Category Archives: Legal

07.14.14
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Another sign controversy

It all started a few weeks ago, when the Oakland Fan Pledge guys reported that they had to take down their sign at a game. Was this a technicality at work, or the A’s putting the hammer on signs they don’t agree with? Since then, it appears that the takedowns have been more frequent. Sign makers are crying First Amendment violations, while defenders of the takedowns say that A’s games are private functions. Of course, they’re held in a publicly-funded venue, so there’s a gray area here*. This fans-with-signs vs. management battle has gone on for decades, and it has never failed to make management look bad. Let’s look at the A’s sign policy.

Banners and Signs:

Management reserves the right to remove any signs or banners at any time. Each sign and banner must comply with the guest code of conduct. Signs and banners may be displayed at games as long as:

• They do not obstruct the sight line of another guest

• They are not larger than 3′ tall x 6′ wide

• They are not in the field of play.

• They do not cover up any existing signage.

• They are not commercial in nature.

• They do not contain obscene or inflammatory language

• They are not paraded around the stadium.

Nothing in there explicitly discusses critiques of management, or even players. If the A’s are going to have a sign policy, they better stick to it and not go beyond their stated rules. Otherwise they’re asking for legal trouble. The backed down in 2010 after John Russo threatened to sue the A’s. Now that Russo has left the government he described as “morally corrupt” (on the way out, of course), is Barbara Parker or someone else going to step in? The only remotely sports-related opinion Parker has rendered so far has been about the City Council’s voting procedure with regards to JPA matters.

At the very least, OPD shouldn’t be helping with the takedowns. Leave Coliseum private security to do it. If someone in the legal field wants to take up the sign makers’ cause, let the chips fall where they may.

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* Reason why I say the publicly-owned stadium principle is a gray area is because private isn’t always completely private, nor is public always completely public. AT&T Park is a privately owned and built stadium, yet it’s on public land. Does that make AT&T Park more or less suitable for similar protests?

07.08.14
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Miley and Reid stir up A’s relocation talk

If you’re Bud Selig or Lew Wolff, sometimes you don’t have to play your own cards when others play them for you. Case in point: Oakland CM Larry Reid and AlCo Supe Nate Miley both brought up the specter of the A’s leaving Oakland, perhaps for San Antonio or Montreal. Nevermind the likelihood of it happening, it’s part of the threat, and the City of Oakland should take it seriously. Even sports economist Andrew Zimbalist says so, though the relocation doesn’t have to be as far as Canada. Zimbalist:

“What they could do is make a short-term arrangement to share AT&T Park with the Giants, and you know that could go on for a couple years until they found an alternative stadium situation.”

MLB wielded the move-to-AT&T card last November and the Giants were mum about it. MLB could move the A’s there temporarily while something was worked out elsewhere. Over the last few weeks I saw some discussion about whether the Giants’s Charter Seat License program could muck things up because CSL holders may have first dibs on any regular season games at China Basin, not just the Giants. I’m not so sure about that, since the license agreement indicates that “Home Games” are specific to the Giants. There’s a gray area in how another home team’s games would be handled, but since there are already provisions for offering and distributing tickets for non-Giants game events (“Classic” events), I figure this isn’t a huge obstacle.

That aside, relocation outside of the Bay Area should be taken much less seriously. Field of Schemes’ Neil deMause lays out the difficult cases for each market and includes San Jose, which has the Giants’ territorial rights claim as its because hurdle. If MLB wants to go through the same charade for the A’s as it did for the Expos, there isn’t a huge pot of gold at the end of the rainbow. Oakland is in no position to give up a publicly financed stadium to the A’s. Portland, San Antonio, Charlotte, and Montreal can be best described as mid-level markets, and while some of those cities don’t have problematic stadium T-rights situations to deal with, a relocated team will still be invading existing TV territories, which are arguably just as valuable if not more so. Hell, it’s been a decade and MLB is still trying to unwind the O’s-Nats TV mess.

So for now, there’s nothing to see here. There’s little real action, only theatrics on the part of the JPA and Oakland. If the City calls the Wolff/Selig bluff and sends back a revised offer, then we’ll see the threats fly in earnest. Or not.

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P.S. – Keep in mind that until November and last week, MLB has been playing nice with Oakland. They allowed Oakland to entertain the Howard Terminal concept. They didn’t nudge Oakland to choose the A’s over the Raiders. Now all of that has changed. Howard Terminal has been shut down via the lease talks. MLB is waiting for Oakland to partner with the A’s after the dissolution of Coliseum City. If that doesn’t happen, MLB will have a clear indicator of how Oakland wants to proceed.

 

07.02.14
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Excerpts from Proposed Lease Agreement

Ed. – I’ve highlighted what I consider relevant sections of the proposed lease agreement and put them in this post. If you want to look at the whole thing, I’ve converted the original Word doc into PDF format. The conversion preserves the numbering within the document. The excerpts total over 4,500 words, the full document runs more than 22,000. I’m putting this below the summary post for brevity. Eventually the lease will be linked in a new section on the left sidebar.

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4.7 Revenue Generation.

4.7.1 Revenues. Licensee shall control, collect, receive and retain all revenues deriving from its operations, including but not limited to all revenues from ticket sales and distribution, merchandise sales, product and other retail sales, concessions (subject to Paragraph 12), novelties, parking (subject to Paragraph 6), telecast and broadcast rights, pouring rights, advertising, sponsorship, promotional and signage rights (subject to Paragraph 11), asset-specific branding rights to internal Stadium areas, luxury suite sub-licenses and any other revenues, consideration, barter, trade, in-kind or other benefits however derived or generated by Licensee, the Team and/or by Licensee Events and Other Events. Licensor shall control, collect, receive, retain or permit licensees other than the Licensee to retain all other revenues, including but not limited to all revenues from ticket sales and distribution, Stadium naming rights, merchandise sales, product and other retail sales, concessions (subject to Paragraph 12), novelties, parking (subject to Paragraph 6), telecast and broadcast rights, advertising, sponsorship, promotional and signage rights (subject to Paragraph 11), luxury suite sub-licenses and any other revenues, consideration, barter, trade, in-kind or other benefits however derived or generated by Licensor and/or Licensor Events, Arena Events and/or retained rights under Paragraph 11.3.3.

