United States. Congress. House. Committee on the J.

Professional sports franchise relocation : antitrust implications : hearing before the Committee on the Judiciary, House of Representatives, One Hundred Fourth Congress, second session, February 6, 1996 online

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PROFESSIONAL SPORTS FRANCHISE RELOCATION:
ANTmiUST IMPUCATIONS



Y 4. J 89/1:104/57

Professional Sports Frmchise Reloc.



HEAKING

BEFORE THE

COMMITTEE ON THE JUDICIAKY
HOUSE OF REPRESENTATIVES

ONE HUNDRED FOURTH CONGRESS
SECOND SESSION



FEBRUARY 6, 1996



Serial No. 57








9m

^^''18 1998



Printed for the use of the Committee on the Judiciary



PROFESSIONAL SPORTS FRANCHISE RELOCATION:
ANTITRUST IMPUCATIONS



HEARING

BEFORE THE

COMMITTEE ON THE JUDICIAKY
HOUSE OP REPRESENTATIVES

ONE HUNDRED FOURTH CONGRESS

SECOND SESSION



FEBRUARY 6, 1996



Serial No. 57




Printed for the use of the Committee on the Judiciary



U.S. GOVERNMENT PRINTING OFFICE
23-463 CC WASHINGTON : 1996

For sale by the U.S. Government Printing Office

Superintendent of Documents, Congressional Sales Office, Washington, DC 20402

ISBN 0-16-052708-2



COMMITTEE ON THE JUDICIARY
HENRY J. HYDE, niinois. Chairman



CARLOS J. MOORHEAD, California
F. JAMES SENSENBRENNER, JR.,

Wisconsin
BILL McCOLLUM, Florida
GEORGE W. GEKAS, Pennsylvania
HOWARD COBLE, North Carolina
LAMAR SMITH, Texas
STEVEN SCHIFF, New Mexico
ELTON GALLEGLY, California
CHARLES T. CANADY, Florida
BOB INGLIS, South Carolina
BOB GOODLATTE, Vinginia
STEPHEN E. BUYER, Indiana
MARTIN R HOKE, Ohio
SONNY BONO, California
FRED HEINEMAN, North Carolina
ED BRYANT, Tennessee
STEVE CHABOT, Ohio
MICHAEL PATRICK FLANAGAN, Illinois
BOB BARR, Georgia



JOHN CONYERS, JR., Michigan
PATRICIA SCHROEDER, Colorado
BARNEY FRANK, Massachusetts
CHARLES E. SCHUMER, New York
HOWARD L. BERMAN, California
RICK BOUCHER, Virginia
JOHN BRYANT, Texas
JACK REED, Rhode Island
JERROLD NADLER, New York
ROBERT C. SCOTT, Virginia
MELVIN L. WATT, North Carolina
XAVIER BECERRA, California
JOSE E. SERRANO, New York
ZOE LOFGREN, California
SHEILA JACKSON LEE. Texas



Alan F. Coffey, Jr., General Counsel I Staff Director
Julian EIPSTEIN, Minority Staff Director



(II)



CONTENTS



HEARING DATE



Page

February 6, 1996 1

OPENING STATEMENT

Hyde, Hon. Henry J., a Representative in Congress from the State of Illinois,
and chairman, Committee on the Judiciary 1

WITNESSES

Chillura, Joe, Jr., county commissioner, HUlsborough County, FL 48

Flanagan, Hon. Michael Patrick, a Representative in Congress from the State

of niinois 24

Glenn, Hon. John, a Senator in Congress from the State of Ohio 27

Hoke, Hon. Martin R., a Representative in Congress from the State of Ohio .... 16
Keller, Bruce, Esq., Debevoise & Plimpton, on behalf of the International

