II

104TH CONGRESS

2D SESSION S. 1767

To harmonize the application of the antitrust laws to professional sports,

and for other purposes.

IN THE SENATE OF THE UNITED STATES

MAY 16, 1996

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

to the Committee on the Judiciary

A BILL

To harmonize the application of the antitrust laws to

professional sports, 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 ‘‘Sports Antitrust Re5 form Act of 1996’’.

6 SEC. 2. APPLICATION OF THE ANTITRUST LAWS TO PRO7 FESSIONAL SPORTS.

8 The Clayton Act (15 U.S.C. 12 et seq.) is amended

9 by adding at the end the following new section:
2

•S 1767 IS

1 ‘‘SEC. 27. APPLICATION OF THE ANTITRUST LAWS TO PRO2 FESSIONAL SPORTS.

3 ‘‘(a) DEFINITIONS.—For purposes of this section—

4 ‘‘(1) the term ‘home territory’ means the geo5 graphic metropolitan area within which a member

6 team operates and plays the majority of its home

7 games;

8 ‘‘(2) the term ‘interested party’ includes, with

9 respect to a member team—

10 ‘‘(A) any political subdivision of a State

11 that provides, or has provided, financial assist12 ance, including tax abatement, for facilities (in13 cluding a stadium or arena) in which the mem14 ber team plays;

15 ‘‘(B) a representative of the political sub16 division with jurisdiction over the geographic

17 area in which the stadium or arena of the mem18 ber team is located;

19 ‘‘(C) a member team;

20 ‘‘(D) the owner or operator of a stadium

21 or arena of a member team; and

22 ‘‘(E) any other person who is determined

23 to be an affected party by the sports league of

24 the member team;

25 ‘‘(3) the term ‘member team’ means a team of

26 professional athletes—
3

•S 1767 IS

1 ‘‘(A) organized to play professional foot2 ball, basketball, or hockey; and

3 ‘‘(B) that is a member of a professional

4 sports league;

5 ‘‘(4) the term ‘person’ means any individual,

6 partnership, corporation, or unincorporated associa7 tion, any combination or association thereof, or any

8 State or political subdivision of a State;

9 ‘‘(5) the term ‘professional sports league’ means

10 an association that—

11 ‘‘(A) is composed of 2 or more member

12 teams;

13 ‘‘(B) regulates the contests and exhibitions

14 of its member teams; and

15 ‘‘(C) has been engaged in competition in a

16 particular sport for a period of more than 7

17 years; and

18 ‘‘(6) the terms ‘stadium’ and ‘arena’ mean the

19 principal physical facility within which a member

20 team has played the majority of its home games.

21 ‘‘(b) ESTABLISHMENT OF RULE.—

22 ‘‘(1) IN GENERAL.—Subject to the require23 ments set forth in this section, any professional

24 sports league may establish a rule—
4

•S 1767 IS

1 ‘‘(A) authorizing the membership of that

2 league to decide whether or not a member team

3 of that league may be relocated outside of the

4 home territory of that member team; and

5 ‘‘(B) requiring that any person seeking to

6 change the home territory of that member team

7 obtain the approval of the appropriate profes8 sional sports league.

9 ‘‘(2) INAPPLICABILITY OF ANTITRUST LAWS.—

10 Notwithstanding any other provision of law, the

11 antitrust laws shall not apply to the enforcement or

12 application by a professional sports league of any

13 rule established pursuant to paragraph (1).

14 ‘‘(c) PROCEDURAL REQUIREMENTS.—

15 ‘‘(1) REQUEST FOR APPROVAL.—

16 ‘‘(A) IN GENERAL.—Not later than 210

17 days before the commencement of the season in

18 which a member team proposes to play in a new

19 location, any person seeking to change the

20 home territory of that member team shall sub21 mit a request for approval of the proposed

22 change to the appropriate professional sports

23 league.
5

•S 1767 IS

1 ‘‘(B) REQUIREMENTS.—Each request for

2 approval submitted under subparagraph (A)

3 shall—

4 ‘‘(i) be in writing;

5 ‘‘(ii) be delivered in person or by cer6 tified mail to each interested party by not

7 later than 30 days after submission to the

8 appropriate professional sports league

9 under subparagraph (A);

10 ‘‘(iii) be made available by the date

11 specified in clause (ii) to the news media;

12 ‘‘(iv) be published by the date speci13 fied in clause (iii) in 1 or more newspapers

14 of general circulation within the home ter15 ritory of the member team; and

16 ‘‘(v) contain—

17 ‘‘(I) an identification of the pro18 posed location of the member team;

19 ‘‘(II) a summary of the reasons

20 for the change in home territory based

21 on the criteria described in paragraph

22 (2)(B); and

23 ‘‘(III) the date on which the pro24 posed change would become effective.