4.7.2 Operations and Contracts. Licensee, in its sole discretion and subject to this License and applicable law, may take any and all actions and utilize any and all processes it deems appropriate to exercise its revenue generation rights, including but not limited to hiring third parties, to whom Licensee may grant a limited sub-license to enter the Areas Licensed to perform tasks as directed by Licensee. Licensor, in its sole discretion and subject to this License and applicable law, may take any and all actions and utilize any and all processes it deems appropriate to exercise its revenue generation rights, including but not limited to hiring third parties or assigning or otherwise transferring its revenue generation rights to third-parties, and in doing so, Licensor may grant any and all licenses or delegate any and all powers or privileges that, as the operator and manager of the Complex for the City and County, it may wish to grant or delegate.

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5.7.1 Stadium Maintenance Fund. In each year of the Term, Licensor shall provide in its budget for a “Stadium Maintenance Fund” in the amount of at least One Million Dollars ($1,000,000.00). The Stadium Maintenance Fund shall be used for Licensor’s Maintenance and Repairs required hereunder. Following the first year of the Term, Licensor shall increase the amount of the Stadium Maintenance Fund by increasing the preceding year’s budgeted amount by at least five percent (5%). Subject to Licensee’s obligations under Paragraph 5.8, which obligations Licensee must continue to discharge at its own cost, for each year of the Term Licensee may direct Licensor’s use of budgeted Maintenance and Repair funds up to One Hundred Fifty Thousand Dollars ($150,000.00) for Maintenance and Repairs requested by Licensee to be performed by Licensor (including that Licensee may “earmark” all or part of such funds for work to occur in future years; provided, however, that no more than $150,000.00 may be earmarked for any particular future year). To facilitate and enable Licensee to exercise its right to direct the use of certain funds each year, Licensor will provide quarterly reports to account for the uses of budgeted funds in the Stadium Maintenance Fund in the preceding quarter.

5.7.2 Stadium Maintenance Fund. Not a Limitation or Cap. The Parties agree that the Stadium Maintenance Fund is an annual budgeting mechanism designed to ensure that a certain amount of funds is available each year for Maintenance and Repairs and to facilitate tracking of Maintenance and Repair expenditures. Licensor acknowledges that the existence of the Stadium Maintenance Fund does not limit its Maintenance and Repair obligations or put a maximum limit on the amount that it must spend for Maintenance and Repair work. Licensor further acknowledges that compliance with those obligations may require expenditures exceeding the amount in the Stadium Maintenance Fund in any given year.

5.7.3 Licensor Responsibilities.

5.7.3.1 Maintenance and Repair. Licensor, at all times during the Term, shall perform all Maintenance and Repairs of the Stadium (except such items as Licensee Maintains and Repairs as specifically provided herein), including specifically Maintenance of and Repairs of the following associated areas, structures and equipment:

  • All structural parts of the Stadium including the roof, windows, walls, floors, pillars and columns;
  • The electrical system including all electrical light standards, light fixtures and wall sockets but not including light bulbs or moveable electrical equipment;
  • The heating, ventilating and air conditioning systems;
  • The plumbing systems including without limitation all pipes and plumbing fixtures such as sinks, toilets and water fountains;
  • The Parking Area and underground utilities (to the extent such utilities are under the direct or indirect control of Licensor) subject to Paragraph 6 and its subparagraphs;
  • The Stadium seats;
  • The field drainage system;
  • All elevators and escalators;
  • All sound systems and related equipment, except in connection with any new audio components that Licensee installs as part of the Display Equipment Project, which shall be Maintained and Repaired by Licensee as provided within Paragraph 11.4;
  • All Stadium televisions and all amplifier and other systems feeding to such televisions;
  • All cabling of any nature within the Stadium except cabling installed and used exclusively by Licensee;
  • Licensee’s office space and storage provided pursuant to this License and all items and systems of the type listed in subparagraphs (a) through (k) above that affect and/or are used within Licensee’s office space and storage; and
  • All other property, systems, equipment and fixtures currently maintained and repaired by Licensor, owned by Licensor or installed at Licensor’s direction.

Licensor’s Maintenance and Repair obligations shall not include the furniture, fixtures, computers or other equipment of Licensee or of any concessionaire. Licensor shall not charge Licensee any amounts related to Licensor’s obligations, but in the event that Licensor is required to Repair any of the items described above as a result of Licensee’s negligence or willful misconduct, Licensee shall pay the costs of such Repair.

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5.10.3 Exclusive Right to Stadium Use. Licensee shall have the exclusive right to use the Stadium throughout each Baseball Season, but shall use its best efforts to influence MLB to ensure that there are at least two scheduled open weekend dates (i.e. Friday, Saturday, or Sunday) during the NFL pre-season each year for Raiders’ preseason games. Except for scheduled dates of Raiders’ games, which is a use of the Stadium for which Licensee must work in good faith to permit and have a reasonable basis for declining during Baseball Season, Licensor may use the Stadium during the Baseball Season only upon Licensee’s prior written approval, which approval Licensor acknowledges may be withheld in Licensee’s absolute discretion for the date of any Licensee Event and for any dates including and between the day before the commencement of and the last day of any of the Team’s homestands. In connection with the development of each baseball and football schedule, Licensor, Licensee and the Raiders will attempt to accommodate the reasonable scheduling requirements of each other and of the respective leagues and will work in good faith to resolve any disputes arising therefrom. The Parties acknowledge that MLB may not allow Licensee to commit to make the two football weekends available in each of August and September non- consecutively, nor, because of playoffs and the World Series, will MLB commit to make any weekend in October available for scheduling of a football game. Subject to all of the above, the Raiders shall have scheduling priority and the absolute right to use the Stadium for its games from the end of Team’s Baseball Season each year through the end of the following January.

