Paul Allen is required to tell the world whether his Seattle Seahawks football team is winning or losing off the field, the state attorney general’s office says. In an opinion released recently, deputy attorney general David Walsh concludes that legislation created by the 1997 public vote approving a $430 million Seattle football stadium for Allen’s team includes a requirement that Allen must publicly issue an annual team profit-and-loss financial statement. Previously, the Public Stadium Authority, the government agency that oversees the stadium’s operation, had ruled that Allen did not have to release information on his team’s bottom line.
Relying on a contorted legal interpretation by its attorney, the stadium authority had asserted that the statute meant that only Allen’s stadium management group, First & Goal, would have to release a financial statement. But according to Walsh’s written legal opinion, the law requires that Allen’s stadium lease “must include a provision requiring [Allen’s] disclosure of an annual profit and loss statement by the team itself.” Currently, the lease contains no such provision, and, if the opinion is heeded, the Seahawks’ lease would have to be amended or renegotiated.
State Treasurer Michael Murphy requested the opinion after questions about the stadium authority’s decision were raised by Tacoma News Tribune columnist Peter Callaghan, who argued in columns last year that the stadium authority was misinterpreting the law’s intent. State Auditor Brian Sonntag and Murphy agree that a team disclosure is required, Callaghan reported.
The opinion possibly sets up a unique situation by requiring a privately held National Football League franchise to publicly reveal its bottom line. The financial statement could include detailed audit figures on how much the team made at the gate and how the money was spent, such as on salaries of officers, coaches, and players, and travel and equipment costs.
According to state stadium law, “The master tenant lease agreement must require the team affiliate to publicly disclose, on an annual basis, an audited profit and loss financial statement.” Team affiliate is defined as “a professional football team that will use the stadium and exhibition center, and any affiliate of the team designated by the team. An ‘affiliate of the team’ means any person or entity that controls, is controlled by, or is under common control with the team.”
Allen claimed the clause meant a statement would have to be filed by only his First & Goal “affiliate,” not Football Northwest, his team ownership group — despite the clear wording and the fact that the officers of both groups are the same.
The stadium authority agreed. In reviewing the decision, the authority’s attorney — sounding a little like Bill Clinton trying to explain what “is” is — observed that “the word ‘and’ can mean either ‘and’ or ‘or,’ depending upon the context within which it is used.” In the context of the sentence, he said, “and” means “or.”
In his opinion, deputy attorney general Walsh said simply, “and” means “and.”
The stadium deal, approved by less than a 51 percent margin, was engineered by the billionaire Allen, who designed, built, and essentially controls the facility. He was able to pay most of his $130 million share of construction through special seat-licensing sales and a semisecret $63 million loan from the NFL (see “After Further Review,” Feb. 12).
Officials from First & Goal did not respond to queries for comment. Stadium authority director Ann Kawasaki Romero says, “We are still in the process of analyzing the information with our attorney and with board members. The PSA is committed to upholding the law and wants to be certain that anything we do is legally defensible.”
Earlier, the authority’s chairperson, Lorraine Hine, indicated to columnist Callaghan that she was not necessarily persuaded by the attorney general’s opinion. Contrasting it with the opposite view of the authority’s attorney, she said, “Surprise, surprise — two lawyers disagree.”
Deputy attorney general Walsh says he’s unsure how the dispute can be remedied if the authority fails to follow the opinion. “Nothing in the [stadium] act gives any third party the right to enforce the law,” he says. “It may be up to the Legislature.”
