We finally get a look at the contract, and it’s surprisingly good for the Cubs

Late yesterday, Dave Kaplan posted a few paragraphs from the Cubs’ contract with the Rooftop Owners Association, and I, for one, was pretty shocked by what I saw. Given the Cubs’ stance on negotiating with the RTA and Kaplan’s comments that the contract was “pretty good for the RTA,” I was expecting the Cubs to be completely boxed into a corner in terms of language. But they aren’t. At all.

050113-wrigleyjumboFirst, let me say that contracts should be read globally, and it’s tough to just look at certain sections of the contract without having access to the whole thing. Is there a definitions section? Is there a section that limits remedies? Are there other sections that limit or except the sections we’re seeing? Without the entire contract, it’s impossible to know. However, for the sake of argument, let’s assume that the sections Kaplan has published are, on their face, what they appear to be.

I should also say that, as a trial lawyer, I’m probably much more aggressive in terms of letting disputes be settled at trial than some other lawyers. There are plenty of lawyers out there who have never set foot in a courtroom and are terrified to do so. Still others who think trial is the worst way to settle a dispute, because you can never control what the judge is going to do. But I think the specter of a trial looming over one’s head is the biggest incentive to reach a reasonable settlement. Given the choice between an unknown trial result and an attempted settlement that drags out forever, I’ll go to trial every time. I’d be insincere if I didn’t admit that sometimes colors my legal analysis.

So let’s take a look at the contract. The most relevant section we get a look at is section 6.6:

6.6 The Cubs shall not erect windscreens or other barriers to obstruct the views of the Rooftops, provided however that temporary items such as banners, flags and decorations for special occasions, shall not be considered as having been erected to obstruct views of the Rooftops. Any expansion of Wrigley Field approved by governmental authorities shall not be a violation of this agreement, including this section.

7.3 From time to time during each season, the Cubs shall authorize WGN-TV or other Cubs broadcasting partners to identify a phone number where fans can call to reserve Rooftop seating.

7.4 The Rooftops shall have the right to inform the public that they are endorsed by the Cubs.

7.5 The Cubs Director of Marketing shall meet with the Rooftops before the start of each Major League Baseball season to discuss opportunities for joint marketing.

7.6 The Cubs shall include a discussion about the Rooftops on their tour of Wrigley Field and shall include stories positive about the Rooftops in The Vine Line.

7.7 Each of the Rooftops may display broadcasts of Cubs games to patrons at its facility, including displaying such broadcasts on multiple television sets, without any infringement of any copyright owned by the Cubs or its assignees.

I’ve highlighted the “money clause,” as I’m calling it. I actually gasped when I read it, and, given how clear cut it is, I’m really surprised the Cubs have tried to negotiate for this long. What a lawyer is looking for in a contract is not necessarily a dead-bang winner argument, you’re just looking for an argument. A decent argument. This is because judges don’t rule, often, strictly on the law. They decide what they want to do and then work backwards, finding a way to justify their decision based on fairness and public policy and all kinds of other factors.  So what a lawyer is really looking for is something the judge can hang his hat on in taking the Cubs’ side. Here, I think we have more than that.

So what this entire argument comes down to, it seems, is whether or not the jumbotron is an “expansion” of the bleachers within the meaning of the contract. The Cubs have a really, really good argument that it is.

First, the Cubs have been clear that the jumbotron is just part of a larger expansion project at Wrigley. Indeed, the fact that they’ve held off on doing any construction until they have an agreement with the RTA or a court order is to their benefit — it’s harder to make the argument that the jumbotron is separate from the rest of the expansion when the Cubs have refused to separate the expansion into individual parts (jumbotron, right field sign, grand stand renovation, etc.). This is smart on the Cubs part. Unless the term “expansion” is defined elsewhere in the contract, the judge (or arbitrator) can look to the intent of the parties to determine what they meant by “expansion.” In determining the intent of the parties, the judge can look both inside and outside the four corners of the contract.

Which brings us to the next section, even though it expired in 2012.

6.2 If the Cubs expand the Wrigley Field bleacher seating and such expansion so impairs the view from any rooftop into Wrigley Field such that the Rooftop’s business is no longer viable even if it were to increase its available seating to the maximum height permitted by law, and if such bleacher expansion is completed within eight years from the Effective Date (1/27/2004), then if such Rooftop elects to cease operations before the beginning of the next baseball season following completion of such expansion, the Cubs shall reimburse that Rooftop for 50% of the royalties paid by that Rooftop to the Cubs during the time between the Effective Date and the date of expansion of the Wrigley Field bleachers. The Cubs shall pay such reimbursement to the Rooftop within 30 days of receiving notice from the Rooftop it is no longer viable and has ceased operations. Any Rooftop receiving payment from the Cubs pursuant to this provision shall cease operations for the remainder of the term and shall not seek or accept any compensation or benefit related to activity on a Rooftop on a day of a game.

