II

106TH CONGRESS

1ST SESSION S. 952

To expand an antitrust exemption applicable to professional sports leagues

and to require, as a condition of such an exemption, participation by

professional football and major league baseball sports leagues in the

financing of certain stadium construction activities, and for other purposes.

IN THE SENATE OF THE UNITED STATES

MAY 4, 1999

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

to the Committee on the Judiciary

A BILL

To expand an antitrust exemption applicable to professional

sports leagues and to require, as a condition of such

an exemption, participation by professional football and

major league baseball sports leagues in the financing

of certain stadium construction activities, 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 ‘‘Stadium Financing

5 and Franchise Relocation Act of 1999’’.
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1 SEC. 2. EXPANSION, MODIFICATION, AND CLARIFICATION

2 OF ANTITRUST EXEMPTIONS.

3 (a) DEFINITIONS.—Section 5 of Public Law 87–331,

4 commonly known as the ‘‘Sports Broadcasting Act’’ (15

5 U.S.C. 1295) is amended to read as follows:

6 ‘‘SEC. 5. DEFINITIONS.

7 ‘‘In this Act:

8 ‘‘(1) ANTITRUST LAWS.—The term ‘antitrust

9 laws’—

10 ‘‘(A) means antitrust laws, as that term is

11 defined in section 1 of the Clayton Act (15

12 U.S.C. 12); and

13 ‘‘(B) includes antitrust Acts, as that term

14 is defined in section 4 of the Federal Trade

15 Commission Act (15 U.S.C. 44).

16 ‘‘(2) CONSTRUCTION.—With respect to a play17 ing facility, the term ‘construction’ means the con18 struction of a playing facility that is not in existence

19 at the commencement of the construction.

20 ‘‘(3) LOCAL GOVERNMENTAL ENTITY.—The

21 term ‘local governmental entity’ means—

22 ‘‘(A) a State; or

23 ‘‘(B) a county, city or other unit of local

24 government.

25 ‘‘(4) PERSON.—The term ‘person’ means any

26 individual, partnership, corporation, or unincor-
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1 porated association, or any combination or associa2 tion thereof.

3 ‘‘(5) PLAYING FACILITY.—The term ‘playing fa4 cility’ means a stadium or ballpark designed to seat

5 a minimum of 35,000 spectators.

6 ‘‘(6) RENOVATION.—With respect to a playing

7 facility, the term ‘renovation’ means the renovation

8 of an existing playing facility.

9 ‘‘(7) SPONSORED TELECASTING.—The term

10 ‘sponsored telecasting’—

11 ‘‘(A) except as provided in subparagraph

12 (B), includes all over-the-air, cable and satellite

13 transmissions; and

14 ‘‘(B) does not include pay-per-view broad15 casts.’’.

16 (b) EXPANSION, MODIFICATION, AND CLARIFICATION

17 OF EXEMPTIONS.—The first section of Public Law 87–

18 331, commonly known as the ‘‘Sports Broadcasting Act’’

19 (15 U.S.C. 1291) is amended to read as follows:

20 ‘‘SECTION 1. EXEMPTIONS FROM ANTITRUST LAWS OF

21 AGREEMENTS COVERING THE TELECASTING

22 OF SPORTS CONTESTS, THE COMBINING OF

23 PROFESSIONAL FOOTBALL LEAGUES AND

24 THE RELOCATION OF SPORTS FRANCHISES.

25 ‘‘(a) EXEMPTIONS.—
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1 ‘‘(1) IN GENERAL.—Subject to subsection (b),

2 the antitrust laws shall not apply to any joint agree3 ment described in paragraph (2).

4 ‘‘(2) JOINT AGREEMENTS DESCRIBED.—A joint

5 agreement described in this paragraph is a joint

6 agreement—

7 ‘‘(A) by or among persons engaging in or

8 conducting the organized professional team

9 sports of football, baseball, basketball, or hock10 ey, by which any league of clubs participating

11 in that professional sport sells or otherwise

12 transfers all or any part of the rights of the

13 member clubs of that league in the sponsored

14 telecasting of the games of that professional

15 sport that are engaged in or conducted by those

16 member clubs;

17 ‘‘(B) by which the member clubs of 2 or

18 more professional football leagues described in

19 section 501(c)(6) of the Internal Revenue Code

20 of 1986 and that are exempt from taxation

21 under section 501(a) of the Internal Revenue

22 Code of 1986 combine their operations in an

23 expanded single league that is exempt from in24 come tax by reason of such section 501(a), if

25 that agreement—
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1 ‘‘(i) increases the number of profes2 sional football clubs operating; and

3 ‘‘(ii) contains provisions that are di4 rectly relevant to the combination of oper5 ations for such an expanded single league;

6 or

7 ‘‘(C) by which any league of clubs partici8 pating in a professional sport referred to in

9 subparagraph (A) denies a member club the

10 right to transfer the location of the franchise of

11 that member club.

