Right around Opening Day, Forbes publishes its annual report on MLB team valuations. There is information on team revenues, debt, net income, and overall franchise value. The 2013 valuations, published in March, relied on 2012 numbers, plus a bit of forecasting about teams likely to land new, lucrative local TV contracts soon.

Now Bloomberg Business is getting into the act. A few weeks ago, Bloomberg published its own MLB team valuations, along with a terrific infographic comparing each team to the 29 others. Bloomberg also dug a bit deeper, and broke down each team’s revenue into gate receipts, concessions, sponsorships, and media rights. Bloomberg also used 2012 numbers, but reflected higher revenue and valuation figures than Forbes’ report from earlier this year.

Read the rest of this entry »

Goodbye, 2013 season. Hello, Hot Stove. Stop sobbing. Really, stop. We’re going to get through this. There will be qualifying offers, declined options, over-the-top free agent signings and rumors galore. Before you know it, we’ll be complaining about beat writers’ spring training play-by-play tweets.

Today we’re going to talk about the effect of the new national TV contracts on 2014 payrolls:

• The teams that have already built their 2014 payrolls on the revenue expected from those contracts.
• The teams that haven’t already accounted for that revenue, and have money to play with this winter.
• The teams that have revenues so high and payrolls so large that another $15 million means close to nothing.

Read the rest of this entry »

Read the rest of this entry »

If you’ve ever wanted to invest in the future earning potential of a professional athlete, say hello to Fantex, a San Francisco start-up that is offering shares in an IPO named after Houston Texans running back Arian Foster. To kick start the new company, Fantex paid Foster $10 million, in exchange for a 20% share of Foster’s future earnings on and off the field for the rest of his life. Fantex is banking on Foster having a huge upside and will work with the player to enhance the value of his “brand.” To recoup its investment, Fantex is banking on football fans and other investors who want a piece of the action.

It’s a simple idea, in theory, and makes you wonder why it’s never been tried before. Well, it turns out that a simple idea in theory is quite complicated in execution, and carries substantial risks for all parties. It also turns out that something similar has been tried before, and failed.

Read the rest of this entry »

Federal Judge Ronald Whyte today dismissed the City of San Jose’s federal and state antitrust claims against Major League Baseball but permitted a claim for tortious interference with contract to move forward. The one remaining claim gives the city a glimmer of hope in it’s effort to bring the Oakland Athletics to San Jose.

The city’s complaint, filed in June, alleges that MLB places unreasonable restrictions on competition by making it difficult — if not impossible — for teams to relocate from one city to another. The City also claims that by refusing to act on the A’s proposal to build a privately-financed ballpark in San Jose, MLB has interfered with the City’s option agreement with the A’s. Under that agreement, the A’s would purchase land from the City for the purpose of building the ballpark, if MLB approved the move. My post from June explains the ins and outs of discusses San Jose’s complaint.

Read the rest of this entry »

The Dodgers beat the Braves in Game 4 of the NLDS Monday night to clinch the series and move on to the LCS against either the Cardinals or the Pirates. The outcome of the game didn’t hinge on Clayton Kershaw‘s start on only three days rest, although for a while it looked like it would. The outcome of the game didn’t hinge on the Braves’ sending Freddy Garcia to the mound to try and save their season, although for a while it looked like it would. The outcome of the game didn’t hinge on Adrian Gonzalez‘s poor defense at first base or Freddie Freeman’s phenomenal defense there, although for a while it looked like it would.

Sure, those events played a role. They set the stage for the late-inning heroics that always seem to come from unexpected places in the postseason. Last night, in Los Angeles, the hero was Juan Uribe and his towering two-run home run into the left field bullpen that sent Dodger Stadium into a frenzy in the bottom of the 8th inning and sent the Braves home to Atlanta in defeat. A year ago, that moment would have been impossible to imagine.

Read the rest of this entry »

Federal district judge Ronald Whyte held a hearing today on Major League Baseball’s motion to dismiss the City of San Jose’s lawsuit, which charges MLB with violating federal and state law by refusing — so far — to permit the Oakland A’s to move to San Jose.

San Jose’s complaint, filed in June, alleges that MLB places unreasonable restrictions on competition by making it difficult — if not impossible — for teams to relocate from one city to another. The City also claims that by refusing to act on the A’s proposal to build a privately-financed ballpark in San Jose, MLB has interfered with the City’s option agreement with the A’s. Under that agreement, the A’s would purchase land from the City for the purpose of building the ballpark, if MLB approved the move.

As I explained in this post in June, the core of the City’s case is founded on federal antitrust law. And therein lie the issues before Judge Whyte today on MLB’s motion to dismiss the complaint: Does MLB’s antitrust exemption still exist? If so, what is the scope of the exemption? Has San Jose even suffered an injury recognized by antitrust law?

Before I get to the details of today’s hearing, a disclosure. As it notes in my bio below, I practiced law for nearly 18 years before moving on to other things at the end of 2010. For most of that time, I practiced with the law firm of Keker & Van Nest in San Francisco, first as an associate, then as a partner. That firm, including senior partner John Keker, represents MLB in this lawsuit. This case arose long after I left the firm. I never worked on or was privy to any information about MLB’s decision-making with respect to the A’s.

