Oakland considers lawsuit against the Oakland A's and San Jose

I just returned from a wide-ranging, video-blog interview with Oakland City Attorney John Russo. The video itself is going to be about 30 minutes long when finished, but what Russo had to say, particularly about the Oakland A's, was so important it could not wait for the video. This blog post specifically concerns the Oakland A's baseball organization and The City of Oakland.

 A's Oakland Coliseum lease is under Russo's gaze

Our conversation on the Oakland Athletics started because I asked John what he thought of San Francisco City Attorney Dennis Herrera's letter to Major League Baseball. The letter, released on Thursday and I have (and will post for review) a copy of, states at length that the City of San Francisco is concerned with the potential negative financial impacts on that San Francisco if the Oakland A's are allowed to move into the San Francisco Giants 'territorial rights' area as established by the current Major League Agreement.

The Major League Agreement specifically lists Santa Clara County (of which San Jose is part), along with San Francisco County. This is the specific wording:

City of San Francisco; and San Francisco, San Mateo,
Santa Cruz, Monterey and Marin Counties in
California; provided, however, that with respect to all
Major League Clubs, Santa Clara County in California

Further, past studies I've read have indicated that 47 percent of the SF Giants' fan base comes from the South Bay Area, including San Jose. Oakland A's ownership would be essentially raiding the Giants' main fan base. Such an action would cause harm to the Giants revenue stream and thus their ability to pay the contractually agreed upon rent to San Francisco. Thus Herrera's concern and the letter Russo and I talked about.

San Francisco believes the Oakland A's moves and that of Major League Baseball allowing the A's to consider and work with San Jose to be tampering with their agreements with the San Francisco Giants.

Russo thinks Herrera's letter is "interesting"

On the matter of the letter, Russo said "I think its an interesting letter. I spoke to Dennis today. I told him I think its an interesting theory. I can see where his concerns are; I understand it." Russo says that he can see where San Francisco taxpayers are a third-party beneficiary of those territorial rights given to the SF Giants.

In other words, the SF Giants ability to make lease payments that then go to the City and allows them to maintain services that are of critical need and threatened in an already down economy, would be even more in trouble if the A's move to San Jose reduced the Giants' revenue stream.

Russo said he's "Not going to speak for Dennis" on any possible damage claims because Russo doesn't understand what "territorial rights" mean. Now to clarify, Russo knows what the Major League Agreement is, but the question is can it really be enforced by an organization in Major League Baseball, that's exempt from common anti-trust laws?  If they were not, then anti-trust laws would come to focus on the A's planned move to San Jose, but then because they don't the A's deal does not come under that legal focus.

Still, there's a big, big problem - and because of the baseball exemption and the League's, the Oakland A's, and the City of San Jose's behavior. 

"I do know that over the years, the Giants relied upon that territory in creating their ballpark, Russo said. "I also know that here in Oakland we relied on certain representations by the A's in signing a very flexible and advantageous lease with them. And I'm looking into whether or not their clear, and very clear attempt to move to San Jose - and San Jose's attempts to lure the A's - whether or not those are interfering with our rights under the lease."

Russo said that anti-trust exemptions aside, he's looking specifically into the A's actions and whether those actions violated their lease agreement.

The last time I saw this kind of situation it was the Oakland Raiders actions with respect to the then-current master lease agreement at the Coliseum. As Economic Advisor to the Mayor of Oakland when Elihu Harris was Mayor, it was my job to look at the actions the Raiders took that were in violation of that contract; they were many. Eventually the City of Oakland - along with the County of Alameda and the Oakland Coliseum, called "The East Bay Entities" - did sue the Raiders.

Russo would not say where he was in his analysis, but given that he's looking into A's violations and the City of San Franciso's listing "causes of action" in Herrera's letter - which are commonly a preview of the design of a lawsuit - I can see the City of Oakland teaming with the City and County of San Francisco against both the A's and Major League Baseball and San Jose.

San Jose? Yes. Because of its actions, San Jose is subject to accusations that it also is interfering with lease agreements in both San Francisco and Oakland. I wonder if they did any risk assessment before they embarked on their course of action it trying to get the A's to leave Oakland for San Jose?

The video interview with John Russo will be posted tomorrow, Saturday afternoon, December 19th.

Stay tuned.