Also, if anyone wants to know more about eminent domain and sports teams google that phrase with Oakland Raiders and with Baltimore Colts.
Crew SC owner considers moving team to Austin, Texas
- Thread starter ferrarinycfc
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Depends what the court interprets "opportunity to purchase". You could also mean that Precourt could be forced to sell if he receives a fair offer from the government or a group from Columbus.
Except the words fair value never appear in the actual law, nor do they appear in the legislative notes, which a judge would consult for intent when making a ruling on an unclear law. There is exactly zero use or applicability of fair value in this law, your projecting what you think would happen.
The actual wording in the legislative notes is "a price that the owner of the team would accept on the spot," the determination of the price is completely left to the owners discretion. So yes Precourt can say, I want a billion dollars if that is the price that will make him sign a bill of sale on the spot without any negotiation.
The Crew situation was the subject of multiple questions during today's State of MLS news conference. I did not hear all of it but did catch the following. NB: This is what Garber said. I'm not claiming to believe it, or not.
The Crew was one of the teams Lamar Hunt owned when he had multiple teams. One of the commitments the league made to Hunt was to assist his family in selling the extra 2 teams. They did. When they went to sell the Crew they hired an Ohio based investment bank to find investors from Ohio to buy the Crew. Garber said that only one such investor materialized, and he made an offer that was far below reasonable value. Only after that process played out did they hire another national investment bank looking for any willing buyer which led to Precourt.
Later Aexi Lalas asked Garber if it was disingenuous not to have revealed the clause in Precourt's deal that allowed him to move the team to Austin until Precourt announced he wanted to do that. Garber basically said "lol, no." Except he wasn't actually flip. But he was courteously dismissive of the question.
The Crew was one of the teams Lamar Hunt owned when he had multiple teams. One of the commitments the league made to Hunt was to assist his family in selling the extra 2 teams. They did. When they went to sell the Crew they hired an Ohio based investment bank to find investors from Ohio to buy the Crew. Garber said that only one such investor materialized, and he made an offer that was far below reasonable value. Only after that process played out did they hire another national investment bank looking for any willing buyer which led to Precourt.
Later Aexi Lalas asked Garber if it was disingenuous not to have revealed the clause in Precourt's deal that allowed him to move the team to Austin until Precourt announced he wanted to do that. Garber basically said "lol, no." Except he wasn't actually flip. But he was courteously dismissive of the question.
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Also, either Garber or some other MLS guy made a point of noting how many teams have moved in baseball, NFL and NBA since MLS came into existence and this potentially is MLS's first (I think?)
ETA: Sort of San Jose/Houston. But also sort of not really.
ETA: Sort of San Jose/Houston. But also sort of not really.
Men In Blazers had a pod special come out yesterday of an interview with Garber where they talked pretty extensively about Columbus. Garber noted many times there that the league should consider all options, especially when a particular market is dragging behind in almost all notably categories.
He noted that its possible the Crew could come back to Columbus, but context clues tell you that's absolutely not happening.
This guy cannot be serious if he believes Columbus is dragging down the league.
This is what the Attorney General said:
https://www.reddit.com/r/MLS/comments/7igu53/971_the_fan_brief_interview_of_ohio_attorney/
"Degenerate T Bone: "Now, I know the law says 'an opportunity to purchase the team,' does that have to be some kind of . . . limit on that . . . like if he comes back and says 'yeah i want 20 billion gajillion dollars' like does he have to make some type of realistic discussion with the local people or can he just say whatever he wants or is that we're going to find out through [DeWine mumbles: "noo"] some of these legal proceedings. "
Mike DeWine (Ohio Attorney General): "...yeah, we're gonna find that out but my understanding of how this law should be read is that it has to be reasonable and what that really means that we we in essence, the political subdivision in the city, we have the first right of refusal - in other words - if he has an offer for x number of dollars, and he thinks that's his best offer, he would then have to go to the city, and make that offer available to the city as well. That's how I would interpret it, I think that's the correct interpretation . . . Again, this law has never been used but it is on the books, it is a valid law."
A court might very well read a reasonableness requirement into the statute. But a right of first refusal procedure where he gets his best offer elsewhere is irrelevant when the owner wants to move, not sell. DeWine seems to be dumber than your average AG.
