The following is an Appeal Panel Decision issued pursuant to Section 6 of the BP Deepwater Horizon Economic & Property Damages Settlement Agreement and the Rules Governing the BP Appeals Process. Links may have been added to assist the reader. The original decision may be found here, as well as a glossary of BP Settlement terms.
This Claimant leases [XXXXX – Raymond James Stadium?] in Tampa, Florida (Zone D), from [XXXXX – The Tampa Sports Authority?]. It is the primary licensee of the stadium. In that capacity, it has the right to operate concessions and provide parking for the [XXXXX – Tampa Bay Buccaneers?] football games as well as for other sports and musical events routinely held there. It sublicenses its rights to third parties.
Following review of Claimant’s financial data, the Claims Administrator issued an Eligibility Notice containing a pre-RTP Compensation Amount of $1,910,301.22. He also assigned Claimant a Tourism Industry designation with RTP multiplier of 1.25. Strenuously contending that Claimant should take nothing, BP argues that the Claims Administrator (1) misunderstood Claimant’s basic business model; (2) wrongly concluded that Claimant is a Tourism business; and (3) failed to investigate whether out of Zone revenues were improperly included in the claim calculation.
The essence of BP’s argument in support of error assignment (1) is that the Claims Administrator’s failure to obtain Claimant’s underlying contracts and other basic documents and information led it to apply a NAICS Code of “711310-Promoters of Performing Arts, Sports and Similar Events with Facilities,” reasoning that “the entity’s website indicates it is a football stadium.” To the contrary, submits BP, Claimant does not actually own or operate a football stadium, nor is it a “promoter” of anything. To quote BP:
“There is much missing from the record about what Claimant actually does, including the underlying contracts with the stadium and concessionaire. However, based on the above representation from Claimant’s accountant, Claimant does not own the football stadium and does not sell concessions to football fans. Rather, through means not described in the record, Claimant has obtained the food and parking concession rights and contractually assigns those rights to concessionaires, who in turn sell food and parking to the football fans. Indeed, Claimant’s financials reflect no variable expenses, much less the types of variable expenses which would be associated with operations of a stadium, an event promotion business, or sales of concessions to fans. Thus, the Settlement Program misconstrued the basic nature of Claimant’s business.
“The Settlement Program’s failure to understand Claimant’s business likely stemmed from its failure to obtain basic documents and information which would have shed light on the underlying facts in this multi-million-dollar claim. The concessions contracts which would provide that basic information are absent from the record. Likewise, the Settlement Program did not obtain a schedule or other documentation of the specific stadium events for which Claimant actually received payments from concessionaires. Instead, the Settlement Program’s calculation of this $4.3-million award was based upon Excel spreadsheets for each year which include a bare minimum of data. The 2010 P&Ls, for example, contain eight line-items. On these spreadsheets, the millions of dollars in revenue for each year are listed under a single line-item: “concessions.”
“Respectfully, the Settlement Program did not do its homework on this multimillion-dollar claim. The Settlement Program accountants cannot calculate a business award without a basic understanding of the business at issue. The lack of sufficient attention to this large claim alone necessitates remand. Moreover, the misunderstanding here had substantial, specific consequences, and resulted in a drastic miscalculation of the award.”
Claimant argues, just as forcefully, that its representatives provided all of the documentation required by the Settlement Agreement in support of its claim and that its responses to various inquiries from the claims analyst were accepted as satisfactory in all respects. Further:
“Without a single citation to the Settlement Agreement or Claims Administrator Approved Policy, BP attacks the Settlement Program’s understanding of Claimant’s business model as somehow requiring a remand of the instant Post Re-Review Eligibility Notice. BP asserts several salacious yet ill-supported criticisms of the Settlement Program. Specifically, BP avers that the Settlement Program “did not do its homework,” and “it failed to obtain basic documents and information which would have shed light on the underlying facts in this multi-million dollar claim.” See BP’s Initial Prop. Br. at 3. BP criticizes the Settlement Program for failing to obtain the underlying contracts with [XXXXX] and concessionaires operating within [XXXXX]. See id. at 2-3. Naturally, the Settlement Program did not request documents during its review, which for the first time on appeal, are deemed “basic” by BP. Nor is the Settlement Program obligated to request documents that BP speculates would “shed light on the facts in this multi-million dollar claim” when these documents are not required by Exhibit 4A of the Settlement Agreement. See id. at 3.
“Clearly disgruntled by the instant award, BP assigns error to the Settlement Program’s “failure” to obtain a schedule or other documentation of the specific stadium events for which Claimant actually received payments from concessionaires. See id at 3. Notwithstanding the fact that these documents are not required by Exhibit 4A of the Settlement Agreement, the record reveals in pertinent part:
“The Claimant provided a schedule of adjusting entries to restate revenues on an accrual basis for all months. DWH Accountant noted that the restated monthly concessions revenues are in line with the home football schedule.”
“Finally, BP takes issue with the fact that Claimant’s monthly P&Ls, in BP’s opinion; do not have enough line-items to justify the award. See BP’s Initial Prop. Br. at 3. Once more, there is no requirement that any claimant submitting a BEL claim maintain a minimum volume of line-items or accounts on its P&Ls. If the Settlement Program had failed to obtain ‘basic’ documents as BP argues, it would follow that those documents would, at the bare minimum, be required by Exhibit 4A of the Settlement Agreement.