25 ‘‘(2) PROCEDURES.—
6

•S 1767 IS

1 ‘‘(A) ESTABLISHMENT.—Each professional

2 sports league shall establish rules and proce3 dures for approving or disapproving requests

4 submitted under paragraph (1), that shall—

5 ‘‘(i) include criteria to be considered

6 by the professional sports league in ap7 proving or disapproving such requests; and

8 ‘‘(ii) be made available upon request

9 to any interested party.

10 ‘‘(B) CRITERIA TO BE CONSIDERED.—The

11 criteria described in subparagraph (A)(i) shall

12 include—

13 ‘‘(i) the extent to which fan loyalty to

14 and support for the member team has been

15 demonstrated during the tenure of the

16 member team in the home territory;

17 ‘‘(ii) the degree to which the member

18 team has engaged in good faith negotia19 tions with appropriate persons concerning

20 the terms and conditions under which the

21 member team would continue to play its

22 games in the home territory of the member

23 team;

24 ‘‘(iii) the degree to which the owner25 ship or management of the member team
7

•S 1767 IS

1 has contributed to any circumstance that

2 might demonstrate the need for the reloca3 tion of the member team;

4 ‘‘(iv) the extent to which the member

5 team has, directly or indirectly, received

6 public financial support by means of any

7 publicly financed playing facility, special

8 tax treatment, or any other form of public

9 financial support;

10 ‘‘(v) the adequacy of the stadium or

11 arena of the member team, and the willing12 ness of the stadium or arena authority and

13 the local government to remedy any defi14 ciencies in the stadium or arena;

15 ‘‘(vi) whether the member team has

16 incurred net operating losses, exclusive of

17 depreciation or amortization, sufficient to

18 threaten the continued financial viability of

19 the member team;

20 ‘‘(vii) whether any other member team

21 in the professional sports league is located

22 in the home territory of the member team;

23 ‘‘(viii) whether the member team pro24 poses to relocate to a territory in which no
8

•S 1767 IS

1 other member team in the professional

2 sports league is located;

3 ‘‘(ix) whether the stadium or arena

4 authority, if public, is opposed to the relo5 cation; and

6 ‘‘(x) any other criteria considered to

7 be appropriate by the professional sports

8 league.

9 ‘‘(3) HEARINGS.—In determining whether to

10 approve or disapprove a proposed request submitted

11 under paragraph (1), the professional sports league

12 shall—

13 ‘‘(A) conduct a hearing at which interested

14 parties shall be afforded an opportunity to sub15 mit written testimony and exhibits; and

16 ‘‘(B) keep a written record of that hearing

17 and any testimony and exhibits submitted

18 under subparagraph (A).

19 ‘‘(d) JUDICIAL REVIEW.—

20 ‘‘(1) IN GENERAL.—A decision by a profes21 sional sports league to approve or disapprove a re22 quest submitted under paragraph (1) may only be

23 reviewed in a civil action filed by an interested party

24 in accordance with this subsection.

25 ‘‘(2) VENUE.—
9

•S 1767 IS

1 ‘‘(A) IN GENERAL.—Except as provided in

2 subparagraph (B), an action under this sub3 section may be filed only in the United States

4 District Court for the District of Columbia.

5 ‘‘(B) EXCEPTION.—If the home territory

6 of the member team or the proposed home ter7 ritory of the member team is located within a

8 50-mile radius of the District of Columbia, an

9 action under this subsection may be filed only

10 in the United States District Court for the

11 Southern District of New York.

12 ‘‘(3) TIME.—

13 ‘‘(A) FILING.—An action under this sub14 section shall be filed not later than 14 days

15 after the date of the formal vote of the profes16 sional sports league approving or disapproving

17 the proposed relocation.

18 ‘‘(B) REVIEW.—Not later than 30 days

19 after the filing of the action in accordance with

20 subparagraph (A), the district court shall issue

21 an order with respect to that action.

22 ‘‘(4) STANDARD OF REVIEW.—The scope of ju23 dicial review in any action under this subsection

24 shall be limited to a determination of whether—
10

•S 1767 IS

1 ‘‘(A) in deciding whether to approve or dis2 approve a proposed relocation, the professional

3 sports league failed to comply with this section;

4 and

5 ‘‘(B) the decision of the professional sports

6 league to approve or disapprove a proposed re7 location was arbitrary or capricious.

8 ‘‘(5) RELIEF GRANTED BY COURT.—

9 ‘‘(A) IN GENERAL.—In any action under

10 this subsection, if the district court makes a de11 termination described in subparagraph (A) or

12 (B) of paragraph (4), the court shall—

13 ‘‘(i) remand the matter for further

14 consideration by the professional sports

15 league; and

16 ‘‘(ii) enjoin any relocation of the

17 member team at issue until the profes18 sional sports team has reconsidered the

19 matter in accordance with the order of the

20 court under this paragraph.

21 ‘‘(B) LIMITATION.—The court may not

22 grant any relief in any action under this sub23 section other than enjoining or approving en24 forcement of the decision by the professional
11

•S 1767 IS

1 sports league to approve or disapprove a re2 quest submitted under paragraph (1).’’.

Æ