5.10.4 Protected Dates. Not later than January 15th of each year within the Term, Licensee may designate to Licensor in writing up to five (5) Home Games on which dates Licensor agrees not to schedule any Licensor Event or to permit any Arena Event (other than a Warriors game) unless it (a) concludes at least two (2) hours prior to the scheduled start of a Home Game; or (b) commences at least six (6) hours after the scheduled start of a Home Game.

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7.2 Early Termination Rights.

7.2.1 By Licensee. Beginning January 1 of the second full year of the Term (January 1, 2016 – December 31, 2016), Licensee shall have the right to terminate this License prior to expiration of the Term by providing Licensor written notice of intent to terminate on or before December 31st of any year during the remainder of the Term, with the effective date of termination occurring as of December 31st of the second year following notice. If Licensee terminates this License in connection with any move to a stadium outside of the City, Licensee shall pay on the effective date of termination, in lump sum, all annual license fees pursuant to Paragraph 8.1 below for the remainder of the full 10-year Term, as if this License were operative throughout the Term and had not been terminated. Licensee shall not be obligated to pay such annual license fees if Licensee terminates this License in connection with a permanent move to a new or re-built stadium on or adjacent to the Complex site or to a different stadium within the City.

7.2.2 By Licensor. Licensee acknowledges that a plan may develop for construction of a new football stadium for the Oakland Raiders. Licensor shall keep Licensee reasonably informed of any information related thereto. If Licensor presents Licensee with a Raiders Construction Plan, Licensor and Licensee shall, for a period of thirty (30) days thereafter, negotiate in good faith for an amendment to this License that will account for the financial, operational and other consequences that Licensee would suffer from the construction and operation of such planned football stadium. Such negotiations shall not be necessary if the Raiders Construction Plan includes substantial demolition of the Stadium. If such good faith negotiations are unsuccessful or unnecessary, Licensor may terminate this License upon written notice of intent to terminate to Licensee, such termination to take effect sixty (60) days after the conclusion of the second (2d) Baseball Season that commences after such notice. (By way of example, if Licensor provides Licensee with such termination notice on June 15, 2016, this License will terminate sixty (60) days after the conclusion of the 2018 Baseball Season.) Between the time notice of termination has been given and the date of actual termination, Licensee shall cooperate in good faith with any activities by Licensor or its designees that may be necessary to prepare the site in advance of construction, including by providing reasonable access to any areas for which Licensee has exclusive use rights, so long as no actions are taken by Licensor or its designee and nothing is required of Licensee that unreasonably interferes with Licensee’s operations. For the sole purpose of a possible termination to accommodate a Raiders Construction Plan, the Parties agree to amortize on a monthly, straight-line basis (i) Licensee’s total verified cost reported to Licensor under Paragraph 11.2 for the Display Equipment Project, plus any amount paid directly to Licensor thereunder, and (ii) all other amounts paid by Licensee during the Term for mutually agreed upon improvements to the Stadium or Complex (“Additional Licensee Improvements”) under Paragraph 5.9, provided that Licensee’s costs for Additional Licensee Improvements will be subject to amortization hereunder only if Licensor shall have acknowledged to Licensee in writing at the time of Licensor’s approval of such Additional Licensee Improvements under Paragraph 5.9 that such improvements will be subject to the provisions of this Paragraph 7.2.2. Amortization shall occur from the last day of the month in which the particular improvement is completed throughout the remainder of the planned 10-year Term. Following termination by Licensor in connection with a Raiders Construction Plan, Licensor shall pay Licensee the entire unamortized balance of such improvement costs as measured from the date of completion of installation of the improvements being amortized to October 31st of the year in which termination is to take effect. Licensor shall make such payment not later than December 31 of the year in which termination becomes effective. By way of example, if (a) the Display Equipment Project is completed during March 2015 and the total verified project cost is $11,020,000 and (b) Licensor provides proper termination notice on June 15, 2016, then (x) the $11,020,000 will be amortized on a monthly schedule from March 31, 2015 through October 31, 2024, with $95,000 amortized on the last day of each month beginning on March 31, 2015, (y) this License shall terminate effective sixty (60) days after the conclusion of the 2018 Baseball Season and (y) Licensor shall pay Licensee, no later than December 31, 2018, the lump sum of $6,840,000 ($11,020,000 minus (44 months times $95,000)), plus whatever sum may be due for the costs of Additional Licensee Improvements, utilizing the same amortization methodology. The Parties acknowledge, however, that subject to Paragraph 16, Licensor’s obligation to pay Licensee under this Paragraph 7.2.2 may, and likely would, be passed through to any third-party developer that undertakes the Raiders Construction Plan.

