Ohio AG and Columbus sue under “Modell law” to block Crew’s move to Austin

And away we go: Three months after hinting he’d sue to block Columbus Crew owner Anthony Precourt from relocating his team to Austin, Ohio Attorney General Mike DeWine has joined with the city of Columbus to do just that, under the “Art Modell Law” passed after the Cleveland Browns owner decamped for Baltimore that requires sports owners to offer their teams up for sale to local investors before moving them out of state:

DeWine argues that the Crew accepted $5 million in state taxpayer-funded improvements to their parking lot, tax exemptions for MAPFRE Stadium, a “well below market rate lease” on state-owned land, and other reimbursements.

According to the lawsuit, a 1996 statute in the Ohio Revised Code “prohibits these owners from moving their teams elsewhere unless they give at least six months advance notice of the intention to move and give the city, an individual, or group of individuals, who live in the area an opportunity to purchase the teams.”

All of the above is true: The Crew did get state subsidies for their stadium, and the Modell law does prohibit that! As I noted when DeWine first brought this up, though, there are still two big issues:

  • The Modell law just says local buyers have to be given “the opportunity to purchase the team,” not that the seller has to agree to a fair market price or anything. Which, sure, I guess a clever lawyer can argue that “You may buy my team for 200 squillion dollars” isn’t really an “opportunity,” but that’s a lot less cut and dried than one might like.
  • The statute doesn’t include a penalty clause, so it’s unclear what the state could do if Precourt thumbed his nose at the court and moved to Austin anyway.

A way more interesting case might be if Columbus tried to use eminent domain laws to condemn the Crew franchise and seize it as a public good that’s being endangered — eminent domain has been successfully used for dumber reasons than that, and while eminent domain seizure attempts failed in the Baltimore Colts and Oakland Raiders cases, there’s reason to believe that those instances didn’t set a firm legal precedent. (In the case of the Colts, it was ruled they’d already left town hours before the suit was filed, so there was nothing left to seize control of.) Since no one seems interested in that option, though, the Modell law is an interesting Plan B — even if there are a lot of steps between this and actually forcing the Crew to remain in town, if there’s even a chance that it makes relocation problematic enough that Precourt decides to stay, any statute in a storm, right?


16 comments on “Ohio AG and Columbus sue under “Modell law” to block Crew’s move to Austin

  1. You’d figure that MLS would simply cancel the team’s franchise, create a new team and then assign all the Crew assets to the new team. With single entity ownership of the entire league they could probably do that.

    • They probably could but that’s not as simple as it sounds. Assuming the rest of the ownership was on board with the idea (more on that below) the internal MLS stuff would be the easy part. But totally dissolving the current business and starting from scratch would mean canceling all current vendor and other contracts, redoing all bank accounts, payroll changes, tons of tax adjustments…. That would never be anybody’s first choice of how to handle it.

      Also fair to question if all the other MLS owners would be on board. Clearly, the current owner wants to be in Austin. But are the rest of the owners sold? Doubtful the Crew owner would want his Austin team to compete with another franchise in San Antonio–but San Antonio is by far the larger market and was probably going to be on MLS’s wish list sooner rather than later. Bare minimum you’d think other owners would want some sort of agreement so the guy wouldn’t complain if they did decide to put a team in San Antonio.

  2. Either side could use Cincinnati as leverage. The state could say no subsidies for a Cincy soccer field without a Columbus franchise. Or, MLS could use a fake threat to put the Cincinnati team in Kentucky or give the expansion slot to Sacramento.

    • It wouldn’t be much of a threat. Many in Cincinnati do not want a third major league sports stadium in the city. Building on the other side of the river fixes a lot of the NIMBY problems. I personally think it is a great location. The main arguments against NKY have been semantic surrounding the name Futbol Club Cincinnati and the fact people on the Ohio side would have to walk or drive across one of the half dozen bridges. The funny thing is that many people already drive to the Kentucky side to park for Bengal and Reds games then walk across.

  3. Really confirms just how ridiculous the blanket of “the little league that could” MLS draped itself in was. Just as mean an nasty as any other single entity league in North America.

  4. Ah but as previously noted, isn’t Precourt blowing his Austin opportunity anyway? What with the city’s dumping on the parkland site etc. Guess the Attorney General is covering all bases

  5. Neil, it doesn’t take a lawyer to figure out that the Modell law is blatantly unconstitutional. It violates the interstate commerce clause. Why not just say that?

    • How is it unconstitutional? It doesn’t make it illegal to move your team; it makes it illegal to accept subsidies if you’re then going to move your team.

      • The Ohio AG thinks it does make it illegal to move the team. He is trying to force the owner of the team to sell. You notice that the lawsuit doesn’t ask PSV to reimburse the city and state for any subsidies the team may have received. That’s not the issue. The suit is trying to prevent PSV from doing business in another state by forcing them to sell to someone in state. That’s a clear violation of interstate commerce. And as you know, federal law trumps state law.

        • There are tons of local laws requiring what companies can and can’t do as a condition of accepting subsidies. I’m with you, though, that getting an injunction granted, rather than getting damages after the fact, is a much steeper hill to climb.

    • Dave-

      You may not be aware of this, but what is and is not “unconstitutional” and what does or does not run afoul of the commerce clause has a lot more to do with political reality and justice predispositions than it does the actual letter of the law or constitution.

      That said this is a fairly dumb and badly written law.

  6. There is a lawyer here in Austin who has some thoughts on this:

    http://austin-sports-law.com/mls-to-atx-9-ohio-and-columbus-file-lawsuit-against-psv-and-mls-what-does-that-mean/

    • “A horribly drafted piece of legislation” states the case pretty well. I’m less convinced that MLS’s single-entity structure will necessarily save it — other sports have franchises that only exist so far as they please the league, too — but ultimately it’s going to come down to how some judge determines how to interpret that vague-ass law.

  7. Does the Model Law stipulate how to determine the price of a team? Is it the value of the team in Columbus, or the value of the team in Austin? It could be a huge difference. For example, if Missouri had that law and St. Louis tried to buy the Rams which I think Forbes had valued at about $900 million, Kroenke would have argued, no the team is worth $2 billion, cause that’s what they’ll be worth in LA.

    • Mark –
      The Modell Law says absolutely nothing about how to set the price of the team. The price can be anything the owner says it is. If PSV wanted, they could put the Crew on sale for $10 billion. After six months, when no one has bought the team, PSV can say they fulfilled the obligation under the law to offer the team to a local buyer. This is just one of many reasons why the Modell Law will amount to nothing.

  8. SI’s legal writer has a good analysis:
    https://www.si.com/soccer/2018/03/06/columbus-crew-lawsuit-austin-texas-relocation-precourt-mls-ohio-modell-law