How the Rays Are Playing Hardball…and Winning (Re-Posted From SOTS)

Tropicana Field, as seen from the front row in the Upper Reserved section. (Photo courtesy of Augies Panoramas)
Tropicana Field, as seen from the front row in the Upper Reserved section. (Photo courtesy of Augies Panoramas)

Noah Pransky’s Shadow of the Stadium blog never fails to impress me. Noah, by way of his blog, continuously reaches past the headlines in his attempt to shed light on the Stadium Saga — consistently asking questions that Joe Q. Public might not even think to mention. He posted another excellent article Sunday afternoon, and I felt the need to re-post the piece in its entirety (below). And while I made a gallant attempt to write an introduction for the article, I think Pransky summed things up perfectly,

What St Pete may not realize is that it still holds all the cards in the Rays Stadium negotiations…and it could be the last time any city does for a very very long time.

How the Rays Are Playing Hardball…and Winning, by Noah Pransky

Great piece from the Trib’s Chris O’Donnell this morning on how the Rays were able to negotiate the price of “making St. Pete whole” down to somewhere in the $20-30 million range (less when you factor inflation), despite a fairly ironclad contract with a whopping 13 years left on it.

The story points out how Seattle ultimately got a $45 million settlement when the Sonics left their less-ironclad lease just two years early.  But this week’s deal has been considered “fair” because St. Pete seems ready to move past baseball and the Rays weren’t going to budge:

The amount of compensation is a compromise, Kriseman said — less than the city asked for but more than the Rays wanted to pay. Sports economists say the Rays bargained well.

“We have immense challenges ahead of us,” said Rays President Brian Auld. “Had these payments been significantly higher, they would prohibit us from being able to do a new deal; they could be crippling to whatever business needs we had going into a new ballpark.” 

Indeed, the more the Rays ultimately pay to taxpayers, the less money they make…and they more they’ll need to ask of taxpayers in a new deal.  But “crippling” is poor descriptor given that MLB just hit $9 billion in revenue this year.

Judging from previous reports of what the Rays and former mayor Bill Foster were negotiating, it would seem the team’s hardball tactics worked well.  The current mayor, Rick Kriseman, acknowledged at Tuesday’s press conference that he would have loved to have gotten more, but he didn’t feel like he had the leverage.  He couldn’t even get the team to pay for the right to look at stadium sites in Tampa,one of his original campaign promises.

Reaction has been mixed: the Times’ John Romano said the money stinks, but the deal was necessary.  SaintPetersblog’s Peter Schorsch wrote St. Pete is basically getting screwed.

Of course, the revelation that the Rays won’t consider a single change to the negotiated deal only bolsters the idea that they’re going to keep playing hardball.  They’re basically giving an ultimatum that they won’t re-negotiate anymore and if council rejects this deal, they won’t keep trying to make a new stadium happen over the course of the next 13 years?!?

That’s silly.  Which is why the city may not realize it, but it still holds all the cards in this negotiation.

I’ve written ad nauseum about Kriseman’s tough challenge of satisfying both his taxpayers and a team that doesn’t want to compensate them.  He could have waited the team out until they caved to better terms…but the team played its public relations cards well and forced the city to bend.

How should council vote this Thursday?  I cannot say.  It’s a big decision.

But this may be the last time a municipality has the upper-hand in negotiating with the Rays.  Even Tampa Mayor Bob Buckhorn acknowledged what’s coming next:

You have to wonder if the Rays’ setting their price, playing hardball, then letting public opinion turn in their favor will repeat itself in Hillsborough County too.

If the team/league finds a piece of land they like in Tampa, will theythreatmonger and fearmonger because the city and county aren’t immediately willing to hand over hunderds of millions of dollars?

It wouldn’t be MLB’s first time.

Noteworthiness

Hot-Stove: Rays Leave the Winter Meetings, Rule 5 Draft, Etc

Luis Urena, one of two players the Rays picked up in the Rule 5 Draft, Thursday afternoon. (Photo courtesy of Pirates Prospects)
Luis Urena, one of two players the Rays picked up in the Rule 5 Draft, Thursday afternoon. (Photo courtesy of Pirates Prospects)

Despite the numerous conversations Rays’ representatives continued into Thursday — the last day of the 2015 Winter Meetings in San Diego, Matt Silverman and company headed back to St. Petersburg without the big bat they were seeking, and a second catcher to pair with Ryan Hanigan. Does that mean the team will head to Port Charlotte with the current 40-man roster intact? Not exactly.