Trademark Association 112

Lanier, Bob, mayor, city of Houston, TX 33

Locke, Gary, county executive. King County, WA 56

Roberts, Prof. Gaiy R., Tulane Law School 120

Stokes, Hon. Louis, a Representative in Congress from the State of Ohio 31

Tagliabue, Paul, commissioner. National Football League, accompanied by

Jerry Richardson, owner, Carolina Panthers, Charlotte, NC 79

Thompson, John "Big Dawg" 53

Zimbalist, Prof. Andrew, Smith College 148

LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

Chillura, Joe, Jr., county commissioner, HUlsborou^ County, FL: Prepared
statement 50

Flanagan, Hon. Michael Patrick, a Representative in Congress from the State

of Illinois: Prepared statement 26

Glenn, Hon. John, a Senator in Congress from the State of Ohio: Prepared
statement 29

Hoke, Hon. Martin R., a Representative in Congress from the State of Ohio:

Prepared statement 20

Hyde, Hon. Henry J., a Representative in Congress from the State of Illinois,

and chairman, Committee on the Judicary: Opening statement 2

Jackson Lee, Hon. Sheila, a Representative in Congress from the State of
Texas: Prepared statement 8

Keller, Bruce, Esq., Debevoise & Plimpton, on behalf of the International
Trademark Association: Prepared statement 114

Lanier, Bob, mayor, city of Houston, TX: Prepared statement 35

Locke, Gary, county executive. King County, WA: Prepared statement 58

Roberts, Prof. Gary R., Tulane Law School: Prepared statement 122

Tagliabue, Paul, commissioner. National Football League: Prepared state-
ment 82

Thompson, John "Big Dawg": Prepared statement 55

Zimbalist, Prof. Andrew, Smith College: Prepared statement 149

APPENDIX

Material submitted for the hearing 163

(III)



PROFESSIONAL SPORTS FRANCHISE
RELOCATION: ANTITRUST IMPLICATIONS



TUESDAY, FEBRUARY 6, 1996

House of Representatives,
Committee on the Judiciary,

Washington, DC.

The committee met, pursuant to notice, at 9:35 a.m., in room
2141, Rayburn House Office Building, Hon. Henry J. Hyde (chair-
man of the committee) presiding.

Present: Representatives Henrv J. Hyde, Carlos J. Moorhead, F.
James Sensenbrenner, Jr., Bill McCollum, Greorge W. Gekas,
Lamar Smith, Charles T. Canady, Martin R. Hoke, Sonny Bono,
Steve Chabot, Michael Patrick Flanagan, John Conyers, Jr., Patri-
cia Schroeder, Robert C. Scott, Zoe Lofgren, and Sheila Jackson
Lee.

Also present: Alan F. Coffey, Jr., general counsel/staff director;
Joseph Gibson, counsel; Dan Freeman, parliamentarian; Nicole
Robilotto, assistant counsel; and Perry Apelbaum, minority counsel.

OPENING STATEMENT OF CHAIRMAN HYDE

Mr. Hyde. The committee will come to order. Today the House
Judiciary Committee turns its focus to professional sports and, in
particular, professional football.

Even the most casual sports fan knows the National Football
League has recently been confronted with a difficult and confusing
situation because so many of its teams are seeking to relocate to
other cities. Last year the Raiders moved back to Oakland after
having spent 13 years in their temporary home in Los Angeles.
Also last year the Los Angeles Rams, a franchise located in that
city since 1946, moved to St. Louis.

Now, of course, the Cleveland Browns are seeking to move to
Baltimore and the Seattle Seahawks have announced their inten-
tion to move to Los Angeles, and the Houston Oilers are expected
to seek league approval for a move to Nashville, TN. A number of
other NFL franchises, including the Tampa Bay Buccaneers, the
Cincinnati Bengals, and the Phoenix Cardinals, are also rumored
to be considering other locations for their teams.

