Franchises Insulating Against Brawls

December 10, 2004
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GRAND RAPIDS — The final fallout from last month’s brawl between members of the Indiana Pacers and fans of the Detroit Pistons is almost certain to take place in a different type of court — a circuit court and not the hardwood floor at the Palace of Auburn Hills.

Lawsuits stemming from the action will likely close the door on the incident for many, but not for Bill Davidson. Davidson finds himself in a unique situation. He owns both the Pistons and the Palace, and his organizations will likely bear the brunt of any litigation that will be filed.

West Michigan Baseball Inc., which owns the West Michigan Whitecaps and Fifth Third Ballpark, would find itself in relatively the same position if a melee like the one that broke out in Auburn Hills happened in Comstock Park.

Lew Chamberlin, who founded the franchise with Dennis Baxter and serves as the team’s managing partner, said owners have little to worry about personally as they are fairly well insulated from liability issues due to the country’s corporate structure.

“If a Ford car blows up, you don’t necessarily sue Bill Ford,” he said. “That kind of protection is generally provided by whatever kind of corporate or business structure you have.”

Liability for his organization, however, is another matter.

“We are kind of similar to Bill Davidson. His organization owns the Palace and the Pistons. In that situation, that is what liability insurance is all about, and everybody who is smart carries a significant amount of liability insurance to protect them against something that may occur,” said Chamberlin.

The legal situation is different for DP Fox Ventures LLC, a firm co-owned by Dan and Pamella DeVos, than it is for West Michigan Baseball. The company is majority owner of the Grand Rapids Griffins hockey franchise and sole owner of the Grand Rapids Rampage arena football team, but does not have an ownership share in Van Andel Arena where both teams play. That building belongs to the Convention and Arena Authority (CAA).

DP Fox COO Scott Gorsline said the CAA is responsible for security at the arena and is charged with maintaining crowd control at all events held there. The arena’s liability policy is costing the CAA $85,104 this fiscal year — up from the $73,685 the board paid during FY04 — and the liability premium for officers and directors is $13,200. So the CAA is paying $98,304 this year to protect the board and the building from liability issues.

Still, DP Fox isn’t absolved of all accountability if a malice-at-the-Palace type of event happened at Van Andel.

“Where it gets a little trickier is if our players and coaches would be involved in a situation like that. Then I think we’re looking at a situation where both the team and the building and any fans that are involved, which is what happened in Detroit, could all have some liability,” said Gorsline.

“Certainly if there was a situation like at the Palace that involved our players, the team and the individual players involved are at risk for some liability. But the building would bear some responsibility also, because they have the ultimate responsibility for maintaining crowd control,” he added.

The arena lease requires DP Fox to have $5 million of liability coverage for each team, but doesn’t hold the firm or the arena legally accountable for the actions of opposing players.

“The lease excludes the visiting team’s hockey players from the landlord’s obligation, but it doesn’t say that we’re responsible for them. It just says that we are responsible for our agents and employees,” said Gorsline.

But if a fan dumped a drink on an opposing player and if that player reacted by physically attacking a fan, then the arena, the home team, the CAA and others would get dragged into the incident — at least for the short term.

“The reality is everyone gets pulled in. That is just the way things work until it gets sorted out,” said Gorsline.

As for the incident at the Palace, Chamberlin didn’t feel that the skirmish sprung from the nature of the game, as all sports have always had a degree of aggression. He did feel, though, that how the games are marketed and how the media emphasizes the trash-talking violence in reports contributed to the brawl. Both, he said, have a tendency to whip players and fans into a frenzy.

“As far as we’re concerned, we feel that we’re fairly well protected by liability insurance and the umbrellas that we do carry to protect the organization against anything that might occur. Because you never know,” said Chamberlin. “Anything can occur and you need to protect yourself.”    

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