This section is really good for the Cubs, and here’s why: First, there’s the argument that, once the 8-year period from 1/27/2004 to 1/27/2012 ended, the Cubs were no longer liable for damages that resulted from blocking the rooftops’ view. Otherwise, why would this section have an expiration date? Second, it sets a value on what the rooftops’ view are worth: 50% of the royalties paid by THAT rooftop to the Cubs during the time from 1/27/2012 to the date of the “expansion of the bleachers.” Though technically this section is no longer valid, it gives the judge a good idea of what the Cubs and the RTA intended the contract to do, and, most importantly, it demonstrates that one of more rooftop ceasing operations due to a blocked view was something that the parties contemplated when entering into the contract. This means that the RTA’s argument that the Cubs are in complete and total contravention of the contract rings somewhat hollow.

Then there are the public policy points: As a society, we want contracts to matter and to be valid. Having people just walk away from valid contracts is bad for everyone. On the other hand, the right to do as one wishes with one’s property is a more sacred right, as far as the court is concerned. If the court can come up with a way to make the RTA “whole” without restricting what the Cubs can do with their property (ie. via cash damages), that is what the court should be inclined to do. Add to that the fact that Mayor Rahm Emanuel really really wants this thing to get done (judges and arbitrators are not, sadly, immune from political pressure), and the Cubs are on pretty solid footing.

Obviously, the Cubs don’t care one wit what I have to say about it, but, if I were advising the Cubs, I’d be very comfortable going forward with the renova . .  er . . expansion based on the language in these few sections of the contract. It appears that the Cubs are now, finally, doing that.

Hey, make sure you pop over to Facebook and give LOHO’s page a “like.” We promise you won’t be sorry!

27 thoughts on “We finally get a look at the contract, and it’s surprisingly good for the Cubs

  1. Doc Blume says:

    The wording at the end of section 6.6 is exactly what I posted a year ago. A friend of mine who allegedly has a connection with the rooftop owners had given me that statement and it actually proved to be true. (I’m a little shocked, because the guy is a bit of a BS artist.) The problem now comes down to whether or not the Budweiser ad and video board constitute an “expansion”.

    I’m no lawyer or legal expert, but I don’t think this is a slam dunk for the Cubs. Obviously, the rooftops, as of 2 years ago, have very little financial claim for damages.

    If this contract holds up like most of us want it to, I think we (I can’t believe I’m going to say this) owe Crane Kenney a huge apology.

    The question I have now is if the language here is as strongly in support of the Cubs has it appears, why didn’t the Cubs pull this out earlier and get the legal process moving forward more quickly? Is it yet another case where Tom Ricketts is trying too hard to be a friend to everyone? Did he actually think that there was a chance he could work out a deal with the rooftop owners in order to keep everyone on friendly terms or something?

    Overall, I’m really glad that Kaplan got his hand on this agreement and published it. People, including me, have been speculating about it for years now.

    Thanks for your legal analysis of this Julie.

  2. JJ Fannin says:

    Seeing as the plan calls for moving the walls farther out onto the sidewalks, that meets expansion in every sense of the word IMO.

    Also, I think it is a case of Tom Ricketts trying to keep everyone happy and come to a friendly agreement. I don’t think he wants to be viewed as a bully. Diplomacy first so he can take the high road.

  3. juliedicaro says:

    Doc — I just wrote a post on all the reasons the contract is good for the Cubs, and you’re like “I don’t think it’s a slam dunk for the Cubs.” Legally, there’s almost never a slam dunk, but this is way better than anything I could have hoped for.

    JJ — I really don’t care if my team plays nice with the neighbors. The Yankees bully everyone, and look where it’s gotten them.

  4. Doc Blume says:

    Another interesting this against the Cubs here, though are the section 7 clauses.

    The clauses intended to establish a promotional partnership between the Cubs and the rooftops. As Kaplan reported, the Cubs haven’t really done much of that over the last couple years. I don’t know if they are still advertising in VineLine since I cancelled my subscription a couple years back, but the ads on TV and radio have pretty much ceased and understandably so since Cubs attendance has plummeted the last few years. I’m not sure if some issues will come up due to the Cubs not honoring this part of the contract or if those clauses died after the 8 year period where the Cubs were liable for damages.

  5. Doc Blume says:

    Julie, I guess my nervousness about this whole thing revolves around the fact that the Cubs have taken so long to move forward on this. I’m trying to grasp at anything to explain to me why. Is there a legal problem here that we don’t fully understand (though you might)? Are they trying to play nice? Is there internal disagreement in the family? Are they short on cash? Nothing has explained to me why nothing has been done outside of finally filing for a permit to erect a pretty simple advertisement in right field.

