Lewis Wolff Athletics Nation Interview: Part III

Yesterday you read part II.  Monday was part I.

Here is Part III.  Enjoy.

Blez:  Bob Costas reported on his Costas Now show that MLB teams start out with $40 million due to revenue sharing.  Is that fairly accurate because it would mean that the A's are close to breaking even before even selling a ticket given the current payroll?    

Wolff:  I think we're closer to $30, but that number is probably OK when you factor in everything.  Salaries aren't the only expense we have though.  We have to buy bats, balls.  We have to have an accountant or two.  (laughing)

Blez:  Those ash bats are making things especially expensive.  It feels like a different era in baseball then when you're talking about payroll versus revenue sharing.

Wolff:  We would rather be a contributor to revenue sharing.  Or at least neutral, so just having revenue sharing isn't a reason to be in the business. 

Blez:  But doesn't it encourage you to spend more?

Wolff:  Oh yes.

 

Blez:  Is that something where you feel more free to do something like the (Michel) Inoa signing?

Wolff:  That was just what I was going to say.  I look at salaries in three ways.  One is the draft picks.  Two are the free agents.  And three other opportunities like Inoa.  If you take revenue sharing and put it in your pocket, I think that's despicable.  And Major League Baseball, plus the union, watches that very carefully.  It's hard for us to compete in free agency.  If some guy says he wants $25 million a year for four years, that's not for us.  Even if we had the stadium filled, it would be very hard to do that.  It would be easier if we had a ballpark that had a bunch of the sources of income that come along with that.  So we go out to the Dominican and with a lot of thought, more than most people do in their own businesses, we decide to pay this young man $4.25 million as a bonus.  He's 16-years-old.  I met his parents and they didn't speak English but the mother was the athlete.  She was a softball pitcher.  What Billy's thought was, along with the guys around him, this guy would be in the top ten in the draft.  When you go to pick a draft choice, the league can't tell you what to pay, but they give you guidance.  Everyone knows about it.  So maybe the first guy gets a bonus of $3 million and it goes down from there.  The rich clubs can go, and everyone gets mad at them, but they can say everyone is saying $3 million and we'll give them $9 million or $6 million or something like that.  Up until this year, we have never, to my knowledge, gone over guidance.  Because that is a way we think we should be a part of the whole partnership.  In various years, other people do.  This year, we did go over.  We signed our top five picks at guidance or below.  But the more people do that the more quality we'll have.  If you pass on a guy, you keep him out of baseball for a year.  Then the Yankees can come along and take him later and pay him three times what he was asking for up at the top.  So what we're trying to do, like other teams, we're trying to look at international, draft and free agency as one bundle of money and where we spend it.  So it isn't that our payroll is only $50 million this year.  We probably spent two or three times what we spent over the last few years on the international market.  And we finally beefed it up.  It's a great way because when they come up, we have them for six years.  So this idea of leaving isn't going to be quite the same because you have the three years at a fixed salary and then you have three years of arbitration.  Our goal is that if they do well, sort of like with Swisher, instead of arbitration we'll give you X, Y, Z for three or four years so we can probably lock someone up for seven or eight years.  Because if you take arbitration there's a risk that you might get hurt, so they might as well take a little bit less now and go to bed at night and not worry that I'm not secure.  We're in that balance and we're going to make it work.  Players will be with us six to eight years that way.

Blez:  Do you view the Inoa signing as pretty risky since he's so very young?

Wolff:  Yeah, I think it is.  But I'd rather risk that on a young player than committing six years to some outrageous situation where the guy is 33 and he's going to be 38 at the end.  We look at this very closely.  It's a balance.

Blez:  Did you offer the baseball operations, meaning Billy and his team, any resistance when they informed you they wanted to start moving forward with the rebuilding process?

Wolff:  No.  It was so logical to me that even I could understand it.  (laughing)  It was really logical because if you look at the other side of it.  What happens if we didn't do it?  Where would we be?  Other teams didn't have the trading fodder that we had.  They really have a problem if they don't have anything to rebuild from.  It was just the opposite because it was so logical.  There were so many people involved with this.  Billy Owens and the staff.  Billy (Beane) relies much more on scouts than that book (Moneyball) suggests. 

