A piece by The Bay Citizen’s Zusha Elinson suggests that Oakland may have a legal bullet at its disposal in its efforts to keep the A’s in Oakland. Elinson cites specific language in the original lease that may help Oakland:
“Licensee [A’s] shall not permit or cause to occur any event that may result in the transfer of its Franchise or any of its Home Games to any other city or location or do or fail to do anything which will cause its right to play major league professional baseball in the Stadium to be lost, impaired or transferred to any other city or location.”
I emailed Elinson to figure out where he got this language, as I couldn’t find it in the Seventh Amendment to the Coliseum Lease, which I posted over a year ago. He sent me a 121-page document which, lo and behold, contains the original 1995 lease agreement, the First and Second Amendments, and a bunch of exhibits pertaining to the various improvements that would be made for both the A’s and Raiders. If you’re interested in the grisly details, here’s a link (PDF). The doc has also been added to the Links section on the right. In my rushed reading of it so far, I found it quite illuminating.
Back to Elinson’s article. He spoke to two sides on the SF divide. Jim Hunt represented the Giants in both 1978 and 1992 in their attempted moves to Toronto and Tampa Bay, respectively. Louise Renne was SF City Attorney in 1992 and fought to keep the Giants in town until a new ownership group could be found, effort led by Walter Shorenstein. As would be expected, the two legal eagles don’t agree as to how effective the attempted legal roadblocks were in keeping the team, though it’s likely that at least employing a stall of some kind helped buy the City time in both cases.
Elinson goes on to suggest that Oakland may be able to employ a similar strategy based on similar language in both the Giants’ leases with SF and the A’s lease in Oakland. However, it’s hard to imagine how this would work. Unlike the Giants, the A’s have multiple ways of ending the lease with minimal if any penalty, either by simply staying through the end (2013) or by paying a termination fee if they want to leave anytime in the next three years.
After struggling to find the specific clause in the lease that Elinson cited, I found it in Section 9, titled “LICENSEE’S COVENANTS.” The term licensee refers to the A’s, licensor the Coliseum Authority. The section mostly has to do with keeping the A’s from losing its membership in the American League. As far-fetched as that sounds, it makes sense. If the A’s were routinely going with $10 million payrolls and otherwise making the team look like it wasn’t worthy of being in the majors (some would say this is happening), then Oakland might have just cause. That’s not really here nor there at this point. Section 9.2, which contains the language we’re discussing, is as follows:
9.2 American League Franchise. Licensee shall do all acts required to maintain its membership in good standing in the American League and to comply with all Rules, Bylaws, Regulations and Requirements of Major League Baseball and the American League. Licensee shall notify Licensor promptly after receipt of any information that Licensee is the subject of any action or contemplated action by the American League or any other person or entity that could affect Licensee’s right to continued membership in good standing. No change in the rights and privileges of Licensee as an American League member including the area or exclusivity of the Franchise Territory shall in any way affect Licensee’s obligations under this License. Except as authorized pursuant to Section 3, Section 16 or Section 22, Licensee shall not permit or cause to occur any event that may result in the transfer of its Franchise or any of its Home Games to any other city or location or do or fail to do anything which will cause its right to play major league professional baseball in the Stadium to be lost, impaired or transferred to any other city or location.
Before I do my non-legal (I am not a lawyer or legal expert) reading of this, I must point out that Section 3 has to do with use of the stadium, parking and surroundings, Section 16 has to do with damage done to the stadium due to force majeure (acts of God), and Section 22 deals with condemnation of the stadium (due to deterioration of some kind or eminent domain).
When I first read the part Elinson clipped (in italics), I interpreted it to mean that the A’s can’t do anything to the stadium that would prevent them from playing games there while the lease was in effect. For instance, the Quakes occasionally play games at the Coliseum. The A’s aren’t allowed to cover the baseball diamond with grass for a Quakes game right before an A’s homestand starts, since the time and cost to reconvert the field for baseball use would prevent the A’s from playing there for a lengthy period.