He didn't say it was dragging down the league, just that that market is seriously lagging behind, which has been well-documented earlier within this thread.
Right. It could be that the government would buy and flip to a private party purchaser. In fact, the 6 months seems basically a time period in which the government could get all that set up.
This suggests that the statute was focused on a situation where a new owner buys and moves at the same time, which is why it’s so confusing in context.
I ultimately don’t think this law would make any difference or create any real obstacle to Precourt’s plans.
I looked closer at the reddit thread posted above. Some there are indicating that what DeWine meant was that Columbus gets a chance to match any offer that a competing city makes in terms of inducements to move. I'm not sure if DeWine really meant that or if this is just even dumber fans, because that makes even less sense. First, it has nothing to do with what the statute says, which is an opportunity to purchase. Just because that phrase is less than clear doesn't mean you can interpret it to mean something completely at odds with what it does say. The opportunity to match subsidies is nowhere inside the universe of fair meanings for opportunity to purchase.
Second, let's say the new market really is more economically viable for the team. There will be situations in which this is true. That would mean that the club can be profitable with less or no subsidies in the new city. That is a good thing. Businesses should go where they can thrive and not need government subsidy. A law that stops it unless the new city forks over even more subsidies that the business doesn't need is stupid.
The more I look at the law the more it is clear it is a dumb law. The idea is fine. My preference is governments don't subsidize sports teams and stadiums, but if they are going to do it I have no problem using that to make teams stay there for guaranteed amounts of time or face penalties or give backs. But it has to be done on a case-by-case deal-by-deal basis. This statute was obviously something the legislature did because of the Browns situation and people demanded that the government "do something," and this was "something." But the legislature was at least halfway smart enough to realize that they could not write a law that covered every situation, so they wrote something weak and vague. Now Crew fans want to pretend it is something with teeth and good. The redittor who advanced the "matching subsidy" theory thought it was just keen that a law could be read to incentivize higher sports subsidies and require every resident of Columbus, or Franklin County, or even Ohio, to pay extra taxes to support his hobby. What a selfish asshole.
But this is really why the law is dumb. It kicks in whenever a team 1. uses a tax supported facility for most of its home games and 2. receives [government] financial assistance. Now let's say there's a city with a facility that the city helped build and is underused. Someone approaches them to use it for a new team, and negotiates a fair rent. They just satisfied one of the triggers even though they get no unfair benefit. Now assume the facility is inside a development zone where you automatically get lower taxes. Now they hit the second trigger even though the lower taxes apply to everyone in the zone. Maybe there isn't even a development zone. No matter what rent the team pays, someone can argue it is not fair market rent and therefore a subsidy, which means that if in the future the team wants to leave it faces litigation under this statute. That's part of the argument with the Crew -- that the rent they pay for parking lots is below market. Is it? I don't know. But no matter what your opinion is it is something that can always be argued. There is no way to evade it. Suddenly the law potentially applies to this team in a situation nobody meant it to. So the new team says I want a waiver or we don't come here. We're operating in good faith. We're willing to pay a fair rent and take no subsidies, but the law could still potentially be used as a cudgel against us. Good luck with that. The city can't waive it; it's a state law with no waiver provision for local subdivisions. The only way out of it is to get a special state legislative waiver. Stupid, stupid law.
Second, let's say the new market really is more economically viable for the team. There will be situations in which this is true. That would mean that the club can be profitable with less or no subsidies in the new city. That is a good thing. Businesses should go where they can thrive and not need government subsidy. A law that stops it unless the new city forks over even more subsidies that the business doesn't need is stupid.
The more I look at the law the more it is clear it is a dumb law. The idea is fine. My preference is governments don't subsidize sports teams and stadiums, but if they are going to do it I have no problem using that to make teams stay there for guaranteed amounts of time or face penalties or give backs. But it has to be done on a case-by-case deal-by-deal basis. This statute was obviously something the legislature did because of the Browns situation and people demanded that the government "do something," and this was "something." But the legislature was at least halfway smart enough to realize that they could not write a law that covered every situation, so they wrote something weak and vague. Now Crew fans want to pretend it is something with teeth and good. The redittor who advanced the "matching subsidy" theory thought it was just keen that a law could be read to incentivize higher sports subsidies and require every resident of Columbus, or Franklin County, or even Ohio, to pay extra taxes to support his hobby. What a selfish asshole.
