Notes: Tax loophole, MLB realignment, Oakland sells Coliseum, NCAA settlement

More on the tax loophole, a couple of thoughts on realignment, Oakland’s stadium situation gets additional wrinkles, and the NCAA is primed for a major change.

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Lots to get through today, so let’s get to it.

I went in deeper on the billionaire sports owner tax loophole news for Baseball Prospectus earlier in the week, getting into the origins of the loophole, what it is, why it’s a problem, and why we should hope the IRS decided to remove or rewrite it. The shorter version of it is that it would keep, say, a team that costs $2 billion from pretending 80 percent of the team’s valuation is going to lose value instead of gaining it like what happens with sports franchises simply for existing, allowing them to avoid $650 million in taxes over the next 15 years that they really should have paid. The longer version, well, I wrote that for BP, and while you need a subscription for that, at the least, you could always read the ProPublica reporting from three years ago on the subject.

It’s not going to have the same kinds of context I provided, no — I came at it from a different angle for a reason and all — but it has more tax language information and a less general breakdown of the whole thing.

Over at Forbes, Maury Brown pointed out that two changes have already occurred that would make realignment in MLB easier when it’s time to do so. He’s thinking in a post-expansion world, when there are 32 teams, and commissioner Rob Manfred’s vision of eight four-team divisions comes to pass.

Those two changes are the universal designated hitter, which made every team build rosters in the exact same way instead of half of the league operating and building their team in a much different way, and the balanced schedule introduced for the 2023 season, which downplayed the division-heavy schedule for one that allowed for more games outside of divisional play. As Brown put it:

These two in combination blur the line between the American and National Leagues. Where interleague was once a novel concept that occurred during two stretches of the season, it now takes place on a daily basis. To highlight this change, on the day of the publication of this article, the Mets (NL) will play the Guardians (AL), the Twins (AL) face off against the Nationals (NL), and the Orioles (AL) play the Cardinals (NL).

So, it’s possible that in the future one of the “West Divisions” could feature the Padres, Dodgers, Angels, and Diamondbacks. And even in instances where clubs would be in different divisions yet have some form of rivalry (one example could be the Dodgers and Giants), the league could retain portions of the schedule to make these still exist.

While the Astros moving to the American League and the Brewers heading to the National League were a bit isolated, it was still kind of odd for it to happen the way it did. Houston also being in the AL West after being in the NL Central was its own weird thing, too. Just like the introduction of three divisions per league helped clean up some oddities in alignment, though — think the NL West Braves becoming the NL East Braves, and the existence of Central divisions giving those teams in the middle of the country a more sensible home and “local” schedule than the East/West dichotomy had allowed for — switching to four divisions per league could help with some existing messes.

Of course, a lot has to happen before then, but while we’re on the subject, it would also be nice to do this without adding any additional postseason clubs: just get rid of one of the wild cards in each league and make them a division winner instead. Teams might have to try a little harder for that to work, assuming realignment doesn’t accidentally create additional AL Central-type laissez-faire divisions. This is the time for dreaming, you know?

The city of Oakland announced that they’re planning on selling their half of the Coliseum, where the A’s will play until the 2024 regular season ends, to a private developer. The San Francisco Chronicle has the details, but there are a couple of things I’m curious about.

The first is that Oakland’s current mayor’s office talked up how they make more money from hosting soccer games at the Coliseum than they did the A’s, so in that sense I’m surprised they’re selling here given they could fill the place with additional events with the Athletics no longer part of the equation as soon as this fall. With that being said, though, the Coliseum does sit on some land developers have been dying to get their hands on, as the Chronicle points out, and there’s plenty that could go in there that would be more productive, financially, than a sports complex that big without a major-league-caliber tenant residing in it.

The second thing is that Oakland owns just half of the stadium — John Fisher, the A’s owner, is “in the process of completing a purchase of the other 50% stake of the Coliseum,” which was in the possession of Alameda County. The A’s bought that from the county back in 2019, but they haven’t yet finished paying it off just yet, is all. So they’re completing that purchase in the near future, but what they do next is in the “remains to be seen” category. The African American Sports & Entertainment Group is who has tentatively purchased Oakland’s half of the Coliseum, and they’ve already reached out to the A’s about the second half. Per ESPN, “the team was not interested in selling.”

However! A court case is scheduled for September that could cause the A’s purchase of that 50% stake to fall through. As the Chronicle reported a few weeks ago:

Communities for a Better Environment, a California nonprofit environmental health and justice organization, claims that the county and Coliseum Way Partners LLC, which represents the A’s and team owner John Fisher, ignored the state’s mandatory Surplus Lands Act in the sales agreement.

The A’s purchased that half-interest in the Coliseum site in 2019, ostensibly as a backup site for a new ballpark in the event that their plans fell through to build a ballpark at Howard Terminal. The A’s subsequently declared the Coliseum site unfit for a baseball stadium, yet continued with their purchase.

The A’s don’t have “legal ownership” of the site until 2026, and even though they’re nearly finished paying it off, it could all be reversed through this suit. Which would make things easier for the AASEG in their quest to purchase the entire site, sure, but nothing in this whole endeavor has been easy, so expect whatever the most complicated outcome is.

The NCAA, and its five largest sports conferences, have agreed to pay a settlement of $2.8 billion thanks to antitrust claims. As The Associated Press put it, this is “a monumental decision that sets the stage for a groundbreaking revenue-sharing model that could start directing millions of dollars directly to athletes as soon as the 2025 fall semester.”

The NCAA announcing it doesn’t mean it’s happening, as there’s still plenty of legal stuff, to use a technical term, to get through, including a judge approving of this settlement. What I want to do here, though, since this isn’t entirely my lane, is point you to the outlet I’ll read to learn more about it than I already know: Matt Brown’s Extra Points. I’m writing this the night before it publishes, which is unusual for me, but so it goes with the available time for this edition of the newsletter, so Brown doesn’t have a specific feature to link you to here right now. But he’ll certainly have something eventually that explains all of this better than I can, so keep an eye out.

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