https://www.sfchronicle.com/sports/giants/article/mlb-doc-south-bay-18087162.php

John Shea
May 20, 2023

Territorial rights in the Bay Area have been debated ever since the Oakland Athletics were blocked from relocating to the South Bay after Major League Baseball determined the territory belonged to the San Francisco Giants.

But should the Giants have retained those territorial rights after they built Oracle Park?

The Chronicle obtained minutes from a June 1990 owners meeting in which a resolution was passed for the Giants to acquire exclusive rights to Santa Clara County. The minutes, however, suggest the territorial rights were contingent on a ballpark being built in Santa Clara.

That ballpark was never built, but the Giants subsequently assumed rights to the territory anyway. The A’s, unwilling to consummate a new ballpark deal in the Bay Area to replace the Coliseum, are now focused on relocating to Las Vegas.

The minutes from the 1990 meeting explained how Giants then-owner Bob Lurie received permission from A’s then-owner Walter Haas to take over Santa Clara for the purpose of a possible ballpark site for the Giants.

“Mr. Haas said it would be difficult to assess the impact; perhaps it might be slightly negative,” the minutes read. “He added, however, that the Oakland club did not wish to stand in the way and hence Oakland would vote to approve.”

According to the minutes, Lurie’s team “desires to relocate its operations from Candlestick Park to a new stadium to be constructed in Santa Clara, California, subject to a satisfactory completion of the stadium project and execution of a satisfactory stadium lease.”

The resolution was for the Giants to relocate “provided that the new stadium in Santa Clara is satisfactory in all respects to the Commissioner of Baseball and that such stadium is leased to the Club on terms which are approved by the Commissioner.”

Technically, the phrases “subject to” and “provided that” suggest the Giants should have kept territorial rights to the area only if they secured a stadium in the South Bay.

In November 1990, Lurie’s Santa Clara referendum for taxpayer funding of a ballpark was voted down, his third of four losses at the polls. No. 4 was San Jose in June 1992. He sold the Giants that December to the current ownership group, which inherited that potentially contingent claim to territorial rights.

After Lurie’s ballpark referendums were rejected, neither the Haas-owned A’s nor MLB pushed to make Santa Clara neutral territory again, affecting multiple failed attempts by ensuing A’s ownership groups — Steve Schott-Ken Hofmann and John Fisher-Lew Wolff — to relocate to the South Bay.

The Chronicle shared a copy of the 1990 minutes with Bill Gould, professor emeritus at Stanford Law School and former chairman of the National Labor Relations Board, who said the wording doesn’t seem to make the Giants’ territorial rights absolute.

“These notes show on the merits the A’s really had the right to pursue the building of a stadium in San Jose and should not have been precluded from doing so,” said Gould, author of the 2011 book “Bargaining With Baseball: Labor Relations in an Age of Prosperous Turmoil.”

“The notes contradict baseball’s decision unless something out there contradicts this to deny the A’s that relocation.”

Gould said no matter how the language in the minutes are perceived, challenging the territorial rights issue in court can be a lost cause because of baseball’s antitrust exemption — which allows MLB to oversee the location of teams — and precedent established in several court cases that ruled in favor of baseball.

“What the courts are saying under federal baseball is it doesn’t matter, that the courts have no jurisdiction to intervene,” Gould said.

With Fisher and Wolff blocked from relocating the A’s to San Jose, the city of San Jose filed a suit against MLB in 2013, challenging its exemption to federal antitrust law. That was batted down when the U.S. district judge said the exemption, while “an aberration that makes little sense given the heavily interstate nature of the business of baseball today,” could only be revoked by Congress. San Jose appealed and was rejected.

Similar conclusions were reached in other lawsuits against MLB, including the 1972 Supreme Court case in which outfielder Curt Flood challenged MLB’s reserve clause, which kept players under team control — he lost but opened the door to free agency — and the 1976 Charlie Finley case in which the former A’s owner lost to MLB after Commissioner Bowie Kuhn voided Finley’s attempt to sell off Rollie Fingers, Joe Rudi and Vida Blue.

Joe Cotchett, who represented San Jose in the 2013 case, said the minutes obtained by The Chronicle, which he reviewed, were not produced at the time of the hearing. He insists it would not have mattered because of MLB’s sweeping powers, courtesy of the antitrust exemption established in 1922.

