One of the odd side stories that came out after MLB officially approved the sale of the Astros to Jim Crane was this contention by attorney Kevin W. Yankowsky of Fulbright & Jaworski that the Astros’ lease at Minute Maid Park required them to be in the National League. At the time, Sports Authority Chair J. Kent Friedman said it was an “interesting analysis” and that he’d have their legal beagles look it over. It didn’t take them long to kick it out.
On Tuesday, McLane and Crane completed the transfer of the Astros.
Crane said he will attend the winter meetings. One thing he won’t have to deal with is any challenge from the Harris County Houston Sports Authority over the Astros’ move to the AL. A partner from Fulbright & Jaworski L.L.P. last week said a move to the AL would violate the terms of the lease at Minute Maid, but the HCHSA said in a release that its legal team has a differing opinion. Withholding consent for the Astros playing as an AL team, the HCHSA determined, would be “unreasonable.”
Here’s the Sports Authority’s full response:
The Lease provides in Section 5.1(a) that the Astros have the right to use the Stadium for “the operation of a Major League Baseball franchise.” There is no reference in this Section to league affiliation. Further, as defined in the Lease, the term “Major League Baseball” expressly includes the National League, the American League and all Member Teams. In addition, Section 5.1(a) of the Lease expressly uses the uncapitalized word “franchise” instead of the capitalized, defined term “Franchise.” Only the capitalized, defined term “Franchise” is limited to a National League franchise. The uncapitalized term “franchise” is not so limited. Finally, the reference to “Baseball Home Games” (basically defined as Astros baseball games as a member of the National League) in Section 5.1(a) of the Lease is not a limiting phrase. Rather, it is used as an example of a use incidental to the use of the Stadium for the “operation of a Major League Baseball franchise,” not as an exclusive use. This interpretation is confirmed by the use of the phrase “including, but not limited to,” which precedes the phrase “Baseball Home Games.”
Accordingly, the Astros are permitted under the Lease to operate a Major League Baseball franchise in either the National League or the American League and to play their games in the Stadium attendant to such operation. Therefore, the Sports Authority is not in a position to prevent Major League Baseball from potentially moving the Astros to the American League.
The Astros transfer to the American League does require a minor change to the Non-Relocation Agreement to confirm that the Astros cannot play any home games outside the Stadium in violation of the Non-Relocation Agreement. The Astros have agreed to this minor change.
Even though the Astros cannot assign their interest in the Lease or mortgage their leasehold estate in most instances without the consent of the Sports Authority, the Sports Authority may not unreasonably withhold its consent. The Sports Authority’s withholding of its consent based solely on a potential Astros move to the American League could be considered unreasonable and therefore a violation of the Sports Authority’s covenant not to act in an unreasonable manner in this regard.
I don’t know, I have a hard time believing this will be the end of it. I just have a feeling that there’s a lawsuit out there to force the issue. I certainly could be wrong, I have nothing more than my gut to go on, but this is what I think. What do you think?