A broader reading of the language could potentially include actions taken by the A’s off the field, such as discussions with San Jose (or even Fremont), which would move the team away from the Coliseum. However, I think this is much too broad an interpretation. If that were correct, it would preclude the A’s from even talking to other cities about future moves even as they terminated the lease by one of the methods described previously. Terms of a lease don’t bind a team any longer than the length of the lease, whatever that is, and most leases have a termination fee. It’s really all a matter of whether or not that fee is too high to stomach (hello, Tampa Bay). Besides, the A’s couldn’t be in San Jose anytime before 2014 due to the lengthy ballpark construction process.
Since I am in no way a legal expert, I can’t say whether or not my take on this matter has any validity. It is clear that from reading the full agreement and the amendments, there are few contractual obligations keeping the A’s in Oakland. Unlike the Giants back then or the Rays today, the A’s aren’t locked in. They’re free agents after a few years at best. If this bit of language is the basis for a lawsuit to keep the A’s in town, things don’t look particularly good for Oakland. Then again, we’ve heard that their strategy is the same as SF’s was: threaten with a lawsuit, stall and hope for a moneybags savior. And we know how that turned out.
If the A’s were breaking the lease that would be one thing but in this case they are not talking about leaving the Coliseum until 2014 at the earliest….probably 2015…So I agree with you 100% ML.
Back in the 1978 Charlie Finley tried to sell the team to a Denver businessman and he was going to move the team to Colorado. The city and county after seeing the Raiders leave sued and would not let the A’s out of their lease. Then of course Wally Haas stepped in and bought the team and kept them in Oakland.
In SF’s case they were going to leave and violate their lease but someone came and saved them twice (Bob Lurie and Peter Magowan).
I do not see the same thing happening with the A’s in this day and age as it is known Oakland is not the best location in the Bay Area for a 2nd MLB team when another team plays in the best ballpark in the league 12 miles away across the bridge.
No smart businessman would buy this team and keep it in Oakland with the Giants right there soaking up the spotlight. Unless that person has $$ to spend and doesn’t care about location, revenue, and profits…..The “perfect owner” to the fans.
The A’s need to get further away from Giants and with RDA’s about to be imploded by the state Oakland has no chance to keep the team since they cannot float bonds without an EIR. This article fails to mention this and Oakland needs to understand they should just team up with the Raiders and keep them at the Coliseum site along with the Warriors.
SF 49ers plan on moving to Silicon Valley along with the A’s. It would allow a better geographical dispersion of the teams in the Bay Area.
1 team in SF (Giants)
2 teams in the East Bay (Warriors and Raiders)
3 teams in the South Bay (49ers, A’s, Sharks)
In either SF or SJ you can even add another NBA team and it would work. In this scenario SF would be better since 3 teams would already be exhausting the corporate sponsors in Silicon Valley…But there are so many it may not even matter.
Sometimes in life you have to “pick your poison” and you cannot always have “Cheese with the wine”….
From the Bay Citizen article, Oakland City Attorney John Russo’s line is very telling of the dealing with the A’s:
When asked if he had a complaint drafted and sitting on a desk somewhere, Russo’s tone became more ominous: “The A’s pattern of behavior has been apparent for many years now, and were we forced to act, we are ready to act very quickly.”
Sounds like Zusha Elinson is grasping for straws. One the lease is up, there’s absolutely nothing Oakland can do legally.
ML, I am curious where you think the A’s will play in the year 2014.
It seems like the projected timelines make that year (2014) the most awkward: the Coliseum lease is up, and yet neither stadium proposal (SJ or Oakland) projects to be ready until 2015.
If Oakland loses the A’s, I could see them refusing to offer a one-year renewable on the lease for 2014, partially out of spite.
So what might the team do in that single awkward year, 2014? Play in a minor league park, perhaps (Sac, Las Vegas)? Share Pac Bell?
@Jacob Jackson – I could see the A’s playing at China Basin for a year. The Giants would get enough incremental revenue to cover a big part of T-rights indemnification.
jk, he can be as ominous sounding as he wants, but once the lease is expired there is nothing the city of Oakland can do should the A’s and MLB determine they want to be elsewhere.