  6. johnnywest333 says:

    I do not think that the Cubs would have even started with the said “expansion” process if their lawyers had not thoroughly read and we’re in 100% agreement that the expansion was in full compliance and that they would not receive any backlash monetarily. They have all their ducks in a row and are just going through due process to assure It’s handled appropriatly.

  7. NotAgain says:

    JUST GET THIS THE EF INTO COURT. Or start construction. Or both. And yes, I’m aware I’m shouting.

  8. NotAgain says:

    Re: Doc’s article link, doesn’t 83 MPH seem slow for a come-backer to the mound? It seems to me they come back a HELL of a lot faster than they get there.

  9. Drew says:

    time to just get it done. Let them sue, and bury them.

  10. johnnywest333 says:

    The thing that really concerns me the most is if the reply button will ever work again.

  11. juliedicaro says:

    Me too. The like button is gone as well. Mark is buried at work right now, so if anyone has experience with WordPress comments, you’re more than welcome to take a look.

  12. Doc Blume says:

    Not, it does say average speed, we often only think about the bullets that are hit at the pitcher’s head…but many of the balls hit back to the mound don’t reach that level. For the most part, though, a ball hit back at 83 MPH is slow enough to provide the pitcher enough time to react. When that happens, we really don’t think much about it.

    Regardless, it is the first step to start to protect pitchers. I’m not sure it will be hugely effective, but it is a start.

  13. Go Cubs says:

    First time visitor to your website, Julie. (Got here from Twitter.) Enjoyed reading through it, including your analysis of Kaplan’s release of the Cubs/Rooftop contract.

    I agree with you that it’s going to hinge on what the parties meant by “expansion”. But I agree with the lawyer Kaplan talked to when he says that it’s far from a slam dunk for the Cubs.

    The reason why is that it doesn’t matter what you, I, the City, or anybody else thinks the word “expansion” means today. It doesn’t even matter what Tom Ricketts and Co. thinks it means, or that he keeps packaging the Jumbotron as part of an overall “expansion”.

    The only thing that the arbitrator will try to determine is what the Cubs ownership in 2004 and the rooftop owners in 2004 meant by “expansion” BACK THEN when the contract was entered into. What does “expansion” mean *for the contract*. And if you look at the history of the Cubs/Rooftop kerfuffle, the way that this particular contract even came into existence was when the Cubs declared their plans to expand the bleacher seating . (Which they eventually did end up doing in 2005.)

    Here’s a USA Today article from back when the deal was reached (http://usatoday30.usatoday.com/sports/baseball/nl/cubs/2004-01-13-rooftop-deal_x.htm):

    >The Cubs had been arguing with the rooftop owners over plans to expand the stadium without obstructing the view from the rooftops. After negotiations broke down, the Cubs sued the owners in December 2002. The lawsuit accused the owners of stealing the team’s product, copyright infringement and unjust enrichment at the Cubs’ expense
    >The Cubs’ agreement does not affect the team’s wish to add about 2,000 bleacher seats.
    >Tunney said if the bleachers are expanded within eight years, the agreement requires the Cubs to compensate rooftop owners whose views are obstructed.

    So if I’m the rooftop owners, my argument to the arbitrator is this:

    “Look, back in 2004, the Cubs were trying to expand bleacher seating. They were negotiating with the City as to whether they’d be allowed to do so. So we threw that clause in Section 6.6 (Any expansion of Wrigley Field approved by governmental authorities shall not be a violation of this agreement, including this section) to make it clear that their plans to proceed with bleacher expansion back in 2004 could proceed unaffected by this deal. But first we put in Section 6.2 saying that if they DO block our views with their bleacher expansion, they’d have to pay us X dollars. In other words, when we used the word “expansion” in that contract, we meant a “seating expansion of the stadium itself” such as the ones the Cubs were already negotiating for at the time. We DID NOT put that clause in to give them a back-door to blocking our views with signage, netting, banners, etc. The whole point of this agreement was to prevent them from blocking our views!”

    Will this be persuasive to an arbitrator? We shall see. But again – it’s much, I think that it’s much closer to a 50-50 case than it is a “slam dunk” for the Cubs – as many people seem to believe.

  14. Doc Blume says:

    Good analysis. Section 6.2 is the key to all this I think. It specifically calls out expansion in regards to seating, “If the Cubs expand the Wrigley Field bleacher seating…” and as you pointed out, it could be interpreted that the term expansion in regards to the contract could represent only seating of which there is no plans for at this time.

    The Cubs do have approval to move out the outfield wall…maybe if they add 3 or 4 rows to the back to bleachers too they can fulfill the “expansion” requirement without any questions. :)

  15. Doc Blume says:

    I seriously need to change my avatar…I look nothing like that anymore.

