Bay Area Sports Guy – Oakland A’s biggest financial problem isn’t the ballpark

For the longest time the talk about the A’s financial problems have revolved around the team’s old ballpark. However, in the new age of regional sports networks shelling out huge sums of money to teams, the Coliseum now seems like a secondary issue compared to the lack of TV money.

The A’s current deal was signed in 2009 before the TV rights deals exploded (or the bubble started inflating).

The deal goes for 25 years with an option to opt out of the deal in 2024. The exact financial terms were not disclosed, but the estimates available seem to point that it is in the $15 to $20 million a year range. Wendy Thurm recently listed out all of the TV deals for Major League Baseball and that number puts the A’s squarely in the bottom handful of teams with quite a bit of time to wait around before they can renegotiate.

Marine Layer from New Ballpark has taken a look at the A’s deal and speculates that with the escalators that are a part of the deal the team could see that annual payout reach $30 million. This still depends on the A’s ability to retain some of the ratings growth they saw at the end of last year, allowing CSN California to boost subscriber and advertising fees. Even with this, CSN California pays out rights fees to carry the Sharks and Kings as well, which most likely dampens their ability to pay a huge fee for the A’s.

Looking at the published reports and putting in a couple estimates for teams that don’t have public information, the average TV rights deal is about $45 to $50 million per year. This is skewed quite a bit by the Dodgers, Angels and Yankees deals so let’s also take a look at the median, which comes out to $33 million per year. That is still about 50 to 100 percent more than what the A’s are getting annually in their deal from CSN California.

Taking a look at the way things shake out in their own division and things look even more grim; the A’s play in the same division as teams with the 2nd, 4th, 5th and 10th highest local television revenues. The Angels deal pays them $147 million per season, the Rangers and Astros both get $80 million and the Mariners get $45 million a year and will be looking to sign a new deal after the 2015 season.

Yikes, that sure is a lot of money in the AL West. Considering how all of these teams’ ballparks offer the ability to generate more revenue than the Coliseum, and the A’s margin for error in building their team is even smaller.

The new national TV deals will help with revenue, but that money is split evenly among the teams. That allows every team to spend more, which doesn’t really change the status quo in a league without a salary cap.

A new stadium would certainly help bring in new revenue streams, but even that might not be a panacea with the A’s ownership picking up a large portion of the development costs and having to service that debt. In addition, that dream keeps getting pushed into the future and doesn’t seem to be much closer than it was when the new ballpark talk started years ago.

Regardless of where or when a new stadium will be built for the A’s, that seems to be the least of their economic disadvantages … at least in the short term.

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The Sports Leader

Interesting post BA Stats Guy. I was not aware that there was such a disparity between the teams (just in the AL west) in terms of TV revenue. This has got to be difficult for Lew Wolf to accept. I might be tempted to renegoiate this current TV contract if I were in his shoes.

Slam

The Giants also made a long term deal with Comcast. It does have escalator clauses, but I bet the Giants are kicking themselves for not starting their own TV Network, because i don't think they're making that much coin

Bay Area Stats Guy

The Giants actually own a third of the network and have a deal that gives them a certain amount of the ad revenue during the Games. So they are in a pretty good spot TV wise, probably not Dodgers money but they are most likely not hurting there.

erik

Can anybody name a good TV or Radio deal that the A's have made since they were here?

how about putting some blame on CSN California! Why would any company want to partner with Lou Wolff and A's? CSN California would have been better off saving their millions and replace it with SJ Giants or Fresno Grizzlies games. The ratings would be much better than what the A's are getting.

John Sports

T, your disdain for the A's is quite obvious over time. Why? who knows. I am not a Giants fan, but love having them in the Bay Area, and would never wish them any misgivings...I have fun cutting up on them (in a fun sports way) when I get the chance. So let me take a wild guess on when you became a Giants fan. Shortly after Coke-slide park was built, because you thought it was the cool place to be. Right? Then when they won a couple of World Series you figured you had this entitlement to say lame things about the other Team in the Bay area...Correct so far?...I thought so.

My Hatred for this ownership group grows with every passing Day. Why would you make a deal like this for that amount of time? Either they don't know what their doing or there is a-lot more to this.

Stan

John Fisher OWNS the A's,not Wolff,not Beane. Where has anybody seen him? Its just another for profit sideline. I bet John Fisher never had a baseball glove in his life. Toss him a ball now,and he drops it like a girl.

And who's fault is that? Its Beane and Wolff. They drove down attendance and they were very happy to get a 25 year deal. That sounds like they were prepared to stink forever. For whatever reason- Sabean- maybe,Beane decided he would try,the A's would spend last year. Lets remind that John Fisher and family are multi billionaires. The can easily be in Angels payouts out of pocket. Or sell the A's. But winning with John Fisher isn't the goal..money and commodity is.