San Diego Union-Tribune

NORBERTO SANTANA JR.

Chargers guarding strategy as lease talks near

October 28, 2002

Abstract:

With a critical deadline looming just a month away, Chargers officials are staying silent on their strategy for dealing with a key renegotiation clause in the team's stadium lease with the city.

Mark Rosentraub, a dean at Cleveland State University who has worked with several cities dealing with sports franchises, said the Chargers only reached the trigger mark in 1998. Since then, he said, the team has not paid out enough to force a renegotiation of the lease agreement.

Rosentraub also said the trigger section has several vague terms, such as "benefits" to players that can be interpreted many ways. For example, if medical treatments for injured players are included, then salary costs could soar. Rosentraub also said that without access to individual player contracts, he could not verify current estimates.

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Copyright SAN DIEGO UNION TRIBUNE PUBLISHING COMPANY Oct 28, 2002

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With a critical deadline looming just a month away, Chargers officials are staying silent on their strategy for dealing with a key renegotiation clause in the team's stadium lease with the city.

Under the 1995 agreement, the Chargers are allowed to reopen contract talks during windows that can be opened once roughly every four years if their salary costs meet certain conditions.

Often referred to as "the trigger," the clock on the renegotiation notice starts ticking Dec. 1.

After Dec. 1, team officials have 60 days to notify the city whether they have met the salary threshold. That notification would activate a series of deadlines that could ultimately lead to a negotiated change in the contract between the team and city, to the team's relocation or to lawsuits.

With Super Bowl XXXVII in San Diego so close to the trigger date, neither side is excited about the possibility of creating a negative atmosphere.

And as they try to gain support for a new stadium proposal, Chargers officials are especially silent.

"Our focus now is on the great season the team is having, a great playoff run and promoting the best possible Qualcomm site proposal to the public," said Mark Fabiani, special counsel to Chargers President Dean Spanos. "We're not going to talk about the trigger."

Earlier this year, when team officials posed the threat of the team relocating to Los Angeles, they said their estimates showed they could have triggered a renegotiation last year and expected to be able to do the same this December.

That announcement prompted the San Diego City Council to appoint a Citizens' Task Force on Chargers Issues to study the team's demands and explore what, if anything, could be done in a fiscally responsible way to keep the Chargers in San Diego.

This week, a consultant hired by City Councilwoman Donna Frye told task force members that based on his estimates, the team would not be able to meet the salary mark this year.

That would mean the Chargers could not force a renegotiation of their lease, which extends to 2020.

Mark Rosentraub, a dean at Cleveland State University who has worked with several cities dealing with sports franchises, said the Chargers only reached the trigger mark in 1998. Since then, he said, the team has not paid out enough to force a renegotiation of the lease agreement.

However, Rosentraub also said the trigger section has several vague terms, such as "benefits" to players that can be interpreted many ways. For example, if medical treatments for injured players are included, then salary costs could soar. Rosentraub also said that without access to individual player contracts, he could not verify current estimates.

Frye hired Rosentraub in June, paying $2,700 from her council budget for the analysis.

She said that at the time she was uncomfortable with the city's preparation for the triggering event. With the stadium in her home district, Frye said she wanted to make sure that adequate information was provided to the public.

Dan Barrett, a sports consultant hired by the city, told task force members earlier this week that he questioned Rosentraub's estimates, saying they omit certain figures included in the lease.

While Barrett has not provided final numbers of his own to the task force, he previously told members that his estimates lead him to believe that the Chargers met the trigger mark last year and may be able to do so this year.

Fabiani also questioned the accuracy of Rosentraub's analysis by adding, "In life, you get what you pay for."

Responding to those criticisms, Frye said, "If someone says this is not accurate, then fine, show us the numbers."

Several task force subcommittees are about to begin reviewing a series of financial documents turned over by the Chargers, which could shed more light on the renegotiation possibilities.

Confirming revenue and salary figures while simultaneously trying to craft a deal may be the biggest challenge for team and city officials.

Both sides agree that the short time lines in the 1995 agreement's renegotiation clause make a deal difficult to craft.

Assistant City Attorney Les Girard said, "There are really short time frames and it doesn't give much time to talk this through. It probably was not a healthy way to do it."
Attorneys serving on the task force have been examining the 1995 agreement for months and are close to issuing a series of recommendations to city officials. They expect to deliver their opinion on options by Nov. 15 to the City Council.

"There are very bright and capable lawyers on that subcommittee, and their comments and suggestions have been helpful," Girard said.

David Watson, an attorney who leads the task force, said the panel's subcommittee reviewing the 1995 agreement has identified numerous issues that could help the city in any negotiation.

"The contract is not as one-sided as some people think," Watson said. "We're not negotiating with a gun at our head. It's maybe five feet away."

Norberto Santana: (619) 718-5069; norberto.santana@uniontrib.com