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SBD/March 26, 2013/FranchisesPrint All
Warriors Vice Chair and NBA Kings bidder Vivek Ranadivé last night announced the group bidding for the team, also consisting of Penguins co-Owner Ron Burkle and 24-Hour Fitness co-Founder Mark Mastrov, "has added a fourth member" in the Jacobs family, which owns Qualcomm, according to a front-page piece by Kasler, Bizjak & Lillis of the SACRAMENTO BEE. Ranadivé said that the Jacobs bring "heft and a pan-California persona to what he called the Sacramento 'dream' team." The announcement's timing gives Sacramento Mayor Kevin Johnson "added momentum going into tonight's council vote" to decide whether the city should invest $258M in a "public-private partnership" to build a $448M downtown arena. Johnson said that he "wants to send a 'resounding' message" to the NBA that city officials are "solidly behind keeping the Kings." City Council member Steve Cohn "met with Burkle and Mastrov in Sacramento," and said that the deal is "superior to the one he supported last year." Cohn said, "I feel a lot better having met with them about their commitment. They feel it's very important to act on it this week so we don't lose momentum" (SACRAMENTO BEE, 3/26). In Seattle, Bob Condotta cites sources as saying that while tonight's Sacramento City Council vote "would be nonbinding, simply getting an arena deal approved would send a loud signal to the NBA." The term sheet is "expected to be approved without much opposition." With Ranadivé and the Jacobs family now on board, it is "expected" the group will "up the ante." That means Seattle and Sacramento will head to N.Y for a pair of meetings with the NBA next month with "what could be fairly similar packages." However, having a "higher public contribution might favor Sacramento since owners generally favor deals in which less money comes out of their own pockets" (SEATTLE TIMES, 3/26).
A TALE OF TWO CITIES: In Seattle, Nick Eaton wrote the NBA may see both cities’ plans as "similarly sound." But the Seattle group led by hedge fund manager Chris Hansen has what "could be a trump card: an actual, pen-on-paper agreement with" Kings Owner the Maloof family. A deal with Seattle also would allow NBA owners to "split a relocation fee." The NBA would "jump from having an underperforming team in the 20th largest television market in the U.S. ... to a reinvigorated franchise in the nation’s 12th largest TV market." It would be "strange, perhaps, for the NBA to reject a tangible agreement to buy a franchise for a record price, especially since Hansen’s purchase of the Kings -- not the league’s most esteemed team -- would drive up the value of other NBA franchises." Eaton: "Then again, it might seem equally strange for the NBA to reject a competitive bid from a city that already has a team and wants to keep it" (SEATTLEPI.com, 3/25).
PROPERTY VALUE: In Sacramento, Phillip Reese cites real estate experts as saying that the downtown properties that Sacramento officials are proposing to give to developers "will increase sharply in value once the arena is built." The city is giving arena developers land it says is worth $38M as a "chunk of its contribution to the arena's construction." That is about "twice as much land as the city proposed selling on behalf of the Maloofs ... in an aborted deal last year" (SACRAMENTO BEE, 3/26).
LAYING LOW: In Sacramento, Ailene Voisin writes Burkle is "only occasionally seen and rarely speaks." It is said that Burkle would "rather slide across the ice on his backside than sit down for a chat with journalists." Former Pennsylvania Gov. Ed Rendell said, "Ron totally eschews publicity, but he is one of those people who has a great instinct for what works. Sacramento could not get a better result than having Ron buy the Kings and develop downtown." With the Penguins, as "presumably would be the case here, he leaves team operations to others and expends his energy expanding his business empire." Rendell: "Ron is a very, very tough negotiator, but he's very fair. If he's going after the Kings and downtown redevelopment, it's because he knows he can make money, which will be good for Sacramento" (SACRAMENTO BEE, 3/26). In L.A., Daniel Miller notes Burkle "has invested" in the new Three Lions Entertainment company along with publishing exec Richard Beckman and Greenberg Traurig LLP shareholder Joel Katz. Three Lions will "produce network television programs that embed advertisers' products within the shows" (L.A. TIMES, 3/26).
The Red Sox "have encountered trouble selling tickets for the first time in recent memory," so as part of the team's "push to be more welcoming to the fans," the Sox are offering free food and reduced-price beer at home games in April, according to Amalie Benjamin of the BOSTON GLOBE. Kids under 14 "will eat free -- well, before the third inning, provided they go to specially designated concession stands to pick up their Fenway Frank, Goldfish, and carton of juice." Around the park, fans can buy one hot dog and "get a second for free." Hot chocolate will "be sold for half-price," and beer will be "sold for $5 per 12-ounce cup, down from between $7.50-$8.50." It is clear that the Red Sox are "ready to admit to fan dissatisfaction and capitulate to fan demand for a friendlier environment." Tickets remain for all home dates in April, and the Sox "hope that the fan appreciation discounts will help boost ticket sales." Red Sox COO Sam Kennedy said, "We're looking for ways to fill the ballpark, and hopefully this will help." In another "family-friendly move, or one in response to chilly April evenings," 11 of 17 April home games will start before 7:00pm ET, including eight "true afternoon games and three games with a first pitch" set for 6:35pm (BOSTON GLOBE, 3/26). Aramark runs the concessions at Fenway Park (THE DAILY).
