One way Ralph could keep the team in Buffalo

[BillnutinHouston]

Buffalo is not the economic basket case the media paints it as. It has over 9 million people within a 2-hours drive. It has the potential of being the de facto Toronto franchise without having to locate an NFL team outside the country. If the Bills are contenders they can sell out every game. PTR

 

Correct, but the fact is that the Bills do not currently command, relative to the rest of the league, even mid-tier prices on seats, premium seats or private suites. The same is most likely true for advertising revenue as well. Whatever the reasons (and I believe they are valid) the Bills have made a very carefuly calculation in setting their prices, and that is directly related to the economic strength of the market they're in.

 

When parties to a commercial lease agree in advance to a fee that the tenant must pay if the tenant later breaches the lease, the term for that fee is "liquidated damages." But that's just a fancy legal phrase for exactly the type of fee you suggest.

 

http://www.legalmatch.com/law-library/article/commercial-lease-early-termination-lawyers.html

 

 

 

Unfortunately for us, for reasons beyond the scope of this post, courts place certain limits on the amount of "liquidated damages" that can be enforced later, even if all parties to the lease voluntarily agree to a large dollar figure during negotiations. The amount of liquidated damages that can be enforced isn't a pre-set number - - it depends on what a court determines would have been a reasonable estimate of actual future damages, based on what the negotiating parties knew at the time the deal was struck.

 

http://www.legalmatch.com/law-library/article/liquidated-damages-lawyer.html

 

 

 

So if Ralph wants to use a liquidated damages clause to make it more likely that a future team owner will keep the team in Buffalo for the full duration of the new lease, the tricky part is picking the dollar figure. Pick a number too low, and the new owner might simply break the lease anyway and pay the pre-determined fee. Pick a number too high, and the courts might decide the liquidated damages clause is void, and refuse to enforce it at all.

 

All of this assumes that Ralph would be willing to sacrifice some portion of the future sales price of the team in order to make it more likely that the Bills would stay in Buffalo for the duration of the lease after he's gone. People have different opinions about how likely that is.

 

Great post, thanks.

Edited October 12, 2011 by BillnutinHouston

[May Day 10]

There was an article on yahoo yesterday and in it, they stated 'numerous owners' would prefer the team in Toronto

 

 

http://sports.yahoo.com/nfl/news?slug=ms-silver_al_davis_raiders_relocation_la_stadium101011

 

The Bills will likely be sold upon the passing of 92-year-old owner Ralph Wilson, but numerous owners prefer that a buyer would choose to relocate the franchise to nearby Toronto, the fourth-largest market in North America. A move to L.A. is viewed as a secondary option.

[BRAWNDO]

Buffalo is not the economic basket case the media paints it as. It has over 9 million people within a 2-hours drive. It has the potential of being the de facto Toronto franchise without having to locate an NFL team outside the country. If the Bills are contenders they can sell out every game. Plus the NFL does seem to value history and tradition, and the Bills in Buffalo are steeped in both.

 

PTR

I think the NFL will probably want a few more regular season games in Toronto.

[bowery4]

There was an article on yahoo yesterday and in it, they stated 'numerous owners' would prefer the team in Toronto

 

 

http://sports.yahoo.com/nfl/news?slug=ms-silver_al_davis_raiders_relocation_la_stadium101011

 

Mike Silver is a dick. I stopped reading his crap years ago. That said if that is true and they did move move because the greedy bastards want a better market Eff em. The Bills will no longer be a part of my life. Dead to me.

[ICanSleepWhenI'mDead]

The next owner may not be bound by that contract. He will of course want to renegotiate---as a contingency for purchase, perhaps. No owner is going to eat such a bad deal as that. What if he wanted to build a new stadium?

Ralph Wilson is not individually a party to the existing stadium lease - - Buffalo Bills, Inc. (a New York corporation) is. That corporation, which owns the team, will continue to be obligated to comply with the terms of the lease even if Ralph dies tomorrow. Corporations continue to exist, even after the individual who owns the shares of that corporation dies. It won't be any different if Ralph dies after the new lease is signed.

 

You do, however, have a valid point about the possibility of renegotiation. If Ralph dies, and somebody else becomes the controlling shareholder of Buffalo Bills, Inc., that new controlling shareholder might very well seek to have Buffalo Bills, Inc. renegotiate the lease terms. Whether a renegotiation actually happened, however, would depend on whether all the parties to the lease were willing to make a new agreement.

 

The County and State might display more backbone in enforcing their legal lease rights if they knew in advance that a new agreement would make the team more likely to move. They gave away one home game to Toronto, when they had the legal right to complain about it, because they apparently believed the Toronto game would make it MORE likely that the Bills would remain in Buffalo long term.

[JohnC]

There is a very difficult issue for the county or whatever governmental jurisdictions are involved regarding the stadium. A lot of money has to be invested into upgrading the stadium in order to bring it up to date. The Kansas City Chiefs is the best model that the Bills and the western NY region should use. The franchise and localities jointly spent a lot of money thoroughly refurbishing the facility. The problem the localities have in spending money for a major stadium upgrade is that at this time they don't have a committment to keep the team in the region when there is an ownership change. As it stands it is doubtful that a very elderly owner is going to make a long term financial committment to refurbishing the stadium. So the upgrades can't be committed to until an owner (new owner) is willing to do so.