Blez:  You mentioned the inelasticity of the market.   And you seem to have a set number of people regardless of whether you win or lose.  Does that make it much easier to make the decision to go into rebuilding mode?

Wolff:  Well yes, it sure does.  That (the inelasticity) isn't just my ownership.  I looked back 10, 12 years.  Yeah it does because it's sad, and I don't want to penalize the fans who come,  because there is no reason to come if you aren't going to get what you want.  We have to earn that right.  But I have to tell you the year after the playoffs we had to think that fans were thinking, gee whiz they have those guys coming back whether we changed it or not.  We didn't have any change in whether or not we had fans signing up for season tickets or advertising.  It's inelastic.  The word is a facetious word but it should be that the better you do, the more people want to come.  We may be the one or few teams in the Major Leagues that are in a market area that is saturated to a point where it's inelastic.  I use that a little bit facetiously. 

Blez:  I saved this until later because this is your baby, but you recently seemed frustrated, I think it was during a Rick Hurd interview, about the slow pace of the Fremont stadium progress.  Do you still believe that Fremont will happen?

Wolff:  If I didn't believe it, I wouldn't be doing it.  I was in an owner's meeting last week in Washington D.C. and one guy said to me, "Well in our state they may put a law in that there can be no public money to help sports teams."  I wanted to raise my hand and say, "Well in California there is going to be a law that no private money can do it."  (laughing)  I think Rick Hurd helped me because it got attention to the issue.  Our problem isn't with the city.  We don't want to be in a city that doesn't want us and we think they want us.  There are so many constituencies that are outside. 

Blez:  That aren't a part of the city you mean?

Wolff:  That aren't city functions that want their piece of the pie where they think we're giving a gift.  We're paying for everything we're asking for.  All we're asking for is the process to help us.  I wasn't faulting the city.  I don't want to call out any one thing.  But there's a bunch of other governmental things and non-governmental that would like a voice in baseball and sports.  So it's sort of piling on.  So if we're going to devote four acres to some public use in our ballpark, that public use might want 10 acres.  I'm used to this.  I've been doing this all my life.  This one is just a little odd.  Especially with what we're contributing to the area.  I don't care what the economists say, I'll be happy to debate any economist on this.  If our scheme could go ahead, even if it isn't in the same exact form it is.  It certainly isn't going to drain the community of anything, it's going to add to it; jobs and tax revenue and identity.  California is very tough.  If we were building a hospital, we'd have the same problems.  I give a speech that's called, "If there's a cure for cancer in California, someone would be against it."  (laughs)  I think the progress is fine.  It would be nice to have a process that moves faster.  There's no reason not to move it faster.  It's not like we're displacing anyone and it's our own land.  It's strange but the reality is that it is hard to do it.

Blez:  This is all a little complicated for the average fan, but you mentioned that there was seemingly too many hands in the cookie jar when it comes to getting the ballpark done.  Are those the biggest obstacles remaining to getting it done and finally having a groundbreaking?

Wolff:  My analogy is that, and I stole this from a friend of mine who was heading Chrysler when they were having their problems many years ago, all the banks came along, 20 or 30 banks or whatever they had and he tells me that he went to the meeting with them and brought a bunch of fake hand grenades.  He put one in front of each one of the bankers' seats and asked, "Which one of you want to pull the pin?"  (laughing)  I don't think this is quite as serious an issue here yet the answer is that it's up to us, not these constituencies to bring them together.  We have a lot of power to do that in the sense that we're not trying to build a nuclear power plant.  We're not going to hurt anyone with what we're doing.  But if some merchant or national retailer says that we're going to mess up their street up seven days a year for day games for 45 minutes and wants to make a big deal out of that, we have to counter that.  The question is why we have to counter that, but that's the nature of it.  If a major employer there wants to have their trucks come in at a certain time, do we add to that?  One of the things that no one notices or says much about is that the property that we're on was zoned and is ready for four and half million square feet of office space.  What we're putting on is less obtrusive than that.  And we only operate, not including playoffs, less than 90 days a year.  It's crazy that people are attributing our 90 days as if we were flooding the area 365 a year.  Not all people are saying this but the smarter people see it very clearly.  I'll be very direct about it.  There are ones that want their day in the sun and want to exert their power or whatever it is.  There are very few of those and we'll get past them.  It's just, why do we have to?

