Sports

Group of Rays minority owners files lawsuit against majority owner Stuart Sternberg

Five minority owners of the Rays filed a lawsuit against majority owner Stuart Sternberg in the Pinellas County Circuit Court over the weekend (full complaint available here). The action alleges that Sternberg has worked to “squeeze out” minority owners and increase his personal ownership stake in the franchise.

Sternberg, as managing partner of the organization, has a fiduciary duty to prioritize the interests of the partnership over his own. The minority shareholders allege he’s instead used his authority to decline to acquire potentially advantageous interests for the partnership as a whole, only to then personally acquire those interests and increase his own stake in the partnership. The suit alleges Sternberg has increased his personal share in the franchise from 49% in 2004 to 85% by 2020. The complainants additionally claim that Sternberg has placed himself and others on partnership payroll without explanation, among other allegations.

Of most interest to Rays fans is likely their assertion that Sternberg “has been secretly negotiating to sell an interest in the Franchise and Club to a Canadian businessman named Stephen Bronfman and his Montreal Baseball Group.” The complaint alleges that Sternberg has been in clandestine discussions with Bronfman since the “Spring of 2014.”

The Rays announced in June 2019 they were planning to explore an arrangement that would see the organization potentially split its home games between Tampa Bay and Montreal. Unsurprisingly, the City of St. Petersburg stated a few months later they would not grant the organization permission to embark on that concept. With the Rays contractually tied to St. Petersburg through the end of the 2027 season, the organization needed the city’s permission to pursue a split-city arrangement within the next few years. In the immediate aftermath of St. Petersburg’s announcement, a few Rays executives hinted that a post-2027 permanent relocation of the franchise could be a possibility.

The minority shareholders’ allegation that Sternberg was in discussions with a Montreal group five years before the organization’s first announcement about the potential split-city situation has raised eyebrows. Marc Topkin of the Tampa Bay Times reports that city officials have expressed concerns those alleged conversations violate the organization’s lease agreement with the city, which bars the team from negotiating to play elsewhere during the term of the contract. (Sternberg, Topkin notes, has previously told reporters discussions with Bronfman began in 2017, but whether those discussions ever got specific enough to violate the lease terms is unclear.)

St. Petersburg mayor Rick Kriseman now suggests (via Topkin) that Sternberg “consider relinquishing control” of the franchise in light of the allegations in the complaint. Kriseman went on to further suggest that he cannot negotiate a deal for a new stadium with Sternberg while the suit is pending (via Josh Solomon of the Tampa Bay Times).

It’s worth remembering the filing of a complaint marks one of the earliest stages in litigation. The suit has not yet proceeded to the point of discovery, where more facts would figure to come to light to either support or refute the minority shareholders’ allegations.

The Rays, for their part, have issued a statement on the matter: “We are disappointed that a handful of our limited partners have filed suit. The suit is deceptive and inflammatory and is fraught with error and falsehood. We have abided by the partnership agreement and the Tropicana Field use agreement.“


Most Related Links :
Business News Governmental News Finance News

Need Your Help Today. Your $1 can change life.

[charitable_donation_form campaign_id=57167]

Source link

Back to top button