Top 25 Baseball Stories of 2017 – No. 24: Disney purchases majority stake in BAMTech

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We’re a few short days away from 2018 so it’s a good time to look back at the top 25 baseball stories of 2017. Some of them took place on the field, some of them off the field and some of them were more akin to tabloid drama. No matter where the story broke, however, these were the stories baseball fans were talking about most this past year.

Back in 2000, Major League Baseball created a joint venture between the leagues and its 30 owners called Major League Baseball Advanced Media (MLBAM). Each owner contributed about a million bucks a year over a four year period to create the thing, which is less than the going rate for your team’s second worst relief pitcher. By 2017 that modest investment has now made each owner in excess of $100 million. Possibly much more.

MLBAM was simple at first. It was a vehicle for baseball teams to have a central authority managing team websites, to create an overall digital presence for the game and to sell tickets and merch. Over time it evolved into a streaming service for  baseball games in the form of the subscription product, MLB.tv. MLB.tv proved to be successful in its own right, but it proved to be more successful as a proof-of-concept for streaming services in general. The technology was great, other people liked it and soon baseball — which has never been all that visionary an enterprise — realized it had something pretty big on its hands.

In 2015, Major League Baseball spun off the streaming technology into a separate company called BAMTech. It would keep control of the baseball properties using the platform under the authority of MLBAM, but BAMTech and its streaming product would be open to anyone who wanted to pay for its use. BAMTech already had an agreement with the NHL for streaming hockey games, but soon other content providers came calling, which put even more money into the pockets of baseball owners who still held the controlling interest in the company.

In August 2016, The Walt Disney Company acquired a 33% stake in BAMTech for $1 billion, which gave about $33 million to each baseball owner. At the time Disney also purchased an option to acquire a majority stake in the future. They waited about a year.

Back in August, Disney announced that it had agreed to purchase a majority stake in BAMTech, putting its ownership share at 75%. The price for the new shares exceeded $1.5 billion. While there is a bit of murkiness to the numbers, sources familiar with the deal told NBC Sports earlier this month that each owner will net about $68 million, payable in the early part of 2018. Between that and last year’s round, baseball owners will have realized in excess of $100 million, all for a pocket change investment made by them or their predecessors over a decade ago.

The owners have maintained about a 15% stake in BAMTech, and that’ll make them even more over time. After all Disney, as is its wont, will surely monetize the living hell out of BAMTech. It announced in August that it is launching its own streaming service, for sports with ESPN-branding on top of the BAMTech platform, and for Disney content — including Marvel, Pixar and Star Wars content — which will set them up as a rival for Netflix and Amazon. The enterprise will make billions. Owners may very well make more money off of it than they do on their baseball teams, at least in terms of straight profits on revenue go.

Good for them. Just remember that the next time your favorite team’s owner says he doesn’t have the money to pay your favorite player.

A’s running out of time to find home in Oakland, Las Vegas

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LAS VEGAS — The Oakland Athletics have spent years trying to get a new stadium while watching Bay Area neighbors such as the Giants, Warriors, 49ers and Raiders successfully move into state-of-the-art venues, and now time is running short on their efforts.

The A’s lease at RingCentral Coliseum expires after the 2024 season, and though they might be forced to extend the terms, the club and Major League Baseball have deemed the stadium unsuitable for a professional franchise.

They are searching for a new stadium in Oakland or Las Vegas, but they have experienced difficulties in both areas. The A’s missed a major deadline in October to get a deal done in Oakland, and there has been little indication they will receive the kind of funding they want from Las Vegas.

“I think the A’s have to look at it in a couple of ways,” said Brendan Bussmann, managing partner at Las Vegas-based B Global. “Obviously, they have struggled in Oakland to get a deal across the line. It isn’t for a lack of effort. . You have an owner that’s willing to pony up money, you have a club that wants to sit there and figure out a way to make it work, and you keep running into obstacles along the way.

“It’s time to fish or cut bait. Oakland, do you want them or not? And if not, where are the A’s going to get the best deal? Is it Vegas? Is it somewhere else? They’ll have to figure that out.”

What the A’s are thinking is a little bit of a mystery. Team President Dave Kaval was talkative earlier in the process, saying the A’s are pursuing two different tracks with Oakland and Las Vegas. But he went silent on the subject several months ago. A’s spokeswoman Catherine Aker said mostly recently that the club would withhold comment for now.

The A’s have been negotiating with Oakland to build a $1 billion stadium as part of a $12 billion redevelopment deal.