“It’s a tragedy we have this law on the books that prevents any move of a team to San Jose without a full vote of the owners in Major League Baseball,” Cotchett said. “It violates the antitrust laws that every other sports league has to deal with. Baseball is the only sport that has a statutory exemption from the antitrust laws, and that’s outrageous.”

John Moore, a prominent East Bay trial attorney, said the A’s and MLB should have agreed that the Giants’ territorial rights to Santa Clara were only temporary.

“To me, if I were voting to expand the territory, there would be an implied condition that the Giants move there,” Moore said. “Otherwise what is the motivation to expand the territory?”

Aside from the minutes’ language suggesting the contingent nature of the Giants’ territorial rights, they include a resolution stating MLB’s Constitution would be “amended to mean and include” Santa Clara as part of the Giants’ operating territory.

“The resolution at the end gives San Francisco the right to relocate to Santa Clara subject to conditions,” said Moore, who reviewed the minutes. “But the last part of the resolution is likely the key one. It changes the definition of San Francisco in the Constitution and the Major League Rules to include San Francisco, San Mateo and Santa Clara counties and does not attach conditions to that, like the club actually moving to Santa Clara. Could such a condition have been implicit or intended?”

Conversely, Gould argues the two points in the minutes “are not mutually inconsistent” because “access to Santa Clara was based on building a stadium which is satisfactory.”

In March 2009, then-Commissioner Bud Selig appointed a three-person committee to examine the A’s stadium situation including in the South Bay. The A’s released a statement in March 2012 saying they didn’t believe delineated territorial rights existed in the Bay Area because “MLB-recorded minutes clearly indicate that the Giants were granted Santa Clara, subject to relocating to the city of Santa Clara.”

In response, the Giants fired off a statement later that day saying Fisher agreed to the territorial rights when buying the team in 2005 and that “the A’s fail to mention that MLB’s 1990 territorial rights designation has been explicitly re-affirmed by Major League Baseball on four separate occasions.”
In June 2013, Selig sent a letter to Wolff denying his relocation request to San Jose.

While MLB said the Constitution is clear in respect to territorial rights, the wording seems a bit complex. For many years, the Constitution listed the Giants’ territories beginning with San Francisco, San Mateo, Santa Cruz, Monterey and Marin counties and added “provided, however, with respect to all Major League Clubs, Santa Clara in California shall also be included.”

In 2021, it was updated to “provided, however, that Santa Clara County shall be shared with the San Jose Minor League Club,” referencing the minor-league team, which remains a Giants affiliate even though they sold their share of the team in January 2022. In other words, other MLB clubs can’t move a farm team into the territory.

Cotchett calls this language “gobbledygook. … It’s a way to confuse the issue. It’s done every day of the week. You go to the very last paragraph of any statute, it says ‘unless otherwise deemed different.’ Tell me what that means.”

Alan Greenberg, founding partner of Greenberg Gross LLP, a national litigation boutique that handles sports and entertainment cases, also reviewed the minutes and concluded they wouldn’t supersede the language in the Constitution.

“Whether it was intentional or not, they did change the Constitution many years ago to give the Giants that area,” Greenberg said. “It was not tied to them actually moving to Santa Clara or getting a stadium there. It should have been conditioned somehow on the Giants moving there or the rights would go away. Even if the intent of the A’s ownership at the time was more limited than what got translated into the Constitution, they didn’t raise that issue at the time and let the Giants keep that territory.”

Unlike two-team markets in New York, Chicago and Los Angeles-Anaheim, whose territories overlap and are shared, the Bay Area territory is divided by counties. The A’s have Alameda and Contra Costa counties.

As the 1990 minutes attest, Haas didn’t stand in the way of the Giants controlling the Santa Clara territory for their ballpark pursuit, nor did he ask for compensation. Years later, under different ownerships, the Giants claimed much of their fan base is in the South Bay and that the value of the new owners’ purchase price included those rights, and they would not reciprocate and offer the territory when the A’s wanted to move in. Meantime, the Giants received voter approval for a China Basin ballpark in 1996 and broke ground in 1997.