In my hometown of Chicago, the Bears have expressed dis-
satisfaction with Soldier Field and are exploring other options. The
Bears have played football in Chicago since 1922 when the Decatur
Staleys chose to relocate. The Bears, the "Monsters of the Midway,"
are a team with a glorious history. Legendary players such as Red
Grange, Bronco Nagurski, Sid Luckman, and more recently Gayle
Sayers, Dick Butkus, and Walter Paj^n have all worn the Bear

(1)



uniform. In 1933, the Bears won the first NFL championship play-
off game, and subsequently they won NFL championships in 1940,
1941, 1943, 1946, and 1963, as well as the Super Bowl in 1986. To
me, the Bears are a part of the fabric of the city of Chicago and
the State of Illinois.

I also remember another Chicago football team called the Car-
dinals, but that team flew away to become the St. Louis Cardinals
in 1960, and later on that minatory bird went to the Southwest
and became known as the Arizona Cardinals. Now rumor has it
those same Cardinals are looking longingly at a possible fourth
home in Los Angeles, but the Seattle Seahawks hope to land there
first. One could say that the migratory habits of these particular
birds boggle the minds of sports fans as well as ornithologists.

With no fewer than 8 out of the NFL's 30 franchises either hav-
ing moved or considering moving in a period of less than 2 years,
there is an obvious air of uncertainty. This instability is disruptive
to the league itself, to the cities involved, the players, and the fans.
Without question, fan loyalty is severely tested, and one cannot
fault public criticism about sports becoming too much of a business.

There is no question but that professional football is a business
and a big business at that. The gross revenues of the NFL teams
far exceed $2 billion annually and the average player's salary is
$714,000 a year. With the lucrative television contracts, luxury box
revenues, tax advantages, big salaries and player free agency,
these days you have to have an M.B.A. or a law degree to be an
informed sports fan. But a football team can also be an emotional
matter. It involves tradition, personal memories, nostalgia, commu-
nity pride. It is one way a citizen identifies with his or her commu-
nity.

Still, many ask why should Congress get involved in the internal
workings of a private business? What is the compelling public in-
terest here? Well, this committee's jurisdiction over tne Federal
antitrust laws gives us a legal perspective from which to consider
and review this situation. All professional sports leagues have rules
governing franchise relocation, and such rules have been subject to
antitrust court challenges in the past.

Our committee also nas jurisdiction over the Federal trademark
law, and one of the bills pending before us on this subject raises
certain trademark issues. I am not certain that legislation is nec-
essary or justified in this case, but I do intend to listen carefully
to the testimony we will receive today. I am not unmindful that
many cities, counties and States have a strong interest in the out-
come of this debate. I look forward to hearing from a number of in-
terested parties and experts today as the Judiciary Committee con-
tinues to consider this matter.

[The opening statement of Mr. Hyde follows:]

Opening Statement of Hon. Henry J. Hyde, a Representative in Congress
From the State of Illinois, and Chairman, Committee on the Judicluiy

Today, the House Judiciary Committee turns its focus to professional sports and,
in particular, to professional football.

Even the most casual sports fan knows the National FootbeJl League has recently
been confronted with a difficult and confusing situation, because so many of its
teams are seeking to relocate to other cities. Last year, the Raiders moved back to
Oakland after having spent 13 years in their temporary home in Los Angeles. Also
last year, the Los Angeles Rams — a franchise located in that city since 1946 — moved



to St. Louis. Now, of course, the Cleveland Browns are seeking to move to Balti-
more, the Seattle Seahawks have announced their intention to move to Los Angeles,
and the Houston Oilers are expected to seek League approval for a move to Nash-
ville, Tennessee. A number of other NFL franchises including the Tampa Bay Buc-
caneers, the Cincinnati Bengals, and the Phoenix Cardinals are also rumorea to be
considering other locations for their teams.

In my own hometown of Chicago, the Bears have expressed dissatisfaction with
Soldier Field and are exploringother options. The Bears nave played football in Chi-
cago since 1922, when the Decatur Staleys" chose to relocate. The Bears — the
"Monsters of the Midway" — are a team with a glorious history. Legendary players
such as Red Grange, Bronko Nagurski, Sid Luckman and, more recently, Gayle Say-
ers, Dick Butkus, and Walter Payton have all worn the Bear uniform. In 1933, the
Bears won the first NFL championship playofF game and subsequently, they won
NFL championships in 1940, 1941, 1943, 1946, and 1963, as well as the Super Bowl
in 1986. To me, the Bears are part of the fabric of the City of Chicago and the State
of Illinois.

