Baseball Prospectus - Chat with Neil deMause

Chat: Neil deMause

Welcome to Baseball Prospectus' Thursday April 21, 2011 1:00 PM ET chat session with Neil deMause.

Someone building a stadium in your back yard? Local team owner standing on the corner asking for spare change? If you need help solving these problems, look no further than BP Senior Editor and Payoff Pitch columnist Neil deMause!

Neil deMause: Howdy, BPeeps! Happy to be here with you today on Dodgers Debacle Day. Feel free to throw me questions on the McCourt mess, falling baseball attendance, my initial take on the new Feelies album, you name it. Just don't ask me to explain what happened in the 8th and 9th innings of last night's Mets game, as that's beyond the power of any mere mortal.

david b. (montreal): Why don't ballparks like Yankee Stadium just drop their prices to sell more tickets early in the year,seems simple enough?

Neil deMause: They do, in a way: The discounted $5 games in the Bronx are all weeknights early in the season, and teams that do variable pricing invariably discount April games and jack up the prices in the summer, when the kids are out of school and you don't need a parka to make it past the 6th inning. I'm going to the Mets game tonight, in fact, in large part because they're offering half-price tickets. (Though we're buying them via StubHub, that's still the savings being passed along to us.)

There are several reasons why teams would rather do this kind of under-the-table discounting rather than a straight April price cut: You don't want to annoy season-ticket holders who are paying full price for the whole year, you don't want to cannibalize ticket sales from your other games, and you don't want to give up the revenue from fans dumb enough to buy April weeknight tickets for full face value in February. The upshot is the same, though: If you want bargains, now's the time to go to a game.

BeplerP (NYC): Neil: Thanks for the chat! While this may fall outside your stadium beat, I'll pursue it anyway- how much credence do you give to the merits of the Madoff trustee's suit against the Mets ownership? While I can certainly see that suit having the power to absolutely dry up any market for the Wilpons to finance their way out of this problem- the trustee wins if he outlasts the Wilpons' liquidity! I think so long as the trustee's claim has not been decided, it would be seen as coming first against every other unsecured creditor? In short, I see the trustee's suit as a great device to compel the Wilpopns to surrender, regardless of the merits? What do you think? Thanks

Neil deMause: I think that Irving Picard is serious about recouping $1 billion from the Wilpons, if that's what you're asking. As for whether he'll be successful, that's a question way above my pay grade - there's not a lot of good precedent here for how liable an investor is for getting out of a Ponzi scheme while the getting was good.

There look to be plenty of people interested in buying a share of the Mets, in any case (with good reason - the team's finances are in far better shape than those of Sterling Mets, the Wilpons' umbrella ownership group), so the Wilpons should be able to hold out a bit longer. My bigger concern is what happens if the stalemate continues into next winter: Will Sandy Alderson be put on a short leash as far as filling the team's many holes, and even if not, will free agents want to go to Flushing when the ownership is so uncertain? A quick settlement this summer makes the most sense all around, but the distance between the two sides may be too big to breach by then.

hotstatrat (Toronto): If you had to move two franchises, which ones and where to?

Neil deMause: The Dodgers, to Brooklyn? Seriously, there aren't a lot of untapped markets out there, and while there are certainly still small-market teams, nobody's so far off the map in terms of revenue that they really need to move - the two big current move threats (Rays and A's) are all about stadium leverage, not markets that are any crappier than anywhere else.

That said, one point that came up when I was on XM radio this morning: The Marlins' new stadium opening next year is going to be a huge test case for whether MLB can ever draw serious fans in Florida. If you give that stadium a year or two and the honeymoon has already worn off, it'd probably make sense to move the Marlins, though of course that can't happen because of the new lease they signed in exchange for getting taxpayer money for the stadium.

As for where to move teams if you moved them, what would undeniably be best for baseball would be putting a third team in the NYC market, diluting the Yanks' and Mets' market advantage. Hey, Dodgers back to Brooklyn is sounding better and better...

david b (montreal): Would Montreal be a good market for a AAA team?

Neil deMause: I still think Montreal is a good market for an MLB team, frankly - especially now that the exchange rate looks more kindly on loonies than it did when the Expos moved. The problem is where they'd play: The Big O isn't workable for AAA ball (and isn't really for MLB, either), and Parc Jarry has been converted to tennis now, if I remember right. That, and the fact that Selig & Co. have publicly declared Montreal to be scorched earth, so they're not going to be eager to go running back there too soon, and certainly not without a lucrative stadium deal in place.

Aceball (Reno): What is going on with Portland? First, they lose their affiliation with the Padres and then that mysterious season finale for Portlandia on IFC. Are they getting ready for an MLB team? Is Willy Mo Pena's career in Reno really happening, or this some interpretive theater piece of what Roy Hobbs's career might have been like in real life?

