Reminder: “state-of-the-art” clauses let team owners make stadiums the gifts that keep on giving

In case you missed it, Aaron Gordon had a good overview at Vice Sports yesterday of stadium state-of-the-art clauses and how they screw over taxpayers, citing me lots. In particular, Gordon noted that one of the big problems with these clauses — which tons of local governments continue to agree to — is that “state-of-the-artness” is a legally fuzzy concept:

According to the Rams’ lease, such things are measured by at least 15 different components: “everything from luxury boxes to club seats, lighting, scoreboards… regular stadium seating, concession areas, common areas (such as concourses or restrooms), electronic and telecommunications equipment,” as well as locker and training rooms, and the field itself.

But, according to an analysis by Kristen E. Knauf in the Marquette Sports Law Review, this doesn’t provide much clarification. What is state-of-the-art lighting? How does one rank NFL locker rooms? Does a state-of-the-art concession area mean better food, shorter lines, Apple Pay compatibility? The lease doesn’t provide any details. It’s up to an arbitrator to decide, and that arbitrator just so happened to side with the Rams in 2005. That triggered negotiations for a $30 million stadium upgrade, which was completed in 2009.

It’s worth a read, especially if you’re a local government official who is considering signing one of these clauses. In fact, if you happen to be standing near a local government official, consider printing this out and smacking them upside the head with it. History will thank you.

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10 comments on “Reminder: “state-of-the-art” clauses let team owners make stadiums the gifts that keep on giving

  1. I decided to see if I can see such a clause in Sacramento’s deal, and I can’t. For reference:

    If it’s in there, it’s pretty well hidden.

  2. MikeM – It is in the Sacramento agreement. Look at the Arena Design and Construction Agreement, page 29.

  3. Well, one thing to keep in mind: we are the government. If more people would pay attention to their local and national politics and vote we’d probably end up with government that truly mirrored our own values. I think more people know who are finalists on TV talen shows than who their elected officials are.

  4. It did not matter in Sacramento. The pro-arena crowd bussed people from outside the city of Sacramento and had them lining up outside the council chambers early in the morning. Those of us who are residents with jobs were stuck in the ante-rooms and were unable to comment. In addition, the mayor wanted to build an arena regardless of what it cost. The deal was structured to avoid any trigger that would have put the question to the people.

  5. I don’t see it either. And I looked at both page 29 of the document and page 29 of the PDF.

  6. It’s been weeks since I mentioned Holographic Displays in this forum.

    The Rams have been waiting since 1995 for Holographic Displays, people… tick tock… How long do you think you can keep your NFL team if you won’t invent Holographic Displays????

  7. Sorry about the bad reference. I used the copy I had downloaded when it was originally posted to find the page then looked for the link to the document on the website. It is on page 45 of the PDF, page 39 of the document under “Quality Standard”.

  8. That’s not a state-of-the-art guarantee clause, RA, even if it contains the words “state of the art” in it. If you look at the other references to the Quality Standard, it’s just a guarantee that the initial construction is considered NBA quality; there’s nothing in there about Sacramento needing to provide further upgrades to keep it on par with other new NBA arenas that are built later.

    (Actually, clauses like that would be in the lease, not the construction agreement. Has anyone looked there?}

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