City Says Yankees Owe $3.6M in Rent

This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.

The New York Sun

Not only did the New York Yankees lose the American League pennant to the Boston Red Sox, but now they have found out they owe the city $3.6 million in back rent dating from 2001.


The discovery of the underpayment came in a comptroller’s audit released yesterday that found that while the Yankees have generally followed the provisions of their lease agreement with the city, they underreported their revenues by about $9 million and overstated deductions by more than $30 million. The audit covers January 2001 through the end of 2002.


While the Yankees don’t entirely agree with the audit’s findings, their spokesman, Howard Rubenstein, said the two sides are trying to work out “small differences.” Right now they are about a million dollars apart, he said.


“They are trying to iron out the details,” Mr. Rubenstein told The New York Sun. “It is a documentation issue.”


The affability between the comptroller’s office and the Yankees’ front office in working out the shortfalls is in contrast to the reaction to a similar audit the comptroller conducted on the Mets’ books last year. In 2003 the city had demanded the Mets pay $4 million in unpaid fees dating back to 1996, and the cellar-dwelling club said it didn’t owe the money. After some public feuding, the Mets settled with the city for about $2.7 million.


The Yankees’ lease agreement – which expires at the end of next year – requires the team pay the city either an annual minimum rent of $200,000 or a percentage of the revenues it gains from admission, concessions, waiter service, parking, and cable television receipts, whichever is greater. The Yankees are allowed to deduct from gross revenue their payments made to Major League Baseball, sales taxes, and 25% of property insurance premiums for the stadium.


The audit found:


* For 2001 and 2002, the Yankees underreported their cable-television receipts by about $7 million. That makes the city entitled to additional rent of nearly $700,000.


* In 2001 and 2002, the team reported concession revenue of $92.5 million, about $1.2 million less than what was reflected in their books. That entitles the city to another $100,000 in rent.


* Attendance figures shifted. The Yankees underreported paid attendance by $33, 214 and over reported deductions by $34.5 million. Together that accounts for another $2.8 million in rent, the report said.


The Yankees have agreed with $2.5 million of the assessment and said they would find the documentation needed to support their contention that the remaining $1.14 million isn’t due to the city.


The New York Sun

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