Billionaire Oakland A’s owner wants a coronavirus rent holiday, but only for him

Times are undoubtedly tough for pro sports team owners, who are looking collectively at billions of dollars in lost revenue thanks to the coronavirus pandemic, though the exact amount will depend on whether they can still play enough games to collect on TV contracts, how much they’ll save on reduced player salaries, and a bunch of other as-yet-indeterminable factors. It helps that the big four North American sports leagues normally bring in almost $40 billion a year in revenue and earn around $6 billion a year in profits (the latter estimated from eyeballing Forbes’ operating income figures, so don’t take that number as gospel), but still the current crisis has team owners looking for ways to pinch pennies, whether it’s telling players they won’t be allowed to play games unless they take huge pay cuts or laying off stadium workers even after they promised they wouldn’t.

Or, if you’re Oakland A’s owner and billionaire Gap heir John Fisher, you decide to simply stop paying rent because their stadium is being considered for use as an emergency medical treatment site while baseball is shut down:

In a March 31 letter, A’s general counsel D’Lonra Ellis cited the stadium authority being “unable to make the Coliseum available for our use” in light of shelter-in-place orders and restrictions on large gatherings enacted by Alameda County and the state.

The A’s had also learned the Coliseum complex was being evaluated as a potential “surge site” for treating COVID-19 patients, the letter stated, and would defer the payment “until we have a better understanding of when the Coliseum will be available for our use.”

Coliseum Authority head Henry Gardner was a little unclear on what justification A’s officials used for withholding this year’s $1.2 million rent payment, telling the Bay Area News Group that “they said because they haven’t used it, they were not able to generate revenue and they have no ability to pay,” then turning around and telling the San Francisco Chronicle that “the A’s never said they didn’t have the money.” There are also mixed reports on whether the ballclub is seeking to defer its rent payment or skip it altogether; BANG has apparently seen the letter, but has chosen not to share it with readers.

Now, there are legitimate arguments for a rent holiday during the pandemic: Some state lawmakers have proposed suspending all rent and mortgage payments for the time being so people don’t lose their homes and businesses for inability to pay, and some nations like Portugal are allowing low-income renters and small business owners to defer rent payments until after the economy has recovered. None of this, needless to say, is what Fisher has in mind, especially since his family investment holdings are thought to include tons of valuable Bay Area real estate — he just wants to be able to skip his own personal stadium rent payment, presumably while all of his tenants go on sending him checks. (It’s worth noting that The Gap has also stopped paying rent on its closed stores, saving an estimated $115 million in April alone.)

Fisher could still be forced to pay up — Coliseum authority member Ignacio De La Fuente responded to the A’s owner’s move by calling his justification “bull” and saying he was “full of it” — but it’s yet another stark reminder of how certain people have the power to simply stop paying rent, while others face eviction proceedings. If you’re Portugal, you try to draw this line based on ability to pay; if you’re the U.S., apparently, you draw it based on the ability to pay high-priced lawyers.

 


11 comments on “Billionaire Oakland A’s owner wants a coronavirus rent holiday, but only for him

  1. I know the Yankees have a mortgage on the Stadium where they are paying $75m a season, and to the best of my knowledge they are not getting any breaks on that ( and they rely on fans at the gate far more then Oakland ( based on attendees): I have no sympathy for any of them. The vendors and small businesses ( like those by Yankee Stadium)? Those I do.

    • It’s not really a mortgage though…. if it was a mortgage, they’d own the stadium and pay taxes on it. They had to get a city/state agency (the IDA if I recall correctly) to issue new bonds to refinance the remaining bond debt (I think in 2016?).

      The Yankees make payments in lieu of taxes that are supposed to cover the bond debt obligations. I guess you could say they have already gotten their break, since roughly 40% of their stadium was financed with tax exempt municipal bonds.

  2. A’s aren’t refusing to pay rent, they’re deferring it until the facility, removed from availability by the county itself, is restored to use.

    “There are also mixed reports on whether the ballclub is seeking to defer its rent payment or skip it altogether; BANG has apparently seen the letter, but has chosen not to share it with readers.”

    Because they are following the existing Force Majeure clause in their rental agreement, and while the local media loves to trash the A’s, they also hate to backtrack on a negative story.

    Also, Fisher doesn’t run The Gap. His two older brothers (who are the majority owners) were running it into the ground even before the pandemic. Fisher has never been good at business so he leaves that to other people most of the time.

    • Do you have a source confirming that Fisher plans on paying the rent eventually? BANG looks to be the only news outlet that saw the letter, and it reported that the force majeure clause “relieves both sides from obligation when there is an extraordinary event,” which sounds like they could refuse to pay entirely. (Though it also included a line about deferring payment, hence “mixed reports.”)

      • https://www.sfchronicle.com/athletics/article/1-2-million-rent-dispute-erupts-between-A-s-and-15282202.php
        ===========================================

        In a March 31 letter, A’s general counsel D’Lonra Ellis cited the stadium authority being “unable to make the Coliseum available for our use” in light of shelter-in-place orders and restrictions on large gatherings enacted by Alameda County and the state.

        The A’s had also learned the Coliseum complex was being evaluated as a potential “surge site” for treating COVID-19 patients, the letter stated, and would >>>defer<<< the payment “until we have a better understanding of when the Coliseum will be available for our use."

        • That’s the same quote that was in the BANG article. It doesn’t indicate whether the A’s are promising to make the payment once they know when they can restart games.

      • Also, as you may read in Susan Slusser’s article, the whole “can’t pay because no games this year” talking point pushed by BANG was shot down by the person who supposedly said it.

        ============================================
        “The A’s never said they didn’t have the money, they’ve never represented that,” Gardner said. “The A’s position is what’s stated in that letter, and we have been having discussions about that because it’s a lease agreement — we need it, we expect it.”

      • https://mobile.twitter.com/susanslusser/status/1262910324400721920

        Susan Slussers tweet with a screencap of the letter

        • Anyone have a copy of the lease that indicates whether the force majeure clause allows the A’s to skip payments or only to pay them late?

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