BP surmises that the ‘misunderstanding here had substantial, specific consequences, and resulted in a drastic miscalculation of the award.’ Id. at 3. Tellingly, BP did not proffer a single consequence of its perceived failure by the Settlement Program to obtain documents (not required or identified in Exhibit 4A of the Settlement Agreement) that BP has concocted as ‘basic.’ In the same vein, BP failed to identify any accounting error or specific miscalculation by the Settlement Program. Instead, BP summarily concludes that the Settlement Program’s ‘lack of sufficient attention to this large claim alone necessitates remand.’” Id.
The panelists sought input from the Claims Administrator. His response, with respect to this issue, is as follows:
“As documented in the Calculation Notes (Note 8), the Settlement Program discussed the nature of the Claimant’s business with the Claimant’s accountant. The Settlement Program determined the Claimant leases the stadium from the [XXXXX] and that, although football games are played there, the stadium is separate from the [XXXXX] football team. Rather, the claimant’s revenues are generated from concessions and parking. Because concessions are run by a concessionaire, the claimant does not have COGS but instead receives a percentage of the concession revenues received at football games and other events.
The analyst’s Contact Notes Report confirms a July 30, 2014 telephone conference with Claimant’s accountant which confirms that information as well as the fact that the stadium “hosts events other than football games as well.”
The record provides no support for BP’s position. To the contrary, it evidences a thorough analysis and evaluation of claimant’s business enterprise and financial data. As is evident from the quoted portion of BP’s Memorandum, its position is long on rhetoric but short on substance.
Its anguish over the size of the award is understandable, but there is nothing in the record which can provide it solace. This error assignment is without substance. In its second error assignment, BP disputes the Tourism Industry designation granted by the Claims Administrator. It argues that Claimant does not cater to the needs and wants of tourists because it does not deal directly with them. Instead, it submits, Claimant assigns the concession rights to third parties who actually sell food and parking to stadium attendees. Therefore it does not meet the Tourism Industry definition. Alternatively, BP contends that even if Claimant did provide services directly to them, the record contains no evidence that they are “tourists” since “[m]ost visitors to [XXXXX] are, no doubt, locals to the area.”
The Summary of Review rejects these contentions with the following analysis:
“Claimant is involved in the operation of [XXXXX]. The Claims Administrator classified this business using NAICS Code 711310 – Promoters of Performing Arts, Sports, and Similar Events with Facilities, which is not listed on Exhibit 2 as a Tourism NAICS Code. This determination was made based on the claimant’s 2010 tax return, which states that the Entity’s principal business activity is “football stadium – miscellaneous services,” and 2010 Profit & Loss Statement, which indicates that the Entity derives its revenue from concessions and parking.
“Under Policy 289, a business classified under a NAICS Code not listed on Exhibit 2 may still receive the Tourism Industry Designation if the Claims Administrator determines in his discretion that the claimant’s business ‘provide[s] services such as attracting, transporting, accommodating, or catering to the needs or wants of persons traveling to, or staying in, places outside their home community.’ The website for Claimant states that it hosts a variety of events that are generally known to attract visitors to the Tampa area, such as NFL and NCAA games, monster truck rallies, and concerts. As such the Claims Administrator assigned to this claimant the Tourism designation.”
The record fully supports the Claims Administrator’s analysis and determination of this issue. BP’s final argument consists of its speculation that claimant’s award “may be based in part upon revenues from a ‘home’ game played in [XXXXX]. It notes that the [XXXXX – Buccaneers] played a ”home” game at [XXXXX – London?] in October of 2009 while only playing one game at [the stadium] in Tampa during that month, yet its revenues in that month were comparable to October’s in other years in which two such games were played at the stadium.
In response to that contention, the Summary of Review notes that on October 9, 2009, a concert performed by the internationally acclaimed rock band [XXXXX] during its [XXXXX] at [XXXXX] resulted in the largest attendance in the stadium’s history. As above noted, claimant derives parking and concession revenues from various music concerts, regular season college football games, and other events in addition to those of the [XXXXX]. Moreover, it is clear that Claimant has the concession rights at [XXXXX] in [XXXXX] not at [XXXXX]. The Summary of Review made no mention of that fact. It merely explained why the October, 2009 revenues were consistent with October revenues in other years which included two home games.
Not satisfied with that explanation, BP submitted an unsolicited response to the Summary of Review wherein it repeated the position it took in its Initial and Final Proposal memoranda as well as another, unsolicited supplemental memorandum it filed under the guise of responding to “new claims” raised in Claimant’s Final Proposal memorandum.
Claimant’s counsel objected strenuously to the panelists giving any consideration to them as that would necessitate him filing a response with no idea what the time frame for such a response might be. Inasmuch as Claimant’s Final Proposal memorandum inexplicably did not directly refute BP’s out of Zone revenue argument, the panelists offered him an opportunity to reply and provided an appropriate deadline for that purpose.
Claimant’s timely reply, supported by an affidavit of , its Controller, is short and to the point:
Specifically, and as the attached Affidavit attests, Claimant did not derive any revenue from an October 2009 football game played in [XXXXX]. To be clear, Claimant received zero funds as a result of the game. Consequently, this contention is likewise insupportable.
Following de novo review, the panelists have concluded the Claims Administrator committed no error. This BP appeal must be denied. Claimant’s Final Proposal is hereby selected.