No, Rays owner can’t pay a “penalty” to move out of Tampa Bay before 2027

I don’t usually like to respond here to things that were only raised on Twitter, but this seems like an important one: Boosters of baseball in Montreal have seized on this week’s announcement that Tampa Bay Rays owner Stuart Sternberg has given up on a new stadium in Tampa for now as a sign that the team could be headed for relocation. And sure, their lease says that the Rays can’t move before 2027, but either Sternberg or a new owner can just get out of that by paying a lease penalty and then skedaddling.

Except that’s not what the Rays’ lease says at all. Here’s the MOU signed by the Rays and the city of St. Petersburg in 2016 to amend the team’s lease, and here’s the relevant sections:

And then a whole bunch of dollar figures, which comes down to $3 million a year if the team leaves before 2023, and $2 million a year if it leaves before 2027.

That wouldn’t be much of an obstacle if Sternberg wanted to move the team — but note that this only applies if the team wants to move to “another location in Pinellas or in Hillsborough” counties. There is no provision in the MOU that will allow Sternberg to move anywhere else in the world other than those two counties. Sure, he could try to negotiate one with St. Pete officials, and might even be able to do so once 2027 is getting closer and it’s a matter of “I’m gonna leave anyway, let me pay you some cash to let me do it a year or two early,” but there is no mechanism currently in place for him to demand to be allowed to do so.

St. Petersburg got a lot of things wrong when it built its dome back in the 1980s — building a stadium without first securing a team was the worst move, since it allowed the city to be used as a stalking horse by MLB owners seeking to extract stadium cash from their home cities for a decade before the Rays finally arrived in 1998 — but it did a hell of a job negotiating one of the most stringent stadium leases in the world. Let’s all remember that as we hold our fun debates over whether the best relocated team name would be the MonterRays or the Charlotte Raes.


18 comments on “No, Rays owner can’t pay a “penalty” to move out of Tampa Bay before 2027

  1. That’s a very good point.

    On the other side, if I’m not mistaken, the Use Agreement allow the Rays for rights to benefit from the Tropicana Field land development (until the end of 2027 I think). So if St. Pete wants to develop the land, it must include Sternberg in the negotiations process. This is a topic that could be use to negotiate a mutual agreement to leave before 2027 and let St. Pete re-develop the site.

    https://www.draysbay.com/2014/12/19/7423193/rays-redevelopment-tropicana-field

    • Sure, absolutely. (Though note that if the Rays leave the Trop, they no longer get any share of the redevelopment cash.) But it’s more likely that St. Pete will use this as leverage to get the Rays to move elsewhere in Pinellas County, so as to clear the Trop site for development.

  2. The contract/lease can most likely be broken by the Rays. They’ll just have to pay the city for damages. Google “specific performance” to see why forcing someone to do something (even if you have an “ironclad” contract) is so difficult. The standard remedy is to pay damages, regardless of what the contract says.

    • The bigger issue is: would MLB allow the Rays to move before the lease runs out? It’s a very bad look for baseball, and if Florida politicians threaten MLB’s antitrust exemption, baseball might not allow the move.

      • If St. Pete okays it, it wouldn’t be a bad look for MLB. And if St. Pete doesn’t okay it, it can’t happen, so.

    • In most cases that’s true, but not in the case of the Rays’ lease. Sternberg tried exploring that option years ago, but decided it wouldn’t fly.

      • There is nothing unique about the Rays’ lease. If the Rays say “bye”, St Pete can try to sue for specific performance but that’s usually only granted by a court when you’ve contracted to buy or rent a property and the seller changes their mind and refuses. Not when you’re a renter who wants to walk away. In that case, paying damages is sufficient.

        • The lease grants the city the right to seek a court injunction if the Rays try to skip town. You can argue that a judge might not be quick to grant that, but clearly Sternberg isn’t so sure, as he spent years negotiating an out clause to the lease (which is what expires at the end of this month).

        • Here’s a good explainer on what’s unique about the Rays’ lease (which is technically a “use agreement”):

          https://www.forbes.com/sites/ericmacramalla/2014/12/12/sorry-expos-fans-the-tampa-bay-rays-arent-moving-to-montreal

          • Agreed. Some time has passed since that argument was made, but for the most part it still holds true.

            The type of agreement the Rays have with their landlord does very much change things. They can leave, but they can’t be sure what the upper limit of damages they might be ordered to pay could be.

            If they were to ‘leave’ to be the third team in NY, it might still be worth it (maybe). But for Montreal, Portland, San Antonio?

            That’s huge risk taken on for limited potential upside.

      • But now, with a potential market like Montreal and only 8 seasons remaining (after the 2019 season), throwing more money to break the Use Agreement could make sense financially.

        MLB owners are putting a lot of pressure on the Rays to be more profitable. In Oakland, MLB owners had to cut part of the central revenues to the As to make things happen. Rays may be at a point to get less money from the other owners (sharing revenues). Such situation could change the business plan in Tampa Bay and force the franchise to move.

        • Why do you Montreal boosters forget that Montreal was a terrible market for decades and the team moved for a reason.

          • It wasn’t a terrible market – just a middling one. And the team mostly moved because of Jeff Loria’s desire to own the Marlins and MLB’s desire to threaten the players’ union with contraction.

            I think Montreal would be a decent MLB market. Just not any better than Tampa Bay.

  3. Expos Attendance History:

    www.baseball-almanac.com/teams/montattn.shtml

    When the team was contending (1979-83) and had some of the best players in major league baseball, they drew reasonably well (outdrew the MLB avg by some way).

    The rest of the time, even accounting for the Brochu & Loria Effects, they were below average draws (including those allegedly halcyon days at Jarry Park – capacity 28k+). More worrying is that as the MLB avg attendance rose from 1.3m to 2.5m annually, the Expos trend stayed quite flat over the same 30 year period.

    If they were to be reborn, the Expos would safely outdraw both the Marlins and Rays, and almost certainly the Orioles. Getting past the next tier of bottom end draws (Oak, KC, Pitt, Cin) would be significantly harder.

  4. So the old Montreal Expos will rise from the ashes of the Rays? Lets call them the X-Rays!

  5. Too bad contraction is off the table, sounds like this could turn into Expos 2.0 on the negative side, the next 9 years could be hell for both team and the city. From a owner/MLB standpoint, forgetting the logistics and MLBPA, could the team could be dissolved and resurrected elsewhere a year or two later if another city could meet expansion requirements? It’s comlplex a hundred different ways and quite impossible to do that but it’s an interesting idea for a unique situation.

    Montreal can work out and it did work, with some effort with all involved. They don’t have many realistic options besides Montreal, whether it’s a relocation threat or expansion; they said D.C and Winnipeg would never get a team or would work out there either and both are doing fine. It never worked in St.Pete and likely never will even if a stadium gets built, the Yanks rule there and I doubt that will ever change.

    • MLB would have to buy the team in order to dissolve it, so then they’d be in the hook for any lease lawsuits.

      Anyway, I think Stu Sternberg still wants to own an MLB team, and may even still prefer to own one in Tampa Bay. He just wants to own one in a new stadium that he doesn’t have to pay for.