But would the Giants actually agree to that right after losing a fight to keep the A’s out of San Jose. Wouldn’t it be just A’s likely Oakland agrees to extend the lease another year. Either way both parties(Oakland or the Giants) will be pissed at the A’s
Would MLB allow the A’s to play in a venue as small as sac for a year?
@Mike – It’s an idea that would require all of the saber rattling to go away no doubt. For the A’s to play a full year in a temporary stadium the place would require 30,000 seats. So either someone pays to add 20k temp seats to Raley Field or an existing MLB stadium is used.
@ Dan – funny how the pro Oakland contingent are so happy about lawsuits and such, until they realize the fine print.
@ ML – interesting opinion on 2014 strategic move. Let all home game revenues be directed to the Gnats for 2014. This will also cover any collateral effects of a SB A’s move because some casual fans will like Phone Booth Park in the process and be converted to Gnats fan. Seems a bit silly that we have to sell out a whole year to them, but it would also give a big middle finger to Oakland for not renewing the Coliseum lease.
Just A’s likely should have been just as likely. Stupid auto correct on iPhone always changes as to A’s.
I can see the A’s playing at China Basin for one year. The Angels played at Dodger Stadium from 1962 to 1965 and the Yankees played at Shea Stadium during the renovation of Yankee Stadium in the mid 1970’s. If the California Bears can play football at Pac Bell Park, while their home stadium is being renovated, then the A’s can have their home games at Pac Bell for a year. Marine Layer: Just how bad is it for the Rays? Is there no way they can break their lease?
Mike: And thats bad?
Also, we know how good stadium leases are when it comes to trying to use a team to prevent them from moving and breaking the lease: Seattle.
@zonis. Haha at first I thought it was cool. Obviously I type A’s enough where my phone thought it should be priority. But when I’m typing work emails it gets kinda annoying with A’s everywhere. Of course it’s one thing iPhone doesn’t allow you to edit anywhere from automatically doing.
What about using candle stick for that year? (as awful as it sounds) That way they don’t have to deal with Oakland who would certainly be upset with them, or the giants who probably wouldn’t want to give up their park. Or is it permanently configured for football and too difficult to change now? Also now that I think about it they would run into the territory problem again.
James, not possible. It would cost millions to get the “movable” seats at Candlestick ready to move again. As of now they’re no more movable than the rest of that stadium due to decay and damage to the motors and tracks that made that grandstand slide out. Not to mention the issues that arise renting Candlestick from the city of SF who are backing the Giants play (and are against any bay area teams in general moving with their own Candlestick tenant trying to do the same thing the A’s are doing.
Oh, yeah, the G’s will welcome the A’s with open arms to play at Pacbell after getting screwed by BS. I don’t think so. You can charge them 10 mill in rent and take 50% of the gate, but that will still fall way short of the $150- $200 mill TR are worth.
Looks like Sacto in front of 14,014 (lawn and SRO) to me if SJ gets the go ahead, but it’s not gonna happen anyways. They’ll be at the Coli for awhile when new local owners take over and ground break at that cool site at Oak and 3rd..
Jk’s other proclamations about San Jose “not happening” and his fantasies about Oakland aside, he’s likely right that the A’s playing a year at Sac with some temp bleachers being more likely than SF without a MAJOR payoff to the Giants. But frankly I don’t think that’s likely to happen either if just because Raley doesn’t have the infrastructure around it to deal with that kind of influx of people. Neither of these options is likely. What’s more likely is a one year lease for the Coliseum should any time beyond the current lease be needed, with that kind of language that’s in the current lease taken out. (unless of course Oakland is feeling particularly butt hurt), in which case all bets are off on what the A’s will end up doing to cover the intervening year needed.
I am not a lawyer, but it seems to me the A’s are already in violation of this clause since they have already been causing to occur an event that could result in the franchise being moved to another location: they are and have been for years taking concrete steps which are intended to move the team to San Jose, and previously Fremont. Sure, when the lease expires they can go wherever they please, but in the meantime they have violated this contract language, and it seems that Oakland could sue the A’s for monetary damages, if nothing else.
