Though there’s been no indication by the Tampa Bay Rays ownership that bankruptcy is an option, the City of St. Petersburg is wary enough of the potential lease-ending legal move that it’s looking at hiring bankruptcy counsel to counter any possible action by the team.
Declaring bankruptcy to avoid a lease isn’t exactly unknown in the business world — indeed, that’s usually why retail chains like Borders go that route but remain open for business — but it is unheard-of in sports-business circles. Under a reorganization bankruptcy, a business will declare it cannot make money under its present situation, shed leases and obligations under court supervision, and then embark on a new business plan.
A solution, of course, that fits the Rays’ situation to a T.
The team cannot make money under its present lease at Tropicana Field: despite a winning record and commitment to the community, the Rays would lose money if it weren’t for revenue sharing — some $35 million in 2008. The very nature of Tropicana Field and its location are two prime reasons for the financial losses. The team has put a great product on the field and done a slew of community events, and so far attendance is down some 29 percent this season. Really, it’s hard to say what else the team could do.
The solution: a new ballpark. That’s still not sitting well with St. Pete Mayor Bill Foster, who argues the team has only two choices: play out the contract (the lease runs through 2027) or negotiate with St. Pete for a new ballpark. Trouble is, St. Pete has shown very little willingness to actually negotiate for a new ballpark. Foster may have done something incredibly stupid: tell a bunch of lawyers they only have one real option, and those same lawyers are going to do their best to come up with other options.
Of course, there’s no record of anyone in the front office of the Rays actually threatening bankruptcy — but the move by the city to consider retaining Brown Rudnick LLP, a bankruptcy firm, does say someone in the city takes the threat seriously.
Meanwhile, talk about a new downtown Tampa ballpark continues to bubble. There’s certainly land available, and there seems to be some public will to make it happen.
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