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The first stop in our exploration of whether an NFL lockout will cost San Diego taxpayers: figuring out if the Chargers still have to pay rent at Qualcomm Stadium.
There’s a clause buried in the city of San Diego’s contract with the team that allows it to forgo paying the $2.5 million rent if a “force majeure event” prevents the team from using the stadium.
Force majeure literally means a “superior force” and is an unexpected event, like a natural disaster, war or other “act of God,” that would keep a party from living up to its contract.
The National Football League’s 32 teams collectively have decided that they need a greater share of the league’s revenues and have begun a battle that threatens the upcoming season. It’s not entirely unforeseen, either. This labor strife has been simmering for years.
The Chargers say, though, that the lockout is indeed a force majeure.
That term isn’t defined in the latest amended contract, so the definition falls back to the original lease, team lawyers say.
I don’t have a copy of that original lease on hand. Special counsel Mark Fabiani sent me this via email:
There, Force Majeure Event explicitly includes lockouts:
“Force Majeure Event” shall mean any of the following events which prevents a party from performing its obligations hereunder: any act of God, strike, lockout, etc.
The Mayor’s Office began exploring the issue for me late last week but hasn’t been able to provide any official interpretation yet. I’ll post its response when I have it.
Next Step: The next question then becomes whether that’s a good thing for the city of San Diego.
Intuitively, losing out on $2.5 million in rent would seem bad. But there are years in which the city actually sends the Chargers more money than it receives from the team because the team gets rent credits for things such as property taxes on skyboxes and compensation for lost ticket sales because of the addition of disabled seating.
I’ll explore all of that in my next post.