The A’s also need to be careful when they say that the facility itself is unfit for baseball, which they have been very close to doing. I recall them saying how the clubhouse is inadequate, that there is a major sewer problem which causes a bad odor at times, and that the facility is in such a condition that they cannot attract free agents. While they don’t own the Coliseum, if they fail to address and these issues and the Coliseum does become unplayable as a result, then it seems they may have some legal exposure here, too.
@Jerry-hard to argue that the A’s should be required to do nothing and wait until the lease expires to explore other options….and the fact is…Oakland still doesn’t have a financially viable option to replace the Coli—-so imagine the arguement in front of a judge—-because they happened to locate in our city they should be forced to stay here regardless of financial considerations and should be required to build a new ballpark because we can’t build one for them….
Also, someone remind me of what Oakland’s success rate is suing its sports franchises–I know they have sued all 3 at one point in time–Raiders, A’s, Warriors—and I believe with pretty dismal results
Thanks for this post ML. Fascinating stuff. Jerry’s comments seem to speak to the legal reality. I remain hopeful that my A’s will stay in Oakland.
The only “legal reality” is that the lease ends in 2013. Enough said.
How much did it cost the Giants to expand their territory back in 1992 to include SCCo./SJ? Can you say $0! Worth $150-200 million today?…PLEASE! The Giants will be forced to accept whatever MLB dictates in terms of compensation and will like it. Remember all “There’s no crying in baseball!”
“Oakland City Attorney John Russo said that he has gone over the A’s lease with a “fine-toothed comb,” and if the A’s violate the agreement, “my office will consult with the decision makers and take whatever action is necessary.” But he said that because Oakland is working with Major League Baseball on the whole issue, “it’s premature for us to look at things like legal action against the A’s.”
I found hope in the above comment.
If we have a decision soon—and it is SJ—there will be more than likely no need for a 1-year lease anywhere—assuming a successful ballot initiative in SJ the rest of 2011 would be focused on remaining acquisition of land and completion of drawings—2012 and 2013 would be focused on building the park itself- and any infrastructure improvements–opening day could be 2014–these are the timeframes that LW layed out in the Boston Globe article—
@ GoA’s – I think that it could be interpreted that the clause was designed to keep the team in Oakland, and to ensure that all alternatives must be exhausted before looking elsewhere. Of course, Lew has stated that he did go through that exercise, but it was his unilateral conclusion that Oakland had no good sites. Oakland did not, as far as I know, agree with his conclusion or accept that there was no place where a new ballpark could be built. And while they did wait for years to take action, the City did come up with a location, and is going through the process. Furthermore, Lew is not giving Oakland the deal he is giving SJ, which is to pay for the ball park himself (and potentially some land).
@David–you should also question why someone in Oakland is raising the lawsuit angle again—
@GoA’s – Russo didn’t bring it up, he was asked. Then he goes on to say that the City of Oakland is working with MLB. I find hope in that fact. I have nothing against SJ. I just want my A’s to stay in Oakland.
Re: Giants/China Basin, their argument against relinquishing the South Bay has always been that a move would threaten their ability to pay off the loans for China Basin. The A’s giving a sizable rent payment to the Giants would help retire that debt. If they reject that deal, it’s apparent they don’t need help with the mortgage and are not actually threatened, undermining their argument.
Russo has basically said the same thing for two years now. Nothing new.
Jerry, the problem with what you’re saying is that the clause refers specifically to the Stadium, not the City. Upkeep of the ballpark is not the responsibility of the A’s other than day-to-day cleanliness while it’s in use. If the clause is meant to prevent damage to the City or the Stadium by preventing the A’s from talking bad about the conditions, then why allow for a no-questions-asked termination clause in every version of the lease since 1995? Nothing about the Coliseum sucking compared to new ballparks prevents the A’s from playing there. So they do it, muttering the whole way. I can’t see how that breaks the lease in any way.
