2024-128 Anaheim’s Lease Agreement With Angels Ownership
Unclear Terms Have Hindered the City From Ensuring That Its Own Stadium Is Properly Maintained, While Revenue Sharing Provides Limited Funding
Published: March 27, 2025
Audit Recommendations Disclosure
When an audit is completed and a report is issued, auditees must provide the State Auditor with information regarding their progress in implementing recommendations from our reports at three intervals from the release of the report: 60 days, six months, and one year. Additionally, Senate Bill 1452 (Chapter 452, Statutes of 2006), requires auditees who have not implemented recommendations after one year, to report to us and to the Legislature why they have not implemented them or to state when they intend to implement them. Below is a listing of each recommendation the State Auditor made in the report referenced and a link to the most recent response from the auditee addressing their progress in implementing the recommendation and the State Auditor’s assessment of auditee’s response based on our review of the supporting documentation.
City of Anaheim
Recommendation 1
To protect its interests in the future, Anaheim should ensure that future lease agreements regarding a city-owned stadium include clear language in the following areas:
- Anaheim’s right to inspect the stadium periodically for any reason.
- The party responsible for maintenance and repairs, the specific systems covered and exempt, what constitutes normal wear and tear, and what condition Anaheim expects the stadium to be in at the end of the lease.
- Treatment of any funds spent in excess of the capital reserve fund at the end of the lease.
It may also be in Anaheim’s best interest to include the following in its future agreements:
- No option for the tenant to terminate the lease early without cause.
- A continuation of base rent for the duration of the lease, including extension periods.
- A requirement for periodic stadium inspection reports by an independent third party.
- The city’s right to use the stadium for its own events.
Agency response status:
pending
Recommendation 2
To ensure that the stadium is in good condition and repair, and that Angels ownership is completing required maintenance and repair tasks, Anaheim should negotiate with Angels ownership or seek to obtain a court order allowing it to perform physical inspections of the stadium on an annual or bi-annual basis to verify its condition and to verify the maintenance Angels ownership has performed or needs to perform. Anaheim should post on its public website the results of such inspections to the extent the reports are not privileged or otherwise confidential.
Agency response status:
Not fully implemented
Date of implementation:
Some parts of the Recommendation have already been completed. Other parts cannot be completed until as late as the end of the Lease, currently set to expire in 2032. However, with extensions, could continue through the end of 2038
State Auditor assessment status:
Partially implemented
60-Day Agency Response
The City has recently secured access to the Stadium to complete its maintenance and condition assessment of the Stadium. The work is being performed at the direction of the Office of the City Attorney and is therefore work product in anticipation of potential litigation. If and when the City decides not to pursue litigation, or otherwise waives the confidentiality of the work product, the City can properly disclose the report publicly. The current assessment being conducted is intended to be exceedingly thorough. When it is completed, the City will be in a better position to determine the frequency of future inspections or assessments. However, in anticipation of the termination of the lease (currently 2032), the City will ensure that appropriate studies or inspections are done and will either negotiate reasonable access or else will seek a court order as recommended.
6-Month Agency Response
The City secured access to the Stadium and is in the process of completing its property condition assessment of the Stadium. The work is being performed at the direction of the Office of the City Attorney and is therefore work product in anticipation of potential litigation. If and when the City decides not to pursue litigation, or otherwise waives the confidentiality of the work product, the City can properly disclose the report publicly. The current assessment being conducted is intended to be exceedingly thorough. When it is completed, the City will be in a better position to determine the frequency of future inspections or assessments. However, in anticipation of the termination of the lease (currently 2032), the City will ensure that appropriate studies or inspections are done and will either negotiate reasonable access or else will seek a court order as recommended.
Recommendation 3
To ensure that Anaheim is receiving the appropriate revenue, it should use its right to audit Angels ownership to obtain and review ownership’s records every year to determine if Anaheim received all revenue to which it is entitled. At a minimum, the review should include verifying key information used to calculate revenue from ticket sales, parking, and other events. The review should also include verifying, through physical inspections, if possible, that claimed work was performed.