I also remember another Chicago football team called the "Cardinals" — but that
team flew away to become the "St. Louis Cardinals" in 1960. Later on, that tran-
sient bird went to the Southwest and becemie known as the "Arizona Cardinals."
Now, rumor has it that those same Cardinals are looking longingly at a possible
fourth home in Los Angeles, but the Seattle Seahawks hope to land there first. One
could say that the migratory habits of these particular birds, boggles the minds of
sports fans as well as ornithologists.

With no fewer than eight out of the NFL's 30 franchises either moved or consider-
ing moving — in a period of less than two years — there is an obvious air of uncer-
tamty. This instability is disruptive to the League itself, to the cities involved, the

f (layers and the fans. Without question, fan loyalty is severely tested and one can't
ault public criticism about sports becoming too much of a busmess.

There is no question but that professional football is a business and a big business
at that — the gross revenues of the NFL teams far exceed $2 bUlion annually and
the average player's salary is $714,000 a year. With the lucrative television con-
tracts, luxury box revenue, tax advantages, big salaries and player free agency —
these days you have to have an MBA or a law degree to be a sports fan.

But a football team can also be an emotional matter. It involves tradition, per-
sonal memories, nostalgia, and community pride — it is one way a citizen identifies
with his or her community. Still, many ask why should Congress get involved with
the internal workings of a private business. What is the compelling public interest
here?

Well, this Committee's jurisdiction over the federal antitrust laws gives us a legal

{>erspective from which to consider and review this situation. All proiessional sports
eagues have rules governing franchise relocation and such rules have been suoject
to antitrust court challenges in the past. Our Committee also has jurisdiction over
the federal trademark law and one of the biUs pending before us on this subject
raises certain trademark issues.

I am not certain that legislation is necessary or justified in this case. But I do
intend to listen careiully to the testimony we will receive today. I am not unmindful
that many cities, counties and states have a strong interest in the outcome of this
debate. I look forward to hearing from a number of interested parties and experts
today as the Judiciary Committee continues to consider the matter.

Mr, Hyde. At this point, I will recognize the committee's ranking
minority member from Michigan, the Honorable John Conyers, for
an opening statement.

Mr. Conyers. Grood morning, and thank you, Mr. Chairman. I
concur with your comments and on calling this hearing, and re-
mind the Members of my continuing interest in moving legislation
repealing yet another sports antitrust exemption, baseDall, an in-
stitution which is also in very critical shape as we meet.

It becomes increasingly difficult to understand why baseball is
entitled to a nonstatutory antitrust exemption based on a 1922 Su-
preme Court decision which has long been repudiated, and at the
same time when no other professional sport is entitled to the same
treatment. So, that is why I have legislation which would repeal
the exemption baseball enjoys with respect to labor matters, and
that too is within the jurisdiction of this distinguished committee.



As for the specific issues before us today, I hope the Members
will forgive me if I am just a bit skeptical of the proposition that
giving a monopoly comprised of 30 of the wealthiest individuals in
America an exemption from our antitrust laws is an answer to our
franchise relocation problems. The real issue is not how we can
protect a monopoly from antitrust liability. The answer to that is
simple: Abandon your monopoly status and do not discourage com-
petition.

The real issue is how can we protect our cities from blackmail
by vagabond sport franchises playing the cities and their taxpayers
against each other. This is a problem we face in all professional
sports. Even baseball, which boasts of its franchise stability cour-
tesy of its nonstatutory exemption, frequently uses the threat of re-
location to negotiate lucrative stadium deals at taxpayer expense.

