This week, two rooftops finally threw down and sued the Chicago Cubs (and owner Tom Ricketts, individually) over the renovations at Wrigley Field, and, more specifically, over the signage in the outfield that may impact their views. While the suit does contemplate a breach of contract claim, it is largely focused on an argument that the Cubs sought to bully the rooftops to sell and to fix prices, all in violation of federal antitrust laws.
You can read the full lawsuit here.
I’m going to offer some stray thoughts on the suit, but, before I do, massive caveating:
- I am no longer a practicing attorney, and I haven’t been one for almost four years now (whoa). None of this is legal advice or legal opinion. Even if I were still a practicing attorney, all I could offer you today is a very general, legal perspective on the specific language of this complaint, and on the legal principles that govern the claims. Don’t take my thoughts for any more than they are: the musings of a dude who knows a little bit about corporate lawsuits, and who is looking at what is in this particular suit.
- Any lawyer worth his salt – or former lawyer worth his salt – will tell you that, even with the complaint (and related contract) available for viewing, you can’t analyze the entirety of the legal situation without the broader context. That means supporting documents, correspondence between the parties, other agreements that might be in place, statutory and administrative law in the relevant jurisdiction, and the positions/pressure points/etc. of the parties. That last one can be a biggy, because frequently, business decisions supersede legal positions.
- I know a little bit about antitrust law, but it was not my practice area. I did focus on these kinds of corporate lawsuits, so you run across it organically from time to time. But I am no antitrust expert. At all.
- This is a really bare-bones analysis, written for BN readers. In other words, I’m not drafting a memo for a partner here or a brief for a court. I’m trying to balance meaningful analysis with a writing style that is actually enjoyable/easy to read. You lawyers out there: don’t rip me.
So, then, some thoughts on the suit …
A general reminder to those who sit down and read the suit: all complaints since the history of ever are written in the strongest possible tone, and will always make the other side look very bad. Two sides could draft a complaint about the exact same event, and, if you read only one of them, you’d be convinced the other side was a dirtbag … until you read the other side. This is simply the way these things work. Indeed, seeing this day in and day out during my years of practice is the primary reason many of you perceive my writing here to be wishy-washy and constantly apologizing for “the other side.” It’s because there’s always another side to the story. Always, always, always. And it’s usually not the case that one side is 100% wrong, and the other 100% right.
“Price-fixing scheme” makes for good headlines, but is there any merit to the antitrust claim? I think the complaint is written in a way to make something that, at first, would have seemed like an insane claim (the Cubs tried to fix prices on their own tickets … well, duh) actually read like something that makes a little sense (there was a broader market for Cubs tickets, and the Cubs tried to inhibit competition by forcing price baselines). I get the argument. But after letting it roll around in my head a little longer, it seems like a clever, but ultimately difficult, argument.
The rooftops complain that Cubs have a 93% share of the market for live Cubs tickets (which amounts to an unlawful monopoly), and effectively suggest that the Cubs created that market by contracting with the rooftops to also sell live Cubs tickets. If I understand that argument correctly, and turn it on its head: the Cubs did not have an illegal monopoly when they controlled 100% of the live Cubs tickets (like most sports teams), but the moment they allowed even 1% of that market to be sold by another entity, they have created a monopoly? By selling a smaller share of live Cubs tickets, the Cubs went from no monopoly to monopoly?
The actual argument is a little more nuanced than that, but you can see how difficult it becomes when you restate it in slightly different terms. And we didn’t even get into the idea that live Cubs tickets compete in the entertainment market (that’s ultimately what governs pricing), the idea that the rooftop experience isn’t solely about watching live Cubs games (there’s also food and drink)*, and the idea that the Cubs and rooftops might not actually be competitors for live Cubs games at all (since they are also partners). The antitrust argument becomes complicated very quickly, and, while I won’t pretend to give you the “answer” on how this shakes out, I do know enough to tell you that the Cubs are going to have some very strong arguments to get the claim dismissed. The rooftops will have responses to those arguments, however, which means we’re likely going to see a lot of briefing early on this case (several months) before things get to a potential settlement stage.