8. LICENSE FEES

8.1 License Fees. Licensee shall pay to Licensor an annual license fee of One One Million Seven Hundred Fifty Thousand Dollars ($1,750,000.00) for 2014, One Million Two Hundred Fifty Thousand Dollars ($1,250,000.00) for the first full year of the Term (January 1, 2015 – December 31, 2015), and after that, One Million Five Hundred Thousand Dollars ($1,500,000.00) for each of years two through five of the Term (2016 through 2019), and One Million Two Hundred Fifty Thousand Dollars ($1,250,000.00) for each year of years six though ten the Term (2020 through 2024). Except for fees in 2014, when payment was due June 30, 2014, the full and timely payment of which is a condition of the Parties’ entry into this Agreement, Licensee shall make each annual payment April 1st of each year of the Term. Each payment shall be due and owing immediately upon each payment date and shall be considered payment in advance for all use and other rights granted under this License during the subsequent twelve months. Subject to Licensee’s right to cure under Paragraph 22.1.2, any late payment shall be subject to a late fee of two thousand five hundred dollars ($2,500) per day and any accumulated delinquency shall carry interest at a daily compounded interest rate of ten percent (10%) per annum.

8.2 Prohibition on Deductions. Licensee shall not deduct, offset or otherwise withhold any amounts payable by it to Licensor under this License Agreement except to the extent expressly authorized under Paragraphs 17.1, 17.2, 17.3, 20.2, 23.2 or 27.2 herein. Any payment delinquency uncured under Paragraph 22.1.2, including any unauthorized deduction, offset or other withholding (a) shall (in addition to the late charges and interest under Paragraph 8.1), accrue pre-judgment interest at the maximum statutory interest until paid in full, (b) shall trigger a payment owing to Licensor to compensate it for difficult-to-calculate harm in the amount of all remaining Annual License Fees under Paragraph 8.1, and (c) shall give Licensor the right, at its option, to seek declaratory and injunctive relief in court or in arbitration (notwithstanding Paragraph 38) terminating the License and all of Licensee’s rights thereunder, including its rights of use and occupancy under Paragraph 4, effective immediately if the delinquency takes place outside of the Baseball Season, or otherwise effective on the day after the conclusion of the last Licensee Event during the Baseball Season in which the delinquency took place. Monetary recovery for any such delinquency may be sought in court or in arbitration, at Licensor’s option, notwithstanding the provisions of Paragraph 38 herein. Should Licensor file an action seeking monetary relief for any delinquency under Paragraph 8, Licensor shall be entitled to recover its entire attorney’s fees and costs upon entry of judgment in its favor or in the event that any of the delinquency is paid or ordered paid prior to entry of final judgment.

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11.2 Stadium Display Equipment. Licensee shall, no later than October 31, 2014, commit to spending not less than Ten Million Dollars ($10,000,000.00) to purchase and install (i) two (2) new digital video/score boards, a new digital ribbon board or boards on the Stadium Plaza Level Façade (the video/score boards and ribbon boards will be referred to collectively as “Digital Displays”), and, if Licensee chooses to do so, in its sole discretion but subject to Licensor’s approval below, a new integrated audio system, and (ii) and associated new control room equipment capable of programing, controlling and storing digital content for the new Digital Displays along with associated audio (collectively, all components, equipment and systems comprising and related to the new Digital Displays, the new audio system, if installed, and the associated new control room, will be referred to as the “Display Equipment”). Licensor acknowledges that, by agreeing to undertake the purchase, installation, maintenance and repair of the Display Equipment (the “Display Equipment Project”), Licensee will be relieving Licensor of substantial future Maintenance and Repair costs that Licensor would otherwise be required to bear. The Parties agree that time is of the essence for the completion of the Display Equipment Project. As soon as possible after the Signature Date, Licensee commits to provide to Licensor detailed costs, plans and equipment specifications for the Display Equipment and to seek Licensor’s approval for the Display Equipment Project under Paragraph 11.4 after providing that information, which approval shall not be unreasonably withheld or delayed. The Parties agree to cooperate and use mutual best efforts to achieve completion of the Display Equipment Project by April 1, 2015. Upon completion, Licensee shall provide Licensor with a report detailing the equipment purchased, work performed, and total cost (as measured by the total project cost without reference to whether Licensee obtained financing for the Display Equipment Project), together with copies of reasonable backup verification of such costs including invoices, cancelled checks or other proof of payment or payment obligation. If such total amount is less than Ten Million Dollars ($10,000,000.00), Licensee shall pay Licensor the difference within thirty (30) days after Licensor’s written acceptance of the contents of such report.

11.2.1. Licensor Consultation. Licensee shall have absolute discretion on the selection of all Display Equipment and shall perform all work required to purchase and install the Display Equipment (excluding any necessary structural work to the framing cabinet structures and support beams that will house and support the Display Equipment (“Display Equipment Structural Work”), which shall be Licensor’s responsibility), but shall consult with Licensor in connection therewith. Licensor shall cooperate with Licensee during the entire Display Equipment Project, including without limitation the installation of all Display Equipment, in connection with which Licensor shall perform any Display Equipment Structural Work reasonably necessary to facilitate such installation. The Parties shall confer in good faith and seek to agree about whether any Display Equipment Structural Work is required for installation of the Display Equipment, and if they cannot agree, shall follow the procedures for resolution set forth in Paragraphs 5.7.3.4 and 5.7.3.5.

11.2.2. Structural Work. The Parties recognize that, if Display Equipment Structural Work is necessary for the Stadium Display Project, that work could potentially delay the projected April 1, 2015 completion date for the Stadium Display Project. As soon as reasonably possible after the Signature Date, Licensee will identify specifically in writing the particulars of the Display Equipment that Licensee plans to install in order for the Parties jointly to determine the extent of any Display Equipment Structural Work. So long as Licensor works diligently and in good faith to complete any Display Equipment Structural Work as soon as possible after receipt of Licensee’s writing, Licensor shall have no liability for any losses attributable to delays in meeting the April 1, 2015 completion date (including without limitation in any instance where Licensor works diligently and in good faith but Licensee by its own conduct interferes with, delays, or impedes Licensor’s process of evaluating or undertaking such work).