Blez:  How much of your day do you spend getting this project up and to a point where you can finally start the groundbreaking and building?

Wolff:  Actually I'm just the gray hair.  I've got my son on this who has pretty much given up his development career.  He's working on this in the Bay Area.  He's on this every day with our staff.  We don't want that to interfere with the baseball operation.  We also have our soccer venue situation.  I guess if you can build one, you can build two.  I never measure by time and how much we spend.  I measure by how we perform.  So if we need a better radio station and we get one, I say, give me a check mark or a plus for that one.  It's getting across the goal line that's important to me whether it takes an hour or 1,000 hours.  Same thing with Billy.  They're very productive.  I don't measure how much time they put in.  I never liked that. I used to be in the consulting business and you get paid by the hour.  An hour of one guy could be 10 times worth what an hour of mine would be worth.  (laughing)  The answer is that I don't really keep track.

Blez:  Do you think things have been pushed back in terms of the timetable of the stadium opening? Originally it was talked about possibly 2011 with more likely being 2012. 

Wolff:  Yes, I think so.  For no legitimate reason, but yes.  I'm prejudiced on this topic.  My worry isn't so much the stadium.  Baseball is baseball and we're going to build this great franchise thanks to Billy and other owners, they're growing in value whether we do anything or not.  That isn't the goal.  But I worry about California.  I worry about a state where the process has become the end product.  Too many people live off the process.  If a community needs a hospital, it shouldn't be delayed by someone at the end of the block who doesn't want a hospital and files lawsuits and doing whatever to stall the process.  There should be a better way, forget about baseball, to get something done that is proper to be there.  I'm not saying they should forget about environment and traffic, but the report should be done within a reasonable timetable.  The original environmental studies needed to be done and submitted within a 12-month period and by the time all the attorneys and government people and all the people who don't want anything good to happen, it's now an extremely long process.  And I'd rather be spending the money on ballplayers. 

Blez:  The environmental impact report...

Wolff:  It's almost done.

Blez: OK, I was wondering if it had been released yet. 

Wolff:  It takes a year, but they've had one on this project before a few years ago.  You'll get someone on the other side who will say there should be 10 environmental impact reports before they do anything.  Baseball is not my issue here.  It's bigger than that.  Much bigger.

Blez:  So does it frustrate you to a point where you want to throw up your hands and say, that's it I'm done with California, Vegas here I come.  I'm not saying specifically Vegas, but I'm just using that as an alternative.

Wolff:  No because I've been doing this stuff, not on this scale, all my business life.  I would like us to have another option in the Bay Area if it's good, but we don't as of today.  And therefore we're not leveraging anything.  I could fly to Las Vegas and meet with the mayor or whomever, but that isn't our nature.  I have to also admit to you that in thinking about it, and baseball doesn't want a team in Vegas, but I'm not sure Vegas is a good baseball town because it would require a dome stadium and this and that and it's a transient population.  We're in the hotel business so we know some of the key people and there was a great site at one point with Harrah's, but I want to be where we're at if at all possible. 

Blez:  Is it basically Fremont or bust right now?

Wolff:  If I say that and you print it then the guy who has one of the hand grenades will say, "Ooooh".  (laughs) Our focus is this.  We don't have any other options that are in our mind directly.  I like the Fremont location.  I don't think it's as big a traffic deal or anything as what could be built there.  The answer is that's about it.  In Alameda County, I don't think there's another site we could do and we're not going to go to Contra Costa County.  Those are the only two territories we have from baseball. 

Blez:  If you could go back in the process which you obviously can't at this point and explore other options including other locations in Oakland, would you do just that?  From everything that you've told me, it sounds like you think Oakland is simply too close to San Francisco.

Wolff:  I think it is, but I don't think that's the issue. I spent over two years, and it didn't cost me anything, helping the former owners, but I could not find a way to get it done in Oakland. 