Neil deMause: Speaking of nowhere to play: Portland agreed to convert its minor-league baseball stadium to soccer, effectively booting out the Beavers in the process. Which is hard to argue with, if only for the great Opening Day spectacle it provided.

Portland now has nowhere for an MLB team to play, no political interest in getting a stadium built, and the same marginal market it did when it finished deep in also-ran territory in the Expos sweepstakes. I'd put their over/under of getting an MLB team somewhere between "2030" and "never."

charlesf (nyc): What legitimate options does Stuart Sternberg have for a new stadium?

Neil deMause: If he wants to pay for it himself and build it in St. Petersburg, plenty of options. The whole point of his stadium campaign is to get public money and/or move to Tampa, though, so those wouldn't be "legitimate" from his standpoint.

Right now the thing to pay attention to with the Rays is the sparring between Sternberg and St. Pete Mayor Bill Foster, since the city has that ironclad lease with which to hold the Rays in the Trop for the next decade or more. Sternberg will no doubt keep holding up the threat of contraction, but I assume eventually either the two sides will agree on a location in Pinellas north of St. Pete (how they'd pay for it, I have no idea), Sternberg will wait out the time until Foster leaves office, or he'll punt on the whole thing and sell the Rays and buy the Mets, thus making it officially somebody else's problem.

James (Philadelphia): In the past teams could "lose" money, put owners could make it up by selling the franchise at a huge profit (thanks in part to a new stadium with sweet deal). Now we've got three different leagues owning teams. And plenty of franchises looking to sell. Is the bubble popping?

Neil deMause: Sure, in that I don't think you'll ever again see the mammoth team value increases that we saw over the last decade or two. (Not unless somebody invents cable TV all over again, anyway.) But I wouldn't cry too much for owners: Most teams are still profitable, if you believe Forbes (and I do), and it's not like they're likely to actually take a loss on their investments when they sell. No matter how much of a fire sale price Frank McCourt ends up with for the Dodgers, he'll almost certainly do better with that investment than with all the real estate he bought by siphoning off Dodgers revenues the last few years.

Josh (The lonesome crowded west): So how long should we expect the Dodgers to remain wards of the state?

Neil deMause: Judging from McCourt's defiant comments today, a long, long time. This isn't like the Rangers bankruptcy, where Tom Hicks wanted to sell, and MLB basically helped walk him through the process. It looks like Selig is going to try to use his "best interests of baseball" powers and a 3/4 vote of the MLB owners to force a sale, but how the probably inevitable judge will look at that - not to mention Jamie's divorce lawyers - I can't even begin to guess.

mattymatty2000 (Portland, OR): Other than Bud's feelings of affection, what is the great difference between the Dodgers, which MLB has seen fit to take over, and the Mets, which he has not?

Neil deMause: The McCourts were actually stealing money from the team, using future Dodgers revenue ($390 million worth, according to one report) to underwrite their personal expenses; the Wilpons had borrowed against their team as well, but there's less of a sense of "If we don't stop this now, they'll sell off the World Series trophies and hightail it to the Cayman Islands."

That said, you'd think that Selig would be putting some pressure on the Wilpons by now. Unless he has a more sanguine view of the Picard suit than the rest of us, which is possible. Or, like you say, it's because Fred is one of his guys and Frank isn't.

(Though it's worth noting that Selig absolutely loved McCourt when he bought the Dodgers. Check out this Bud quote from 2004: "The sale of the Los Angeles Dodgers to Frank and Jamie McCourt heralds the beginning of a new era of family ownership for one of the game's most storied franchises. This transaction meets all of Baseball's debt service rules and financial requirements in every way. We at Major League Baseball are confident that Mr. McCourt, as a rabid and knowledgeable fan and successful businessman, will devote the time and energy necessary to make the franchise a great success.")

Marc (Inside Your Internets): How much are you rooting for Omar Minaya to be the financial representative of MLB that needs to sign off on the Dodger's decisions until the ownership situation is resolved? Would that be the greatest thing ever, or simply great?

Neil deMause: Which is a more wasteful way to spend Dodger money, on an estate in Cape Cod or on Oliver Perez? Hmm.

dianagramr (NYC): Hi Neil ... thanks for the chat. Do you think that rising gas prices is having an impact on attendance for those teams without large mass transportation choices?

Neil deMause: Ooh, good question. My guess is not - all the studies I've seen show that brief blips in gas prices don't affect driving habits too much. And while the top three attendance-losers as of today (the Dodgers, Mariners, and Rays) are in transit-deprived cities, it's tough to blame attendance at Cubs games on people not wanting to pay for gas.

Mountainhawk (Salem, MA): With the mood of the country wheer it is right now, and the city of Glendale, AZ about to get stuck with an empty arena just a decade after building it, are we pretty much done with publicly financed ballparks for awhile?