  16. juliedicaro says:

    I don’t think any case is ever a slam dunk, but, while you’re right, the judge will look to the original intent of the parties (assuming there’s no definition of “expansion” in another section that we’ve yet to see), the two sides obviously contemplated a situation where one or more rooftops will have their views “blocked.” Whether it’s via really tall bleachers or a jumbotron, I’m not sure it matters.

    But I also agree with your analysis. I still think it’s 70-75% in the Cubs’ favor.

    1. Go Cubs says:

      > the two sides obviously contemplated a situation where one or more rooftops will have their views “blocked”

      Yes. By an expansion of the bleacher seats. :) Which is exactly what the Cubs were in the middle of negotiating with the City in 2004 when the deal was agreed to. Section 6.2 points directly to this.

      I just can’t read this agreement and think that Section 6.2 requires the Cubs to pay the RTs X dollars should the Cubs put them out of business by blocking their views with a bleacher expansion (which the city also had to approve, BTW), but 6.6 lets them throw the whole agreement out and not pay the RTs a dime, if they do any other type of “expansion” which blocks their views, so long as the City approves it.

      “Get the city to approve your use of advertising sings or a huge banner, or any other structure that would block our view? No problem, put us out of business. You don’t even have to pay us a dime. Get the city to approve your expansion of the bleachers? Well now you have to pay us.”

      That reading of the contract makes no sense to me. If this “version” of the agreement is the one the parties actually entered into, the Cubs would have put up signs long ago. They wouldn’t have waited 10 years to attempt to implement Section 6.6.

  17. Doc Blume says:

    Julie, do you think there is a serious chance the RTA will actually settle out of court on this (with the RTA’s business on the line)? Once this process is over, does the contract pretty much dissolve?

    I’m trying to get an idea of what the potential end-cases are here now.

  18. juliedicaro says:

    Hard to say. I would have thought they’d settle by now, given that the rooftop’s business basically depends on the Cubs’ goodwill, but obviously that’s not the case. Typically, as soon as one side feels like things are starting not to go their way in the legal proceedings, they suddenly want to settle, and that can be really early on in the case or much further down the road.

    Typically what happens in a case like this (if the parties don’t come to an agreement on their own), is that the judge would issue an order only as to the parts that were litigated, and the rest of the contract remains in effect.

  19. Doc Blume says:

    Boers and Bernstein gave a shout out to this post today!

  20. juliedicaro says:

    I missed it. What hour of the show?

  21. juliedicaro says:

    Oh, I’m not saying they don’t owe them a dime. Like I said, I think they put a value on the view from the bleachers at 50% of the total revenue the blocked rooftop has paid to the Cubs. If they could block them in 2012 and only owe them 50%, it’s a hard argument that now they can’t block them at all and by the way we want a permanent injunction for the life of the contract.

    1. Go Cubs says:

      > If they could block them in 2012 and only owe them 50%, it’s a hard argument that now they can’t block them at all and by the way we want a permanent injunction for the life of the contract.

      As you’ve stated all along, we’re looking at a very incomplete version of the agreement. So to a large degree, we’re guessing on a lot of this.

      I think that the RT’s response to your point would be that the Cubs *can* block their views if and only if such blockage is pursuant to the type of expansion that was envisioned in 2004 and codified in Section 6.2 – a “bleacher expansion”. It’s just that before 2012, exercising such a “bleacher expansion” exception would have required the Cubs to pay the RTs that 50%. After 2012, no 50%. And yes, injunctive relief would have to be the remedy for any “non-bleacher expansion related” breaches.

      Forget the bit about city approval or the definition of “expansion” for a moment. Let’s say that a month after the contract was entered into, the Cubs just said “Screw this, we’re going back to our 2002 idea. We’re going to put up some cheap netting and block the RTs views.” Would the RTs have gotten injunctive relief? Of course. With no specific agreement for monetary relief, that would be the likely result, no? Can we simply read the monetary remedy from 6.2 into 6.6? I personally don’t’ think so. Monetary relief would have been worthless, since the RTs had yet to pay the Cubs any of their revenues. So, IMHO, the injunctive relief has always been there for “non-expansion related” violations.

  22. juliedicaro says:

    IIIIII just want to be able to reply to a comment!

  23. Jim Lonergan says:

    Nice article, Julie. Really puts it into perspective for those of us who get lost in legalese.

    A reminder to Like https://www.facebook.com/pages/Boycott-Wrigleyville-Rooftops/431500950272989, we are nearing out 1,00th Like!

  24. Doc Blume says:

    Another question for you Julie…

    Are contracts like this supposed to be confidential? If it were discovered that a member of the Cubs had purposely leaked the details of this contract (in order to gain popular support), could there be some legal ramifications?

    Or has the difficulty in getting the text of this contract just been to to the fact that no one has bothered to give it out?

Leave a Reply