Blez:  For what reasons?

Wolff:  There was no real property available.  And Oakland has a huge number of other priorities from security to education to health and so on.  Both mayors while I was there, Jerry Brown and Ron Dellums, said look whatever we can do, let us know.  Even to acquire a piece of land that we paid for was difficult.  It was almost impossible.  It just bothers me because it's in the path of growth.  It's got great weather.  The Coliseum site is fantastic.  I don't know if we could do any better if we had a new stadium or not, but it certainly is a great location relative to BART, the freeway system, the airport and visibility.  But it loses $20-30 million a year on their bond issue.  Everywhere we turned there was a major stumbling block.  And no one has come back and said, we can deliver this site to you.  I think that most of the professional people who work at the city and whatnot recognize the difficulty of getting something done at this scale in Oakland. 

Blez:  If you had to put a percentage chance that you thought the Fremont stadium was going to happen, what would that be?

Wolff:  Happen at all as opposed to not happening?

Blez:  Yes.

Wolff:  I'd say where I thought it was 75 percent, it's probably more like 65 percent now.  But as we get through more things it changes almost daily.  I would say that our chances of staying in the Bay Area in a new stadium if we can't get Fremont but I think we can get it, are probably very high.  I think baseball would have to say that they want us to stay here and have to open up our territories in some manner.  But that isn't the overriding issue.

Blez:  You were interviewed by the Angels broadcasters during an Angels game and since I live in the area now, I have to listen to those guys but I heard the interview.  You had said something to the effect of, "of Fremont" if the Fremont move happens.  I think most people have speculated that the name of the team will wind up being the San Jose Athletics of Fremont in thinking that was enough of a differentiation between the team and the San Francisco market.  A lot of people also speculate that you love San Jose area. 

Wolff:  I'm in love with any place I can build a building.  (laughing)  That's actually totally wrong. 

Blez:  People have said that that is why Fremont is so appealing to you because of the proximity to San Jose. 

Wolff:  That's true, but unless someone else has another site for me anywhere in Alameda County, and the only reason we got a site there is because Cisco didn't want it anymore.  The answer was that I hadn't even thought of that until this piece of property became available.  I didn't say, let's go move closer to San Jose.  It's a matter of where we can go.  This really is not an array of choices.  However I do think that on the naming thing there are 10 different names out there, including keeping our Oakland fanbase.  We're really not thinking about that at this point.  Someone said that the Silicon Valley name could help get more corporations but this is a fun thing that we're going to sort of leave to the end.  Listen, I made my career in San Jose and I love San Jose.  It's got some issues to it too, it's got a public vote you need if you get help and things don't happen there overnight either.

Blez: I've read where people have said that this project is becoming a bit more of a nightmare because of the downturn in the real estate market.  Because so much of this project was dependent on the real estate built around it, and I know that you were planning on having commercial and residential around it to fund things.  Is that an accurate statement to make?

Wolff:  No, for a couple of reasons.  We are not foolish enough to go into any long-term project with only one option in terms of how we finance it.  Somebody thinks we are, then they're wrong.  So the housing element was critical and interesting, and we don't know that if by the time we get going again that it won't be booming again.  We've got some other options which I'd prefer not to discuss but they're logical business options.  And we have our own resources.  So we're not without capital if we need to do something.  Listen 3,000 townhomes don't sell in 20 minutes even in a good market.  So it's a matter of how you flow funds.  The best part about us is that we can say if it takes an extra five years to sell these homes, we'll bridge it now and you can take us out when that happens.  You know, things like that. 

Blez:  In other words, be creative.

Wolff:  Creative is a good word for it.  Creative but realistic.

Blez:  You mentioned leaving the team in good shape for your son and the Fisher family.  Are you in this as an A's owner for the long haul?

Wolff:  Absolutely.  I tend to be a hypochondriac and I get off the phone with someone my age who is ill and I say well, there is an end.  I hope it doesn't come for many years, but I like succession planning.  Billy's twins, I've got them taking Billy's job. 

Blez:  (laughing) Wow, you really are in it for the long haul.  My question to that would be who winds up taking it, Brayden or Tinsley? 