@Jerry–and who defines that all-alternatives have been completed before they can look….thats up to Oakland also? Thats one hell of an agreement—and what would Oakland be able show for the past 15 years? There is nothing that prevented the city of Oakland from buying land, preparing a site, doing an EIR in preparation for when their lease expires in 2013. If you are going to claim you were harmed you had better have an airtight show of how you tried to do everything in your capacity to take care of this asset—–and you and I both know that would be a tough sales job for any lawyer relative to Oaklands efforts. Regarding LW offering a better deal in SJ–business is business—if I am going to invest I expect an ROI as I am sure you do–without trying to throw a flame I think that most reasonable minds would conclude that SJ is a better investment at this point in time when compared to Oakland for all the factors that have been bantered about before—so for a private investor to be told he has to build a ballpark in Oakland is not going to happen—this is America after all—freedom of choice rules–
@ML – The clause quoted by Elinson specifically states, “…that may result in the transfer of its Franchise to any other CITY…”
I realize that with respect to Section 9.2, my point is legally very weak in that, as I have acknowledged, the A’s don’t own the stadium. However, it seems really disingenuous for the team owners to not sit down and work with the Coliseum owners (the City/County) to improve known facility deficiencies and then make a big issue of the fact that the stadium is so bad that no one wants to play there.
@Jerry – Yes, only during the term of the lease. It doesn’t prevent the A’s from doing anything after the lease ends.
The A’s have given the Coliseum Authority a laundry list of items, and neither side has come up with a remedy. Wolff also asked the Authority to go dutch on a ballpark study at the Home Base/Malibu site, The Authority refused. When Haas needed improvements at the Coliseum in the mid-80’s, he got a $15 million loan. The Authority isn’t working with the A’s and they’re doing a new stadium study with the Raiders. I can’t see how the A’s have been negligent in this regard. Classless perhaps, yes. Negligent, hardly.
Godzilla (Matsui) wants to play in Oakland!
That’s great! Too bad his diminished play on the field makes him more akin to “Godzooky” than “Godzilla.” Let’s just hope he gives us Jack Cust-like production this year.
@ GoA’s- Both sides must define the point when all reasonable alternatives have been completed. Wolff, however, simply decided unilaterally when enough was enough. That, to me. is not all fair or ethical, since all reasonable minds know that he wanted to leave Oakland from Day 1 and he made no secret of it. And I don’t agree that SJ is a better investment.
It’s not a question of Wolff being told where to build a ballpark, it a matter of him honoring the contract that he agreed to when he took over ownership of the A’s. He had the freedom of choice to not buy the team if he could not live up to the expectation of keeping the team in Oakland.
@Jerry–agreed that LW should of never bought the team if he wasn’t committed to Oakland, their home for 37 years when he took over. He had his eye on SJ since 1998, before he was even associated with the A’s. With a little speed bump in Fremont, he’s back where he always wanted to go, even though SJ should of never been on the table, according to MLB and the Giants. Both LW and Oakland should work together for a change and pursue the VC site.
Jerry- emotional arguments don’t win in court-LW is honoring his agreement and will be there until 2013-beyond that there is nothing he owes Oakland contractually and personally I don’t buy into the Oakland is entitled argument….if they spent half the effort on the A’s that they did on the Raiders than we wouldn’t be having this conversation because a new park would have already been built
GoA’s pretty much summed up this thread with this excellent post.
My quick, drive-by 2 cents as a commercial attorney:
There is, as has been stated, a possible hyper-literal reading of the lease clause saying the A’s cannot take action during the lease which results in their moving after the lease expires. This reading is nonsensical because it would give the A’s the risk that the City could decide to non-renew the lease and yet the team couldn’t seek another venue until the day the lease expires. A court will read contract provisions in context, and no reasonable business person could possibly have intended that result. As such, I agree with ML that the chance of the clause being construed this way is vanishingly small. The most reasonable interpretation is that the A’s cannot take action resulting in the team’s movement while the lease remains in effect.
Moreover, Jerry is quite correct that the normal remedy for breach of contract is money damages. If the A’s breached this clause and moved while the lease was in force, the A’s would have a solid argument for the balance of the lease payments, less costs avoided. However, the A’s have no entitlement or legal expectation of any payments during the period after the lease expires. In other words, even if the City could somehow establish that the A’s were technically in breach, their damages would be zero.
