The Expos move to DC doesn’t mean the
A’s get into San Jose
How MLB's payoff and provisions to Peter Angelos for moving the Expos to DC fueled talks of the Oakland A's moving to San Jose, and Peter Magowan of the San Francisco Giants will kill off that notion
By Maury Brown
Peter Angelos is good.
Well, he’s good at getting his way, and that’s about it.
For well over two years Angelos, the owner of the Baltimore Orioles, railed on about how a team in Washington, D.C. would harm him—irreparably, mind you—if MLB decided to relocate the Montreal Expos to Washington or Northern Virginia. Angelos had won cases involving big tobacco and the asbestos industry—two industries viewed as unbeatable in the courts. MLB feared that Angelos and the City of Baltimore might get into court to challenge this encroachment on the Orioles’ Territory due to losses created by a new DC franchise, should MLB decide to move there.
Wait a minute … “Orioles’ Territory”?
Angelos used the term to good effect. But the fact is that none of the D.C. or Virginia site locations was ever in the territorial limits for the Baltimore franchise that are outlined in the Major League Agreement, Major League Rules, or the league constitutions, the governing documents of Major League Baseball
What was the threat based on? Where was the real impact? Cable and over-the-air TV market reach.
Angelos’s claim that attendance at Camden Yards will be hurt is true—to an extent. Baseball analysts predict anywhere from 5–15 percent of the Orioles attendance might be siphoned off by a Washington franchise. While this is nothing to scoff at, it’s not where the real impact would be felt.
The Orioles’ vast cable market would get sliced up like a Thanksgiving turkey with the addition of a Washington team. That’s the key factor. The Orioles won’t divulge what they currently net with Comcast, but USA Today estimates their total revenue from all local broadcast sources at $21 million for 2002.
To placate Angelos, baseball is reportedly negotiating the following (subject to change):
- A guarantee that will keep Baltimore’s annual revenues no lower than $130 million. If they do drop below that threshold, MLB will make up the difference;
- A minimum franchise value for the Orioles at around $360 million; and
- A 60-percent equity in a proposed new regional sports network (RSN) to the Orioles while the Washington franchise would receive only 40 percent.
MLB is about to move forward on a compensation package the likes of which has never been seen in the history of the sport because of the threat of litigation that had little chance of success. Quite bluntly, MLB was scared enough to give in to Angelos to avoid releasing documents in discovery that would create a PR nightmare for MLB.
The bad news is that MLB is setting a precedent that will affect relocation or expansion for many years to come. MLB could not move into a single city in the U.S. without affecting another franchise’s television market.
Noted economist Andrew Zimbalist saw this when we interviewed him in September of 2004. “[Under this scenario], whenever you contemplate adding a team you’d be interfering with somebody’s television market,” Zimbalist said. “And if you held that argument as decisive that, ‘Oh, you’re taking away part of this guy’s television market,’ then you’d never be able to have expansion. Not now and not in forty years. Even when the U.S. population might be 350 million instead of 290 million.”
From now on, every consideration of a move or expansion will come with the knowledge that the hands of the nearest team’s owners will be outstretched. “What was good for Peter Angelos is good for us. Let’s negotiate our compensation.”
Some locales (Portland, San Jose and New Jersey) are looking to recruit relocating franchises. Other locales (such as Oakland and Florida) seek to hang on to franchises. Meanwhile owners of existing franchises (San Francisco and the New York teams) seek to stymie relocations near them. Even as newspapers in potential host cities ran stories about how the move to D.C. would open the door for further relocations—with Oakland leading the pack, those potentially involved in relocations scrambled to figure out the impact of the new paradigm on them.
Do you know the way to San Jose?
The Giants control most of the Bay Area. Their territory includes San Francisco, San Mateo, Santa Cruz, Monterey and Marin Counties, plus Santa Clara County with respect to another major league team. By comparison, the Athletics' territory includes only Alameda and Contra Costa Counties.
When Bob Lurie was looking to get out of Candlestick Park in the late 80’s, baseball expanded the Giants territory to include Santa Clara County where there were efforts to pass funding to build a new ballpark in San Jose. The voters in Santa Clara County rejected tax hikes to fund the stadium in both 1990 and 1992, yet baseball reaffirmed those rights when Peter Magowan purchased the team in 1995 and built PacBell Park.
Now, Oakland owners Steve Schott and Ken Hoffman are looking to get out of the aging Network Associates Coliseum that they share with Al Davis’ NFL Raiders.