17. DAMAGE AND DESTRUCTION

17.1 – Major Damage – Repairable. In the event of the damage or destruction of the Stadium so that Licensee cannot reasonably use the Stadium for Home Games, and there are insurance proceeds available to Licensor to pay eighty percent (80%) or more of the cost of repairing the damage, such repairs can be performed under applicable governmental laws, rules and ordinances, the design and construction work can be reasonably completed within eighteen (18) months after the date of damage, and will enable Team to play at least one complete Baseball Season at the Stadium during the remaining Term as the same may be extended by mutual agreement of the Parties, and Licensor delivers notice to Licensee within one hundred twenty (120) days of the date of damage that such repairs can be so completed, then this License shall remain in full force and effect, and Licensee shall have no liability to pay any fees or perform its other obligations hereunder with respect to the Stadium during any such period when Licensee is unable to use the Stadium, and Licensor shall refund to Licensee a portion of annual fees under Paragraph 8.1 already paid by Licensee based on the rights lost by Licensee as a result of the damage and repairs. Licensor shall collect and expend all funds required to repair the damage at the earliest possible date. During the period that the damage is being repaired and Licensee cannot reasonably use the Stadium for Home Games, Licensee shall have the right to play Home Games in any other one or more comparable stadiums located in the Licensee’s Home Television Territory and acceptable to MLB or, if no such stadium is available on commercially reasonable terms, then in the stadium available as close to Licensee’s Home Television Territory as is reasonably possible and acceptable to MLB that is available on commercially reasonable terms for use by Licensee until the Stadium is again ready to be used for Home Games; provided, however, that the Parties acknowledge that MLB may relocate affected Home Games to the stadiums of the Team’s respective opponents. Subject to any scheduling requirements of MLB, and subject to the repairs being reasonably acceptable to MLB, Licensee shall recommence playing Home Games in the Stadium from the date specified by Licensor in a written notice delivered at least thirty (30) days before the first Home Game to be played in the Stadium stating that the repair work has been completed to the extent where the Stadium can reasonably be used for Licensee’s Home Games.

17.2. Major Damage – Not Repairable. In the event of damage or destruction of the Stadium so that Licensee cannot reasonably use the Stadium for Home Games, and there are no insurance proceeds available, or insurance proceeds are available but are less than eighty percent (80%) of the cost of repairing the damage, or the repairs cannot be performed under applicable governmental laws, rules and ordinances, or the design and construction work cannot be reasonably completed within eighteen (18) months after the date of the damage, then for a period of thirty (30) days after the facts regarding the insurance proceeds and governmental laws are known to Licensor (which Licensor shall promptly communicate to Licensee) but in no event more than 120 days following the date of damage, Licensor shall have the right, exercised by written notice to Licensee within such period to terminate this License or to keep the License in force and proceed to repair the damage at Licensor’s cost. If Licensor fails to notify Licensee of its election within the 30-day period then Licensor shall be deemed to have terminated the License at Licensee’s election and immediate notice to Licensor. If Licensor elects to repair the damage and the work cannot reasonably be completed or in fact is not completed within eighteen (18) months after the date of the damage, then Licensee within thirty (30) days after notification from Licensor of its election to repair the work (if the repairs cannot be reasonably completed within eighteen (18) months) or within thirty (30) days of Licensee being notified (if the repair work will not be completed within the eighteen (18) months) that the work will not be completed within the eighteen (18) months, shall have the right to terminate this License by written notice to Licensor. If Licensor elects to repair the damage, then the provisions of Paragraph 17.1, dealing with the repairs and 17.3 dealing with the obligations of Licensee during and after the repairs are made, shall apply. To the extent that Licensee has paid annual fees in advance under Paragraph 8.2 for the right to use the Stadium, and as a result of Major Damage, that use is no longer possible during such quarter, Licensee shall be entitled to a pro rata refund or credit of fees for the number of months remaining in the quarter for which Licensee has paid fees. During the time period beginning with the damage and destruction through either the re-opening of the Stadium or termination of this License, Licensee shall have no liability to pay any fees or perform its other obligations hereunder with respect to the Stadium.

17.3. Less Than Major Damage. In the event of damage or destruction of the Stadium and there has not been a material reduction of the seating and/or parking capacity and the playing field can be configured to meet MLB standards so Licensee can reasonably continue to use the Stadium for Home Games, then Licensor at its cost shall promptly repair the damage to the extent possible under applicable laws and shall do all acts required to protect users of the Stadium from any hazards created by the area damaged or the repair work. During the period of any such repairs Licensor shall continue to perform all of its obligations hereunder and to the extent areas of the Stadium are used by Licensee shall use its best efforts to provide temporary additional areas in the Stadium or Complex where Licensee can continue to perform the activities previously engaged in the damaged areas. In the event Licensor is unable to reasonably provide sufficient temporary areas, it shall be Licensee’s responsibility at its cost to obtain such facilities as are required outside the Complex. Licensee’s obligations to pay fees for such unusable areas shall be reduced on a pro rata basis, and Licensee’s other obligations hereunder with respect to such unusable areas shall be abated, until the date repairs have been completed.

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20.1 Property Taxes and Assessments. The Parties acknowledge and agree that the appropriate City of Oakland or County of Alameda entity shall pay any and all real property Impositions including, without limitation, any transaction privilege tax or other similar Imposition (collectively, “Real Property Taxes”) now or in the future levied, assessed or otherwise payable in respect of the Stadium or Complex or any part thereof. Licensee shall have no responsibility for any Real Property Taxes.