 

Will the current owner make the arrangements prior to his passing to keep the team in the region? I'm not confident that he will make that committment because it reduces his estate's option to get the best price for the franchise. It comes down to what will the owner do. My guess is that the owner has already made his estate plans that maximize the best return he can get for the team regardless where it is located.

Edited October 12, 2011 by JohnC

[Malazan]

It's simple enough. The NFL would not allow that lease.

[BillnutinHouston]

Esmonde article

 

Donn Esmonde's column this morning quotes Andrew Zimbalist, who Esmonde says is "among America’s foremost authorities on the business of sports."

 

Zimbalist says, “Wilson can sign a lease tomorrow and say the franchise is committed to spending the next 10 or 20 years in Buffalo, and any new owner would be bound to that,” said Zimbalist. “But I don’t think he’d do that, because the team is worth more somewhere else.”

 

Interesting that Zimbalist refers to the concept I brought up by posting this thread (where the terms of the next lease WILL survive Ralph). So theoretically it sounds like my concept could work. Now the question is, WOULD Ralph actually do this?

 

I do also think its interesting that Ralph seems to be in more of a hurry to lock in the new lease than does the County (if media reports are to be believed.)

[Mr. WEO]

Esmonde article

 

Donn Esmonde's column this morning quotes Andrew Zimbalist, who Esmonde says is "among America’s foremost authorities on the business of sports."

 

Zimbalist says, “Wilson can sign a lease tomorrow and say the franchise is committed to spending the next 10 or 20 years in Buffalo, and any new owner would be bound to that,” said Zimbalist. “But I don’t think he’d do that, because the team is worth more somewhere else.”

 

Interesting that Zimbalist refers to the concept I brought up by posting this thread (where the terms of the next lease WILL survive Ralph). So theoretically it sounds like my concept could work. Now the question is, WOULD Ralph actually do this?

 

I do also think its interesting that Ralph seems to be in more of a hurry to lock in the new lease than does the County (if media reports are to be believed.)

Isn't the new lease contingent upon significant upgrades to the stadium by the county? And what if the new owner simply re-incorporates the Bills as a new entity?

 

Regardless, the new owner could walk away and force the county to sue him. Any settlement would never include 300 million dollars. Also, as your quote implies, such a poison pill would negatively affect the value of the team--and that is why Ralph would never ask for such a penalty in the lease.

Edited October 16, 2011 by Mr. WEO

[Red_Tory]

Ok, so first of all dont shoot the messenger. Am 37 and a lifelong Bills fan. Ive Seen the bad, then the great, then the absolutely horrible. Dont want to see the Bills leave WNY, no way.

 

However, need to clear up a couple of points that I keep seeing made on here that make some assumptions that arent correct in the case for the Bills staying in WNY.

 

1) I have seen it posted that the Bills somehow "have Canadian football fans" - this just is no longer accurate. There are more NFL fans here than ever before, but for a number of reasons not least of which has been the Bills awful performance for the last decade, and just that its now so much easier for fans in any region of North America to follow the team of their choice. So the Bills actually dont have that going for them, cannot assumme the TO and Canadian markets belong to the Bills anymore. NFL execs see the numbers and correctly feel a home team here would see the tap turn on even more, ie the Toronto Blue Jays in MLB.

 

2) "Rogers Centre not up to NFL standards" - while this is certainly true, its also true that basically for the first time in the history of pro sports, stadium size and facilities matter the least they ever have from the standpoint of a franchise's bottom line. So the argument that TO ownership group would need a new stadium just doesnt hold water. If the NFL sees the books and business plan that shows the added $$$ the league stands to earn, I guarantee you know one cares if the stadiums capacity is 55,000 or 70,000. And contrary to comments on here all the time, the owners also wont care if the fans that show up tend to be quiet, sit on their hands and arent as knowledgable about football as most NFL fans from traditional markets - because the money they bring to the table is worth every bit as much.

 

3) "Bills leaving Buffalo would leave a black mark on the NFL" - this just in: none of the people involved in making these decisions care because they know long term there will be no lasting negative consequences, and theres just too much money at stake here. MLB strike in '94 left a black mark on the game, and now MLB revenue is at an all time high. Cleveland was devasted when the Browns left, but what happend? NFL kept selling out and when they had a chance to acquire a new team for Cleveland locals literally jumped at the chance. As long as the money keeps rolling in no one cares about fans and effect on a community etc etc. Sucks, but its true.

 

I just dont think the size and dollars of the Toronto and Canadian market can be understated in this debate. Profit for the owners is the only thing that matters.

 

I want to see the Bills stay in Buffalo - if the Bills move to Toronto I cant guarantee I would still cheer for them. I would just feel awful about the loss to Buffalo area fans, and I can assure you most of the locals here I root for the Bills with would feel the same. If the team were to move to LA, no question I would divorce myself from the organization.

 

Work with the Rogers folks, try and make the best of the Bills in Toronto series and realize while its not ideal that working with TO is your absolute best bet of keeping our beloved Bills where they belong. Look at the chance to visit TO once or twice a year as a great opportunity to see a city you dont live in, visit with Bills fans from a different background that share your passion for the Bills - when you think about it, to a lesser scale this is exactly what Bills fans in WNY ask of the 15-20% of fans at each game in Orchard Park that travel over the border from Canada.

 

Just the view from the cheap seats, Cheers,

 

Chris

[I hate the Bills !]

I wish people who think they are in the know, but really aren't would just take their med's and be happy the Bills are 4-1 rather than try to raise an issue in which they clearly have no knowledge.