Neil deMause: My very first article for BP, back in 2003, predicted that the public stadium boom was at an end. After discussing rising opposition to subsidies then, I concluded: "there could be baseball played in Pro Player and the Metrodome--and Fenway Park and Yankee Stadium--for a long time to come."

I've learned my lesson: There will never be an end to new stadiums until owners stop demanding them. And given how integral they are to the entire business plan of modern sports, that's not going to be happening anytime soon. We may see a lull for the next year or two while state and city budgets work themselves out, but rest assured the owners will still be there waiting once the money is back.

Aaron (YYZ): Where in the stadium life-cycle are the Jays and the Skydome? I fondly remember the early days when it was the best thing going.

Neil deMause: First stadium ever to draw four million fans in a season! Man, that buzz didn't last long, did it?

A stadium "life cycle" is less about how long girders go before wearing out than about when owners can work up the chutzpah to demand a new one, so I think this question can only be answered in terms of 1) how desperate the Jays' owners are to get out of the Rogers Centre and 2) how likely it is that they could extract significant money from Toronto/Ontario for a new place that's less, you know, domey. Given that the Jays' attendance is actually up more than any team in baseball now (they passed the Giants and Rangers last night), and the huge uproar over a hockey arena in Quebec and a football stadium in Hamilton, I expect they'll remain quiet for a bit. Though other owners have tried the "Our team is finally drawing fans, now we deserve a new stadium for them!" gambit before - it's what got Petco Park built in San Diego - so you never know.

Irving Picard (US Bankruptcy Court): Neil,I'm no lawyer, but I do know you are incorrect. The Wilpons will at a minimum owe 300 million to the Trustee for withdrawal of phantom profits. That is a given with substantial legal precedent. Its also quite a lot of dough. The Trustee will not settle on that amount which is seemingly more than they can get their hands on even with selling the team...probably the reason they haven't settled because they can't afford too? The additional 700mm is what is up in the air as they are accused of aiding and abetting the fraud which is a much tougher legal standard.

Neil deMause: The Mets are worth $747 million according to Forbes, and their cable network SNY is worth hundreds of millions more (and SNY is far less leveraged). So if that's all the Wilpons owe, they might be able to hold onto majority ownership. If it's $1 billion, that's a whole nother kettle of fish.

jhardman (Apex, NC): North Carolina is often mentioned as a "Statewide" market, even though there are three major TV markets within it. Since the Rays own a portion of the Durham Bulls, there have been local rumors that they would "switch markets" and move the Rays to Durham to leverage the stadium deal there. Have you heard this anywhere else or is this just a local dream? (I mentioned this in Jay jaffe's chat a couple of weeks back and he hadn't heard of such a thing.)

Neil deMause: I have heard of it (though possibly because Jay asked me about it), and I think it's just a local dream. Among other things, the Rays can't even talk about moving to Tampa, let alone Durham, without being in violation of their lease.

I'm also pretty doubtful that North Carolina is a better MLB market than Tampa Bay - if you're in the Triangle you're far from the Triad, and vice versa. It's notable that neither the Expos nor the Marlins ever talked about North Carolina as an option when they were kicking the tires on various cities during their respective move threats.

jedmonds15 (St. Louis): What is the deal with Ballpark Village? Who is to blame for it not getting completed? Ownership? City government? We had been fed the idea that it would be finished by AT THE LATEST All-Star game 2009 and it is still not even started.

Neil deMause: That would be the Ballpark Village that was supposed to be built across from the new Busch Stadium in St. Louis, but which has more recently known as the Great Mud Pit. I think part of the blame goes to overpromising by the Cardinals in order to get a deal done ("You'll get a new residential neighborhood!" is a nice hook for legislators who don't care about baseball), and part of it goes to the popping of the real-estate bubble, which has left most of America strewn with half-finished lots. Near my house in Brooklyn, what was supposed to be the borough's tallest condo towers (to accompany the new Nets arena) is now a vacant lot with vague plans of an apartment building made of stacks of something like shipping containers. For that matter, anyone see any of that development yet that was supposed to spring up around the new Nats stadium?

James B. (Philadelphia): Is it too early to be worried about dropping attendance, or is there really a problem?

Neil deMause: It's been going on for three years now, so it's really a problem. How much of a problem, and whether it will reverse if/when the economy recovers, is another story. But given that the whole sports industry has been based for years now on constant increases in consumer demand, I think whether this is a real decline or just a leveling off, it's going to mean big changes for not just MLB, but all sports.

Bobo Dolls (Late Season Collapse): Why doesn't my great city of Wichita (pop. enough) have a minor-league affiliate? The Royals packed up the Wranglers and moved them to Nowhere, Arkansas. A city this big should have affiliated baseball, no?

