MLB, The Giants, And The Law Job The A's ... Again
Wendy Thurm
Major League Baseball is breathing a huge sigh of relief after a federal appeals court upheld a broad scope of the league's exemption from federal antitrust law on Thursday. But the league's win comes at a high price for the Oakland A's—and adds to the literal ****storm the A's are in at the old and dilapidated Oakland Coliseum.
On Thursday, the U.S. Court of Appeals for the Ninth Circuit issued a unanimous opinion in a case filed by San Jose, Calif. The city charged MLB with violating federal antitrust law by refusing to rule on the A's request to build a new ballpark in San Jose on land the team had agreed to purchase from the city. The A's need MLB's permission to move because the San Francisco Giants hold the exclusive territorial rights to San Jose, thanks to the A's goodwill back in the 1990s when the Giants were desperate for a new ballpark.
San Jose argued that the U.S. Supreme Court's 1922 decision in the Federal Baseball case —which created the league's exemption from antitrust law—had been narrowed by later Court rulings, and no longer applied to issues of franchise location. San Jose also rightly claimed that MLB's exemption from antitrust law is an antiquated and unnecessary legal protection for a $9 billion industry, and one that no other professional sports league in the U.S. can claim.
But the Ninth Circuit did what appeals courts do. It relied on U.S. Supreme Court cases that make no sense in today's world but that have not been overturned by the Court or Congress.
"There is no question that restrictions on franchise relocation relate to the business of providing public baseball games for profit between clubs of professional baseball players," wrote the court. "The designation of franchises to particular geographic territories is the league's basic organizing principle."
That language made incoming MLB commissioner Rob Manfred very happy, given the way it endorses the status quo. "It's important that we prevailed in the litigation because the exemption is very important to the way we've done business," Manfred told reporters.
Unlike the other two-team territories—New York, Chicago, and Los Angeles—the Bay Area's two teams split the counties surrounding their home cities. The A's territory includes Alameda and Contra Costa Counties; the Giants' territory includes San Francisco, San Mateo, Santa Cruz, Monterey and Marin Counties, "plus Santa Clara County with respect to another major league team," according to MLB's constitution. (Here's a map of northern California counties if you need to get your bearings.) In other words, the Giants hold the rights to San Francisco, Silicon Valley, and the wealthy communities just to the north and south.
The language cited above was added to MLB's constitution in the early 1990s when the Giants tried to move south to Santa Clara County to escape cold and windy Candlestick Park on the southern tip of San Francisco. Neither the Giants nor the A's held any rights to Santa Clara County. Then-Giants owner Bob Lurie asked then-A's owner Walter Haas to grant those rights to the Giants. Haas, the commissioner and the other owners agreed. At the time, the A's were packing the Coliseum game after game, with yearly attendance topping 2.5 million; pushing the Giants further away from the Coliseum and San Francisco made sense, at the time.
But the Giants never built a stadium in Santa Clara County, because several voter initiatives to fund such a stadium failed. Instead, Lurie sold the Giants to a group of investors who in turn privately financed what is now called AT&T Park, in downtown San Francisco. The MLB rule granting the Giants "Santa Clara County with respect to another major league team" was never amended.
Despite their immense success since opening AT&T Park in 2000—including three World Series championships in the last five years—the Giants have worked hard behind the scenes to keep the A's from moving to San Jose. The Giants claim that a significant slice of their fan base resides in Santa Clara and San Mateo counties. Of course, the team also gobbles up millions in corporate sponsorships from Silicon Valley tech companies.
The A's started exploring sites for a new ballpark in 2005, shortly after John Fisher and Lew Wolff bought the team. Fisher is an heir to the Gap fortune. His parents Doris and Don Fisher founded the clothing company in the late 1960s. Wolff is a real estate developer and the public face of the franchise.
Wolff first proposed building a new ballpark north of the Coliseum but couldn't convince the multiple landowners to sell. He then turned his attention to a site in Fremont, at the southern end of Alameda County and only 17 miles east of San Jose. The A's planned to purchase land from tech giant Cisco and privately finance a new ballpark, to be called Cisco Field. Two-plus years of political wrangling and neighborhood opposition killed the deal.
That's when Bud Selig announced that he was forming a "blue ribbon commission" to investigate and recommend a solution to the A's ballpark situation. Nearly six years later, that commission apparently is still investigating.
But Wolff pushed on and struck a deal with San Jose in late 2011. The team and the city entered into an option agreement; the A's would pay the city $25,000 per year for three years to have the option to purchase city land in downtown San Jose for slightly less than $7 million. The A's planned to build a privately financed ballpark on that land once MLB approved the move.
But that approval never came, thanks to the Giants' opposition, the blue ribbon committee's "investigation" and the Wolff's inability to build support among the 28 other owners.
San Jose tried to force the issue with its lawsuit. That failed too.
But the city isn't giving up hope. Newly elected mayor Sam Liccardo told reporters on Thursday that the city will ask the Supreme Court to overrule the Ninth Circuit's decision and put an end to baseball's antitrust exemption once and for all. Liccardo sees a no-lose situation for the city because its attorneys, led by famed antitrust lawyer Joe Cotchett, are handling the case on a contingency. The lawyers get paid only if they are successful.
Cotchett and his colleagues are expected to file with the Supreme Court within 90 days. The Court is likely to decide whether to take the case before it adjourns in early July. San Jose will have no easy task in convincing the Supreme Court to hear the case; on average, the Court accepts less than two percent of all appeals in any given year.
Meanwhile, the A's will continue to play their home games in the sewage-strewn Coliseum for the foreseeable future. The team signed a new 10-year lease agreement with the Coliseum Authority in July. The lease deal not only gives the A's some stability going forward, but theoretically ushered in a new, more positive relationship between the team and East Bay officials. Wolff pledged to reconsider building a new ballpark in Oakland and Oakland's newly-elected mayor Libby Schaaf says she's going to "fight like hell" to keep the A's from moving.
Unfortunately for the A's, the Oakland Raiders also play their home games at the Coliseum and are in the market for a new stadium. The Raiders have been courted by San Antonio and are reportedly in the mix to be one of two NFL teams to relocate to Los Angeles. But East Bay officials are working just as hard to keep the Raiders in Oakland.
With Oakland and Alameda county still paying off millions in bonds issued in the mid-'90s to pay for Coliseum renovations (including the infamous Mt. Davis), it seems highly unlikely those municipalities will want to pony up millions more for a new A's ballpark and a new Raiders stadium on the current Coliseum site. And there's a big question whether either the A's and Raiders could raise enough capital to privately finance new side-by-side stadiums on the Coliseum site.
There's little as dear to MLB's legal heart as its antitrust exemption, and the league will do whatever it takes to keep that exemption going as long as possible. It's one reason MLB caved to congressional pressure to take a hard line on performing-enhancing drugs. So what if it means the A's can't move to a different city in the Bay Area and build a privately-financed ballpark? The A's have Billy Beane! They'll be fine! Just not as fine as MLB or the Giants.
Wendy Thurm writes about sports and other things. She practiced law for 18 years but is now almost recovered. She can be found on twitter @hangingsliders. Photo via Getty
And yeah, Clip will become a free agent after this year. Guessing old man Lerner didn't wanna pay $10M for a setup man. Plus, Clip has stated he wants to be a closer and he wouldn't get that opportunity here. Hopefully Storen's bounce back year wasn't a fluke.
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