The Brewers after signing P Kyle Lohse to a three-year, $33M deal "must forfeit the 17th pick in the first round" of this year's MLB Amateur Draft, and Lohse's agent Scott Boras "blasted MLB for forcing teams to make that choice in trying to improve their roster," according to Tom Haudricourt of the MILWAUKEE JOURNAL SENTINEL. The Brewers under MLB's new compensation system lose the draft pick and the "pool money allotted for that slot" because the Cardinals offered him a free agent qualifying offer. The loss of the draft pick "was a sticking point for the Brewers in negotiations," and it "forced Boras to come down from his original asking price" of four years and $60M. Brewers President of Baseball Operations & GM Doug Melvin said, "Every general manager likes to have a first-round draft pick. But that's the way the system is." Brewers Owner Mark Attanasio was "heavily involved in the discussions with Boras," and had "created financial flexibility for such a move by dropping the payroll" from $100M in '12 to about $80M this year. The team's payroll will now "rise to about" $84M (MILWAUKEE JOURNAL SENTINEL, 3/26). FOXSPORTS.com's Jon Paul Morosi notes MLB implemented a "new compensation system for free agents this year" in which teams could make $13.3M qualifying offers "to any of their own free agents" who spent the entire '12 season on the team. Nine free agents -- including Lohse and Nationals 1B Adam LaRoche -- "received a qualifying offer in November." Each player "rejected it, meaning a new team would need to surrender its highest pick in order to sign one of them." Perhaps "equally significant, the acquiring teams ... had to give up the signing-bonus allocation associated with the pick." Boras said, "When you have a system that does not reward performance, you know we have something corrupt in the major league process" (FOXSPORTS.com, 3/26).
The MLB Rangers' ticket sales "have been strong," as season tickets have "reached the 21,500 level" and all ticket sales are near the 1.9 million mark, according to Randy Galloway of the FT. WORTH STAR-TELEGRAM. The numbers are "dead even" compared to this time last year, but "dead even is actually a gain." Despite a club that "unfortunately seems to be making a worrisome drift into the area of Cow-Mav mismanagement, the fans are hanging in there, and the loyalty is showing by the use of the hip pocket." Team officials said that the "worry in ticket sales this spring centered on how 2012 ended on the field." Galloway noted the Rangers this offseason made "no trades or acquisitions that excited the fans," and decided to "hike ticket prices after a bad finish by the team." The officials also "worry about a fan backlash" if CEO Nolan Ryan "leaves the club." But "so far, so good, at least with the fans" (FT. WORTH STAR-TELEGRAM, 3/24).
OFF THE TRACKS: In Austin, Kirk Bohls writes "almost no one is betting" Ryan will stay with the Rangers. A source said that "it was '70-30' that he leaves, stung by his ill treatment." Ryan's lack of comment on the matter has "spoken loud and clear." A source said that he is "hurt, bitter, and confused." Bohls writes what is "sad is nothing really had to change." Team management has "worked well together," and Rangers President of Baseball Operations & GM Jon Daniels "remains a rising star in the game for mostly smart roster decisions." Ryan is "not completely blameless in this soap opera because he's overstepped his bounds at times." Daniels said that he "did little to instigate this coup." But Bohls writes Daniels "might not have done much to dissuade ownership from either pushing Ryan out or minimizing his role." Ryan has "done too much and meant too much to be treated so callously" (AUSTIN AMERICAN-STATESMAN, 3/26).
HOW YU DOING? The team on Saturday announced a new special section at Rangers Ballpark called the Kia Yuniverse, in honor of Rangers P Yu Darvish. All fans in the section for Darvish's starts in '13 will receive a free Kia Yuniverse T-shirt and K-Card. The promotion is part of the team's partnership with Kia, which also includes ballpark signage (Rangers).
Tigers fans "scouring the Internet for tickets to Comerica Park already are finding an unwelcome surprise: sky-high ticket prices," according to Karl Henkel of the DETROIT NEWS. Data from N.Y.-based TiqIQ shows that home ticket prices "average $111 on the secondary, or resale market, such as StubHub.com." The average "at this time last year was about $66." This season, only Red Sox tickets, at "approximately $118 a pop, cost more." Tickets for the April 5 home opener against the Yankees "average nearly $203, in line with last year's home opener, but still nearly 400 percent higher than the average ticket price set by the team." The Blue Jays ($101) and Yankees ($100) are the "only other major league teams whose tickets on the resale market are in triple digits." TiqIQ Senior Dir of Data & Communications Chris Matcovich said, "Coming off a World Series appearance, that drives ticket prices up." Henkel notes the Tigers raised ticket prices in February "to help pay for" their $150M payroll (DETROIT NEWS, 3/26).
SOUTH SIDE SPRING SALE: In Chicago, Danny Ecker cited data from Team Marketing Report as showing that the average White Sox ticket price is 10% "cheaper than last year at $26.05, dropping below the league average of $27." That new average is "projected to be the 14th most expensive ticket in baseball, down from 11th in 2012, when the team had one of its worst attendance numbers since 2004." The White Sox have now "cut the average cost of attendance" by 34% since '11. Last year, a "series of half-priced and other ticket deals couldn't lure more fans, leading to the team's sixth straight season of lower attendance at just less than 2 million fans -- good for 24th" in MLB (CHICAGOBUSINESS.com, 3/25).