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Major League Baseball Sued Over A’s Relocation by San Jose

June 19, 2013

Major League Baseball Sued by San Jose Over A’s Relocation

Major League Baseball intends to block the A’s move using provisions of its rules that unlawfully restrict the transfer and relocation of teams, San Jose said in the complaint. Photographer: Daniel Acker/Bloomberg

Major League Baseball was sued by the city of San Jose, California, accused of improperly keeping the Oakland Athletics from moving there to shield the nearby San Francisco Giants from competition.

San Jose alleged in a complaint filed yesterday in federal court that there’s a “blatant conspiracy” by MLB to prevent the A’s from moving and the city has lost millions of dollars in new sales-tax revenue as a result.

San Jose sought baseball Commissioner Bud Selig’s blessing to relocate the A’s in 2010, according to the complaint. He hasn’t approved the move, which would place the A’s in the defined territory of the Giants, according to the suit, which names Selig as a defendant. The A’s currently play home games at the O.co Coliseum in Oakland, on the east side of the San Francisco Bay.

“The Giants have been able to build their base of support down the west side of the bay,” said Paul Swangard, a University of Oregon professor and managing director of the school’s Warsaw Sports Marketing Center. “To have a team move to San Jose would undermine the support they’ve built up, and baseball is trying to protect that.”

Rob Manfred, MLB’s executive vice president, said the league has acted in the best interests of fans and communities.

‘Unfounded Attack’

“The lawsuit is an unfounded attack on the fundamental structures of a professional sports league,” he said in an e-mail. “It is regrettable that the city has resorted to litigation that has no basis in law or in fact.”

A’s owner Lew Wolff didn’t immediately return a call seeking comment about the lawsuit.

Major League Baseball intends to block the A’s move using provisions of its rules that unlawfully restrict the transfer and relocation of teams, San Jose said in the complaint. One such rule says no team can move “within the operating territory of a member without the written consent of such member.”

A team has exclusive territorial rights in the city where it’s located and within 50 miles (80 kilometers) of the city’s corporate limits, according to the complaint. The proposed site for a new Athletics ballpark in San Jose is 48 miles from the Giants’ AT&T Park in San Francisco.

Protect Monopolies

The rules let teams unreasonably restrain trade and protect their monopolies, and deny consumers the benefits that would flow from increased competition, according to San Jose.

“It has become abundantly clear that Major League Baseball prefers to use territorial restrictions as an excuse to restrict commerce and prevent the Athletics from relocating to San Jose,” San Jose Mayor Chuck Reed said in an e-mailed statement. “This restriction is costing San Jose residents millions of dollars in new annual tax revenues that could go towards funding more police officers, firefighters, libraries, gang prevention efforts, road repairs and other critical city services.”

Construction of a new ballpark in San Jose has been stalled by the Giants’ claim of territorial rights to Santa Clara County, Reed said. The league’s failure to approve the relocation interferes with an option agreement San Jose has with the Athletics Investment Group LLC, the limited partnership that owns and operates the A’s, to purchase property for the ballpark, according to the e-mail.

Court Order

The city is seeking a court order saying baseball’s actions violate antitrust law and barring MLB from prohibiting the relocation of the A’s.

The dispute over moving a team to San Jose, the largest city in California’s Silicon Valley, dates back to the 1980s, when the Giants unsuccessfully tried to get San Francisco voters to approve a new ballpark. The Giants got their own stadium in San Francisco in 2000.

After San Jose began efforts to bring the A’s south in 2004, the Giants claimed to have exclusive rights to territory including Santa Clara County, where San Jose is located, and MLB has stalled progress in getting owners to vote on whether the A’s can move, according to the complaint.

“San Jose emerged over the past 20 years and is now a legitimate market unto itself,” Swangard said. “The Giants don’t want to see the A’s come in and take away part of their fan base.”

San Jose is California’s third-largest city and home to Cisco Systems Inc. and eBay Inc. (EBAY:US) Oakland has recently brought in former Los Angeles Police Chief Chief William Bratton to help fight growing crime.

“Instead of lawsuits, Oakland is focused on building a new stadium for the A’s here in their hometown,” Oakland Mayor Jean Quan said in a statement. “We’ve offered two sites: Howard Terminal is a beautiful waterfront location facing the Bay, and Coliseum City is one of the great development projects of our time. Both would make fantastic sites for a new stadium.”

She also said the city continues to negotiate a lease extension for the team “and I’m confident we can reach a fair deal.”

The case is City of San Jose v. Office of the Commissioner of Baseball, 13-cv-02787. U.S. District Court, Northern District of California (San Jose).

To contact the reporter on this story: Karen Gullo in San Francisco at kgullo@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

Major League Baseball intends to block the A’s move using provisions of its rules that unlawfully restrict the transfer and relocation of teams, San Jose said in the complaint. Photographer: Daniel Acker/Bloomberg

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