Facts

Plaintiff, Chargers Football Co. LLC, signed a lease with the city of San Diego to rent Qualcomm Stadium for 10 percent of certain stadium revenues. In 2002, the city renovated the stadium so that it complied with the Americans with Disabilities Act. The renovations resulted in a loss of 4,989 seats, a six percent decrease on the admission levels. Some seats also had obstructed views as a result of the renovations. The plaintiffs sued the city of San Diego for indemnification for loss of ticket revenue.

PLAINTIFF’S CONTENTIONS:
The plaintiffs claimed that the city as the owner of the stadium was responsible for complying with the ADA, not the team, and that prior to beginning the renovations, the city agreed to indemnify the plaintiffs for any loss, cost, liability or expense resulting from the renovations.

DEFENDANT’S CONTENTIONS:
The defendant contended that the plaintiffs were partially responsible for ADA compliance and that the lease between the parties did not specify an acceptable number of seats in the stadium.

Specials in Evidence

The plaintiffs requested damages for the duration of the lease, which expires in 2020. They proposed multiplying the number of seats impacted by the renovations by the percentage of all seats sold to determine how many seats were lost. The number of lost seats would then be multiplied by the average ticket price value to determine the lost-ticket revenue. Rent owed to the city by the net lost seats would be subtracted from this total.

Damages

The plaintiffs asked for $900,906 for lost-seat revenue on general admission seats for the 2004 season and the first six home games of the 2005 season; $1,502,315 for lost revenue from Club Level seats for the 2002, 2003, and 2004 seasons, and the first six home games of the 2005 season; and $123,511 for lost revenue from concessions and merchandise for the 2002, 2003, and 2004 seasons, and the first six home games of the 2005 season.

Injuries

The plaintiffs alleged loss in revenue due to the lost and view-impacted seats.

Result

The arbitrator awarded the plaintiffs $1,980,340 and accepted the plaintiff's formula for calculating damages until 2020. The arbitrator applied the formula to all of plaintiff's home games from 2002 until 2005 where at least 90 percent of the available seats were sold.

Other Information

Due to San Diego's financial crisis, the plaintiffs announced that they will not demand payment during 2006 and will revisit the issue of payment during 2007.