20.2 Licensee’s Responsibility to Pay All Taxes. Licensee shall pay and is responsible for all federal, state, City of Oakland and County of Alameda Impositions, including all income, sales and use taxes, payable on account of revenues reserved to or retained by Licensee from the operational and use rights granted to, and exercised by, Licensee under this License.
43. CONTINUED STADIUM DISCUSSIONS
Licensee and Licensor (or Licensor’s designee) shall continue to engage in good faith discussions concerning the development of a new baseball stadium for use by the Licensee that would be a permanent home for the Oakland Athletics, provided that such discussions shall solely focus on the development of a new baseball stadium that would be located on land within or immediately adjacent to current Complex property. If agreement is reached on development of such a stadium, the Parties will renegotiate any terms of this License Agreement that may need to be modified or eliminated in order to facilitate the construction of the new stadium. The Parties’ discussions concerning a possible new stadium will continue during the Term until Licensee communicates to Licensor that Licensee has made a decision on a permanent baseball stadium at another location or until Licensor provides Licensee notice of early termination (as provided in Paragraph 7.2.2.) in connection with a Raiders Construction Plan.

07.02.14
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Summary of 2014 Coliseum lease agreement

OAKLAND ALAMEDA COUNTY COLISEUM AUTHORITY

July 3, 2014

STAFF REPORT

6a. Resolution Approving and Authorizing the Execution of a Stadium License Agreement between the Oakland Alameda County Coliseum Authority and Athletics Investment Group LLC

Background. The Oakland Athletics (“A’s”) have been operating at the O.co Coliseum under the current License Agreement (the “License”) since October 31, 1995. It has been amended and extended a number of times. The last extension, in November 2013, extended the License through December 31, 2015. After the 2013 extension to the license was approved, the A’s requested that the Authority work with them to come up with a longer term License Agreement For a number of months, representatives of the A’s and the Authority have been negotiating terms of that License. In light of the desires of both parties to reach a longer term agreement and to begin to work on the possible replacement of 0.co as the home of the A’s, the negotiators are proposing to the Authority a Stadium License Agreement (the “2014 License”) which is attached to this report. The A’s have expressed willingness to sign this form of 2014 License.

Proposed Terms of the Amendment. The following is a brief summary of some of the proposed terms of the Amendment. The full form of the proposed form of the Amendment is attached for review.

• Term. The term of the License would commence on the date the last approval is obtained and terminate on December 31, 2024.

• License Fees. The A’s agree to pay license fees for use of the stadium of $1.75 million in 2014; $1.25 million in 2015, $1.5 million from 2016 through 2019, and $1.25 million from 2020 through 2024. The 2014 License explicitly prohibits the A’s from withholding license fees as a method for resolving disputes and provides strong protection against such withholding in the future.

• Early Termination. The 2014 License provides for certain early termination rights.

  • Construction of new Raiders’ stadium. The Authority is permitted to terminate the 2014 License if certain criteria are met with respect to a plan to build a new stadium for use by the Raiders on the Coliseum site. This termination would take place 60 days after the end of the second baseball (sic) from the date the Authority give notice of an intent to terminate.. The clause permitting early termination by the Authority to accommodate a new Raiders’ stadium contemplates that the A’s would not have to leave the Coliseum Complex site, but could build their own new stadium on the site at a different location than the new Raiders’ stadium.
  • The A’s move from Coliseum site. The 2014 License also provides that, beginning in 2016, the A’s may give notice of an intent to terminate. Termination by the A’s would be effective December 31 of the second year following notice. At the earliest, any termination by the A’s could not take place until December 31, 2018. If the A’s terminate in order to relocate to any permanent stadium site outside of the City of Oakland, the A’s are required to pay in a lump sum the remaining license fees through the end of the term. This lump sum early termination payment by the A’s would not be required if the A’s were to move to a new stadium anywhere within the City of Oakland.

• Improvements to Stadium. The A’s agree to spend not less than $10 million to install a new scoreboard system in the stadium by the 2015 baseball season. The Authority agrees to pay for any structural work that may be required to support the scoreboard installation. The A’s would pay to maintain and operate the scoreboard and retain all advertising generated from the scoreboard for A’s games and events. The Authority will control the revenues from advertising on the scoreboard for all other events in the Stadium, including Raider’s games. The Authority agrees to spend not more than $1.5 million to provide enhanced lighting to the parking lot and certain areas of the Stadium.

• Stadium Maintenance and Repair. In connection with the Authority’s obligation to maintain and repair the Stadium, the Authority agrees to fund a Stadium Maintenance Fund by setting aside $1 million each year, increasing by 5% each year, to fund its ongoing maintenance and repair obligations. The A’s may designate $150,000 of this fund each year for a particular project. The Authority is required to maintain the stadium even if the amount required exceeds the amount available in this fund. The 2014 License provides for an expedited dispute resolution should the A’s and the Authority disagree on the necessity and cost of the maintenance and repair obligation.

• Scoreboard caps. The Authority will pay $200,000 per year for the use of the scoreboard caps where the am name is currently displayed. The 2014 License contains provisions that delineate the rights of the parties should the caps be removed in connection with the installation of a new scoreboard.

• Continued Stadium Discussions. The 2014 License provides that the A’s and the Authority will continue to engage in good faith discussions regarding the construction of a new permanent home for the A’s on or adjacent to the Coliseum property.

• General Release of Claims. As a condition to entering into the 2014 License, the A’s and the Authority agree to release all claims against the other party, including the claims that are the subject of an arbitration proceeding.

• Financial Impact to the Authority: The A’s have provided a financial analysis showing that, compared to the last 10 years of the 1995 License Agreement, the proposed 2014 License Agreement has the potential to return total cash value to the Authority of more than triple that provided by the 1995 License Agreement (and more than double the cash value on a present value basis).