I am also a season-ticket holder with the San Francisco Giants and a Giants fan. But I’ve been on record since early 2012 with a proposal for resolving the territorial rights dispute between the Giants and the A’s in a way that allows the A’s to move to San Jose. My personal view is that a financially-vibrant A’s franchise would be good for MLB and the Bay Area and, ultimately, the Giants.

Now, on to the hearing.

Judge Whyte began the proceedings with questions about the existence and scope of baseball’s antitrust exemption. It was clear from his questions that the judge had read the motion papers and the case law in detail. He was prepared with pointed questions for both sides.

Joe Cotchett, who represents the City, addressed the court first. Cotchett argued that the U.S. Supreme Court and lower courts have narrowed the exemption significantly, and that it now covers only the “business of baseball.” Cotchett then argued that the “business of baseball” is limited to “the play on the field” and does not include matters relating to team location and relocation.

John Keker argued for MLB. He told the court that the exemption was alive and well and that the “business of baseball” includes — at a minimum — league structure and organization, franchise location, broadcast agreements, and revenue sharing.

Read the rest of this entry »

Super agent Scott Boras is known to boast about his clients’ market value, particularly as each player nears or enters free agency. Oh, Boras doesn’t come right out and give a number. Sometimes he gives a range. Sometimes he talks on background and allows a reporter to claim “Sources say Boras is looking for 5 years/$100 million for Johnny So-in-So.”

This week, Boras tried to set a floor for Reds outfielder Shin-Soo Choo, who will be a free agent this winter. Jon Heyman had suggested in August — based on discussions with “baseball executives” — that Choo’s new contract could be in the $90 million to $100 million range. On Wednesday Heyman followed up, noting the considerable backlash against such a high number for Choo. And there was backlash from Boras, too. He believes $90 million to $100 million is too low for Choo.

“As a custom of the industry, prognostications by executives this time of year are dramatically divergent from the real market,” Boras said in a phone interview. “I don’t think anyone correctly predicted what Jayson Werth or Carl Crawford got.”

The interesting question is what Boras predicted Werth and his other clients would get. How close were Boras’ pre-contract comments with the deals he eventually negotiated for his clients?  Does he undersell? Oversell? Something in-between?

Read the rest of this entry »

Miami Marlins owner Jeffrey Loria was in the news this week and, as usual, there was a decidedly unctuous odor to it. Ken Rosenthal of Fox Sports reported on Monday night of a power struggle between Loria and Larry Beinfest, the team’s president of baseball operations. Lining up with Loria is Dan Jennings, the vice president of player personnel. Lining up with Beinfest is Mike Hill, the general manager. David Samson, Marlin’s president and Loria’s stepson, is nowhere to be found.

In essence, Loria reportedly has pushed aside or overruled Beinfest on a series of baseball decisions, for less than rational baseball reasons. Although the feud between the two dates back many years — Beinfest has been with the Marlins for 13 years — it escalated recently in the wake of allegations that hitting coach Tito Martinez had verbally abused several players. Beinfest conducted an investigation and promised the players confidentiality. Loria was furious when Martinez resigned because he had hand-selected Martinez in the first place. Loria took that anger out on the players who complained: Beinfest was preparing to promote Chris Valaika from Triple-A but Loria interceded because Valaika had been one of the complainants against Martinez. Valaika lost the opportunity he’d earned for a major-league paycheck.

Beinfest wants to know where he stands. Loria refuses to tell him, perhaps preferring to let Beinfest twist in the wind long enough to get fed up and resign. Beinfest is under contract until 2015. If Loria fires him, Beinfest gets paid for two more years. If he resigns, he doesn’t. Given his history, it’s no surprise that Loria would choose the less costly route — to him.

Read the rest of this entry »

Several news outlets reported on Tuesday that the Yankees will ink a new contract with CBS Radio worth $15 million to 20 million per year. As part of the deal, the Yankees’ radio broadcasts will move from one CBS Radio-owned New York station to another. Starting in 2014, Yankees games will be heard on WFAN (660 AM), the sports-only radio station that’s been home to the Mets since 1987. The Mets are in discussions with several radio broadcasters and expect to announce a new radio home in the next six weeks.

Radio broadcast rights in the $15 million to $20 million range are a rarity in MLB. The Red Sox are the only other team that reportedly rakes in close to $20 million per year from its radio broadcaster, WEEI (93.7 FM). It was big news when the Red Sox signed that 10-year/$200 million deal in 2006, to cover the 2007 through 2016 seasons. At the time, WCBS paid the Yankees only $10 million a year for the right to broadcast its games.

But the Red Sox deal doesn’t appear to have led to an escalation in radio rights fees, the way the Rangers’ multi-billion dollar contract with Fox Sports Southwest did on the TV side. Indeed, the Yankees’ radio revenue jumped from from $10 million in 2006 to just $14 million this season.

Read the rest of this entry »