Neil deMause: Nowhere, Arkansas spent $50 million on a new stadium. If you have $50 million burning a hole in your pocket, you can get a minor-league affiliate to play in your backyard.

Minor-league-ready cities, unfortunately, are a dime a dozen, so franchises can continue to play them off against each other in search of subsidies.

Angela (Chicago): What kind of financial shape are the Cubs in? Before the Ricketts' purchase the talk was all about what a cash cow the Cubs were. Now we're the Ricketts are saying they need financial assistance to take care of all the work the team needs. And if they Cubs are in a tougher financial position that the Ricketts thought when purchasing the team, why are they hanging on to a GM that keeps handing out bad contracts?

Neil deMause: Back to Forbes again, which says that the Cubs' revenues are outstripping payroll costs, even with all the Sorianos and Fukudomes larding up the roster. So don't cry for Ricketts - he's doing fine, and will be doing even better once those big, bad contracts start to expire (Fukudome and Ramirez are both done after 2011).

What Ricketts' demand for financial aid was about was that in order to make money off renovating Wrigley Field, he says he needs state assistance. I don't know if I believe him - the Red Sox seem to have managed to pay off Fenway's renovations just fine, after all - but even if it's true, the state response there should be (and so far has been), "Okay, if it doesn't pay, don't do it." My guess is Ricketts figured it was worth a shot to see if he could score a big subsidy payday; he just picked a terrible time what with the state of Illinois in the middle of a huge budget deficit and tax hikes. It'll be interesting to see if he tries the same proposal again next year.

mattymatty2000 (Portland, OR): Thanks for the chat, Neil. Crazy crystal ball question for you. What would you say are the chances a third team appears in the New York market in the next 100 years?

Neil deMause: I expect the New York market to be mostly under the Atlantic Ocean in 100 years, so I'd say not too hot.

Stu (NYC): Baseball is losing young fans with each passing year, True or False?

Neil deMause: That's another prediction I used to make, but frankly, I'm not seeing it. My son and his classmates are easily as rabid fans as I was at his age - sure, they don't go see as many games in person because of ticket prices, and they can't stay up to watch the World Series since the games end at midnight. But they're still playing baseball, watching baseball, buying souvenir jerseys, playing that atrocious 2K Sports baseball game for the Wii. You really need to beat kids off with a stick to get them to stop liking baseball, and MLB hasn't found a big enough stick yet.

Jason W. (Oakland): With MLB taking over the Dodgers and the Oakland A's stadium fiasco going nowhere, what are the chances Bud Selig works a deal to sell the Dodgers to Lew Wolfe and MLB finding another owner for the A's?

Neil deMause: It's possible, I suppose, along the lines of the Henry/Loria Expos-for-Marlins-for-Red Sox shuffle. I think Wolff is far more interested in real estate opportunities in NoCal, though. Besides, the A's are his problem, not MLB's - if you're Selig, which would you rather have try to find a buyer for, the Dodgers or the A's?

Getting close to my time limit here, but I'll take a few more...

Rob (Houston, Baby): Wait, the Feelies have a new album out? I heard Crazy Rhythms for the first time last year and am kicking myself for having not noticed them for 30 years. How's the new disk stack up?

Neil deMause: I'm loving it - it sounds exactly like you'd expect the next Feelies album to sound like if they hadn't taken that little 17-year break. They may yet give Mission of Burma a run for their money in the Best Post-Punk Reunion category.

John (DC): Put on you Baseball Czar For A Day Hat. Do you change revenue sharing? And, if so, how?

Neil deMause: I might tinker with it at the edges, but really, this is about as good as it gets in terms of finding a balance of rewarding on-field success while still allowing small-market teams to survive. The best solution (short of a third team in New York) is probably more national sharing of TV revenues, and given that I expect within a decade we'll all be watching baseball games on our computers instead of on our TVs, that may well be coming.

Paul (Chicago): How can the Twins afford Mauer, but the Brewers can't afford Fielder? Wasn't Wrigley North supposed to bring them a bigger revenue stream?

Neil deMause: It did, but it didn't move them into a bigger market. The Twin Cities still dwarf Milwaukee in terms of potential cable and ad revenue.

That said, I think punting Fielder is a tactical decision as much as a depth-of-pockets one: The Brewers know he's going to be looking for Ryan Howard-type money, and don't think it's worth busting their payroll to keep a very good player at a position where it's easy enough to find average production. The Twins broke the bank for Mauer, but without it they were looking at Wilson Ramos, who isn't close to the same player - nor close to the same attendance draw, which is important when you're trying to sell high-priced tickets to a brand-new stadium.

Neil deMause: And with that, I'm past my sell-by date. Thanks for all the excellent questions, and I'll see you in the comments section.