View Audit

The New York Yankees have paid the City $367,321 based upon an audit of the Yankees lease agreement with the city, according to New York City Comptroller William C. Thompson, Jr. Although auditors found that the Yankees generally adhered to the provisions of the 30-year lease agreement and had an adequate system of internal controls over their revenue collection and reporting functions, the Comptroller's audit identified a pattern of unreported revenue from January 1, 1997 to December 31, 2000.

"My Office regularly performs audits to ensure that the Yankees are complying with the lease agreement," Thompson said. "Auditors found that the Yankees underreported revenue by $1,394,110, and overstated the credits they were entitled to take against revenue by $2,502,968. This miscalculation shortchanged the City $367,321."

Under its 30-year lease agreement, the Yankees are required to pay the City the greater of either an annual minimum rent of $200,000 or a percentage of revenues from gross admission, concessions, wait service, pre-paid parking and a portion of cable television receipts. Prior to calculating the City's payment, the Yankees can deduct payments made to Major League Baseball, all sales taxes, and other items before calculating rent payments.

During the audit period, the Yankees reported gross revenues of $416.7 million and paid the City $18.8 million. But the Comptroller's Office determined that the Yankees overstated payments to Major League Baseball by $2,285,727; overstated Insurance Credits of $176,390; deducted undocumented concession credits totaling $40,851, and failed to report "rain-check" revenue - accumulated when patrons don't redeem tickets for rained-out or cancelled games - amounting to $1,519,149.

The lease agreement, which expires December 31, allows the Yankees exclusive use of Yankee Stadium during the baseball season and permits the Yankees to sell tickets, provide food and souvenir concessions, provide parking for season ticket holders and offer cable television broadcasts. The City's Department of Parks and Recreation monitors the agreement.

The Yankees readily agreed with Thompson's audit, have paid the fees, and in the future, will report all rain-check revenue, deduct only the actual payments made to Major League Baseball for revenue-sharing, and maintain documentation to substantiate all credits taken from reportable gross receipts.

###