Further Approvals. The Management Agreement, between the Authority, the City of Oakland and the County of Alameda, requires that each of the City and the County approve the 2014 License. In addition, Major League Baseball must approve the 2014 License before it becomes effective.

Recommendation. Staff recommends that the Board of Commissioners adopt the resolution approving and authorizing the execution of the 2014 License and requesting that the City of Oakland and the County of Alameda approve the 2014 License..

Deena P. McClain
Acting Executive Director

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P.S. – This agreement, which is supported by Alameda County and the A’s, is to have a vote on July 3. If it passes, the matter would go to the Alameda County Board of Supervisors and the Oakland City Council, who each would have to approve separately. Oakland has indicated that it will vote against the lease and provide a counteroffer. The A’s have indicated that they will not entertain any such counteroffer.

06.23.14
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Quick visit to Fitch Park & Hohokam Stadium

Before I headed back to the Bay Area, I quickly drove by Fitch Park and Hohokam Stadium to see how the improvements there were progressing.

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The City of Mesa has a progress report page on the project. Things seem to be going to schedule, with completion expected before the end of the year.

In related news, a Maricopa County judge has declared illegal the car rental tax that provides funding for all of the area spring training facilities and larger facilities like the Cardinals’ University of Phoenix Stadium. Car rental companies had argued for years that any taxes on car rentals have to go towards road projects and maintenance, not unrelated things such as stadia. While the expected to be appealed, the potential impacts on local Arizona governments are potentially huge. The state would have to refund the tax to car rental agencies, but oddly enough, not consumers even though consumers ultimately paid the tax on their individual car rentals. The ruling won’t stop funding for the A’s project as it’s likely that it will be completed by a final ruling in either a state appeals court or the Arizona Supreme Court. Should the ruling be upheld, it would be a double whammy on Maricopa County as they’d have to rebate the already collected funds and figure out where another source would come from. Or you could be Pima County (Tucson), which paid for upgraded spring training facilities and are left holding the bag because the teams left anyway.

04.29.14
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NBA Commissioner Adam Silver bans LA Clippers owner Donald Sterling for life

Some of you may not be aware that I am every bit as much a basketball fan as I am a baseball fan. It is with that fanaticism that I am proud that NBA Commissioner Adam Silver has banned LA Clippers owner Donald Sterling for racist remarks made on tape that were released over the weekend. There is no place for these kinds of comments in pro sports, let alone the NBA. Commissioner Silver may have only been on the job for three months, but he has already leapt above the other Big 4 commissioners in terms of forcefulness. Thanks, commish.

There will be plenty of time in the future to speculate on the fate of the Clippers, Sterling, or new ownership. For now let’s reflect on where we are as a society in terms of race relations, and remember that sport in its purest form transcends race.

04.26.14
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Warriors, Coliseum JPA dispute arena debt

It just keeps happening this week. Shortly after the flareup regarding the A’s and JPA’s dueling 10-year lease offers, the Warriors get into their own little fracas with the JPA. After the team announced their Mission Bay arena plans, they were also asked what would happen to the current Oracle Arena, which will have its debt retired in 2027, nine years after the W’s plan to leave. Through team spokesperson Raymond Ritter, the team denies it has any additional obligation to pay off the arena after the team leaves. The JPA countered that the team is fully obligated to pay off the full remaining debt, even if they leave after the 2017 season.

Just as with the “A’s owe back rent” allegation, I figured it was best to look through some documents to figure out the truth. It’s pretty simple:

From the arena bond filing

From the arena bond filing

In case you don’t want to read all of that, the language from the MoU is:

“After June 30, 2007, the Warriors may terminate the license by paying the Authority a termination payment in an amount sufficient to retire all of the then outstanding Bonds, as well as other debts associated with the Arena Project.”

It’s highly unlikely that concert revenue or other non-game receipts will make up the difference in the meantime, so chances are that the W’s will be liable for $61 million. Here’s the payment schedule for the remaining arena and stadium debt:

schedule

Arena and Stadium bond payment schedules

And that’s that.

04.04.14
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MLB files reply brief in antitrust case, ties in Stand for San Jose lawsuit

MLB filed its initial response in the Ninth Circuit’s antitrust case. The general thrust of MLB’s argument hasn’t changed. They still argue that San Jose doesn’t have standing against baseball because of the flimsiness of the option agreement between San Jose and the A’s and because the sport’s antitrust exemption allows baseball to act however it likes regarding franchise relocation.

A wrinkle was added, in that MLB filed a Motion to take Judicial Notice of the ongoing Stand for San Jose-vs.-City of San Jose case (in Santa Clara County Superior Court). In this motion, MLB points out that the next court date for that case is on August 8, with the deadline for the opening brief set for May 14. Baseball argues that if the option agreement is considered invalid by the lower court, San Jose will lack standing in the bigger case.

If you’re following all of the legal meanderings, you may have noticed that the federal and appeals court proceedings have gone much faster than the county court’s. Much of that is procedural, as the S4SJ group has launched two lawsuits only to have them combined, while San Jose has tried to smoke out the SF Giants as the real instigators of the lawsuit. The important thing is that 8/8 will be the date that the court decides the validity of the option agreement, which could make or break a large part of San Jose’s case.

For its part, San Jose has maintained that the option agreement is completely valid, arguing that baseball’s refusal to allow the move has caused economic damage to the City. Joe Cotchett has repeatedly said that he’d love to take MLB all the way to the Supreme Court regardless of what happens in the lower courts. In an interview with KCBS Radio, he cited the Ninth Circuit’s approval of an expedited appeal as a positive for San Jose. MLB had previously filed a motion against an expedited appeal.

