A’s TV Deal, Finances Play Major Role in Sacramento Move

The future of the Oakland A’s took another step forward on Thursday as the club announced plans to play in Sacramento for three seasons starting next year, with an option to stay for the 2028 season if their new stadium in Las Vegas is not ready.

The A’s considered temporary options in Las Vegas, Salt Lake City and Oakland, where their lease at the Oakland Coliseum expires after the 2024 season. Ultimately the team landed on the state capital with a strong recruiting pitch from Sacramento Kings owner Vivek Ranadivé, who also owns Triple-A club Sacramento River Cats, the newest roommates for the A’s.

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Additionally, the A’s took into consideration their current local TV deal with NBC Sports California, and if leaving the Bay Area, the move to Sacramento likely represented the best option for maintaining TV revenue. The A’s and NBCUniversal reworked their RSN agreement ahead of the Sacramento stadium announcement, according to two people familiar with the negotiations who were not authorized to speak publicly.

With the A’s now in Sacramento for at least three seasons, the games will continue to be aired on NBC Sports California, and the A’s are expected to still capture a significant portion of their local rights fee, which was $67 million last year. NBC Sports California is also the home to the Kings.

The A’s and MLB are operating under the premise that the Las Vegas move is 100% a done deal, but there has been angst within the sport about what the next four years will look like for the club. The team generated an MLB-low $241 million in revenue last year—more than $30 million behind any other MLB team—but the makeup of that revenue highlights why trading a stadium with a 63,000-person capacity for one with just over 10,000 seats might not be that big of a financial strain—it will be a logistical strain and one that costs people their jobs.

The A’s booked just over $100 million in gross central revenue last year from MLB via equally shared media rights deals, sponsorships and merchandise. The net amount is lower as MLB covers player benefit costs and has an assessment to fund the league office—Sportico uses gross revenue from the league in its franchise valuations. The team is in line for a bigger check from the league in 2024, based on the regular escalators in national media deals, as well as a strong climate for leaguewide sponsorship and merchandise sales.

Local revenue was $102 million last year with $67 million from their local TV contract and just $35 million from their stadium via gate receipts, premium seating, sponsorships, concessions, merchandise and parking. For comparison, the New York Yankees generate more than $500 million in local revenue, excluding their media deals.

That $35 million in stadium revenue represented just 15% of the A’s total last year; the team ranked last in attendance for the second straight year with an average of 10,276 fans per game, and this year is shaping up to be even worse with attendance tracking at historic lows. The A’s drew 13,522 for their 2024 home opener and then didn’t get more than 7,000 fans at any of the rest of their seven-game homestand to open the season; attendance bottomed out at 3,837. The Montreal Expos averaged 9,369 fans in their final season in 2004.

The A’s will also receive a larger revenue sharing check based on terms outlined in the 2022 collective bargaining agreement. MLB disqualifies a dozen big market teams from receiving any revenue sharing proceeds, which transferred roughly $500 million from the financially strongest clubs to small market ones. The most recent CBA made an exception for the A’s but with an important caveat. They needed a “binding agreement” in Oakland or another city to build a new stadium by Jan. 15 of this year. The deal to move to Las Vegas qualified the A’s to keep receiving their revenue sharing checks.

The A’s got a 25% share of their full allotment during the 2023 season. Last year, the A’s received 50%, which worked out to $27 million—a full share would have been $54 million. They qualify for a 75% share this year which will likely mean around $45 million for the club. The revenue-sharing formula is based on three years of data with the most recent year weighed twice as heavily as the prior two ones. MLB revenue rose 9% last year, and the A’s are falling further and further behind the other 29 teams. So, a full share of revenue sharing should top $60 million next year when the team is eligible for 100%. The current CBA expires after the 2026 season.

Maintaining as much of their local TV revenue as possible was vital for the A’s. The best option to keep their deal with NBC Sports California in place was by remaining in Oakland. The problem there was the city of Oakland wanted the A’s to pay $20 million per year to play at the Coliseum, up from their current $1.25 million rent. The city also wanted MLB to give it an exclusive one-year window to find an owner for an expansion team, which was a non-starter all around. The A’s will not pay any rent to play at Sutter Health Park in Sacramento but will help fund ballpark improvements, including the addition of more seats.

The A’s also could have maintained their current TV rights by playing at Oracle Park in San Francisco, but that option never got any traction.

Sacramento is a smaller market with 1.5 million TV households versus 2.6 million for the Bay Area, per Nielsen, but it is much larger than Salt Lake City (1.15 million) or Las Vegas (870,000). The A’s would also have to find a new local media rights partner in both of those markets, had they chosen to move there. The A’s also want to enter the Vegas market with the momentum of their new stadium and not move to the new venue after several years already in the city.

Ranadivé has not been shy about wanting to expand his sports holdings beyond the Kings and River Cats, and outside of Orlando, Sacramento is the biggest market without an MLB team. The A’s tenure in Sacramento could serve as a trial for a future MLB expansion, and Ranadivé will be incentivized to make the A’s time at Sutter Health Park a success.

“I’ve been in touch with the commissioner, and I’ve gotten to know him,” Ranadivé told reporters on Thursday. “And they will be creating a new team. They want it to be on the West Coast. They’d love for it to be in California. And I think this is a good showcase for us. If we can prove that there’s a market here, that we can make the team successful, I think we’re in pole position to get the new franchise, specifically.”

In February, Rob Manfred said he wanted two more teams added by the time he retires in 2029. The expectation is that one city in the west and one in the east will get clubs. “Those teams won’t be playing by the time I’m done but I would like the process along and (cities) selected,” Manfred said at the owners meeting.

An MLB spokesperson confirmed that no formal expansion process has begun.

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