Before this nearing is over, I am hoping someone will explain
whv we are being told that the price of keeping your city's football
or baseball team is a new stadium with boxes for the wealthy paid
for by taxes of the workers. If a stadium is safe and clean and peo-
ple pay good money to fill its seats, as they have done in Cleveland
in the last 50 years, whv is that not enough? Why do we even need
to talk about Cleveland imposing new taxes to entice Mr. Modell
or the NFL to keep a team there?

Unfortunately, I have seen precious little indication that the
NFL or other sports leagues are willing to do anything to respond
to the problem. Instead, the leagues have created a chronic short-
age of franchises, adopted revenue sharing rules which practically
force owners to press for lucrative new stadiums, and promulgated
relocation rules which stacked the decks against the cities. So be-
fore the NFL asks for legislative relief, I urge them to take some
good-faith gestures to respond to problems of owners and the way
thev treat cities, which I believe are very much of the NFL's own
making,

I will try to keep as open a mind as this statement will allow me
to for the rest of the day. Thank you, Mr. Chairman.

Mr. Hyde. Thank you, Mr. Conyers. The gentleman from Califor-
nia, Mr. Carlos Moorhead.

Mr. Moorhead. Thank you, Mr. Chairman. I am pleased that we
are taking this opportunity to examine the antitrust and other im-
plications of relocating professional sports teams. As we have seen
recently in Cleveland and Baltimore, this is an issue that strikes
a nerve in many of the loyal fans and profoundly affects local gov-
ernments, businesses and entire communities.

I can certainly sympathize with the gentlemen from Ohio. As a
native of southern California, I have witnessed a great deal of team
shifting. Within the last few years I have seen the exodus of two
Los Angeles professional football teams, the Rams and the Raiders,
and now there is talk of another team coming to town.

Today we will hear about a variety of proposals to discourage the
relocation of established sports teams, including provisions that af-
fect the trademark law. As the chairman of the Subcommittee on
Courts and Intellectual Property, I advise that any changes to
trademark law be very carefully deliberated.

After years of careful study, we completely overhauled the Fed-
eral trademark law in 1988. This was the first comprehensive revi-



sion of the Lanham Act since it was first enacted in 1946. These
changes, which took effect in 1989, modernized trademark law and
struck an important balance in protecting intellectual property and
promoting commerce.

With this background in mind, I look forward to a thorough hear-
ing process in examining all the issues involved with this very im-
portant topic.

Mr. Hyde. Thank you.

The gentleman from Virginia, Mr. Scott.

Mr. Scott. Thank you, Mr. Chairman. Some of what I had in-
tended to say has already been said, and the question is: What is
the congressional interest in these hearings?

Obviously, there is a significant fan interest, the excitement and
the traditions that the teams have, but there is also a lot of public
money involved. Public money is often involved in building stadi-
ums, building roads to the stadium, and other services and costs
involved in the traffic and services. Teams also have a significant
economic impact. When a team leaves an area, it results in signifi-
cant unemployment and economic disruption.

One of the issues that I would like to pursue is the issue of pub-
lic ownership of some of the teams. I imderstand that is not pos-
sible right now. There are exceptions, and that would cure many
of the problems because if a team were locally owned, the chances
of it leaving would be much more remote.

As is not the case with I think just about everybody else here,
my area does not have a professional team either coming or going
in the foreseeable future, but we are trying. And if we do make the
public investment in a team, I would certainly hope that it would
not pick up and leave shortly after that investment were made.

Thank you, Mr. Chairman.

Mr. Hyde. Thank you, Mr. Scott. Before I ask Mr. Sensenbrenner
for an opening statement, I have here the statement of Con^ess-
man Norm Dicks of the State of Washington, and I ask unanimous
consent that this statement be made a part of the record. Without
objection, so ordered.

[See appendix, page 163.]

Mr. Hyde. The gentlemgm from Wisconsin, Mr. Sensenbrenner.

