II

104TH CONGRESS

2D SESSION S. 1696

To provide antitrust clarification, to reduce frivolous antitrust litigation, to

promote equitable resolution of disputes over the location of professional

sports franchises, and for other purposes.

IN THE SENATE OF THE UNITED STATES

APRIL 23, 1996

Mr. THURMOND introduced the following bill; which was read twice and

referred to the Committee on the Judiciary

A BILL

To provide antitrust clarification, to reduce frivolous antitrust litigation, to promote equitable resolution of disputes over the location of professional sports franchises,

and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Professional Sports

5 Antitrust Clarification Act of 1996’’.

6 SEC. 2. ACTIONS AUTHORIZED.

7 (a) IN GENERAL.—Notwithstanding any provision of

8 the antitrust laws, and subject to section 3 and subsection
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1 (b) of this section, a professional sports league or its mem2 ber franchises may establish and enforce rules and proce3 dures for the purpose of deciding whether a member fran4 chise may change its home territory.

5 (b) CONSTRUCTION.—Nothing in this section shall be

6 construed to exempt from the antitrust laws any conduct

7 which would be unlawful under any antitrust law if en8 gaged in by a single entity.

9 SEC. 3. REQUIREMENTS FOR ANTITRUST PROTECTION.

10 (a) IN GENERAL.—This Act applies to a professional

11 sports league and its member franchises if such league—

12 (1) establishes applicable rules and procedures

13 to govern whether a member franchise may change

14 its home territory that are available upon request to

15 any interested party;

16 (2) affords due process, including 180 days no17 tice and an opportunity to be heard, to interested

18 parties prior to deciding whether a member fran19 chise may change its home territory; and

20 (3) promotes comparable economic opportuni21 ties by sharing revenue among member franchises to

22 account for disparities in revenue received or costs

23 saved due to direct or indirect public benefits and

24 subsidies, including publicly financed facilities, rent

25 abatement, special tax treatment, favorable arrange-
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1 ments for parking, concessions, and other amenities,

2 and other public benefits not generally available to

3 businesses as a whole within the jurisdiction.

4 (b) RULES AND PROCEDURES.—Rules and proce5 dures established under subsection (a)(1) shall require

6 consideration of various factors to protect the public inter7 est, including—

8 (1) the extent to which fan support for a mem9 ber franchise has been demonstrated through attend10 ance, ticket sales, and television ratings, during the

11 period in which the member franchise played in its

12 home territory;

13 (2) the extent to which the member franchise

14 has, directly or indirectly, received public financial

15 support through publicly financed facilities, rent

16 abatement, special tax treatment, favorable arrange17 ments for parking, concessions, and other amenities,

18 and any other public benefits not generally available

19 to businesses as a whole within the jurisdiction, and

20 the extent to which such support continues;

21 (3) the effect that relocation would have on con22 tracts, agreements, and understandings between the

23 member franchise and public and private parties;

24 (4) the extent of any net operating losses expe25 rienced by the member franchise in recent years and
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1 the extent to which the member franchise bears re2 sponsibility for such losses; and

3 (5) any bona fide offer to purchase the member

4 franchise at fair market value, if such offer includes

5 the continued location of such member franchise in

6 its home territory.

7 SEC. 4. JUDICIAL REVIEW.

8 (a) STANDARD OF REVIEW.—The standard of judi9 cial review shall be de novo in any action challenging the

10 establishment and enforcement of rules and procedures for

11 deciding whether a member franchise may change its

12 home territory, except that the reviewing court shall give

13 deference to actions of the professional sports league re14 garding compliance with paragraphs (1) and (3) of section

15 3(a).

16 (b) DECLARATORY ACTIONS.—A professional sports

17 league or any interested party may seek a declaratory

18 judgment with respect to whether paragraphs (1) and (3)

19 of section 3(a) are adequately satisfied by the professional

20 sports league for this Act to apply.

21 (c) LIMITATION ON MONETARY DAMAGES.—A judi22 cial finding that a professional sports league did not com23 ply with any provision of section 3 shall result only in fur24 ther proceedings by the professional sports league and
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1 shall not result in liability under the antitrust laws or

2 monetary damages, if—

3 (1) the professional sports league implemented

4 a revenue sharing plan in a good faith attempt to

5 comply with section 3(a)(3) prior to the specific dis6 pute in issue; or

7 (2) a prior declaratory judgment held that the

8 revenue sharing plan of the professional sports

9 league complied with section 3(a)(3).

10 (d) VENUE.—In any action challenging the establish11 ment and enforcement of rules and procedures to decide

12 whether a member franchise may change its home terri13 tory, venue shall be proper only in the United States Dis14 trict Court for the District of Columbia, except that—

15 (1) venue shall be proper only in the United

16 States District Court for the Southern District of

17 New York if the existing or proposed home territory

18 of a member franchise is located within 100 miles of

19 the United States District Court for the District of

20 Columbia; and

21 (2) venue shall be proper only in the United

22 States District Court for the Northern District of Il23 linois if—

24 (A) the existing home territory of a mem25 ber franchise is located within 100 miles of the
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1 United States District Court for the District of

2 Columbia or the Southern District of New

3 York; and

4 (B) the proposed home territory of the

5 member franchise is located within 100 miles of

6 the United States District Court for the Dis7 trict of Columbia or the Southern District of

8 New York.

9 SEC. 5. DEFINITIONS.

10 For purposes of this Act—

11 (1) the term ‘‘antitrust laws’’—

12 (A) has the same meaning as in subsection

13 (a) of the first section of the Clayton Act (15

14 U.S.C. 12(a)), except that such term includes

15 section 5 of the Federal Trade Commission Act

16 (15 U.S.C. 45) to the extent that such section

17 relates to unfair methods of competition; and

18 (B) includes any State law comparable to

19 the laws referred to in subparagraph (A);

20 (2) the terms ‘‘professional sports team’’,

21 ‘‘team’’, ‘‘member franchise’’, and ‘‘franchise’’ mean

22 any team of professional athletes that is a member

23 of a professional sports league;

24 (3) the terms ‘‘professional sports league’’ and

25 ‘‘league’’ mean—
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1 (A) an association of 2 or more profes2 sional sports teams that governs the conduct of

3 its members and regulates the contests and ex4 hibitions in which such teams regularly engage;

5 (B) whose decisions relating to franchise

6 relocation would otherwise be subject to the

7 antitrust laws; and

8 (C) that has combined franchise revenues

9 of more than $10,000,000 per year;

10 (4) the term ‘‘interested party’’ means the

11 member franchise at issue, local and State govern12 ment officials, owners and operators of playing fa13 cilities, concessionaires, and others whose business

14 relations would be directly and significantly affected

15 by the franchise relocation at issue, and representa16 tives of organized civic and fan groups; and

17 (5) the term ‘‘playing facility’’ means the sta18 dium, arena, or other venue in which professional

19 sports teams regularly conduct their contests and ex20 hibitions.

21 SEC. 6. EFFECTIVE DATE.

22 This Act applies to any action occurring on or after

23 the date of enactment of this Act.

Æ