Manatee County discusses best ideas for oil spill compensation
If the Tampa Bay Buccaneers had won their Deepwater Horizon settlement program claim, they would have received nearly enough money to cover quarterback Jameis Winston’s 2019 salary of $20 million.
However, in a decision filed on May 24, the U.S. Court of Appeals for the Fifth District denied the Bucs’ $19.5 million claim of damages from the 2010 spill of 3.19 million barrels of oil off the coast of Louisiana. And in rendering its decision, the court said the Bucs failed to substantiate an accounting assertion.
The Bucs declined comment on the litigation on Tuesday.
News of the decision left some wondering why a team valued at $2 billion would make any claim of damages for a spill that occurred more than 300 miles from Tampa Bay, let alone a claim of $19.5 million. Even the court’s eight-page decision stated the spill didn’t hurt the Bucs’ performance, noting the team went 10-6 after the spill in 2010, just a year after finishing 3-13.
“The Bucs have not had a 10-win season since,” the decision stated.
However, a number of local businesses, municipalities – and sports franchises – declared the spill economically damaged their business. The way courts set up the settlement program, companies did not have to show a direct connection between the spill and financial loss. Those who filed claims included the Bucs and the Tampa Bay Lightning.
A Lightning official confirmed Tuesday the team will receive more than $788,000 from its claim. The same appeals court that outright rejected the Bucs’ claim denied the Lightning’s appeal of its award. The issue is now settled, according to the team.
The Rays also may have filed a claim, but declined comment on the issue Tuesday.
Meanwhile, cities and counties did receive substantial settlements from the program, including Hillsborough County ($28.5 million), the city of Tampa ($27 million), Pinellas County ($9.5 million) and Pasco County ($7.4 million). In each settlement, the municipalities reportedly received less than they requested.
Overall, more than 100,000 businesses throughout the Gulf region filed claims with the settlement program, many prompted by law firms who invited and encouraged companies to stake a claim.
So, the Bucs’ request of $19.5 million may not seem as exorbitant given the terms of the settlement agreement, which “essentially treats a post-spill decline in a business’s profitability as circumstantial evidence of causation,” according to court papers.
The team based its claim on the formula spelled out in the settlement agreement BP crafted with the courts. The formula is largely based on whether a claimant’s financial condition worsened after the spill. BP agreed to the procedure to avoid litigation in countless trials.
The settlement divided impacted areas into four zones. Tampa Bay fell into Zone D, the geographic area farthest from the spill. Businesses in that zone had to prove they suffered a “V-Shaped Revenue Pattern” loss. Think of what a V shape line on a revenue graph would reflect: revenue at a certain level in 2009, a decrease due to the spill in 2010, followed by a rise in revenue in 2011.
As explained in the court’s decision, “If revenue in the spill year is lower than in the surrounding years, the inference is that the spill caused that downturn.”
Specifically, according to the court document, claimants had to show a post-spill revenue downturn of 15 percent during a three-month period between May and July of 2010, and a revenue upturn of 10 percent during the same three months in 2011.
The Bucs relied on the same accounting data it used for routine audits, and that data reflected a revenue increase during those months in 2011. In 2010, according to the court documents, the team calculated the money it received in NFL Ventures, part of the league’s revenue sharing program, during the months the team played: September through January 2011.
However, the Bucs claimed that in 2011, it received a portion of those same NFL Venture dollars not during the 2011 season, but during the three-month period in question: May through July, 2011. Why? Because the league was enduring a player lockout from March to July of that year.
The court said the Bucs failed to substantiate the claim, not necessarily the integrity.
According to the court decision, “The team told the accountants that, during the labor troubles, the NFL ‘provided guidance for us to record . . . NFL Ventures revenue for April, May, and June of 2011 in case there was a lockout.’”
If it received some of those dollars during that three-month period, the uptick in the V-Shape would have been dramatic. To support the claim it added revenues during the period in question, the Bucs submitted an affidavit from its comptroller.
The judges, however, wrote in their decision the Bucs never submitted financial statements or other evidence showing that it made and implemented this accounting decision during 2011.
“There is nothing from the Buccaneers’ regular accounting firm indicating that it decided in 2011 that the NFL Ventures revenue should be allocated differently,” the court wrote in the decision.