Notes: Public team ownership, A’s ballpark funds

A deep dive worth diving into, and my latest from BP, plus a response to a comment there.

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R.J. Anderson has done some deep dives over the years at CBS Sports, but Tuesday’s feature might be one of the deepest: he looked at the history of private team ownership in professional sports, why it’s worked, why it’s been obstructed, and why it could be a useful rejoinder to the exceptionally greedy, corporate mentality that plagues pro sports today.

…A dirty secret of professional sports is that you can already find financial information concerning two franchises: the aforementioned Packers, and the Atlanta Braves, who are owned by a publicly traded company and therefore must disclose their finances. Anyone with internet access can learn that the Braves generated $641 million in revenue last year, and that the Braves showed an operating profit before depreciation and amortization of $38 million. But, through perfectly legal tricks like the Roster Depreciation Allowance, the Braves were able to report an operating loss of $46 million. The Braves subsequently increased their payroll by another $20 million over the offseason — hardly the sort of a thing a team in any actual financial distress would do.

Public knowledge of the Braves and Packers’ financial situations hasn’t prevented their privately owned peers from readily turning on the public-funding spigot. It hasn’t stopped some fans and media members from uncritically repeating talking points from teams about losing money or being unable to afford star players, either. What it has done is highlight that the real risk public ownership poses for private owners is revealing how little they matter. The leagues, through careful and often calculated moves, are simply too big to fail and the individual teams print money even when they’re unable to sell tickets or concessions. The owners, these contemporary Lords of the Realm, may fancy themselves as business geniuses, but any replacement-level suit could make many quick bucks from a sports team.

And so, it stands to reason, could municipalities — if they were permitted a seat at the table.

The whole thing is worth reading — it’s lengthy, but highly informative, and while I’ve long been in favor of public-owned teams, to me it still reads like something that could create some converts to the idea. Anderson did his homework here, and it shows. And hey, owning a team would be expensive out of the gate, sure, but you have to remember that privately owned teams keep asking for more and more money constantly out of the public, anyway: if they’re going to pay a billion dollars in public funds for a stadium a few years down the road, and then improvements on top of that a few years later, then why not spend what it takes to acquire a team and get the profits for the city instead of someone who’s going to threaten to leave it all behind when they don’t get their way?

Speaking of all of that. My latest for Baseball Prospectus went up, and it’s for subscribers, but it’s also on a subject we’ve discussed quite a bit in this space: the A’s relocation saga. Specifically, it’s an update on the mess that only seems to be growing, since they still don’t have the financing they need to pay for the ballpark they’ve been approved to both build and relocate to.

What I want to focus on here is a comment left on that piece, by reader Scottie3234, in regards to the A’s trying to get up to eight games on their Vegas schedule set aside for neutral venues:

The bigger issue about shifting the games elsewhere might circle back to funding. The chair of the Las Vegas Stadium Authority is quoted in the linked Nevada Independent story as saying there is a direct correlation between games played and bonding capacity. So if the bonding capacity decreases by 10% is that what brings down Fisher’s house of cards?

That’s not incorrect by any means: if the bonding capacity decreases, then suddenly there’s a new cash issue to solve. There are a couple of things worth noting there, however. The bonding capacity is $120 million — it’s not the full $380 million that has been promised to the A’s, so we’re not talking about a nearly $40 million chunk of cash disappearing because the A’s got overzealous with their upper limit of non-home home games. And also that $380 million is actually more like $600 million, as Neil deMause has explained before. So it’s unclear to me if $12 million disappearing from $120 million is going to bring down Fisher’s house of cards, as it were, when there’s actually more money there to grab than is being widely reported. It would also be just another $12 million to grab in the financing the team needs, which, considering they need $900 million, another $12 million isn’t going to keep them from securing a deal from someone willing to give it to them.

That’s the thing, though: the main concern here remains that financing. The public funds don’t even unlock for the A’s use until they’ve secured the private financing, and as that piece goes into detail to explain, it’s unclear that they’ll be able to get the private financing they need. The bonding capacity decrease is a problem, yes, but without the private financing in place, it doesn’t matter, anyway, because there are no public funds to speak of without it. As things stand now, negotiating to get additional games outside of the new Vegas park in order to schedule other events implies a lack of worth to the A’s being in Vegas in the first place, which is the kind of thing potential investors — necessary investors — could frown upon, and Fisher’s team can’t afford the frowns right now.

There just might be too many moving pieces here for everything to work out like Fisher envisions, which makes sense, given his plan seems to be mostly about assuming everything will work out since it always does for this guy who has never truly earned any of what’s in his bank account.

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