The chance that the City could get a court order forcing the A’s to stay in Oakland even for the remainder of the lease (i.e. specific performance) is also nearly zero. Specific performance is an extraordinary remedy not normally given in a situation where money damages will make the plaintiff whole (e.g. a typical lease agreement). Remember, Seattle had a contract clause which specifically entitled them to specific performance if the Sonics broke the lease, and look how far that got them.
The notion that this clause can be construed as a commitment by the A’s to stay in Oakland forever, as some have suggested, is simply absurd.
Paragraph 4 of the above post should read “..the City would have a solid argument for the balance of the lease payments, less costs avoided. However, the City has no entitlement or legal expectation of any payments during the period after the lease expires.” Sorry, it’s late and I’m tired.
@bartleby – Not a problem, and thanks for your expertise!
What’s Oakland going to do? Force the A’s to stay for centuries in a stadium that Oakland deliberately wrecked? Oakland can play the victim card because most people plain don’t know Oakland’s abysmal record in “helping” the A’s.
@ pjk: To reference Melville (Bartleby), I’m sure the A’s would reply, “I would prefer not to.”
“Rule of reason” defense was used when juries in the NFL vs. Raiders and NBA vs. Clippers court cases in the 1980s.
The league may want to geographically disperse their teams but that has to be held against if the particular owner can make more money via fan support, stadium, etc…from a new city versus the old city the team is in currently.
The is why I believe the AE does not extend to Franchise relocation. If Lew Wolf can make more $$ in San Jose vs. Oakland then he should be allowed to move if his lease is up in Oakland for example…Regardless if it affects the Giants or not.
The Raiders and Clippers had the other owners “unanimously” shoot down the moves only to lose in court thus allowing both teams to move to LA.
I may not be a lawyer but this is pretty clear and this argument would come up if the city of Oakland was to sue the A’s.
The AE is the difference maker. I’m a little unclear on the Clippers situation (my understanding is that they voluntarily paid $6 mil to settle the case, I don’t think it ever went to a jury), but the Raiders sued for an antitrust violation. The NFL offered a few defenses: that the league was a single-entity rather than 28 (at that time) separate entities, which the court wouldn’t allow them to argue, and a more common sense defense, but that lost.
Here, the antitrust exemption would be MLB’s defense. No antitrust violation, no case.
A gold star to Briggs for knowing his American Lit. That story was required reading when I was in high school, so I don’t think it’s particularly obscure, but a surprisingly small percentage of people seem to recognize it.
Discussion of the AE seems a bit of a tangent. The original post and discussion had to do with whether Oakland/Alameda have contractual arguments against the A’s, and I can’t think of any obvious way the AE factors into that. It seems very clear Oakland/Alameda have no antitrust claims; if anyone did, it would be the A’s/San Jose vs. efforts to prevent the move (but for the AE).
Back to the lease: One point I think is counterintuitive to many non-lawyers is the fact it is entirely possible to intentionally and fragrantly breach a contract and have zero liability if the other party suffers no financial losses as a result. For example, if the A’s left tomorrow in breach of their lease and the City found a new tenant willing to pay more money for the period remaining on the lease, the A’s would likely have no liability for the breach.
Even if the non-breaching party does incur financial losses, there is an influential legal school of thought which says breach is socially desirable if the breaching party can make more money breaking the contract than honoring it after paying off the other side’s damages (efficient breach). The logic is that if the non-breaching party receives the benefit of their bargain through money damages and the breaching party makes more money, forcing the parties to honor the old deal constitutes economic waste.
There are no punitive damages for breaching a contract, as there may be in tort claims. In fact, the parties’ attempt to impose punitive consequences for breach through contract clauses are strongly disfavored, for the economic reasons mentioned above. Penalty clauses are generally unenforceable under U.S. law. Liquidated damages clauses function similarly to a penalty clause and are potentially enforceable, but are subject to close scrutiny by courts and vulnerable to legal attack.
Damn Bartleby, you da legal man brah! Perhaps when this ballpark saga is all over you can come out with your true identity.
My guess: an attorney/member of the A’s ownership group.
@Tony “My guess: an attorney/member of the A’s ownership group.”
I wish! That would pretty much be my dream job. I’ll tell ya, if the A’s post such an opening, I’ll sure send in my resume. 🙂