Business of Baseball Report

MLB Files For Mediation Over D.C. Stadium Deal

As we ring in the New Year, we also begin the newest chapter in what’s turned into a saga. In fact, in a lot of ways, things have almost moved backwards since this time last year. Negotiations on the prospective stadium deal went right up to the December 31, 2005 deadline, but nothing was agreed upon.

On Tuesday, MLB President Bob DuPuy made his feelings heard by issuing a scathing editorial in The Washington Post. Not only did he blast the city by bringing up the last installment of the Washington Senators’ departure for Texas, but he also brought up how Washington, D.C. was passed up when the league expanded in 1990 and again in 1995. He also saved some comments for D.C. officials, whom he cited as being difficult to deal with and who quarrel amongst each other.

Yesterday DuPuy brought out his hammer. He stated that MLB has filed a claim with the American Arbitration Association to settle the two parties’ differences. The mediation process cannot exceed 15 days and is nonbinding. If MLB and Washington, D.C. aren’t able to settle their differences, then MLB appears ready to take the matter to arbitration, which would be binding and could take up to six months.

The biggest issue continues to be cost overruns. Washington, D.C. officials want assurances that if stadium costs exceed their budget, MLB or the future owner of the Nationals will help out. DuPuy likened this to paying your MasterCard bill while allowing MasterCard to run up the tab since D.C. would have control over the variables that could cause the stadium to run over its budget.

Also keep in mind that any attempt by MLB to threaten to move the team would be somewhat hollow. They have eight $450 million offers for the team, and at this point, they wouldn’t be able to garner that amount anywhere else. Money still talks.

New Yankee Stadium Nears Approval, With a Price

Bronx Borough President Adolfo Carrion appears set to approve the construction of the new Yankee Stadium, but his approval will be contingent on furthering some of the initiatives he’s championed in the past. Carrion’s development plan centers around turning the old Yankee Stadium into a community ball field, which would include a Yankees Hall of Fame, a hotel and a convention center. It also includes a high school for sports industry careers across the street from the new stadium, in addition to having the interim park facilities completed prior to the ground breaking of the new stadium.

What’s most interesting is most of these expenses won’t be paid by the Yankees. The funds will be supplied by city and state budgets. So while the Yankees won’t be on the hook, they will need to get the state and local governments to sign off on the deal.

Minnesota Governor Plans to Get Involved in Twins Stadium Plan

While I’m sure Twins owner Carl Pohlad had quite a few things to be happy about when he rang in the new year, one thing he wasn’t pleased about was how New Year’s Day came and went once again without a deal for a new home for the Minnesota Twins. Like years past, 2006 appears to be more of the same. Governor Tim Pawlenty has pledged to work on a new stadium deal, which will probably resemble the one that expired on December 31, 2005. He’s promised that he’ll personally get the Twins and Hennepin County, where the new stadium is set to be built, to agree on a deal by March 1 when the next legislative session begins.

The reason that the odds of a deal actually happening are slight is that this is an election year. So while the Twins and Hennepin County officials try to circumvent the public to get a stadium deal passed, the public will be able to speak at the ballot box. Oddly, the general public doesn’t take too kindly to giving handouts to billionaires, so you can see why politicians will tread lightly before passing something like the sales tax increase that went along with last year’s stadium deal.

Oakland Running Into Problems Over Land Grab

It appears to be hard times for any team looking for a new stadium. Oakland Athletics owner Lew Wolff set an April deadline for having both a location and plan for his team’s new stadium, and so far neither has materialized. Wolff agreed to pay for the construction of the 35,000-seat park, but the city of Oakland has been unable to make any progress in purchasing the 100 (give or take) parcels of land owned by business owners where the stadium is set to be built. Few appear willing to sell, and the appraised value of more than $100 million is probably low compared to what the land will sell for in the open market.

Both the city and the Athletics appear hesitant to use eminent domain to acquire the property, so it looks like the parties will be moving to Plan B. That consists of building a new stadium on the parking lot of the Athletics’ current home, the McAfee Coliseum, and then using the surrounding property for parking garages, retail and housing. Because the city already owns the land, the process could go more smoothly; both the Oakland Raiders and the Golden State Warriors, however, would have to sign off on any deal, because their parking would be affected by the construction.

Anaheim Set to Kick Angels Out in 2016

According to a court filing by Anaheim city attorneys, the city of Anaheim is not planning on renovating or replacing the current home of the Los Angeles Angels of Anaheim as long as they keep “Los Angeles” in the team name. They also fully expect the team to move in 2016 when the Angels are able to opt out of their stadium lease.

The citiy’s argument is that they’re unwilling to promote the Angels when they have no real financial incentive to do so. As long as the Angels are affiliating themselves with Los Angeles, Anaheim feels that the team is basically paving its way towards moving there.

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