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Sunday, December 20, 2009
 
City of San Francisco Threatens to Sue MLB

The San Francisco Chronicle reported on Friday that San Francisco's City Attorney has sent Major League Baseball officials a letter threatening a lawsuit by the city of San Francisco should MLB approve the relocation of the Oakland Athletics to San Jose. MLB has been exploring the possibility of moving the A's to San Jose following the collapse earlier this year of a plan to move the franchise to Fremont, CA, with a decision on the San Jose relocation expected as early as next month.

San Francisco's purported basis for suing MLB stems from its financial interest in the Giants. The city reportedly receives $3.6 million in rent the from the Giants annually for AT&T Park, as well as taxes on game day revenues such as ticket sales and parking. The city apparently believes that these tax revenues would be threatened should the A's relocate to San Jose, a territory which has historically been assigned to the San Francisco Giants.

On first impression, the threatened suit by the city of San Francisco seems problematic on several fronts. First, the city would have to convince a court that its interest in protecting its tax revenues from the Giants gives it sufficient standing to legally challenge MLB's approval of the relocation of another franchise into the Giants' assigned territory.
However, even if San Francisco is able to establish standing, such a suit would also place the city in the awkward position of effectively asking a court to enforce MLB's anticompetitive territory allocation system. While professional baseball's practice of granting franchises exclusive rights to certain geographic territories has previously been challenged by those seeking to enter a restricted market -- suits which have historically been dismissed pursuant to MLB's antitrust exemption (see, e.g., New Orleans Pelicans Baseball, Inc. v. National Association of Professional Baseball Leagues, Inc., Case No. 93-253, 1994 WL 631144 (E.D.La. March 1, 1994)) -- a suit by San Francisco would mark the first time that MLB has faced a lawsuit seeking to require the league to enforce this restriction. The optics of such a suit, being filed by a municipality no less, would be less than ideal. I suspect most courts would be uncomfortable issuing an order requiring baseball to enforce its territory restriction, especially in a case where MLB had already decided to set aside its long-standing anticompetitive policy.





5 Comments:

"The city apparently believes that these tax revenues would be threatened should the A's relocate to San Jose, a territory which has historically been assigned to the San Francisco Giants."

I find this idea very interesting. While the territory has been assigned to the SF Giants, this is actually rather new (for baseball at least). The rights to San Jose were just assigned to the Giants in 1992. Do you think it matters that the Giants have only held this right for 18 years?

Blogger Paul -- 12/21/2009 6:16 PM  


(Link)

http://www.contracostatimes.com/columns/ci_13861635

Blogger Paul -- 12/21/2009 6:17 PM  


Don't they have a non-relocation clause in their lease?

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