12 ‘‘(b) CONDITIONS ON EXEMPTIONS.—

13 ‘‘(1) IN GENERAL.—The exemption under sub14 section (a) for a joint agreement described in sub15 section (a)(2)(A) shall apply, with respect to a foot16 ball league or major league baseball league only if

17 the league of football or major league baseball clubs

18 involved—

19 ‘‘(A) agrees—

20 ‘‘(i) to meet the requirement under

21 paragraph (2);

22 ‘‘(ii) not later than 90 days after the

23 date of enactment of the Stadium Financ24 ing and Franchise Relocation Act of 1999,

25 to establish a special trust fund into which
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1 the league will deposit an amount equal to

2 10 percent of the amounts received under

3 that joint agreement for the sale or trans4 fer of the rights in sponsored telecasting of

5 the games of the professional sport of that

6 league in the United States, on the condi7 tion that any funds in the trust fund that

8 are not obligated during the 10-year period

9 beginning on the date on which those

10 funds are deposited in that trust fund shall

11 be withdrawn from that trust fund and

12 treated as gross revenues of the league;

13 ‘‘(iii) to use the amounts in the trust

14 fund established under clause (ii) only for

15 financing, in accordance with this section,

16 the construction or renovation of playing

17 facilities from which games of the teams of

18 that league will be televised; and

19 ‘‘(iv) to make available to a local gov20 ernmental entity, upon request of that en21 tity, from the amounts in the trust fund

22 established under clause (ii), assistance for

23 the cost of the construction or renovation

24 of playing facilities to be used by a mem25 ber club in that league (if that construc-
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1 tion or renovation was not completed prior

2 to the date of introduction of the Stadium

3 Financing and Franchise Relocation Act of

4 1999), up to a maximum of one-half of

5 that cost, if—

6 ‘‘(I) the local governmental entity

7 makes a commitment, under a lease

8 or other written agreement entered

9 into between the member club in10 volved and the local governmental en11 tity, to provide funds in an amount

12 equal to at least one-half of the

13 amount of funds to be provided for

14 that purpose by the league; and

15 ‘‘(II) the amounts requested by

16 the local governmental entity are

17 available or become available for obli18 gation from the trust fund established

19 under clause (ii); and

20 ‘‘(B) not later than the date specified in

21 subparagraph (A)(ii), notifies the Attorney Gen22 eral that the league will establish a trust fund

23 in accordance with subparagraph (A).

24 ‘‘(2) ADDITIONAL REQUIREMENT.—If a league

25 establishes a trust fund under paragraph (1)(A), as
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1 a condition to receiving an exemption under sub2 section (a)(2)(A), the league shall exclude the

3 amounts deposited in the trust fund from designa4 tion as defined gross revenues of the league, or as

5 any other similar designation that describes revenues

6 that are to be shared by the member clubs or the

7 players of the league.

8 ‘‘(3) MAJOR LEAGUE BASEBALL.—

9 ‘‘(A) IN GENERAL.—The requirements of

10 paragraphs (1) and (2) shall apply to a league

11 of major league baseball clubs in the same man12 ner as they apply to a league of professional

13 football clubs.

14 ‘‘(B) OTHER EXEMPTIONS.—Nothing in

15 this subsection is intended to affect any exemp16 tion from the antitrust laws that may apply to

17 major league baseball with respect to activities

18 that are not covered under this Act.’’.

19 (c) TECHNICAL AND CONFORMING AMENDMENTS.—

20 (1) AREA TELECASTING RESTRICTION LIMITA21 TION.—Section 2 of Public Law 87–331, commonly

22 known as the ‘‘Sports Broadcasting Act’’ (15 U.S.C.

23 1292) is amended—

24 (A) by striking ‘‘SEC. 2. Section’’ and in25 serting the following:
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1 ‘‘SEC. 2. AREA TELECASTING RESTRICTION LIMITATION.

2 ‘‘Section’’; and

3 (B) by striking ‘‘described in the first sen4 tence of such section’’ and inserting ‘‘described

5 in subsection (a)(2) of that section’’.

6 (2) INTERCOLLEGIATE AND INTERSCHOLASTIC

7 FOOTBALL CONSENT LIMITATIONS.—Section 3 of

8 Public Law 87–331, commonly known as the

9 ‘‘Sports Broadcasting Act’’ (15 U.S.C. 1293) is

10 amended by striking ‘‘SEC. 3. The first sentence of

11 section 1 of this Act’’ and inserting the following:

12 ‘‘SEC. 3. INTERCOLLEGIATE AND INTERSCHOLASTIC FOOT13 BALL CONSENT LIMITATIONS.

14 ‘‘The exemption under section 1(a)’’.

15 (3) STATUTORY CONSTRUCTION.—Section 4 of

16 Public Law 87–331, commonly known as the

17 ‘‘Sports Broadcasting Act’’ (15 U.S.C. 1293) is

18 amended by striking ‘‘SEC. 4. Nothing’’ and insert19 ing the following:

20 ‘‘SEC. 4. STATUTORY CONSTRUCTION.

21 ‘‘Nothing’’.

Æ