Columbus could try to use “Art Modell Law” to force Crew to stay put

Ohio Attorney General Mike DeWine thinks he has a way to save the Columbus Crew from moving to Austin, and it involves a 21-year-old piece of legislation known as the Art Modell Law, officially Ohio Revised Code 9.67:

9.67 Restrictions on owner of professional sports team that uses a tax-supported facility.

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:

(A) Enters into an agreement with the political subdivision permitting the team to play most of its home games elsewhere;

(B) Gives the political subdivision in which the facility is located not less than six months’ advance notice of the owner’s intention to cease playing most of its home games at the facility and, during the six months after such notice, gives the political subdivision or any individual or group of individuals who reside in the area the opportunity to purchase the team.

This was passed in 1996 in the wake of Art Modell moving the Cleveland Browns to Baltimore and the city coughing up big money for a new stadium to get a new Browns franchise, though it’s the first I’m hearing about it. (Joanna Cagan researched and wrote the Cleveland section of the opening chapter of Field of Schemes, so my knowledge of that deal isn’t quite as encyclopedic as it might be.) DeWine says his office has reviewed the law and believes it applies to the Crew, and is “prepared to take the necessary legal action under this law” to enforce the provision that team owner Anthony Precourt give Columbus six months to either find a local buyer or buy the team itself.

The law applies, according to state representative Mike Duffey, who asked DeWine to look into it, because, as the Columbus Dispatch puts it, “it is paying a below-market rate to lease state land for parking, the stadium sits on land that is tax exempt, and the state in 2009 provided $5 million for parking upgrades at the Ohio Expo Center, where lots just south of the stadium and are used by Crew SC fans.” Which all sounds reasonable enough to me, though I am not a lawyer, and in any case “reasonable” isn’t going to stop Precourt from going to court to fight it.

Of course, if the state or city were to sue and win, they’d then have to find an owner willing to buy the Crew. That actually may not be so difficult — if all else fails, Franklin County already owns the Clippers, so it has some experience hiring a professional manager to run a publicly owned sports franchise — and might actually be cheaper than ponying up for a new stadium would be, especially since then they’d get whatever profits the Crew are currently earning. Except, uh, there’s nothing in that law that I can see that says a team owner has to agree to sell the team to local owners at any particular price, is there? So what’s to stop Precourt from saying, “Fine, you win, but despite expansion franchises going for $150 million and my only spending $63 million to get my team four years ago, it’s such a glorious franchise that I won’t take a penny less than $400 million”?

And also, the law doesn’t seem to specify penalties, so what happens if Precourt just picked up and leaves? Does Ohio just have to sue to get back its past subsidies? Can it seize the team by eminent domain? I still have not gotten my law degree since two paragraphs back, so maybe these aren’t really such big worries, but it sure seems like there are a lot of lawsuits ahead for this project. Might be easier if Austin voters just tell Precourt to take his MLS-stadium-in-a-public-park plans and go back to Ohio.


23 comments on “Columbus could try to use “Art Modell Law” to force Crew to stay put

  1. My law degree’s in Ontario and I specialize in a different area of law, but I’d say the most reasonable reading would be that the municipality/local buyers would have an option to buy the team at the same price it’s being sold for.

      • Ty, do you mean at the present “expansion price”?

        In this case, at least so far as I know, Precourt is not selling the team either in Columbus or once it is installed in Austin.

        With that in mind, I would suggest he is entitled to ask any ridiculous price for his property. Do you believe that this legislation might be able to impose a fair market value price on an enforced transaction as well?

        • It could, if it had included the phrase “at a fair market price.” They seem to have omitted that part, though.

          Really, any of a couple of dozen FoS commenters could do well giving advice to cities and states on how to write their stadium legislation and leases.

  2. It might be easier to pinpoint a value on the franchise than it would be to prove the team rented parking lots in the middle of nowhere below market. If there isn’t a game the lots sit empty.

  3. This has no chance of working and I doubt that anyone serious will waste time on it.

    Even if someone believes that the law passes 5th Amendment muster — which would be unprecedented — there is absolutely nothing that would prevent MLS & Precourt from folding the Crew and “expanding” in Austin w/ the exact same players, then staying out of Ohio for eternity.

    On the other hand, I will admit that one of the many great things about the Trump era is the media’s eschewing of any shame over “could” headlines.

    • The 5th Amendment doesn’t prohibit strings on government subsidies. Presumably this could be used to intervene whether the owner tries to move the team or fold it — note it’s just “cease playing games” in Ohio, not play games elsewhere.

      The bigger problem, as I noted above, is the lack of any kind of penalty clause. If it’s just “you can’t,” and then Precourt can say “or else what?” and the state has to say “or else … oh, shit, we forgot to write that part,” then this thing won’t have much teeth.

      • The key is the takings clause of the 5th. Unless the club explicitly agreed to government confiscation when they signed the stadium lease, the takings clause would invalidate Ohio’s law.

        • “nor shall private property be taken for public use, without just compensation”

          That doesn’t preclude taking the team with “just compensation.” Which is how eminent domain is constitutional. (“For public use” being a whole other kettle of fish, obviously.)

          • Even though Kelo v. New London was in my mind the worst court decision of the naught, it did decide that public use can be just about anything.

            On BigSoccer.com the layers (and I am one) seem now to be discussing whether this law violates the commerce clause. I think not but the issued raised is whether he fact MLS is a single entity operating across state lines might invalidate the law.

