Rays a winning team in a losing situation - NBC Sports

Rays a winning team in a losing situation
To maintain winning ways, franchise probably has to find a way to move
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Tropicana Field could be the Rays' home through the 2027 season unless the team can find a way out of its use agreement.
February 23, 2012, 2:02 am

Some 15 years ago, Tampa Bay's Major League Baseball franchise, then known as the Devil Rays, was still in the womb, a year away from playing its first game. Some 16 years from now, will the Rays be embarking on their final season of play in the Tampa Bay area?

"I think that's a question they (the Rays) are asking. I'm not," said St. Petersburg Mayor Bill Foster, the city that hosts Rays home games at Tropicana Field. "The Tampa Bay community can support three professional franchises, there's no doubt about that."

Yet they say the best marketing is winning, and despite making the playoffs three of the last four seasons, the Rays' home attendance and local television ratings have dropped. There were even a significant amount of empty seats for Game 4 of the National League Division Series in 2011.

Could it be this market of 2.78 million is already stretched too thin with two other existing major professional sports franchises in the NFL's Buccaneers and the NHL's Lightning? Foster doesn't think so. He argues that a sluggish economy coupled with the fact the Rays' success has only come recently as reasons to be open-minded of the future.

Further complicating matters is the proverbial argument that "a new ballpark will cure all ills." The Rays insist the franchise can't survive much longer without a replacement for Tropicana Field, and that any new MLB facility built in the region would have to be outside St. Petersburg, the smaller of the two cities in the region.

The Mayor of Tampa, 15 or so miles to the other side of the Howard Frankland Bay Bridge, would like to speak with the Rays about building a new ballpark, but the team is prohibited from doing so, per the terms of its unique use agreement with the City of St. Petersburg that also stipulates the club play at Tropicana Field through the 2027 season.

The Rays have asked the City of St. Petersburg for permission to explore ballpark options across the bay in Tampa, but it's been refused. St. Petersburg has said it's poised to fight in court if the team attempts to flee before its use agreement ends.

The Rays declined comment for this story.

The Rays argue that the club needs to be closer to its larger corporate fan base in Tampa and in a ballpark that's also more convenient to reach, especially during the work week - and they've got a good point.

In 2010, a group of leaders in the region, known as the ABC Coalition, published a study that concluded that St. Petersburg's location was a major reason why the team draws poorly, concluding that less than 20 percent of the region's population lives within 30 miles of Tropicana Field.

Validating the study was the fact the Rays season ticket base from corporate sponsors is among the lowest in MLB. Typically, two-thirds of MLB season tickets are bought by corporations, but for the Rays, it's only one-third. The region's collective corporate presence already ranks in the bottom half of MLB markets, according to the study.

"The majority of corporate offices in the region are located outside of Pinellas County/St. Petersburg," the report said, noting "the downtown St. Petersburg trade area has the lowest concentration of drive-time population and the Downtown Tampa trade area has the highest."

One thing is certain: the Rays are unlikely to be going anywhere anytime soon. For starters, there is only one market in the U.S. or Canada today without an MLB team that has a potentially-suitable facility, but it's no lock either (see accompanying sidebar). Furthermore, there's only one metropolitan market in the U.S. or Canada with at least three million residents that doesn't have a MLB team. That's Montreal, former home of the Expos and Olympic Stadium, which was one of the reasons the club left for Washington, D.C. after the 2004 season.

In 1995, three years before its first game as a franchise, the Rays chose to sign a use agreement with the City of St. Petersburg to play MLB games at Tropicana Field through the 2027 season, the only current MLB ballpark that is all-indoors, all the time. The Rays' agreement with the city is indeed rare, as it's not a lease, but rather, a use agreement. The Rays don't pay a single cent to play at Tropicana Field - they just have to play all their regular season home games there.

"The agreement states the Rays must play 81 games a year at the Trop through 2027," emphasized Foster. "They can't just say, `well, we'll just pay maintenance on the building (for the length of the contract and leave).' They really can't opt out."

In fact, the Rays had to request approval from the City of St. Petersburg just to play a three-game regular season series near Orlando at Champion Stadium during the 2007 and 2008 campaigns.

