Business of Baseball Report

For those of you who don’t know (which is most of you), I’m a CPA, so April 15 of every year is pretty interesting. I tried my best to continue writing the Business of Baseball report, but the last few weeks have been particularly trying, so I had to take a short hiatus. I’m going to stick with my typical format for a few current stories, then I’ll try to bring you up to date with what we’ve both missed the last couple of weeks while I’ve been off.

Houston Astros Sue Over Jeff Bagwell Insurance Claim

Back in January, the Houston Astros filed a $15.6 million claim with Connecticut General Life Insurance to recoup most of his salary because they felt that Jeff Bagwell’s career was over. As it turns it out, and based on what happened this spring, the team might have been right because Bagwell started the year on the disabled list because of his injured right shoulder. Even he admitted that the injury could be career ending.

In March, the insurance company denied the claim. The company’s logic was that the Astros wouldn’t play a completely disabled player in the 2005 World Series. The Astros had activated Bagwell for the World Series this past October, and he even got a few at-bats despite not playing in the field. The insurance company is also claiming that Bagwell’s condition at the end of the series was the same as when they filed the claim in January.

The Astros are now suing the insurance company for breach of contract. The insurance company will now have upwards of five weeks to answer the lawsuit. If the Astros end up losing the court case, they’ll not only be on the hook for Bagwell’s entire salary of $17 million, but they’ll also be out the $2.4 million in premiums on the insurance policy.

San Antonio Set to Issue Ultimatum to Marlins

Bexar County Judge Nelson Wolff said on Monday that he’s issuing a May 15, 2006 deadline for the Florida Marlins to decide on whether they’ll be relocating to San Antonio or not. Wolff obviously hasn’t watched the Washington Nationals situation or he’d know how MLB works. Slow and steady would be the understatement of the century, so it’ll be interesting to see if this deadline comes and goes like all of the rest.

If the Marlins decide they do want to move to San Antonio, the primary source of funds for a stadium deal would be the extension of a hotel and car rental tax that was used to fund the construction of the AT&T Center, home of the San Antonio Spurs. In order to get the resolution on the ballot for the November 7, 2006 election, the county has to have everything finalized by August 15, 2006. Wolff obviously feels they need the Marlins in line by May 15, 2006 to get things set up.

The Marlins are claiming that MLB is holding them up because they’re finishing an analysis of the San Antonio market. MLB President Bob DuPuy claims they’re not the one holding things up and that they’re waiting to hear from the Marlins as to their final wishes. DuPuy also stated the ultimate goal is to keep the Marlins in South Florida, but that won’t stop them from using another city to get the stadium deal they want.

Grapefruit League Sets Attendance Record

An average of 5,855 fans showed up to each and every Florida spring training game this past March. The total attendance of 1,603,393 just barely surpassed last year’s record attendance. Five different teams set new spring training attendance records and it was the eighth straight year that the Yankees drew more than 10,000 fans per game.

The Baltimore Orioles, Cincinnati Reds, Cleveland Indians, Pittsburgh Pirates and Tampa Bay Devil Rays all have contracts expiring at their spring stadium sites within the next five years. While I doubt the Devil Rays will be going anywhere, attempts to draw the other four to Arizona will be made. The state government is trying to push through legislation that would help Florida cities retain their respective teams.

House Tax Committee to Hold Hearings on Twins Stadium

This Wednesday and Thursday, the Minnesota House Tax Committee is set to hold hearings to decide whether the Hennepin County sales tax hike, that will be used to fund a new stadium for the Minnesota Twins, will be put to a public vote. Last year, the Twins and the county tried to do an end around to avoid a public vote but the whole plan got derailed when the state fell into a budget crisis and the stadium issue never came to a vote.

The major issue is a 0.15 percent sales tax increase for county residents. The tax committee will hear from both sides to determine whether the stadium should be exempted from a state law that requires voters to decide on these kinds of tax hikes. The primary reason for circumventing the public, the county and team officials state, is that the referendum would create delays and that with escalating commodity prices, the price of the stadium would go up even further.

Catching Up

Since my last report—and this might come as a shocker—MLB has not chosen a new owner for the Washington Nationals. The Kansas City Royals’ stadium bill, which will raise the sales tax rate in the county, was voted through. The New York city council approved the construction of the New York Yankees next stadium and now it’s the Tampa Devil Rays who have told MLB that they’re planning on changing their name. You can read about all of that and more at both the Business of Baseball website and Maury Brown’s Baseball Journals.

Happy Birthday

A year ago tomorrow, I wrote my first Business of Baseball report. I hope you have as much fun reading the reports as I’ve had writing them. It’s funny going back and reading that first report, because a few of the stories are still ongoing a year later. The Yankees are still working on their stadium plan and the Nationals still don’t have an owner. And of course the Marlins are looking for a stadium, it’s just not in southern Florida. And it looks like Minnesota Twins owner Carl Pohlad is closer to getting a new stadium for his ball club than he was this time last year.