If Silverman’s quote in the Tampa Bay Times speaks to anything, it’s that something may be in the works between now and when pitchers and catchers report to camp,

The conversations persist, the phone continues to ring and beep, but we’re still in the conversation phase on many aspects.

Silverman continued,

“We don’t expect to do anything when we come to these meetings. We expect to have conversations to learn more about other teams’ needs, to get a sense of how they value our players and potentially to lay the groundwork for deals. If something happens here it’s a bonus, but there are no expectations.”

Now that a lot of big the moves have been made around the majors, teams will start to focus on the secondary market and that typically involves the Rays. Forget not, it was in the interim following the Winter Meetings that the Rays announced the trade of James Shields to the Kansas City Royals for Wil Myers and Jake Odorizzi (among others) in 2012.

While there weren’t any changes to the 40-man roster, the Rays did lose Class-A catching prospect Oscar Hernandez in Thursday’s Rule 5 draft of minor-leaguers. They hope there is chance they will see him again.

Hernandez, who was impressive last season at low Class A Bowling Green, hitting .249 with nine home runs, 63 RBI, and a .301 OBP, was the top pick of the draft by Arizona Diamondbacks. Under MLB rules, he has to be kept in the big leagues for the entire season or offered back to the Rays for $25,000 — half the drafting fee. The likelihood of that happening is uncertain.

On one hand, he was projected to move up only to advanced Class-A Charlotte in 2015, so it would be a bit of a stretch for him to play in the big leagues. Yet Arizona, who may not be in playoff contention this season, might be willing to weather any mishaps Hernandez may incur thanks to his lack of big league experience, and the transition from Single-A to the majors.

Tampa Bay also lost another prospect, Triple-A starter Merill Kelly. Not seeing a future with the team, he is now off to the Korean Baseball Organization (KBO).

The Rays made no picks in the major-league portion of the draft, however they picked up two players in the minor-league portion: Triple-A RHP Luis Urena (formerly of the Pirates) who Rays farm director Mitch Lukevics said was the number one player on their board, and RHP Michael O’Brien from the Orioles. Lukevics expects O’Brien to pitch at Double-A Montgomery.

Noteworthiness

  • The Rays completed the Sean Rodriguez trade today by getting RHP Buddy Borden from the Pirates. Borden, 22, was 7-9 with a 3.16 ERA in 27 games (26 starts) with the Pirates’ Class-A affiliate last season. The Rays also announced they signed Seminole High School product C Bobby Wilson, Plant High School product OF Corey Brown, and INF/OF Eugenio Velez to minor league deals with spring training invites. You can read player bios for the newest Rays here, and we’ll have a write-up on the newest acquisitions shortly.

    • St. Petersburg Stadium Deal Delayed a Week, Winter Meeting’s Trade Rumors, Etc

    trop4

    St. Petersburg Mayor Rick Kriseman announced a possible agreement for the Rays to explore new regional stadium locations Tuesday morning. While the potential deal should be considered a huge step forward, the addition of any termination agreement to a contract (or in this case, a memorandum) is a complicated matter — especially when you factor in some of the less-than-popular terms which would be set in stone pending a yes vote by the St. Petersburg City Council.

    The vote was initially slated for their next meeting (Thursday, December 11th) less than three days after the deal was announced. Because of it — and following an early morning lobbying effort which apparently fell short — Mayor Kriseman asked council chairman Bill Dudley to reschedule that vote for Dec. 18 to allow for a thorough review of the pending agreement. Dudley agreed.

    Rays president Brian Auld said the team understand the mayor’s move to delay the vote.

    “We don’t mind waiting another week,” Auld told the Tampa Bay Times. “We’ve been working on this for a very long time. We hope to get to yes when the time comes.”

    In other news, as the final day of the 2015 Winter Meetings looms, Marc Topkin reported that Wil Myers has drawn interest from about a half-dozen other teams. A trade of this caliber is not one the team typically make, and will probably culminate in just fruitless discussion. Adding credence to that idea, Matt Silverman addressed the topic with Marc Topkin in San Diego,

    “We don’t have any questions about Wil,” baseball operations president Matt Silverman said. “The guy we saw last year was injured and didn’t really have a chance to demonstrate what he has.

    “We look at him as a rookie of the year who really missed most of the season and expect him to be back in that form as a formidable bat in the middle of the lineup who also plays a pretty good outfield.”