But this is really why the law is dumb. It kicks in whenever a team 1. uses a tax supported facility for most of its home games and 2. receives [government] financial assistance. Now let's say there's a city with a facility that the city helped build and is underused. Someone approaches them to use it for a new team, and negotiates a fair rent. They just satisfied one of the triggers even though they get no unfair benefit. Now assume the facility is inside a development zone where you automatically get lower taxes. Now they hit the second trigger even though the lower taxes apply to everyone in the zone. Maybe there isn't even a development zone. No matter what rent the team pays, someone can argue it is not fair market rent and therefore a subsidy, which means that if in the future the team wants to leave it faces litigation under this statute. That's part of the argument with the Crew -- that the rent they pay for parking lots is below market. Is it? I don't know. But no matter what your opinion is it is something that can always be argued. There is no way to evade it. Suddenly the law potentially applies to this team in a situation nobody meant it to. So the new team says I want a waiver or we don't come here. We're operating in good faith. We're willing to pay a fair rent and take no subsidies, but the law could still potentially be used as a cudgel against us. Good luck with that. The city can't waive it; it's a state law with no waiver provision for local subdivisions. The only way out of it is to get a special state legislative waiver. Stupid, stupid law.
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The weird thing to me is why the league would restrict PSV to Austin. Everyone is up in arms about potential MLS franchise moves, but it's interesting that PSV needed his option explicitly in writing. Isn't the implication there that MLS is generally unwilling to let teams move?
If the league was so open to relocations, why not St. Louis? It's their dream market, and the bidding group simply doesn't want to pay for both the expansion fee and stadium. PSV already has a team and is willing to pay for a stadium. Seems like a fit to me, subject to any challenges from the St. Louis expansion group.
If the league was so open to relocations, why not St. Louis? It's their dream market, and the bidding group simply doesn't want to pay for both the expansion fee and stadium. PSV already has a team and is willing to pay for a stadium. Seems like a fit to me, subject to any challenges from the St. Louis expansion group.
When they signed the deal, I expect they limited it in order to minimize the potential effect on the expansion bidding process. But now, I think you're right. It would make sense to give Precourt options in other places where the league would want to expand but the bidders have not materialized or are inadequate. Just because the deal limits PSV to Austin doesn't prevent MLS from giving him a waiver. So probably one of the following is in play:
- Precourt really just wants to go to Austin
- St, Louis and other options have obstacles besides weak bids. Maybe it would be hard to acquire land and build in St. Louis even if the owner is willing to pay.
- Other owners want to keep certain cities open for their own purposes.
If a city subsidizes a stadium for a team and wants to lock that team down, there is a simple way to do it. Just make them sign a long term lease with substantial breakage costs. You don't need a statute. You need a good contract, and that means government officials who are willing to negotiate one.
St. Pete built a shitty stadium in a lousy location, but they did one thing right. When the Rays moved in, they signed a very long term deal (32 years) with big penalties for breaking the lease, and so the Rays have been stuck there. They weren't even allowed to negotiate another site under the terms of the lease, although some of that has been relaxed, and the Rays can now move early - but only within the Tampa Bay area and only after paying a big penalty.
A relatively positive look at the Modell Law’s potential to survive a constitutional challenge (doesn’t get into whether enforcing it would actually achieve anything), and I’ll defer to the law folks as to whether this holds water
https://www.ballondorder.com/fifa/2017/12/19/precourt-sports-ventures-v-ohio
https://www.ballondorder.com/fifa/2017/12/19/precourt-sports-ventures-v-ohio
Its a good article, though I won't pretend to be any kind of legal expert.
One item I did find interesting in this, is that this "Modell Law" would also go into effect if the Crew wanted to play at a new stadium within Columbus...
"No owner of a professional sports team that uses a tax-supported facility for most of its home games and receives financial assistance from the state or a political subdivision thereof shall cease playing most of its home games at the facility and begin playing most of its home games elsewhere unless the owner either"
So it would seem (from my non-expert opinion), that the state could force the opportunity to have the team purchased if the Crew wanted to move into a new stadium and the state doesn't allow it.
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