Agency response status:
Not fully implemented
Date of implementation:
March 2026
State Auditor assessment status:
Partially implemented
60-Day Agency Response
The City will prepare internal policies and procedures to ensure the implementation of the State-recommended annual review of the ownership’s records. The City plans to review the next annual submission from ABLP, which is due by January 2026. The review will include verifying the reported information with supporting records, including Major League Baseball attendance reports, invoices, receipts, general ledger, financial statements, and other relevant records. The City’s goal is to complete the review by March 2026. ABLP scheduled a walkthrough of their 2024 capital additions with City staff on June 2, 2025. If possible, City staff will confirm the physical existence of these additions.
6-Month Agency Response
The City will prepare internal policies and procedures to ensure the implementation of the State-recommended annual review of the ownership’s records. The City plans to review the next annual submission from ABLP, which is due by January 2026. The review will include verifying the reported information with supporting records, including Major League Baseball attendance reports, invoices, receipts, general ledger, financial statements, and other relevant records. The City’s goal is to complete the review by March 2026.
On June 2, 2025, City staff, consisting of representatives from the Convention Center Accounting and Internal Audit, performed a walkthrough of ABLP’s 2024 capital additions. City internal audit staff documented their observations, which would be utilized in the upcoming contract audit.
Recommendation 4
To ensure that Anaheim is receiving the appropriate revenue, Anaheim should supplement these basic reviews with a complete audit of Angels ownership’s compliance with the lease agreement every three to four years. If Anaheim’s internal audit department is unable to perform the reviews at this frequency, Anaheim should contract with an external party to perform them.
Agency response status:
Not fully implemented
Date of implementation:
June 2026
State Auditor assessment status:
Partially implemented
60-Day Agency Response
The City’s Audit Division’s annual audit plan includes a contract audit of the Angels Stadium lease agreement. An audit notification letter is scheduled to be issued in July 2025 to audit the books and records of ABLP, particularly on the revenue sharing, capital reserves, and other material provisions of the lease agreement. The timing of the audit is dependent upon ABLP’s timely submission of all required documentation. The Audit Division’s goal is to complete the audit by the end of fiscal year 2026.
6-Month Agency Response
The City’s Internal Audit’s annual audit plan includes a contract audit of the Angels Stadium lease agreement. An audit notification letter was issued on September 1, 2025. The objective of the audit was to determine whether ABLP is in compliance with the lease agreement and includes a review of the books and records of ABLP, particularly on the revenue sharing and capital reserves. An entrance meeting will be scheduled to determine the timing of the audit. The Audit Division’s goal is to complete the audit by the end of fiscal year 2026.
Recommendation 5
Through independent online ticket selling sites, staff is already aware of a Stadium events that are, or have been, on sale to the public, and has been involved in staff-level discussions with the Angels to receive a copy of their internal events calendar. As has been its practice, the City will utilize any information obtained, from the ABLP or otherwise, to inform its annual revenue reviews.
Agency response status:
Fully implemented
Date of implementation:
June 2025
State Auditor’s assessment status:
Fully implemented
60-Day Agency Response
Through independent online ticket selling sites, staff is already aware of a Stadium events that are, or have been, on sale to the public, and has been involved in staff-level discussions with the Angels to receive a copy of their internal events calendar. As has been its practice, the City will utilize any information obtained, from the ABLP or otherwise, to inform its annual revenue reviews.
6-Month Agency Response
Through independent online ticket selling sites, staff has been aware of a Stadium events that are, or have been, on sale to the public. In June 2025, the ABLP began providing the City access to the Stadium events calendar, for both public and private events, and the associated estimated attendance. Associated threshold financial actuals are also provided as annual back-up to annual threshold revenue calculations.