I asked multiple legal experts to review the use agreement between the City of St. Petersburg and the Rays. All agreed a court would find the Rays in breach of the agreement if they tried to leave Tropicana Field before the end of the 2027 season, including if the team were sold, declared bankruptcy or was contracted by MLB.

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At issue, however, is just what penalties the Rays would suffer if they were too breach the agreement.

The agreement includes a "specific performance" clause that most legal observers believe puts the Rays in quite the pickle. The city could file an injunction against the team, forcing them to play at the facility if the Rays opted to play home games elsewhere. And there's precedent. In 2002, the Metropolitan Sports Commission, which owns the Metrodome in Minneapolis, sued the Twins to honor the final year of its lease as rumors swirled the team would be contracted by MLB. The Metropolitan Sports Commission won.

Foster estimates the combined bond amount still owed to pay off Tropicana Field to be in the neighborhood of $80-90 million. The City of St. Petersburg expects to have paid off its bonds commitment to Tropicana Field by 2016 but the State of Florida's bond commitment for Tropicana Field continues through the 2027 season, Foster said.

"The public's interest in its local sports team has been recognized as an important legal interest when a professional team abandons its lease as the Twins attempted to do," explained Dr. John E. Murray, Jr., one of the foremost experts on contract law in the U.S. and the Chancellor at Duquesne University. "Professional sports leases have been held to have a special intangible value to the public that is simply not present in other kinds of commercial leases. Money damages alone are not an adequate remedy for the loss of a professional sports team."

The City of St. Petersburg receives just $1 from every ticket sold at Tropicana Field and that money is put back into maintaining the ballpark, according to Foster. Murray says since the City of St. Petersburg generates no real revenue from the facility itself, the benefits of having an MLB team can't be measured in dollars alone.

Still, Marc Edelman, a professor at the Barry University School of Law, said that enforcement of the "performance clause" in the use agreement between the City of St. Petersburg and the Rays is at the judge's discretion.

"The second part of the (performance) clause states that `if a court refuses to grant specific enforcement (of an injunction), the parties agree that one element of the damages to be considered would be the outstanding bond debt at the time of the breach,'" says Edelman.

The City of Seattle tried to make a special performance clause argument in 2008 when it sued the Seattle SuperSonics for attempting to breach its agreement to play at the KeyArena through the 2009-10 NBA season. The SuperSonics and the City of Seattle went to trial, but settled prior to the judge's ruling so it's unknown how the judge might have ruled.

SuperSonics owner Clay Bennett paid $45 million to breach the lease with the City of Seattle and agreed to pay another $30 million if the legislature in the State of Washington authorized at least $75 million in public funding to renovate KeyArena by 2009 and if Seattle didn't acquire another NBA franchise within five years. The $45 million settlement covered lost rent, tax revenue and paid off the remaining debt on KeyArena. The buyout also came five months after a $26.5 million offer by Bennett to break the lease was rejected by the City of Seattle. Bennett moved the SuperSonics to Oklahoma City for the 2008-09 season.

However, unlike the use agreement between the City of St. Petersburg and the Rays, the agreement between the SuperSonics and the City was a lease. Furthermore, the SuperSonics were only two years away from fulfilling their lease obligations, not 16 seasons as is the case in the Rays use agreement.

Edelman believes the Rays options are quite limited. They could request to open contract talks with the City of St. Petersburg regarding amending the current use agreement, and likely have done so already. MLB could also work behind the scenes on ballpark options for the Rays, either in the Tampa Bay area or elsewhere. And if a new ballpark opportunity became available, the Rays could breach the agreement and take their chances in court. Here are six possible outcomes of the Rays situation, from most likely to least likely:

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1. Most likely: The Rays fulfill their agreement and play at the Trop through the 2027 season, and separately, work out an arrangement to move into a new ballpark in the region for the 2028 season.

As hard as it might be to imagine for some, it's actually very possible this option will most likely occur, mainly because A) the Rays are contractually-stuck; B) it traditionally takes a lot of time and effort to build support for a new ballpark in the State of Florida or anywhere else; and, C) the Rays remain a young franchise, still trying to build fan support in a market that's only had a winner the last few seasons.

