The Merc reports that the 49ers have withheld more than $5 million in rent from the City of Santa Clara.
The team is due a rent “reset” that could eventually lower its annual payments from $24.5 million, a figure that includes operating costs. The 49ers like to claim that it’s the highest rent in pro sports, though most leases don’t include operating costs, usually an eight-figure item on their own. Even with those costs removed, it’s still a pretty high rent payment. That doesn’t mean anyone should be sympathetic to the Yorks. Forbes had the team’s revenue and operating income for the 2014 season at $427 million and $123.7 million, respectively.
That said, the system, and the very nature of these lease agreements puts teams in a negotiating advantage from jump. If a lease is about to expire, or if there’s a clause that allows for renegotiation, chances are the team is going to take advantage of it. Let history be a guide.
- A year ago the Raiders withheld rent as they talked 2015 lease with the Coliseum JPA. The lease ended up being for only one year.
- The A’s famously had a lengthy brouhaha with the GPA over shorted parking revenue that eventually spilled over into lease talks. After Oakland played hardball with the A’s, then-MLB commissioner Bud Selig pulled the move threat card and Oakland backed down.
- During the Chris Cohan era, the JPA sued the Warriors three times over breach of contract, ending in settlement.
- The Giants owned the AT&T Park structure, so their lease with SF was for land, a nominal fee. That didn’t stop the Giants from arguing over property taxes, eventually going to court over the matter.
All of that happened since the turn of the millennium.
In a more charitable world, teams and their incredibly wealthy owners would hold to their contracts, instead not even waiting for the ink to dry. That’s not the world we live in. So we can grouse more about certain owners we disdain as opposed to others we hold in higher regard. It doesn’t matter. This is how teams operate. Since these facilities have such huge mortgages and most of them are publicly owned, it’s the municipalities that get the worst of it. Exactly what can the cities do, anyway? Evict the teams? Cities can and should fight for what they can, but remember that in the end, they’re not supposed to be the winners. The teams are. The deck is stacked against the public.