The Senate Commerce Committee resumes hearings today on two bills that would give pro sports leagues limited antitrust exemptions in order to enforce rules on relocation of franchises.
Sources close to the bills' sponsors expect one or both to be revised and voted out of committee next month. The bills considered today are sponsored by Sens. Thomas Eagleton (D-Mo.) and John Danforth (R-Mo.) and by Sen. Slade Gorton (R-Wash.).
Their bills and two others are considerably more complex than just allowing professional leagues to enforce rules on relocation of franchises. Three of them would allow the league to share revenues in all phases of its operations, including potential cable and pay-television telecasts in the future.
Of the bills in the Senate, the NFL publicly has supported one sponsored by Sen. Dennis DeConcini (D-Ariz.) and the Eagleton/Danforth bill. A bill sponsored by Sen. Arlen Specter (R-Pa.) would cover only football, setting guidelines for moves and giving cities with teams a right of first refusal to match offers by would-be buyers intent on relocating the franchise.
The fourth bill, introduced by Gorton, would establish a temporary ad hoc arbitration board and mandate expansion by both the NFL and major league baseball.
The DeConcini and Specter bills are before the Judiciary Committee, which also expects to hold another round of hearings on its bills soon.
Here's a closer look at each of the Senate bills:
This bill would grant football, basketball, hockey and soccer a comprehensive limited antitrust exemption in the areas of franchise relocation and revenue sharing. It would allow the league to set guidelines for team relocations.
"It's the essence of simplicity," an aide to DeConcini said. "It gives the the NFL the authority to do what they used to." If this legislation had been in place, the NFL legally could have blocked the Raiders' move from Oakland to Los Angeles and would not be on the wrong end of a $49 million antitrust judgment awarded Raiders ownership headed by Al Davis and the Los Angeles Coliseum Board.
There is some argument that, conversely, because the NFL would have complete discretion, the league would have been able to move the Raiders to Los Angeles or the Colts to Indianapolis, had it so wished. This would put football in the same position as baseball, which allowed the Senators to move from Washington, the Giants from New York and the Dodgers from Brooklyn. Baseball has been exempt from the antitrust laws by virtue of a Supreme Court decision.
However, both DeConcini and NFL lawyers say the intent of the bill is to deter franchise shifts, and any franchise moves would be subject to the antitrust laws.
The NFL also considers the revenue-sharing issue critical, because the league's authority to share revenues among its teams has yet to be tested in the courts by one of the other owners. It would give the NFL a blanket antitrust exemption to pool any revenues it generates, including those from cable and pay television in the future.
The Professional Football Stabilization Act, as it is called, would empower the league to decide whether teams wishing to relocate meet specific guidelines. It also would give municipalities the right to match any offer if an owner proposes to sell the team and the new owners would move it away.
Under this bill, it would be unlawful for any professional football team which has played its home games in a municipality for at least six years to relocate unless:
There is a breach of the stadium lease essential to profitability, and it cannot be remedied in reasonable time; the current stadium is inadequate, and the stadium authority demonstrates no intent to remedy the inadequacies, or the team has lost money at least three straight years or has lost so much money over a shorter period of time that the team's continued profitability is endangered. However, in computing net losses, no personal obligations or losses of the owner could be considered.
In addition, any attempt to relocate would have to be made in writing to the local governmental authority 120 days before the date of relocation, and the local governmental authority would decide if the criteria for moving had been satisfied.
If a city determined criteria had not been met, the city could go into federal court to prevent the team from moving.
Specter introduced this bill after Leonard Tose tried to move his NFL Eagles from Philadelphia.
This bill does not include any other sports, nor does it include any revenue sharing.
Critics contend the guidelines are ambiguous, and Judiciary Committee sources see some revision and strengthening of the criteria as likely.
Like DeConcini's, this bill would give the NFL limited antitrust exemptions in the areas of franchise relocation and revenue sharing. And, like DeConcini's, it would encompass football, basketball, hockey and soccer.
But, unlike DeConcini, it would mandate specific guidelines to be considered, and, in its most controversial aspect, it would give a league the ability to select or terminate a team's ownership by majority vote.
Under Eagleton-Danforth, a sports team would provide public notice of intention to relocate at least six months before the start of a new season. The league would have to rule on the relocation within three months, and the decision would be based on 13 factors, including the adequacy of the team's stadium and related facilities; the willingness of the community to correct deficiencies; the level of fan support as measured by ticket sales; the team's profitability, and the presence of a good-faith local offer to purchase the team at fair market value.
The relocation decision would be subject to judicial review in a U.S. District Court outside the team's current and proposed locations. Sponsors and the NFL also say this bill is intended to give the leagues the power to stop franchise shifts, but not prevent the antitrust laws from applying to franchises that do move.
This is the most controversial bill, because Gorton proposes an ad hoc Professional Sports Team Arbitration Board to decide relocation issues. It would mandate expansion by four franchises in the NFL by 1990 and two in major league baseball by 1988. Two of the NFL franchises would have to be placed in Baltimore and Oakland. This is the only bill that touches at all on baseball.
The Gorton bill would allow a league to pool all TV revenues and share in their distribution. Another provision would outlaw exclusive contracts by sports teams to use publicly owned stadiums.
In deciding relocation issues, a three-man arbitration board in each case would be composed of a league representative, a representative of the relevant governmental stadium authority and a representative of the president of the American Arbitration Board. The board would be empowered to accept bids to keep the franchise from relocating, pending approval of the new owner by a majority vote of league owners.
Before reaching the arbitration board, the request to relocate would be considered by the league on nine factors. These would include adequacy of stadium, etc.