Can new laws level the field?

0 Comments | Insight on the News, August 3, 1998 | by Tiffany Danitz

Congress is responding to the cries for help coming from cities and fans who are battling sports-franchise owners over issues from taxpayer subsidies to antitrust law.

Texans remember the Alamo, but die-hard Baltimore sports fanatics recollect the infamous chilly night of March 29, 1984, when their beloved Colts football team deserted the city for the greener pastures of Indianapolis. Colt fans, suffering from a decade of rock-bottom morale, didn't shrink from luring the Cleveland franchise to their promised state-of-the-art stadium. It would have taken an experienced priest to find even a twinge of guilt as the fans did unto their neighbors as had been done unto them.

An age of free agency for entire teams has been unleashed. Fans increasingly are cheering for faceless mercenaries, for colors and numbers, as Houston Oilers become Tennessee Oilers and New Orleans Jazz be come the soul of Utah sports in the city of the Mormon Tabernacle Choir.

As the list threatens to grow, congressmen have tuned into fan outrage and are running to their constituents with arms full of sports legislation to remedy real or imagined ills concerning team ownership, tax-subsidized stadiums and exemptions from antitrust laws.

"It is almost as if they have a death wish" Rep. Earl Blumenauer, an Oregon Democrat, says of professional sports franchises. "Fifty million Americans live in a community that has either lost a team or where a franchise relocation is threatened."

Blumenauer has introduced a bill known as the "Give Fans a Chance Act" and tells Insight he is fed up with "the big business of big sports which is increasingly growing distant from the communities of which they once were a part. There is a set of dynamics now that makes the fan feel he or she is being held hostage by the big sports cartels."

Gone are the glory days of the Rooneys, Rosenblooms and Halases, when the game, not the dollar, was paramount. While the sports leagues are making business decisions, cities increasingly are feeling that they are under the thumbs of owners who want lucrative stadium deals and other taxpayer subsidies and concessions from politicians, according to newspaper editorial pages.

To address this issue, New York Democratic Sen. Daniel Patrick Moynihan has introduced the "Stop Tax-exempt Arena Debt Issuance Act," or STADIA, in an attempt to curb the public subsidization of tantalizing stadiums with luxury skyboxes for booster corporations and politicians.

"Team owners can generate greater income," explained Moynihan on the Senate floor, "increase their franchise values dramatically and compete for high-priced free agents with new tax-subsidized, single-purpose stadiums equipped with luxury skyboxes, club seats and the like. Thus, using their monopoly power, owners threaten to move, forcing bidding wars among cities" (see "Public Welfare for Billionaires," p. 16). There is political concern that the sports world is dominated by monopolies. The number of cities with teams is kept artificially low, restricted by owners of competing sports franchises. It also is a point of contention that owners combine their might to sell broadcasting rights, inflating prices that in turn are passed along to advertisers -- and, hence, consumers -- while at the same time being exempt by law from broadcast antitrust action.

New York-based Raymond Keating, chief economist with the Small Business Survival Committee, says Congress is making a mistake if members assume that sports leagues are monopolies. "It is not a good idea at all for the federal government to micromanage sports leagues," he says of Blumenauer's bill. Keating, however, supports Moynihan's attempt to restrict corporate welfare for the owners, noting that "they are competing for entertainment dollars."

Blumenauer believes the two bills complement each other. Government is part of a problem, he contends, in which it is "enabling" and creating "an unhealthy relationship."

The Blumenauer bill, which has been referred to the Judiciary Committee, would require a professional sports team to give communities 180 days notice before leaving for another city, allowing the locals an opportunity to buy the franchise. It further requires the leagues to consider restrictive criteria before authorizing relocation. Since 1950, Blumenauer says, there have been 68 franchise moves in the four major sports leagues.

If a franchise fails to meet the proposed bill's requirements it would lose its broadcast antitrust exemption. Joe Brown, the senior government-affairs officer for the National Football League, or NFL, finds it ironic that Blumenauer is threatening to use the revocation of the 1961 Sports Broadcasting Act as a sanction. He says the act helps fans because the clubs are able to negotiate with the networks as single entities resulting in the free televising of games. "To tie our ownership policy to the Sports Broadcasting Act is unwise," says Brown, who does not believe the Blumenauer measure will pass. He says he is betting on the congressmen and senators who realize that it isn't the government's place to tell an industry how to set up ownership structure.