Sports Authority Responds to Questions Regarding Astros' Potential Move to the AL
November 18th, 2011
The Harris County – Houston Sports Authority has investigated the questions brought forth by the Houston Chronicle article regarding the Astros’ potential move to the American League. The article can be found here:
The response of the Sports Authority’s legal counsel follows:
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.
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