*(The rooftops actually use this fact to plead an alternative antitrust claim, i.e., that if the rooftop tickets are a different market from Cubs tickets, then the Cubs are engaging in anticompetitive behavior by trying to intrude on the rooftop market and gobble up a monopoly there, too. Again, it’s clever, but it’s difficult.)
You’re going to ask me whether baseball’s antitrust exemption plays into this anywhere, and my rough answer is … I don’t think so. That exemption, historically, has been fairly limited (mostly to labor), and it wouldn’t apply if, for example, the Cubs started selling tacos and sought to illegally monopolize the taco market in Chicago (“Tacos: $85. You can’t get them anywhere else in Chicago, so get ’em at Wrigley Field! They’re stamped with a C!” (Yes, yes, I know tacos are part of the broader food market – I’m just trying to keep things light.). The antitrust exemption is not carte blanche to engage in anticompetitive behavior.
By making the thrust of the complaint about antitrust, it seems like the rooftops are trying to avoid the real heart of the case: do the rooftops have a contractually enforceable right not to be blocked by the signage in the renovation plan? Everything actually flows from that question, because if the answer is no, then the Cubs can threaten to block the rooftops all they want in order to get a better sale price on the rooftops. Further, the Cubs can complain to the rooftops about their ticket pricing with signage as leverage because, again, the rooftops wouldn’t have a right not to be blocked in the first place. We discussed the rooftops’ contractual right not to be blocked before, and, my take on the contract is that the Wrigley renovation sure looks and smells like an “expansion,” of which the signage is an integral part, and the rooftops’ views can be blocked as part of an expansion approved by governmental authorities (as this was). It looks like an uphill climb for the rooftops.
I can’t help but wonder whether the rooftops wouldn’t be jumping through these antitrust hoops if they felt more strongly about their contract claim. Sure, the breach of contract claim is in the complaint, too, but it’s very clearly not the focus. The problem for the rooftops, though, is that it appears everything is going to turn on the contract, anyway, no matter how clever the antitrust argument is.
There are a number of allegations that Cubs personnel and the Ricketts made aggressive or intimidating comments about signage in order to pressure the rooftop owners to sell. I’m not sure what I think about these allegations. For one thing, I’m not entirely sure they actually support the legal claims made in the lawsuit. In other words, even if they’re true, I’m not sure they really make a difference in the lawsuit. For another, I’m not really sure they’re unfair or inappropriate things to say within the business context that was at play. Isn’t applying pressure on another party in business negotiations by using whatever leverage you have just, like, part of the game? The way the allegations are stated certainly make the Cubs personnel look like jerks, but, again, I’m not sure whether the point of those allegations was to try and win a lawsuit, or to try and make the Cubs look bad. Those allegations sure are getting a lot of attention in the media.
One other thing: there is a whole lot of argument in this complaint. Usually, you don’t see quite so much actual argumentation of the legal claims in a complaint. Sometimes, that’s a sign of a lack of confidence in the claims, because, typically, a complaint can stand on its own factual allegations, and you deal with the legal wrangling down the road. None of this necessarily means anything, but, if you’re asking me to draw upon my past experience, that’s something that would have stood out to me.
As for all of the other causes of action in the suit, I can understand why they were included … and I can also understand why they weren’t the primary focus. Many of them are simply the kinds of causes of action you include in cases like this, because you never know what angle you might need to take once you get into briefing, and because you maybe-kinda-sorta might have an argument.
All in all, I wouldn’t call the lawsuit frivolous, but I also wouldn’t say I was immediately concerned that the renovation was in peril or that the Cubs were going to take a massive budget hit. I suspect this will proceed quietly over the next several months (in fact, dollars to donuts says that the next update comes quite a while from now, and most of you go, “Oh, yeah, I forgot about that lawsuit!”), and the court will be aggressive in trying to spur a settlement, assuming this gets past the motion to dismiss stage.
It’s interesting that just two rooftops – that may be related – are participating in this suit against the Cubs, whereas several more are participating in the suit against the City. (These two are also involved in the City suit.) There’s some kind of strategic decision involved, and I won’t speculate on the rationale. I just thought it was interesting.
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