Fresno reaches deal with Grizzlies, MLB to keep minor-league baseball. Here are the details
Negotiations between MLB and the city of Fresno to keep the Fresno Grizzlies in affiliated baseball went into extra innings, but a resolution is at hand.
During a Thursday special meeting, the Fresno City Council will vote on new contracts with Grizzlies ownership and MLB designed to keep minor-league baseball in downtown Fresno for at least the next decade.
Details of the new agreement, including a sizable reduction in rent for the team’s use of city-owned Chukchansi Park, were unveiled by Mayor Lee Brand and Council President Miguel Arias in a Wednesday afternoon video conference.
“I’m confident the council will approve (Thursday), and we’ll keep baseball in Fresno,” Brand said.
As previously reported, the Grizzlies will lose their Triple-A status and become a Low Class-A affiliate of the Colorado Rockies. Since their inception, the Grizzlies have been the top farm club of the San Francisco Giants (1998-2014), Houston Astros (2015-18) and Washington Nationals (2019-20). All three won World Series championships, three in the Giants’ case, during their time in Fresno.
On Wednesday morning, Major League Baseball moved forward with its long-anticipated plans to restructure the minor leagues by issuing official invitations to 119 minor-league clubs. Fresno is the 120th and final domino.
The city and Grizzlies owners Fresno Sports and Events LLC needed to rework their agreement since the current deal stipulates Triple-A baseball. Before doing so, city officials conducted an audit of the team’s finances.
The new deal, which reflects an expected drop in revenues, will no doubt please those who enjoy the relatively inexpensive entertainment option that minor-league baseball provides while drawing howls from those who believe the city should not be subsidizing professional sports.
But, really, what was the other option? To let a much-loved, publicly owned property like Chukchansi Park sit empty and become an eyesore?
That doesn’t work, either.
“We inherited this beautiful stadium with a bond payment (of $3.1 million), but it’s an amenity we have that we don’t want sitting vacant,” Brand said. “It serves as a catalyst for downtown and an anchor for downtown development. In my opinion not having an active, vibrant stadium would do a tremendous damage to downtown.”
The city’s new contract with the Grizzlies calls for a reduction in annual stadium rent from $500,000 to $100,000. (That may sound like a lot — and it is — but consider that many Low A franchises pay next to nothing. Of course, those cities aren’t trying to pay off a facility with some $32 million in remaining debt.) Also, the $500,000 owed for the canceled 2020 season will be deferred in lieu of future prorated payments.
Besides the rent break, the city would cover the first $300,000 worth of utilities, with the Grizzlies responsible for any amount above that. Under the old deal, the Grizzlies paid for all utilities.
Concessions for the city
The city is getting some concessions as well. The new contract calls for Fresno and the Grizzlies to enter into a revenue-sharing agreement, with the city receiving 12.5% of every dollar the team takes in. The percentage increases to 20% if profits exceed $500,000.
Previous contracts also contained revenue-sharing clauses, Brand said, but the team always lost money.
In addition, the Grizzlies would no longer collect all the money from stadium naming rights. Instead, the club only gets to keep the first $650,000, with the city sharing in any remaining revenues.
This is important because the current naming-rights deal with Chukchansi Gold Resort and Casino, currently about $1 million per year, expires following the 2021 baseball season.
Control of the stadium’s use on non-baseball days is the only remaining sticking point. Under the old deal, the Grizzlies have that authority. The city wants to wrestle away that control, or at least assume more of it, in part to make the facility cheaper for other organizations wishing to hold events there.
As an example, it cost the Fresno FC soccer team $50,000 to use the stadium for every home match.
MLB gives assurances
Separate from the 10-year contract between Fresno Sports and Events LLC and the city is an agreement with MLB to keep affiliated minor-league baseball downtown Fresno through at least 2031.
As a Low A squad, the Grizzlies will be part of the California League, and play teams from Visalia, Modesto, Stockton, San Jose and three Southern California communities.
However, MLB has agreed through an assurance letter signed by Deputy Commissioner Daniel Halem “to encourage all MLB clubs to consider selecting” Fresno as a Triple-A or Double-A affiliate in the event an opening becomes available. In return, the city agreed to release any legal claims against MLB. And if the Grizzlies receive any compensation from MLB for dropping three levels, that money would go to a capital reserve fund for long-term stadium maintenance.
Neither Brand nor Arias are thrilled with the idea of subsidizing baseball to an even greater extent. But both maintained the alternative was worse.
“One of the realities we have to deal with is it would have cost us millions of dollars to close (Chukchansi Park) and watch it deteriorate in its value and become a fire hazard liability for the whole downtown. We were left between selecting between a bad choice and a worse choice,” Arias said.
“We could always use any additional revenue to address a multitude of issues, but in this case we made the best agreement possible under the circumstances in a situation where the city, quite frankly, has very little control over.”
This story was originally published December 9, 2020 at 1:45 PM.