    Myers is coming off an injury laden and tepid 2014 season where he hit .222 with six homers and 35 RBI in 87. That down year came on the heels of a Rookie of the Year, .293 BA/13 HR/53 RBI campaign. While he will likely always have a high whiff rate, the expectation is for Myers to perform closer to his 2013 form. Because of it, the Rays aren’t going to sell all of the potential they see in Myers on a rookie contract.

    Also not going anywhere: Evan Longoria.

    …And while we’re at it, Ben Zobrist isn’t going anywhere either. “The Nationals have inquired about Ben Zobrist,” writes James Wagner of the Washinton Post, “but it appears like a long shot to pry him away from the Tampa Bay Rays.” An interesting caveat, Andrew Friedman essentially set the market value for Ben Zobrist, Wednesday afternoon. Danny Russell (DRaysBay) wrote, “unable to acquire Ben Zobrist, as it would seem, Andrew Friedman and the massive front office from Chavez Ravine unloaded three trades on the baseball world yesterday to make something else work. Finally, the Winter Meetings have turned into what they’re supposed to be: chaos — and with great implications for the Rays.”

    Noteworthiness

    • On the subject of the approach and execution of one William Bradford Myers, Jason Hanselman (Dock of the Rays blog) writes, “Overall we see him starting the at bat by being ultra passive, doing a mostly good job with one strike, and then finishing the at bat being pretty aggressive, though lefties seem to do a good job of freezing him on borderline stuff and getting him to expand on other stuff that is further off. It’s almost as if he’s operating with a traffic light guiding him. Red light on first pitch, yellow light on second pitch, green light on third pitch.” You can read his excellent piece — bolstered by charts and graphs galore — over at Dock of the Rays.
    • Your tweets of the day, courtesy of Marc Topkin,

    Mayor Kriseman, Rays Announce Pending Stadium Deal

    Mayor Rick Kriseman speaks to reporters gathered at Tropicana Field on Tuesday morning as Rays president Brian Auld listens on. The city of St. Petersburg and the Tampa Bay Rays announced an agreement which allows the Rays to look at potential new stadium sites outside the city. (Maurice Rivenbank/Tampa Bay Times)
    Mayor Rick Kriseman speaks to reporters gathered at Tropicana Field on Tuesday morning as Rays president Brian Auld listens on. The city of St. Petersburg and the Tampa Bay Rays announced an agreement which allows the Rays to look at potential new stadium sites outside the city. (Maurice Rivenbank/Tampa Bay Times)

    In a press conference at Tropicana Field Tuesday afternoon, St. Petersburg Mayor Rick Kriseman laid out his plan to allow the Tampa Bay Rays explore new stadium sites in Pinellas and Hillsborough counties, with the hope of not only keeping them in the region, but in St. Petersburg. Making good on his campaign promise of finding a resolution that would benefit both the team and the citizens of St. Petersburg, Kriseman’s “memorandum of understanding” would give the Rays three years to analyze possible sites in Hillsborough and Pinellas. In kind, Kriseman and his staff are committed to making an aggressive pitch for a new stadium at another St. Petersburg location (such as Carillon/Gateway), on the Tropicana Field acreage, or a complete renovation of the Trop itself.

    The agreement — scheduled to be voted upon Thursday, December 11th — would give the Rays the opportunity to look outside the city of  St. Petersburg without having to pay an exploration cost, and pay minimal amounts to the city for each year departed from the current lease at Tropicana Field.

    The pay-out structure for each year, should the Rays choose to leave St. Petersburg, follows:

    2015 – 2018: $4 million per season, totaling $16 million
    2019 – 2022: $3 million per season, totaling $12 million.
    2023 – 2026: $2 million per season, totaling $8 million
    2027: No payout required for the final year of the lease.

    In turn, the city would pay for demolishing The Trop, estimated by city officials at $4.8 million — the costs would be covered by tax gains from redeveloping the Trop’s 85 acres. When viewed in its totality, the Rays will face a maximum payout of $20 million to be released from their contract if they were to play outside of St. Petersburg (including in another location in Pinellas but outside of the city).

    While the fee is surprisingly low, years void of granting the Rays the opportunity to look elsewhere led to declining leverage with the organization — ultimately limiting the Mayor’s ability to secure a deal, and outweighing the risk of continued negotiation.

