Saturday, August 30, 2008

In 2006, as well, Zimbalist's ($73K) testimony was disallowed in court

Three times in the last year sports economist Andrew Zimbalist’s work has been either discredited in a court case or thrown out of court. Let's add a fourth episode to the list, albeit in 2006, in a court case involving the baseball team in Southern California known as the Angels.

The Orange County Register, in a 1/8/06 article, previewed a case in which the city of Anaheim sued the Angels baseball team, arguing that the change of the team name from “Anaheim Angels” to the “Los Angeles Angels of Anaheim” violated a lease in which the team was compelled to keep “Anaheim'” in the name.

The city contended that the change would cost the city $98 million to $374 million. Meanwhile, the team had the third-highest attendance in Major League Baseball and, while the city was concerned about lowered tourism, bed-tax receipts went up 20 percent over the previous year.

Zimbalist, an expert hired by the city, contended that the effect of advertising must be measured over time. Two sports marketing experts interviewed by the newspaper questioned the city’s argument, however.

Alternative considered

The newspaper reported:
A city witness analyzed how much the stadium property would be worth if the city used it for a different purpose, such as hotels, commercial property or entertainment venues. Zimbalist found that value would be $105 million through 2029, based on 1996 dollars.

Angels' court documents say the damage claim is ``speculative, hypothetical, (and) has no basis in fact or reality,'' mostly because city officials failed to show intent to use the land for anything other than a stadium.


Curiously enough, the opposite happened in Brooklyn. Zimbalist’s deeply-flawed study for Forest City Ratner made no attempt to analyze how much the arena block would be worth if used for a different purpose.

While that may be speculative, Brooklyn is different from Anaheim, and such choice land in New York City couldn’t be ignored.

Zimbalist bounced from case

A 1/26/06 article in the Los Angeles Times explained that Zimbalist would not be allowed to testify, according to the trial judge. The newspaper reported:
In analyzing the effect of the Angels' name change, Zimbalist calculated the city had foregone $138.5 million by signing a long-term lease with the team rather than demolishing the stadium, selling the land and reaping taxes from property development.

But that analysis does not offer "the proper measure of damages" in a breach-of-contract case, Orange County Superior Court Judge Peter Polos ruled. If the Angels have broken their lease by adding "Los Angeles" to their name and dropping "Anaheim" from use, he said, the damages should reflect the value of the actual benefits lost by the city.


Polos did allow two other experts hired by the city to testify on the loss of the Anaheim name.

The city of Anaheim lost the case.

What it cost

A 2/11/06 Orange County Register article reported that the city spent $2.5 million on the case, including some $169,000 for three expert witnesses.

That included $73,276.60 for Zimbalist, even though he didn’t get to testify.

No comments:

Post a Comment