If Rays are forced to open their books, lawsuit could be a good thing

ST. PETERSBURG — What a group of minority owners of the Tampa Bay Rays are seeking in a lawsuit filed recently against Stu Sternberg is nothing short of a coup.

What we should be seeking as community and emotional stakeholders in Tampa Bay’s baseball franchise is nothing short of the truth.

That may sound overly simplistic, but unvarnished truth has always been hard to come by at Tropicana Field. And this lawsuit could provide the best chance yet to take a peek at the team’s financial health to figure out just how profitable the Rays really are.

And, really, that’s what we should care about more than anything.

The accusations against Sternberg are sexy and damning, no doubt about that. A group of minority owners are suggesting he manipulated the books and deceived the partners in order to force them to sell their shares of the team to Sternberg for below-market value. Of course, those partners are free to sell their shares to anyone willing to buy them which, in theory, should set the market value.

In fact, one of the limited partners involved in the lawsuit once ran a classified ad in the Wall Street Journal attempting to sell his stake in the team.

So what we have, in essence, is a family squabble that has turned nasty and litigious.

And there may be some prurient interest in watching millionaires hurl insults and allegations at each other, but what’s far more important is the potential opportunity to understand more about the money flowing in and out of the Tropicana Field executive offices.

The lawsuit references a $385 million windfall from Fox Sports Sun, which presumably was part of a new rights deal signed in 2018, but it’s unclear exactly what that amount represents. The Rays have always been remarkably secretive about their TV money, but now we may have a pathway to find out just how lucrative the deal is.

There’s also a suggestion the team had $400 million of cash on hand in 2020 but, again, without any point of reference to explain whether that was an unusual circumstance or how/if those funds were distributed.

Those are the details that should matter to you.

If that $400 million figure is accurate, then Rays fans deserve an explanation. Now maybe that money is being socked away to help build a stadium, rather than paying dividends to the ownership group. That would be a good thing. But the amount also suggests the team is making far more money than we’ve been led to believe. And that’s concerning.

A lot of the other details in the lawsuit sound shady and underhanded, but we’ve only heard from one side at this point. The accusations could be a complete misrepresentation. Or a slight exaggeration. Or, they could be dead-on accurate.

The point is I don’t know the answer, and you don’t either. It is interesting to note that not all of the team’s minority owners are involved in the lawsuit. Instead, it is limited to a small group of partners who pre-date Sternberg’s purchase in 2005. Does that mean Sternberg is trying to freeze out Vince Naimoli’s old partners, or are those original owners now expecting a windfall 25 years after their initial investment?

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So, again, what we need is more information and more transparency.

The Rays have always hidden behind the façade of being a private business, but that’s not entirely accurate. When it suits their purposes, they like to refer to the team as a public institution and they have been openly seeking public money to help build a new stadium.

Having run into a roadblock with the Rays over the redevelopment of the Tropicana Field land, St. Petersburg Mayor Rick Kriseman suggested Monday that Sternberg should consider relinquishing control of the team. That seems like a bit of an overreaction, although the city attorney’s office is looking into whether the Rays violated their stadium use agreement by reassigning ownership of the team to a new company created by Sternberg, as alleged in the suit.

One of the claims made in the lawsuit was that Sternberg was talking to Montreal officials as far back as 2014. If that’s true, it wouldn’t be a shock. We already know Rays officials were meeting secretly with the Montreal group years before the sister city plan was revealed in 2019, so this is merely a readjustment of the calendar.

Would those supposed talks in 2014 violate the team’s exclusive use agreement at Tropicana Field? I doubt it. There is nothing wrong with Sternberg negotiating with Montreal businessman Stephen Bronfman about buying a share of the team — which is what the lawsuit alleges — as long as there is no evidence they were attempting to play games outside of Tropicana Field before 2028.

So what we have at this point is a lot of finger-pointing, but very little clarity.

Even so, the lawsuit will likely confirm the suspicions of skeptics that Sternberg has always been in this to make a financial killing. That’s regrettable.

I have no doubt that Sternberg wants to maximize his investment in any way he can, but it’s also true that his tenure with the Rays has been mostly exemplary. He took a team with zero history and shaky financial support and turned it into one of the most envied and trailblazing franchises in Major League Baseball. Now, this lawsuit threatens to overshadow those accomplishments.

If the allegations are false, Sternberg should welcome the opportunity in a courtroom to set the record straight.

And we should welcome the opportunity to find out more about the Rays’ financial picture.

John Romano can be reached at jromano@tampabay.com. Follow @romano_tbtimes.

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