The Simple Economics of the MLB CBA and an Oakland Athletics Stadium

For years, A fans, analysts and insiders have followed the A executives and their winding search for a new stadium. It has long been acknowledged how important a new park is towards ushering the franchise into the 21st century of sports business competitiveness. But it has never happened.Also for years, the A business people have received an extra exemption in the MLB MLBPA collective bargaining agreement. This special exemption provided the franchise additional revenue sharing under the program that is intended for small market teams. It was recognized in the CBA that the A were in fact located in one of the larger U.S. markets, but their antiquated dual-use stadium was a hindrance to large market revenue generation https://www.oafanstore.com/Khris_Davis_Jersey-64. Accordingly, the A had a unique exemption that gave them an extra ~$30 million per year based solely on their stadium situation. The prior CBA went so far as to write out specifically that that A would lose these arket Disqualification Proceeds?as soon as they opened a new stadium. Verbatim in the 2012-2016 CBA Beginning with their first full season of operation in a new stadium, the Oakland Athletics shall be subject to the same-percentage revenue sharing disqualification that applies to other market-disqualified Clubs in the given Revenue Sharing Year.What the old CBA was saying, was that the A would receive this additional ~$30-35 million check, so long as they did not build a new stadium.Of course, the MLB and MLBPA folks that agreed to this deal surely did not mean to be paying the A franchise to not build a new stadium https://www.oafanstore.com/James_Kaprielian_Jersey-49. However, effectively, that is exactly what they were doing.Many have criticized former managing partner Lew Wolff for his very slow process of getting a new stadium off the ground. But some blame rests with the MLB MLBPA for the unintended consequences of their prior CBA language and structure. The CBA terms they agreed to prior to this year were a textbook disincentive for the Athletics?business people to build a new stadium. Not only would the A business be shouldering the risk and the challenge of putting together a new stadium https://www.oafanstore.com/Wandisson_Charles_Jersey-101, but they would also lose $30+ million per year in revenue sharing as soon as the new stadium opened! New stadium development is always a risky endeavor - there is great upside but also significant costs and challenges. To add a $30+ million annual disincentive to build is certainly a way to slow the urge to develop.The prior CBA effectively encouraged the A business to sit back at the Coliseum. And that they effectively did, including signing a 10 year lease in 2014.For the ultimate reasons that only the MLB and MLBPA decision makers know Jake Diekman Jersey, the new CBA for 2017-2021 has changed the above situation. The A no longer have an endless ad stadium exemption to the market rules. They will no longer be getting an extra $30+ million annually as long as they stay in the Coliseum. The MLB will be phasing out this payment over the next four years, and the A will be moved into the section of ball clubs who play in large markets. Fellow AN writers Jeremy Koo and Alex Hall have written pieces on the new CBA, with Mr. Koo view being fairly pessimistic and Mr. Hall being more baseball-focused.Ultimately for me, while it is unfortunate the A are in this awkward situation of losing a meaningful portion of their annual revenue before a new stadium has even broken ground, the simple economics of the MLB MLBPA changing the incentive structure make it much more likely a stadium will actually get done. While the prior CBA effectively said uild a stadium please, but once you do, we are cutting off this extra cash spigot the new CBA effectively says uild a stadium as fast as you can While the tough love may be frustrating in the short term, it may be just what the A business people need to finally get the new stadium project off the ground.The Athletics and new club president Dave Kaval issued this statement following the agreement on the new CBA Statement from Oakland Athletics President DaveKaval on MLB's new CBA.