Tampa Bay Rays principal owner Stu Sternberg is being sued by his minority partners for a third time, Evan Drellich of The Athletic reported Wednesday.
The group of minority owners, who own about 9.6% of the franchise, allege that their ownership “has been reduced to a mere shell, with no revenues from baseball-related operations, no cash flow, and no responsibilities of the management of the Rays team and franchise to the Limited Partners.”
Included in the lawsuit are claims of fraud and a violation of Florida’s Unfair and Deceptive Trade Practices Act.
The five minority owners — Robert Kleinert, Gary Markel, the MacDougald Family Limited Partnership, Stephen M. Waters and a trust in Waters’ name — allege in the new lawsuit that Sternberg did not disclose a hefty payment from Bally Sports Sun, the team’s regional sports network. The $376 million payment was allegedly received by ownership of the team and transferred into the new entity.
“Thus, unbeknownst to Plaintiffs, those funds would not become part of the Partnership’s revenues or ‘net cash flow’ calculations,” the plaintiffs said.
Drellich adds that the minority owners have been hit with taxable income without receiving appropriate distributions from the team.
The first lawsuit, filed in March 2021, alleged that as far back as 2004, Sternberg had developed a scheme to squeeze out the limited partners. All counts expect for one were sent by the judge for arbitration. Sternberg’s lawyers argued in May that the minority owners’ complaints “amount to nothing more than the personal grievances of limited partners.”
The second lawsuit was filed in February and alleges that the partners were not provided with documents “with obviously altered dates.”
Sternberg and the Rays are currently embroiled in a longstanding stadium saga, with their lease at Tropicana Field in St. Petersburg up after the 2027 season. Sternberg is currently in discussions with St. Petersburg and Tampa officials in determining a location and financials to build a new stadium.