I
107TH CONGRESS
2D SESSION
H. R. 5062
To amend the Internal Revenue Code of 1986 to require a sports franchise
to provide for all of the games played by the franchise to be available
for local television broadcasting in order to be subject to the presumption
that 50 percent of the consideration in the sale or exchange of a sports
franchise is allocable to player contracts.
IN THE HOUSE OF REPRESENTATIVES
JULY 8, 2002
Mr. KUCINICH (for himself and Mr. HINCHEY) introduced the following bill;
which was referred to the Committee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to require
a sports franchise to provide for all of the games played
by the franchise to be available for local television broad-
casting in order to be subject to the presumption that
50 percent of the consideration in the sale or exchange
of a sports franchise is allocable to player contracts.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Baseball Fan Protec-
tion Act’’.
SEC. 2. LOCAL TELEVISION BROADCAST REQUIREMENT IN
THE CASE OF SALES OR EXCHANGES OF
SPORTS FRANCHISES.
(a) IN GENERAL.—Subsection (d) of section 1056 of
the Internal Revenue Code of 1986 (relating to presump-
tion as to amount allocable to player contracts) is amend-
ed to read as follows:
‘‘(d) PRESUMPTION AS TO AMOUNT ALLOCABLE TO
PLAYER CONTRACTS.—
‘‘(1) IN GENERAL.—In the case of any sale or
exchange described in subsection (a), it shall be pre-
sumed that not more than 50 percent of the consid-
eration is allocable to contracts for the services of
athletes unless it is established to the satisfaction of
the Secretary that a specified amount in excess of
50 percent is properly allocable to such contracts.
Nothing in the preceding sentence shall give rise to
a presumption that an allocation of less than 50 per-
cent of the consideration to contracts for the services
of athletes is a proper allocation.
‘‘(2) ZERO
PERCENT
ALLOCATION
UNLESS
GAMES FIRST MADE AVAILABLE FOR BROADCAST LO-
CALLY.—
‘‘(A) IN GENERAL.—For purposes of the
first sentence of paragraph (1), an allocation of
zero percent shall be presumed unless, as part
of the sale or exchange, the transferee agrees—
‘‘(i) to provide notice to, and a rea-
sonable opportunity for, local television
stations to make bids to license or other-
wise purchase the rights to broadcast the
games to be played by the franchise before
offering others the opportunity to make
such bids, and
‘‘(ii) to accept the highest reasonable
bid from a local television station for such
rights.
‘‘(B) FREQUENCY OF LOCAL BIDDING OP-
PORTUNITIES.—The notice and opportunity
provided to local television stations shall be pro-
vided each time the transferee sells broadcast
rights during the period that the transferee
owns the franchise.
‘‘(C) LOCAL
TELEVISION
STATION.—For
purposes of this paragraph, a local television
station is a television broadcast station (as such
term is defined in section 325(b)(7) of the
Communications Act of 1934 (47 U.S.C.
325(b)(7)) having a local market (as such term
is defined in section 122(j) of title 17, United
States Code) that includes the entire central
city of the metropolitan statistical area within
which, or closest to which, the home stadium,
arena, or other facility of the franchise is lo-
cated.’’.
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply to sales or exchanges of franchises
after December 31, 1999, in taxable years ending after
such date.
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