog of April 4 contends there will be no baseball or Tampa Bay Rays in 2015 although it isn't clear from Ozanian's blog just how that is going to happen. MLB has always been rather condescending towards Forbes' annual market evaluation of Major League Baseball teams.
There is one thing for certain. Major League Baseball needs an even amount of franchises so cutting ties with Stu Sternberg and his Rays without knocking out another franchise is not going to happen. Only two MLB franchises need new stadiums, Tampa Bay and Oakland. It appears San Jose would like the opportunity to build a baseball park for Lew Wolff's A's but a funny thing has happened on the way to San Jose.
The former New York Giants baseball franchise, whose owner Horace Stoneham fled to San Francisco in 1957, seems to think they have control over the San Jose territory even though voters twice turned down referendums for Giants baseball parks in the area. Major League Baseball Commissioner Bud Selig appointed a committee two years ago to study the San Jose situation. That committee is still fact finder although it seems an engine search on the Internet would produce whatever results Selig wants inside of 12 seconds. San Jose is farther away from San Francisco than Oakland (San Francisco and Oakland are connected by a bridge and the Bay Area Rapid Transit) and San Jose is part of the Bay Area media market.
The only reason San Jose cannot go after Wolff is the 1922 Supreme Court of the United States decision that gave the National and American Leagues of baseball an antitrust exemption because the court ruled baseball was a game and not an interstate business. The exemption gave baseball owners the right to do whatever they wanted to do. Most of the exemption has eroded over the years but the owners still control territories, which is why San Jose and New Jersey have been shut out of Major League Baseball.
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.
Wolff has failed in getting a "stadium-village" for his A's and 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 the Rays ownership thought about moving the Rays to Connecticut.
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.
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. 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.
Oakland does not have the corporate crowd that fills the Giants China Basin 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.
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.
That settlement may come back to bite Sterling later this month should the NBA Sacramento Kings owners, the Maloofs brothers, pick up and move into the Los Angeles market in Anaheim and share the area with the Los Angeles Lakers and Sterling's Clippers. The Maloofs, using the Sterling precedent, could end up paying no compensation for entering the LA market.
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 (when he still owned the majority of the New Jersey Nets) took the Nets from the Meadowlands to Newark for 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.
There are 30 Major League Baseball teams. New York City has two teams, Los Angeles has two teams, Chicago has two teams and San Francisco-Oakland has two teams. It is hard to imagine California Senators Diane Feinstein and Barbara Boxer sitting by idly if MLB pulls the plug on the Oakland A’s. The same would probably hold true in Florida after all it was Florida Senator Connie Mack III (the grandson of the Philadelphia A’s manager-owner Connie Mack) that threatened MLB’s antitrust exemption (along with Colorado’s Tim Wirth) in the late 1980s and 1990s and forced MLB to consider expanding to either Miami or the Tampa Bay market or both.
Congress is pretty good at saber rattling and persuasion in the sports industry.
There have been some rumors that have appeared that MLB would mollify Sternberg by giving him a crack at owning the Mets after the Wilpon's fall from grace and that Wolff could take over the Los Angeles Dodgers once the McCourt divorce becomes final. Both seem scenarios seem farfetched. Contracting means the elimination of 50 players which will not please the Major League Baseball Players Association particularly when there are alternatives available — San Jose and maybe New Jersey or Tampa-St. Petersburg — but there is more than just the contraction of two teams. There are minor league cities who will lose clubs and that is sure to draw the attention of Congress. The last thing Selig and company want to do is go to Congress and risk losing the remaining portions of the 1922 SCOTUS decision because that could impact business operations.
Evan Weiner, the winner of the United States Sports Academy's 2010 Ronald Reagan Media Award, is an author, radio-TV commentator and speaker on "The Politics of Sports Business." His book, "The Business and Politics of Sports, Second Edition is available at bickley.com, Barnes and Noble or amazonkindle.