    It’s worth noting: per Stephen Nohlgren of the Tampa Bay Times, if the Rays do find a new stadium site, they will have to negotiate a second agreement with Kriseman to terminate the current contract on the Trop. That will require another City Council vote, but this week’s memorandum would prevent the council from altering the compensation terms or injecting any new requirements. That provision was requested by the Rays so they wouldn’t end up spending time and money on a plan, only to have the council change the terms of the deal.

    Under the Mayor’s memorandum (seen in its entirety below), the Rays will have until December 31, 2017 to declare a date of termination for the lease contract, or they will be bound to the remaining ten years of the lease from that date.

    Rays, City of St. Pete Memorandum of Understanding

    As I mentioned Monday night, there are some questions that beg to be answered:

    1. Will the team finally indicate how much they’d contribute toward a new stadium?
    2. Will the Rays open their books if they want public subsidies?
    3. Will it make a big enough difference in attendance?
    4. How the heck will Tampa (or St. Pete for that matter) come up with enough tax dollars to pay for it?

    Reactions to Tuesday afternoon’s presser

    More than half of the City Council said they aren’t ready to say yes. All five council members said they will spend the next two days studying the documents. Nevertheless, per the Times:

    • Karl Nurse said he opposes the agreement as it is written.
    • Jim Kennedy said he will move to delay the vote to give the council and the public time to understand the proposal.
    • Amy Foster said she’s not sure the compensation Kriseman negotiated is enough.
    • Steve Kornell said he thought Kriseman had secured a good deal for the city, but he isn’t quite ready to cast a yes vote.
    • Council chairman Bill Dudley said he wants to make sure city taxpayers are getting the best deal.
    • Wengay Newton said the Rays should honor their existing contract on the Trop.
    • Darden Rice and Charlie Gerdes expressed support for the mayor’s plan on Monday.

    Tampa Mayor Bob Buckhorn responded to the new deal in a news conference this afternoon. Though Buckhorn excitedly reiterated his belief that downtown Tampa is an ideal location for the Rays, he was quick to note that the team would have to come to the table with cash, not just interest.

    If the tweet above indicates anything, Jeff Vinik wants nothing to do with the Stadium Saga. I’ll cede the point, while that assertion could be called into question considering Vinik’s business partners are the same guys who built Coors field in Denver, and as Danny Russell argued, that may simply be an early negotiating posture. Yet there are a couple of contrary ideas that shouldn’t be overlooked. First, Vinik is a minority owner of the Red Sox, and what effect that could have remains uncertain. Secondly, from a financial point of view, smaller market teams like Tampa Bay generally break even at best. Why would Vinik risk becoming a landlord housing a non-money making venture, when he could develop Channelside into an entertainment and hotel destination?

    Noteworthiness

    Sternberg: “The chances of me owning this team in 2023 if we don’t have a new stadium are probably nil”

    c4s_sternberg040111_168947a_8col
    (Photo courtesy of the Tampa Bay Times)

    In an aired piece with the MLB Network this afternoon (video to come), Rays’ principal owner Stu Sternberg spoke about the deal to explore stadium locations in both Pinellas and Hillsborough counties reached between the city of St. Petersburg and the Rays yesterday afternoon.

    If an agreement — or one like it — cannot be reached in the near future, the Rays could be leaving Tampa Bay. The initial vote will come Thursday, when the City Council of St. Petersburg next meets. If one cannot be met by December 11th, the City Council will have 60 days to amend the Mayor’s memorandum, and vote upon it once again. Per a tweet from Marc Topkin, Sternberg views the Thursday Council vote as “a big hurdle,” and if approved it will set time frame for action.

    It was written elsewhere,

    Should the new deal be passed by the City Council, the Rays will have until Dec. 31, 2017 to declare an opt out date from the current lease, then will be required monetary amounts for each year vacated. The Rays must declare this Termination date in writing before they are allowed to pursue any negotiations with a site outside St. Petersburg city limits.

    If the Rays are unable to move forward, Sternberg announced it is his intention to sell the Rays to a new ownership group.

    He, again, reiterated that he has no intention of moving the team, though if Sternberg cannot find a new stadium for his investment, he has every intention to sell the team to someone who may move the Rays.

    “It remains very possible we could still be in St. Petersburg,” said Sternberg who added a caveat of sorts, “We need to get the building and the location pinpoint perfect for that to happen.” In short, he left a clear message to St. Petersburg’s City Council: approve the deal and allow the Rays to find a new stadium, or risk losing the team entirely.

    Noteworthiness