Newly elected Mayor Sheng Thao said reaching a deal is important as long as it makes economic sense to the city. Her predecessor, Libby Schaaf, led prior efforts to reach an agreement, but after the city and the A’s missed that October deadline, MLB Commissioner Rob Manfred expressed reservations a deal will ever get done.

“The pace in Oakland has not been rapid, number one,” Manfred said at the time. “We’re in a stadium situation that’s really not tenable. I mean, we need to do something to alter the situation. So I’m concerned about the lack of pace.”

Recent California history justifies his concerns. SoFi Stadium in Southern California and Chase Center in San Francisco were built with private money, and Levi’s Stadium in Santa Clara was 90% privately financed.

“And then I think there was some contagion where around the country people realized these deals could be done well privately and could generate a return on investment to those investors,” said David Carter, a sports business professor at the University of Southern California. “Why are we throwing public money at it at all?”

That’s also a question being asked in Las Vegas, even though the Raiders in 2016 received $750 million from the Nevada Legislature for a stadium. That then was the largest amount of public money for a sports venue, but it was surpassed last March by the $850 million pledged to construct a new stadium for the NFL’s Buffalo Bills.

Another deal like the one for Allegiant Stadium, where the Raiders play, appears unlikely in Nevada. T-Mobile Arena, which opened in 2017, was privately financed. An arena planned for south of the Las Vegas Strip also wouldn’t rely on public funds.

Las Vegas, however, has shown financing creativity. Its Triple-A baseball stadium received $80 million in 2017 for naming rights from the Las Vegas Convention and Visitors Authority. Room taxes fund the authority, so it was public money in a backdoor sort of way.

Clark County Commissioner Michael Naft, who is on the board of the convention authority, has spoken with A’s representatives about their interest in Las Vegas and said he is aware of the club’s talks with other Nevada officials. He said the A’s are taking a much different approach than the Raiders, who identified Las Vegas early as their choice landing spot after many years of failing to get a new stadium in Oakland.

“When the Raiders decided to come to Las Vegas, they had a clear plan,” Naft said. “You had a clear body that was tasked with assessing the worth and the value, and they committed to the destination. I have not seen that from the Oakland A’s at any level, and it’s not really our job to go out and beg them to come here because we have earned the reputation of the greatest arena on Earth. We have put in both the dollars and the labor to make that the case.

“I think I’ve made myself clear, but from conversations with others, I don’t think I’m alone on that.”

New Nevada Gov. Joe Lombardo “will not raise taxes” to attract the A’s or any other team, his spokeswoman, Elizabeth Ray, said in a statement. But she said the club could qualify for other ongoing “economic development programs,” which could mean tax breaks similar to what Tesla received in 2014.

Manfred said in December that the A’s relocation fee would be waived if they move to Las Vegas, a savings to the club reportedly of up to $1 billion.

“We’re past any reasonable timeline for the situation in Oakland to be resolved,” Manfred said then.

Naft said Allegiant Stadium filled a hole that went beyond landing an NFL team. It allowed Las Vegas to attract major sporting events such as the Super Bowl and Final Four and major concerts such as Garth Brooks and Elton John that “in many cases we would not otherwise have.”

He said he doesn’t believe a baseball stadium would accomplish that, and sports economist Victor Matheson agreed.

“I think there’s a real question about how much people are willing to watch baseball in Las Vegas,” said Matheson, a professor at College of the Holy Cross in Worcester, Massachusetts. “It’s not like locals don’t have a huge number of entertainment options right now, and it’s not clear exactly how much people might travel to watch baseball in Vegas, either.”

If the A’s truly want to be in Las Vegas, Naft said they need to make that clear.

“I just believe you can’t play destinations against each other,” Naft said. “If you want to come here and you want to be met with open arms, you’ve got to commit.”

Should the A’s fail to reach an agreement in Oakland or Las Vegas, they could consider other destinations such as Charlotte, North Carolina; Nashville; and Portland, Oregon. Whether they would have the time to explore such options is another question.

Oakland has already shown it will watch the Raiders move to Nevada and the Warriors go across the Bay Bridge to San Francisco.

Las Vegas, Matheson noted, is hardly in a desperate situation. He also expressed caution that Las Vegas could go from being among the largest metropolitan areas without a major professional sports team to among the smallest with three franchises.

“So you’ve gone from kind of being under-sported to being over-sported in a short period of time if the A’s were to go there,” Matheson said.