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Read Jim's Baseball Winter Meetings presentation on ballpark liability, the Anheuser-Busch sponsorship lawsuit and health care reform for teams.

Read Jim's tips on sponsorship and naming rights agreements.

Read Jim's presentation on ballpark liability, ballpark leases and Minor League Baseball-regulated transactions.

Read Jim's presentation on ballpark liability and ADA amendments.

 



 
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Ballpark support remains vital in many ways

A recurring theme in the industry of minor league baseball is the need for public financing for the construction, improvement and maintenance of ballparks. Often, perhaps almost always, opposition arises questioning the return on investment to the taxpayer.

During the recession, private and public money was tight. By contrast, over the past few years, minor league franchise transactions have increased, both in number and in individual values. However, the fundamental calculus remains in effect. It takes a cooperative financial effort, as well as a political effort, to construct, improve and maintain a ballpark that benefits the local community. A municipality that does not recognize its role and obligation to do its part will run the risk of losing its team to another municipality that is more willing to provide an attractive ballpark package.

In part, this year's announcement of the transfer of two franchises from the California League to the Carolina League follows prolonged concern that the local municipalities were not able to improve or properly maintain the ballparks, and the franchise owners were not willing to invest private funding for those purposes.

But where there's a will, there's a way. Aberdeen, Md., home of the IronBirds, is struggling with the financial reality that it is spending approximately $2 for every $1 it receives from leases and admissions taxes. The shortfall comes from tax revenue from other sources. This issue is related to maintenance of and necessary public improvements for a ballpark that is only 15 years old. In September the Aberdeen City Council approved about $1 million to replace deteriorated railings at the ballpark.

Also along the East Coast, ownership of the Potomac Nationals in 2015 announced a largely privately funded ballpark project to be constructed on privately owned land adjacent to commercial property. The $70 million project was expected to benefit from a nearby parking garage being financed by the state of Virginia, and the ballpark financing would largely come from private funds. The plan included creative naming rights, namely sponsorship deals that would generate sufficient annual revenue to cover the debt service. However, since last spring the plan appears to be on hold.

In nearby Richmond, Va., plans for a new stadium to replace "The Diamond," home of the Flying Squirrels, are being discussed. Public sector land and money may well be in the picture, although details have not been announced.

 —October 26, 2016

Lawsuits show possible vulnerability to class actions

Two lawsuits that involve baseball illustrate why employers and others should think more carefully about how they comply with government regulations, or about conditions affecting ballpark liability. The lawsuits are both in a California federal court. If certified as class actions, and if successful, they could result in far greater monetary settlements or verdicts than separate lawsuits.

One is the well-publicized lawsuit regarding minimum wage and overtime for MiLB players under both the federal and state versions of the Fair Labor Standards Act (FLSA). In July, U.S. Magistrate Judge Joseph C. Spero issued a 100-page opinion denying class-action certification, but left open reconsideration. He scheduled a hearing on the issue for December.

A point that emerges in his order for the hearing on the plaintiffs' request for reconsideration is that an FLSA case will be very difficult to prove without detailed, contemporaneous records of hours worked. The technical requirements of an FLSA case will be difficult to meet if the individual players must assert their cases one-by-one.

A second class action, also pending in the U.S. District Court for the Northern District of California, involves an attempt at class action certification for spectators injured at major league ballparks. This case is at an early stage. The attorneys, we expect, will be arguing about the certification as a class action, especially in light of the small percentage of fans injured by foul balls and broken bats flying into the stands.

Class-action lawsuits must meet certain tests. They are often brought in consumer cases, and have been criticized for resulting in small awards for all except a few of the aggrieved, with sizeable fees for lawyers. Arguments in their favor include access to relief even when the value of damages is small.

 —October 17, 2016

House bill seeks to exempt MiLB players from minimum wage

Whether Minor League Baseball players are exempt from the federal minimum wage law is an issue that might—or might not—be settled by proposed legislation winding its way through Congress. The Save America's Pastime Act (H.R. 5580) would add minor league players as an exception to the federal Fair Labor Standards Act (FLSA).

MiLB expressed its support for the bill in light of a class-action lawsuit challenging whether the players are exempt. The bill was introduced last month by Reps. Brett Guthrie (R-Ky.) and Cheri Bustos (D-Ill.) and was referred to the House Committee on Education and the Workforce.

But last week, Bustos withdrew her support. She said in a statement that she had new information and, "I cannot support legislation that does so at the expense of the players that draw us to stadiums like those in the Quad-Cities and Peoria."

A news release on Guthrie's website argued, "If the law is not clarified, the costs to support local teams would likely increase dramatically and usher in significant cuts across the league, threatening the primary pathway to the majors and putting teams at risk."

The FLSA is a complex law that governs not only minimum wage but other issues such as overtime. It does exempt certain employers, including amusement or recreational establishments and seasonal events, but only under certain circumstances—some of which fit MiLB.

Aside from the issue regarding players pay, much of which is borne by MLB, MiLB team management should review its pay practices to ensure they are in line with all the provisions of the FLSA.

 —July 7, 2016

 
 
 

This website contains general information that should not be considered legal advice or legal opinion concerning individual situations. Legal counsel should be consulted for specific advice. Unless otherwise stated, inclusions of attachments or links to third-party websites are meant to be informational and do not constitute agreement with or endorsement of material that is presented.

Copyright 2004-2016 by L. James Juliano Jr.
Legally Speaking® is a registered trademark of the law practice of L. James Juliano Jr.

 

 
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