The A’s want to develop a new stadium in Santa Clara County and San Jose is trying to lure them. It’s a perfect fit since Schott hails from there.
Peter Magowan, the owner of the Giants and one of the newer members on MLB’s executive committee, thinks otherwise.
Magowan doesn’t want to give up the lucrative Silicon Valley. Surely a new ballpark in Silicon Valley’s backyard would draw the strong corporate base away that yields suite sales and lucrative naming right possibilities.
Magowan played the diplomat when the issue started to gain steam on March 2 of 2004. “[Steve Schott] wants to get out of the Coliseum, and I don't blame him. He wants to get a new stadium. I think that's a noble objective. But there are plenty of places to put it in the Bay Area that are not in the Giants' territory. Good places. That's where I'd like to see him concentrate, but I don't run the A's."
Five days later, Schott fired back: "I believe that when Charlie Finley moved the A's out here, and the Giants were already here, there was no questions and no discussions about territorial rights. The only way the Giants ended up with territorial rights was because they were going to build a stadium down in San Jose.
"There was no question about whose territory it was. They had to get permission from the A's,” Schott said. “They didn't pay for those territorial rights, by the way. Now, in the meantime, they built a stadium closer to Oakland than they were before. And now, if we talk about another stadium down in that area, they go berserk. It's like my four-year-old granddaughter says sometimes, ‘Crybaby, crybaby.' They like to cry a lot about it. They get nervous about it, you know."
The City of San Jose has further fueled this fire. San Jose Mayor Ron Gonzales introduced a resolution to San Jose's City Council on October 5, 2004, officially requesting that Major League Baseball release the city from the Giants' territorial rights, freeing the A's to relocate there. San Jose is looking to expand its visibility with another sports franchise, while the A’s are having trouble in Oakland getting a new facility built. The timing of the Expos relocation played right into Baseball San Jose Chairman Mike Fox’s hands—or so he thought.
Fox, a San Jose beverage distributor, and others formed Baseball San Jose “to attract a Major League Baseball team to San Jose.” While the Athletics were never directly mentioned, the implication was obvious. “You had an owner in Peter Angelos in Baltimore who has clearly stated he did not want the Expos to move into his area,'' said Fox Jr. “From our standpoint, that's a hopeful sign that there might be an ability to get a Major League Baseball team in San Jose.''
To the layman, the Expos move sets a precedent for relocating a franchise in close proximity to another. Moving to San Jose, proponents argue, would put the A’s farther away from the Giants. All that was required was a payoff to Magowan and Co.
The problem is that the A’s/Giants situation and the Baltimore/Washington franchise situation are quite different from each other.
MLB, which was pushing collectively to get into D.C., placated Angelos. The A’s are standing alone. For the relocation scenario to work, the A’s need a ¾ majority vote by the other owners.
That’s not in the Giants interests. If they hold out, the A’s may move out of the Bay Area all together and the Giants will reap a massive windfall.
However, even were MLB pushing for the A’s to move to San Jose but Magowan wasn’t budging, the resulting scenario would be much the same as with Angelos and Washington. Magowan and the Giants would have the territories defined in MLB’s charter to stand upon in a court of law, not just a television market. The difference is huge—especially in the eyes of the Lords of Baseball.
In the end, Selig put the kibosh on comparing the Washington/Baltimore situation with the San Jose/Giants one. "San Jose is part of the San Francisco Giants territory," Selig said. "The clubs' territories really have always been treated with great respect. And so when a team is sold and a territory exists near theirs, we don't change that. This is a completely different thing, so it is not a proper analogy, frankly."
So, the A’s are concentrating on building a new facility in the parking lot next to their current home in the East Bay. Lew Wolff, their VP of Venue Development, summed it up this way, "I have no idea whether [a move to San Jose] could happen or not. That's up to San Jose and Major League Baseball," Wolff said. "But we're going forward by concentrating on the Coliseum area. We do need a new venue at some point. Our first effort is to see if we can get it in the East Bay."
As to pushing the A’s out of the Bay Area altogether to either Portland or Las Vegas, both of whom are still pushing hard for a team, Selig sends an ominous message touting history.
“When Charlie Finley moved the A's to Oakland, the American League didn't care about the National League and vice versa," Selig says. "That was sad because the A's hurt the Giants. At the time the theory was, 'So what, that's the National League.' Well, come on. This is baseball."
It’s not baseball, Mr. Commissioner. This is business.
Edited by John Ruoff and Gary Gillette.