Mr. Sensenbrenner. Thank you verv much. I had not planned
on making an opening statement until 1 heard the gentleman from
Michigan, Mr. Conyers, bring the subject of the baseball antitrust
exemption into the debate on this legislation.

The antitrust exemption is an entirely different issue with dif-
ferent factors coming up from what we are here today to listen to,
and that is the proclivity of some teams, particularly in the Na-
tional Football League, to take flight and to leave for greener pas-
tures or what they perceive to be greener pastures.

Let me say that this is not a problem in baseball. And where
there has been the urge to move teams, most recently in Pitts-
burgh, baseball has been able to take care of that to protect the
franchises in the city where they are.

And I am confident that baseball, unlike football, is sensitive to
the fact that community spirit is necessary to have a successful
team, and yes, even a profitable team. I remember back in the bad
old days wnen the Milwaukee Braves left for Atlanta. The last 2



years they played in Milwaukee, thev played to an empty stadium,
and that hurt the then owners in the pocketbook pretty severely.
I think the owners got the lesson as a result of that, and that is
why we don't see the problems in baseball that we are seeing in
football today.

I would like to say there is one community-owned team in the
NFL. It is the Green Bay Packers, and not only are we in Wiscon-
sin proud of how the Packers have done on the field this year, but
we are also proud of the fact that because the Packers are commu-
nity-owned, the problems that exist relative to stadium building
and stadium expansion have not existed in Green Bay.

Lambeau Field in Green Bay has been expanded. Nobody has
complained about it. Tax money has been used to expand the sta-
dium which is owned by the city of Green Bay, because the people
in Green Bay know that the Packers are an asset and, more impor-
tantly, that their tax money is not being used to line the pockets
of somebody who is in to make a profit rather than to simply pro-
vide a good football team and quality entertainment for the people
in the community of Green Bay.

Before sigfning off, however, I have to take exception to my chair-
man talking about the glorious Chicago Bears. How glorious were
they in the two games they played with the Packers this year?

Mr. Hyde. You guys cheated.

Mr. SENSENBRE^fNER. I yield back my time.

Mr. Hyde. The Honorable Sheila Jackson Lee.

Ms. Jackson Lee. Mr. Chairman, I come from a town that has
an emerging glorious team. But, in any event, I am appreciative of
the chairman having this hearing today. This is an important issue
to millions of sports fans and to residents who live in cities where
pro football fi'anchises are located.

I represent the 18th Congressional District of Texas, which in-
cludes a significant part of the citv of Houston. As many of you
know, our city's professional football team, the Houston Oilers, has
reached an agreement with local officials of the city of Nashville to
move the team to Nashville, TN. As you can imagine, many
Houstonians are disturbed about the proposed move of tne Houston
Oilers and wonder whether there is anything that could have been
done on a governmental level to encourage the team to remain in
Houston. Many efforts were tried.

The citizens of Houston are not alone. Last year the Los Angeles
Raiders moved to Oakland, CA, and the Los Angeles Rams moved
to St. Louis at a very high cost. The Cleveland Browns have en-
tered into an agreement to move the team to Baltimore. Under this
agreement, the State of Maryland would build a stadium for the
Cleveland Browns for $200 million and the Browns would not have
to pay any rent. Listening to the local television commentary, many
are commenting on what will we do for our children in education
and streets and roads?

There are reports that the Seattle Seahawks are considering
moving to Los Angeles. Some news reports suggest that the Seattle
Seahawks are asking for $150 million in improvements. Media re-
ports also indicate that the professional teams in Tampa Bay, Ari-
zona, and Cincinnati may consider relocating if they do not get bet-
ter facilities.



The question is, when will it all end? It will not end unless we
change the status quo. Those relocation decisions and preliminary



Online LibraryUnited States. Congress. House. Committee on the JProfessional sports franchise relocation : antitrust implications : hearing before the Committee on the Judiciary, House of Representatives, One Hundred Fourth Congress, second session, February 6, 1996 → online text (page 1 of 39)