            In the end, I suppose that Precourt wins, but hopefully not after the league is required to open the books a bit. While one other team has moved (the original (or second) San Jose Earthquakes) and some teams have been contracted, there were extenuating circumstances. In the case of the original Earthquakes, the stadium they had been using was unacceptable from a field perspective (it was way too narrow) and they got a new team, new owners and a new stadium in short order. In the case of the old Florida teams, it was not working and in the case of Miami, the owner could not afford it. In the case of Chivas USA, it was a nice experiment that failed, and in any case a new second LA team starts next season.

            In the case of the Crew it just all stinks. The League was in on this from the start, they killed all chances of local ownership stepping in and probably opened the league up to lawsuits from the other expansion cities.

            Back in early August during the run up to the MLS All Star game I was feeling good about soccer in the US. They sold out Soldier Field and played an entertaining game against Real Madrid, there were lots of events around town, and things seemed on the up. Since then we have the USMNT crashing out of the WC qualifying, The Rhinos suspending operations, SC Kansas City closing up and the Crew situation. Of all of these, the Crew weirdly hurts most. The USMNT was not going to make the WC at some point, Rochester probably has too many professional sports teams for its market, and the NWSL is still trying to figure out where it needs to be (and has now survived longer then previous D1 women’s leagues). But the Crew — Crew Stadium was the first SSS for MLS and was the model for years of what we should build. And on Twitter whenever I make a comment about it, some AstroTurf account responds to me. For it to happen like this, it just completely stinks.

    • “there is absolutely nothing that would prevent MLS & Precourt from folding the Crew and “expanding” in Austin w/ the exact same players, then staying out of Ohio for eternity.”
      ______________
      It’s all hypothetical because it won’t ever get that far but several things could get in the way of that: First and foremost, that would likely invalidate all contracts with players, coaches, front office personnel, etc. Players would be free to negotiate with other teams or demand raises from the “New Crew” or whatever the new entity was called. They’d also need to get the other owners to approve expansion as well as their keeping rights to all the players. Some owners would likely go along because strong owners’ rights are in their best interests but others might be more into poaching talent away from the Crew or be worried about the precedent of something like that–particularly given they’d be interested in getting back into Ohio as a league.

        • Even so that wouldn’t fix all the issues. Teams have legal agreements with the league that would need to be redone, there must be plenty of business contracts the league doesn’t control, doubtful every single employee and contractor is being paid by the league directly, banking accounts would need to be changed, the list just goes on and on. Even if you’re a one-person LLC changing your business name is a HUGE pain.

          Realistically, assuming a court would tell them they couldn’t move it’d be far simpler to fold up shop, the same owners apply for expansion, then build a new team from scratch as a true expansion team. Cleaner legally in all respects and probably simpler in practice.

    • “I doubt that anyone serious will waste time on it.”

      Just to be clear, the person in question, Mike DeWine, is the presumptive Republican nominee for Ohio governor in 2018. As for whether that makes him serious and whether it makes it a waste of his time I cannot say, but it does make a good line in a political ad so I imagine he’ll spend some time on it.

  4. The biggest part of the story seems to be that there are a number of people in Austin actively working on this franchise relocation that are on the MLS payroll.
    http://www.bigsoccer.com/threads/columbus-drops-the-bomb-on-mls-and-dons-dirty-hands.2079587/

  5. If that is the exact and complete wording of the clauses in question, then the legislation may apply but will mean virtually nothing (largely for the reasons you have already outlined).

    As I recall, Precourt isn’t planning to move the club until the end of next season. So sometime this spring all he has to do is give notice, then agree to sell to any buyer qualified by the state/county for $400m (or maybe, raise Dr. Evil finger, $4bn…) in the six month window.

    This seems more like an attempt to extract a concession similar to another part of the Browns’ deal than to actually benefit from enforcing this particular legislation to me (IE: league holds/maintains Crew history and trademarks for a future expansion team rather than allowing the owner-who-arrived-in-a-moving-van to take those IP rights with “him” to Austin).

    Since it is generally leagues that hold all IP rights these days and not individual franchises (legacy of Raiders II, among others), it seems like a relatively meaningless win… but whatever. Maybe it’s an effort at face saving rather than actual saving.

    • What I posted is the entirety of the law, to my knowledge. I don’t know if there’s some kind of addendum, like those special explanations of the baseball rules that only get distributed to umpires.

  6. Neil is spot on. League holds contracts for players…(one reason transfer policy is so FUBAR).

    Secondly, Precourt has the MLS2Austin twitter account sending tweets from Columbus, Oh. So I hope he gets what is coming to him that Kroenke didn’t get and the Flames owners haven’t got yet.

  7. Neil, did you see this article?

    Ohio plan to sue MLS owner over team move likely to fail: experts
    https://www.reuters.com/article/us-ohio-lawsuit-soccer/ohio-plan-to-sue-mls-owner-over-team-move-likely-to-fail-experts-idUSKBN1E22VJ

    • Yep. Only cited two legal experts, neither of whom sounded like they’d actually read the legislation in question, so I’m waiting to hear from someone who’s more familiar with the actual Ohio law.

      (I think it’s likely to fail too, mind you, but I’m not taking the above article as an additional reason why not.)

  8. This law isn’t likely to fail, it’s certain to fail. You can’t force a business to continue to operate in a state. If MLS doesn’t want to be in Columbus, they don’t have to be in Columbus.

    The only reason this law has stayed on the books all these years is that nobody has had any reason to challenge it in court. Once it does get that far, the law will be declared unconstitutional.

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