The Legal Ramifications of the Two-City Rays

By now, you’re undoubtedly aware that Major League Baseball gave the Tampa Bay Rays the go-ahead to explore playing a divided home schedule between St. Petersburg and Montreal. The plan is certainly ambitious, if nothing else:

Though no details of the overall plan are set, the basic framework is for the Rays to spend the first 2½ months or so of the season, playing about 35 of their 81 home games, in Tampa Bay, then move north by early June to finish the schedule in Montreal.

The Rays can pay the players for the inconvenience, similar to the stipends they get for taking international trips, and as part of a compensation package that also could offset other issues such as taxes, currency exchange (though they’re paid in U.S. dollars) and family travel costs.

But practical issues aside, the idea also faces a series of legal hurdles. First, the team’s use agreement with the city of St. Petersburg simply doesn’t allow it. That’s right – the Rays, unlike most teams, aren’t technically a tenant. They’re legally a licensee, as Eric Macramalla explains for Forbes:

The Rays never signed a traditional lease. Rather, they signed a Use Agreement, which, to say the least, is an onerous agreement that strongly favors St. Petersburg. A Use Agreement is in stark contrast to a traditional lease, where a tenant typically owes the landlord what’s left on that lease after breaking it.

As for sharing games with Montreal, the Use Agreement at Section 2.04 expressly provides that the Rays must “play all its homes games” at Tropicana Field unless St. Petersburg consents to the Rays playing some of its game elsewhere.

What’s the difference between a lease and a use agreement? Consider a lease what you sign when you rent an apartment, and a use agreement what you agree to when you buy a movie theater ticket. The lease (usually) gives you exclusive rights to possession of the apartment, and the landlord rights to enter from time to time to fix or check on things. When you lease the premises, you control who can come and go.

But when you simply agree to use the premises to watch a movie, you’re allowed limited, non-exclusive rights and uses at the discretion of the licensor, which is why the theater can throw you out for a whole host of reasons. The Rays’ use agreement says in no uncertain terms that the team is bound to Tropicana Field through 2027, period. John Romano wrote about it back in 2012:

This brief, four-sentence section is known as the “exclusive dealings” portion of the stadium use agreement between the Rays and St. Petersburg.

In other words, it is the lock keeping the Rays inside Tropicana Field. And if you doubt its ability to intimidate, you haven’t been paying attention. . . .

Which is exactly what the city had in mind in the early 1990s when its attorneys were studying the leases of other Major League teams while drafting this agreement.

The clause, essentially, forbids the Rays from negotiating to play in any stadium other than Tropicana Field before 2027. And any violation would result in “irreparable harm and damages.”

That is the deal that the team agreed to back in 1997.

But the Use Agreement isn’t the only problem. Back in 2016, the team also signed this Memorandum of Understanding with St. Petersburg, which addressed the team’s efforts to find and fund a new stadium. That MOU only allowed the team to seek new stadium sites in two Florida cities: Pinellas and Hillsborough. That MOU also prohibited the team from playing its home games anywhere other than Tropicana Field (which the MOU rather ominously calls “the DOME”) until after 2027, and further bars the team from even negotiating to play its home games elsewhere until then. Paragraph six on page three of the Agreement allows the team to break the agreement only if it finds a stadium site in Pinellas or Hillsborough. Montreal isn’t mentioned. On page eight of the Agreement, St. Petersburg is given the right to obtain a court order requiring the team to play in Tropicana Field if the Rays breach the agreement and start playing their home games elsewhere. So simply put, if the Rays started playing home games in Montreal, the city could sue them, and the team would likely lose. If the team even started to negotiate with Montreal, the city could sue them, and the team would likely lose.

So it’s hard to understand what MLB is doing by granting “permission” for the team to look at Montreal. MLB just isn’t the entity from which the team needs permission; MLB could grant permission a hundred times, and it won’t change that both the Use Agreement and 2016 MOU unequivocally bar the Rays from negotiating with Montreal until 2027.

Now, all agreements are negotiable. St. Petersburg could, in theory, modify the MOU and allow the two-city arrangement. But thus far, that doesn’t seem terribly likely as Jeff Passan related for ESPN:

Put it this way: A few hours after the news broke that Major League Baseball’s executive council granted permission to the Rays to pursue a two-city solution, St. Petersburg, Florida, mayor Rick Kriseman said he would not grant the team permission to discuss any proposal with Montreal. The Rays’ lease with Tropicana Field, which is located in St. Petersburg, runs through 2027. “This is getting a bit silly,” Kriseman said.

Kriseman added this at a press conference later:

Here’s the transcript if you can’t hear the audio:

I want to be crystal clear. The Rays cannot explore playing any major league baseball games in Montreal, or anywhere else for that matter, prior to 2028 without reaching a formal memorandum of understanding with the city of St. Petersburg.

Kriseman added that he has “no intention of bringing this [two-city] idea to our city council to consider.” St. Petersburg’s previous mayor had similar thoughts, which he expressed more candidly:

The bottom line is that since the MOU and Use Agreement clearly give St. Petersburg the right to control where the Rays play their home games, the team likely isn’t going to be playing in Montreal before 2028, unless they offer a concession significant enough for the city to change its mind. At this point, it’s unclear exactly what that concession would be. In fact, the team stands to receive the greatest monetary benefit by staying put. That’s because the one significant cash flow granted to the team by the contract is half of all redevelopment revenues from the 86-acre site on which Tropicana Field currently sits. That cold potentially be tens of millions of dollars — but only if the team remains at the Trop through 2027 as required.

St. Petersburg, therefore, is firmly in the catbird seat: if the team stays, the city gets what it wants. If the team leaves, the city keeps all of the redevelopment money and could receive millions of dollars in damages in a lawsuit against the team. It’s no small irony that the Rays, the one team that actually badly needs a new stadium, is the one team that can’t seem to get one.

Sheryl Ring is a litigation attorney and General Counsel at Open Communities, a non-profit legal aid agency in the Chicago suburbs. You can reach her on twitter at @Ring_Sheryl. The opinions expressed here are solely the author's. This post is intended for informational purposes only and is not intended as legal advice.

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Ralph Rowdie
4 years ago

Thank you, Sheryl. I’ve been hoping for an article about this from you!