Wolff:  I think it's both of them. (laughing)  Sort of like the McCourts.

Blez:  The two Beanes are better than one theory.  I can get behind that.  You said 65 percent for Fremont and while that's better than 50/50 odds...

Wolff:  Well, I probably shouldn't do percentages since one day I feel pretty good the next day I don't.  Then the next day we conquer something else.  We're trying to move forward every single day.  Some days we can't because someone wants to push us behind but we are not weak in terms of our dedication.

Blez:  What's a more realistic timeframe for the stadium now?

Wolff:  I don't want to quote it because I just don't know.  I just don't know.

Blez:  A's fans are obviously anxious about this.

Wolff:  They're not nearly as anxious as I am.  (laughing)  I can guarantee there's not one as anxious as I am.  Look we also want to build the most spectacular ballpark in baseball.  We want to take full advantage of technology without, as my son says, getting rid of the smell of the hot dog.  We have so many things we haven't even started yet.  We're not going to put up a B+ when we can get a solid A.  It just isn't going to happen.  Why spend $400-500 million and not do it right?  The owner of the Washington Nationals, and it sounds crazy, took Mike Crowley and I on a private tour of their new ballpark.  We've been sharing information with him as the guy has never owned a ball team, Ted Lerner.  He sort of inherited a free stadium in that it was there and built by the public.  He had a chance to modify it a little bit.  He was there late.  But he says, you've got to see the women's restroom.  I said, what the hell do I want to see the women's restroom for?  But a lot of times women go to a restroom and the stall door is closed then they don't know if someone is in there or not.  Talk about getting down to minutiae.  There was no one there when I was there of course and I go in and they've got something like 60 stalls in this one restroom.  The doors were fitted as to when you're finished they stay half open so you know it's vacant.  The speed of what that does to getting in and out is incredible.  And I mentioned this to my son and he said, oh my God, I have to worry about that?  That's the kind of detail we want in this thing.  And it will never be perfect.  There is no perfect ballpark.

Blez:  You mentioned the Nationals stadium.  Do you have a favorite stadium in MLB where you say, that team nailed it, I want to emulate what they did?

Wolff:  We've also looked at a lot of arenas too.  We think that some of the more inventive things have happened inside arenas.  For example, I think I've mentioned this before, but we're going to have the lowest boxes in baseball and they're going to be four-person boxes so you don't have to buy 20 seats.  Things of that nature.  We will have the closest to the field fans, including Wrigley Field and Boston.  We have so many features that it's driving me crazy that I can't get to them.  Instead we have to worry about someone who is worried that a truck will be noisy at three in the morning delivering our hot dogs. It's not a retro ballpark and it's not a copy of a space ship.  Every seat will have a reason to be there.  We have sections for families which would go at a special rate.  We just have so many things going on that I feel like I haven't even started the good part and I'm walking uphill.

Blez:  Feeling like Sisyphus at this point.

Wolff:  Right, exactly.  It's the ballpark that interests me. 

Blez:  What are some of the arenas that interest you?

Wolff:  Well arenas have these small boxes.  They have terrific ways that they handle their concession stands, when you have 18,000 people you have to do it quickly.  You should probably have a similar interview with my son one of these days because he's much more into the details.

Blez:  Since the A's seem to be stuck at the Coliseum for the foreseeable future...

Wolff:  I didn't use the word "stuck" so don't attribute that to me.

Blez:  That was my word. 

Wolff:  Look we want to be as happy and as good a thing there as we can be until we can't be there any longer.  We might be there a lot longer than we're anticipating if something happens. 

Blez:  You've sat out in the bleachers (at the Coliseum).

Wolff:  I've been dying to do that but every time I go to a game I have people with me.  And that day I just happened to be by myself.  I had more fun that day than I've had since I've gone to other games.

 

TOMORROW:  The Athletics Nation exclusive interview with A's managing general partner Lewis Wolff comes to a conclusion as he discusses one of the funniest interactions with a fan that I may have heard, his working relationship with Billy Beane and finishes with a pitch as to why fans should still come out and see the rebuilding A's.

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