Labor deal to cut A's revenue-sharing funds

CBA underscores club's focus to build ballpark in Oakland

December 3rd, 2016

OAKLAND -- Baseball's new collective bargaining agreement will have significant monetary implications on the A's, who should be further motivated to build a new ballpark after learning of the deal's terms.
As part of the labor agreement, the details of which were officially revealed on Friday, the A's will be phased out of the league's revenue-sharing plan over the next four years. Their share of these annual dollars, worth more than $30 million last year, will be cut to 75 percent in 2017, 50 percent in '18 and 25 percent in '19, before it's gone completely in '20.
That's no small chunk of change for the A's, who in recent years have relied on this pool of money -- redistributed income from richer teams to poorer teams as part of a competitive-balance measure -- to make up more than one-third of their payroll.
The A's, despite playing in a large market, have been included in the program only because of their aging stadium, and MLB's decision to incrementally eliminate them from receiving these funds stresses the urgency for a new ballpark and, perhaps, forces the team's hand.
New A's president Dave Kaval acknowledged as much Friday, first in a statement that read, "The new CBA again highlights the importance of getting a new ballpark built in Oakland. A new ballpark will allow for the most competitive level of play on the field. We are laser-focused on making that happen as quickly as we can."
Kaval also fielded questions on a conference call, the majority of which sought answers not just about the organization's future but current situation; namely, how will the A's make up for lost dollars beginning next season?
"We are committed right now to investing every dollar of revenue that we generate back into the on-field product and the fan experience," Kaval said. "We will also work hard to increase our revenue in the near term so that we can allocate more resources to both of these areas."
Kaval is focused on improving the Coliseum, where attendance has been dismal; only the Rays drew fewer fans last season, with the A's averaging 18,784 ticket sales per game, to Tampa Bay's 15,878.
"What we're focused on is getting more people to the ballpark, because the reality is when you have a vibrant, energized Oakland Athletics fan base at the Coliseum, that's one of the best experiences in professional sports, and we need to create more opportunity for everyone to gather and our community to support their hometown baseball club," Kaval said. "We're going to take a really hard look at ways we can improve the fan experience at the Coliseum, everything from food service to promotions to upgrades to infrastructure."
However, the on-field product typically trumps all, and the A's have finished at the bottom of the American League West in consecutive seasons. Financing the fan experience, then, will have to be balanced by the need to bring in dollars for the roster. Kaval, who was vague when asked about payroll, said he won't raise ticket prices to make this happen, instead channeling his efforts in ways that involve selling more tickets and getting more from sponsorships and partner money.
"I'm confident that we can come up with a plan that we can increase a wide variety of revenue streams to make sure we have the necessary resources to execute our business plan," Kaval said. "We're going to be really smart about generating more revenue and using that as a way to deal with the transitional period before we get a new stadium."
Kaval has no timeline for securing a new stadium, saying, "I think the No. 1 thing right now is to identify the best site."
Kaval, who replaced Michael Crowley as A's president, was brought on board largely because of his experience helping the San Jose Earthquakes build a soccer stadium. The power shakeup also left John Fisher as the managing partner, taking over the role of Lew Wolff, who is selling most of his stake in the team.
"I think the key thing is that long term," Kaval said, "the success of this franchise is really dependent on a stadium that can exist in Oakland and have great fan experience and can strengthen the quality of the club on the field. That's why we are laser-focused on solving the venue challenge, and we're putting a lot of energy behind it to make sure we can get there."