The circular arguments we see related to the case are enough to make one’s head spin. For instance, this from MLB’s reply brief:

In sum, San José uses speculative 30-year and 50-year models of the local economy to seek billions of dollars of damages, all before trebling. This sort of “Economic Impact Analysis” may be appropriate for municipal planning and decisionmaking, but it is far too speculative and judicially unmanageable to create standing for a multi-billion dollar antitrust claim.

Strange that such claims are perfectly fine for baseball when they’re selling a ballpark to a City, but not good enough when being threatened by a lawsuit.

I’d love to able to tell you that all of these legal hijinks will wrap up in a neat, tidy way. But we all know that the loser(s) will inevitably appeal, adding more months and years onto this saga.

03.01.14
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Howard Terminal maritime bids rejected, what’s next?

On Thursday, two weeks after the Board of Commissioners at the Port of Oakland was expected to reject three maritime use bids at Howard Terminal, the Board finished the job. The issue was tabled during the previous meeting when the Board decided to hold off making a decision while coal shipping company Bowie Resources Partners provided additional information. Despite the delay, the decision was expected to be a formality, since Bowie’s bid raised serious environmental concerns and the other two bids were considered incomplete.

With that procedural move out of the way, the possibility of a change to a non-maritime use, such as a ballpark, grows. East Bay Citizen’s Steven Tavares noted that the ballpark concept was not discussed during the meeting, but is the obvious elephant in the room. The Port has created an ad hoc committee to discuss long-term uses for Howard Terminal, though it meets in closed session next week. I figure that the committee will need to have more open meetings in the future to avoid potential Brown Act violations. There’s a good chance that the committee will talk ballpark, as well as the ENA (exclusive negotiating agreement) that ballpark booster group OWB has offered to sign in a show of progress for MLB.

However, the maritime use question is not done just because the Board rejected bids. The Port has to keep pushing to get some use out of Howard Terminal while the process to convert to a different use takes place, since they’re losing $10 million per year for the next several years due to HT’s vacancy. Plus the Port and City of Oakland are not in full control of the final land use decision, because they’re considered trustees of waterfront lands controlled in the end by the State of California. The State Lands Commission, which makes the final decisions on these matters, gave some very clear insight into their process in a letter of support for the Giants’ lawsuit over a height restriction ballot measure under consideration in San Francisco.

However, the State’s grant of these lands to the City did not end California’s supervision and control of these lands. California still remains the ultimate trustee of these granted lands. The actual use made of the lands granted by California to its municipal trustee is a matter of statewide importance and one that directly impacts the Commission’s jurisdiction. The courts have described California’s continuing role by stating that, “Upon grant to a municipality subject to a public trust, and accompanied by a delegation of the right to improve the harbor and exercise control over harbor facilities, the lands are not placed entirely beyond the supervision of the state, but it may, and indeed has a duty to, continue to protect the public interests.”

As such, the City serves as a trustee, both as to the lands themselves and as to the revenue derived from trust lands. The trust lands are not held by the City in a municipal or proprietary capacity, but rather for the benefit of all the people of the State of California. The legislative grant created a trust in which the City is the fiduciary/trustee, the State is the truster, and all the people of the State are the beneficiaries. The legal consequence of this trust relationship is that the proper use of the tidelands and tideland revenues is a statewide affair. While the day-to-day management of these public trust lands was granted to the City, the State, through the Commission, retains trustee and oversight authority over the City’s administration of these lands, and the Legislature remains the ultimate trustor.

The exact same language can be used for Howard Terminal: the City/Port is the trustee, the State has authority, the Legislature is the trustor. It’s not hard to see legislation being required to make any Howard Terminal conversion final. There’s already a precedent in the Brooklyn Basin project (a.k.a Oak to Ninth), when Don Perata got a bill passed in 2004 that allowed for a land exchange that made the project possible. If overall Bay Area Port capacity is to be diminished some significant amount, a plan must be enacted to make up for the lost capacity. Such plans would have to be shaped by the SLC and the BCDC, which has its own regional seaport management plan.

In other words, don’t expect this process to be quick. It’s doable, as was the case in San Francisco, but Howard Terminal’s conversion will have to take place within the context of it benefiting the entire Bay Area and the State of California, not just Oakland or some developers. That’s only fair.

02.20.14
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Ninth Circuit grants San Jose’s expedited appeal request

A simple, one page order came out of the Ninth Circuit Court of Appeals today. In it, the court granted the City of San Jose’s request for an expedited briefing and hearing. While it was previously thought that briefs wouldn’t be field until the summer at earliest, the court is setting a March deadline for the opening brief.

Before: LEAVY and TASHIMA, Circuit Judges
Appellants’ opposed motion to expedite briefing and hearing on appeal is granted. The opening brief is due March 5, 2014. The answering brief is due April 4, 2014. The optional reply brief is due within 14 days after service of the answering brief.

This case shall be placed on the next available calendar after the completion of briefing. Any request for an extension of time to file a brief is disfavored and must be made under Ninth Circuit Rule 31-2.2(b). No streamline requests for extensions of time in which to file briefs will be approved.

While I’m not going to go so far as to say that the court will rule in favor of San Jose (the case still looks pretty weak), this shows that the court acknowledges the high-profile nature of this case. Both San Jose and MLB will get the opportunity to make their filings, just as spring training and the regular season are starting. It could mean a summer trial oral argument date, too. Even if San Jose’s chances of winning aren’t great, it means a potential resolution for this case could come more quickly and a little more work for MLB in the meantime. Plus the timing of the briefs will keep the story in the news cycle.

Of course, March 5 is coming pretty soon. Chop chop, Joe Cotchett!