Although the Rays would like to build a future ballpark in Tampa, it would be foolish for the team and MLB to completely abandon its roots in St. Petersburg after 2027. The team could relocate its spring training operations back to the city and/or house a Florida State League team at a renovated Al Lang Field on the city's waterfront, or on the current site of Tropicana Field.

Precedent: The Marlins. I remember visiting Miami in Sept. 1997 to cover a Padres-Marlins series and reading in the local Miami sports pages about the Marlins plans for a new ballpark, the same year they won their first World Series. Finally, in 2012, 15 years later, the Marlins will open their new ballpark. Some 15 years from now, the Rays could very well be in their final year at the Trop.

2. Behind the scenes, MLB studies the future of baseball in the Tampa-St. Petersburg region and other North American markets; finds a new ballpark alternative to the Trop before 2027; and proposes a settlement to the City of St. Petersburg.

Since the Rays are prohibited from speaking to any city outside of St. Petersburg about a new ballpark, per their use agreement, MLB could do that for them behind the scenes. If an agreement is reached to open a new ballpark elsewhere before the end of the 2027 season, the Rays could then attempt to breach the agreement and take their chances on the consequences in court, including financial damages.

3. The Rays breach the lease, claiming the facility is no longer suitable for baseball.

Although it's highly unlikely, this possibility can't be discounted. Tropicana Field is an indoor facility that is dependent on a functioning roof, and Florida is in hurricane territory. In August 1992, Hurricane Andrew slammed into the Cleveland Indians' brand new spring training facility. The Tribe had been set to debut in Homestead, south of Miami, in the spring of 1993, but that never happened because of Mother Nature. Hurricane Katrina severely damaged the roof at the Superdome in New Orleans, forcing the NFL Saints to play an entire season elsewhere. Last year, the NFL's Minnesota Vikings were forced to play games at the University of Minnesota following a roof collapse at the Metrodome. Mother Nature notwithstanding, the Rays could also attempt to make an argument that Tropicana Field no longer meets ballpark standards compared to the 29 other MLB franchises and is therefore no longer suitable for play.

4. The Rays Declare Bankruptcy as a Means of Selling the Team or Relocating.

There is precedent for a team declaring bankruptcy and relocating to another market. The Seattle Pilots declared bankruptcy to counteract an injunction by the State of Washington that sought to prevent the team from moving to Milwaukee and becoming the Brewers. But current MLB Commissioner Bud Selig acquired the Pilots in bankruptcy court in early 1970 and did just that. However, back then, detailed league bylaws regarding franchise relocation were less stringent. In 2009, a bankruptcy court prevented Blackberry mogul Jim Balsillie from buying the NHL's Phoenix Coyotes and moving the team to Canada. The Coyotes have a long-term lease to play at Jobing.com Arena in the Phoenix area and Balsillie also attempted to move the team without first receiving permission from league owners.

5. The Rays dissolve, but a separate, 30th expansion franchise is born.

Realizing that bankruptcy is not an option, and claiming to be losing too much money that it can operate any longer, MLB pays the Rays ownership a settlement to dissolve itself. Players still under contract enter a draft to be chosen by the 29 other MLB teams as well an expansion team that debuts the next season. This scenario is highly complicated. It would require approval from the MLB Players Association and would be a potential public relations stain on the game. It happened in the NHL in the late 1970s when the Cleveland Barons merged with the Minnesota North Stars.

6. Least likely: The Rays Are Contracted (e.g. the team folds).

Although the current collective bargaining agreement does not have specific language that prohibits franchise contraction, it's highly unlikely the MLB Players Association would let this happen without a fight. Additionally, causing a franchise to just disappear would be a black eye for baseball and the record books. Frankly, the Mets probably have a better chance of relocating to New Jersey than the MLB Players Association letting contraction happen. Such a doomsday scenario would be an utter embarrassment to the game.

Joe Connor is a contributor to NBCSports.com and author of the annually-updated online spring training travel guide, "A Fan's Guide To The Ultimate Spring Training Experience" which is available for purchase exclusively at his Web sites: http://www.modernerabaseball.com and http://www.mrsportstravel.com.

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