EXTORTION or EXTINCTION? : The Raiders’ Move to Los Angeles Opened the Door for Other Franchises to Move or Threaten to Do So While Seeking Advantageous Contracts; Closing the Door Has Become a Daunting Problem for Congress, Courts

The federal court decision permitting Al Davis to move his Raiders to Los Angeles also, in effect, allowed Robert Irsay to move his Baltimore Colts in a surprise midnight caravan last year to Indianapolis.

It paved the way for Leonard Tose to secure, through threats to move his Philadelphia Eagles to Phoenix, a promise of an estimated $30 million in taxpayer subsidies from the City of Brotherly Love.

It encouraged the St. Louis Cardinals and the New Orleans Saints to inform the National Football League that it could not block moves they might undertake. The Cardinals subsequently began talking about providing the New York area with its fourth professional football team unless St. Louis provided them with a new, 80,000-seat stadium. And the Saints put the bite on the Louisiana Legislature for a $25-million contribution of tax funds to assist the wealthy Pritzker family of Chicago in buying that team. Despite such a gift, which the legislature refused to make, sole management rights would have remained with the Pritzkers.

The Clippers, defying the National Basketball Assn., moved from San Diego to Los Angeles. When the NBA sued for $25 million in damages, club president Alan Rothenberg cited the Raider case in predicting confidently: “They can’t win.” He said he was certain that the courts would view the NBA’s attempt to block the Clippers’ move to be as much a violation of the antitrust laws as the NFL’s attempt to block the Raiders’ move.

And so it goes. The Raider decision--which some experts believe NFL Commissioner Pete Rozelle fell into through choosing the wrong legal battleground--has made franchise moving an ever bigger issue in professional sports. Only organized baseball, with its 60-year-old U.S. Supreme Court-granted antitrust exemption, remains relatively free of the franchise-moving craze.

Not only has the decision put most professional leagues at the apparent mercy of their individual owners, it also has radically strengthened the owners’ hands in dealing with public authorities in both their current cities and those to which they might move.

As Arthur Johnson, a University of Maryland political scientist specializing in sports issues, wrote in the Public Administration Review: “Recent legal developments with regard to professional sports franchise relocation threaten to make public investments supporting franchises riskier than ever before.”

Johnson did a survey that showed that in the first two years after the Raider decision, “at least 13 of the 42 American communities having sports franchises have been confronted with demands for increased sports subsidies, such as stadium improvements and tax breaks. Almost without exception, removal of the franchise from the host city was an implied, if not explicit, threat underlying negotiations.”

Even adherents of the decision in the Raider case will concede that in its aftermath there has been a plethora of such maneuvers.

For instance, Howard Daniels, one of the Raiders’ attorneys, said that in some cases threats to move have been used as pressure tactics directed at getting municipalities to grant subsidies.

“My view is that Tose (in Philadelphia) was never that serious about moving,” Daniels said. “It was basically a form of not-so-subtle extortion.”

Tose, of course, says he was sincere.

Daniels does not count the New York Jets’ move from Shea Stadium to Giants Stadium in the New Jersey Meadowlands, since that shift did not result in a metropolitan area losing a team. The Meadowlands is actually closer to mid-town Manhattan than Shea Stadium.

Nonetheless, the Jets’ move has been as strongly resented by many New York civic leaders as the Rams’ move from the Coliseum to Anaheim was resented in Los Angeles, and has inspired recent efforts by New York officials to induce the Cardinals or some other team to move in, perhaps with a new infusion of public funds to improve Shea Stadium or even construct a new facility.

This idea of using public funds to get or keep a sports franchise was reflected in Los Angeles as a defense for advancing the Raiders $6.7 million in rent subsidies and a loan that was termed by some Coliseum commissioners as an outright gift.

William Robertson, the commissioner who was instrumental in negotiating the Raider move, said at the time that the $6.7 million was “a small price to pay to get a professional football team for Los Angeles.”

Noting that Minneapolis had put up $55 million in liquor-tax money to build a domed stadium to keep the Minnesota Vikings (and also the Minnesota Twins baseball club) from moving, and that Indianapolis had constructed a $100-million stadium with tax revenues to attract a pro team (eventually, the Colts), Robertson termed the $6.7 million “relocation money we have to pay to compete.”

In the Raider case, the money put up was from Coliseum receipts, not from general tax revenues.

But unhappy municipal officials and taxpayers in other cities, faced with committing tax funds to keep teams from moving to other cities willing to outbid them, have had a lot to do with inspiring a recent spate of efforts in Congress to put restraints on franchise moving.

Rather ironically as it has turned out, Rozelle had a great deal to do with inspiring such efforts, too. By organizing a huge lobbying campaign to get Congress to overturn the Raider decision and give the NFL new antitrust exemptions, Rozelle--some of his critics, such as Buffalo Bills owner Ralph Wilson, charge--created a boomerang effect which ultimately may sharply curtail NFL powers.

Significantly, most of the proposals in Congress are now opposed by the NFL, which would prefer to keep control at the league level. As in the Philadelphia case, NFL leadership is not at all averse to its owners using muscle to get more public subsidies, which have been so important in allowing professional football to be profitable.

In baseball, Commissioner Peter Ueberroth, protected by his sport’s antitrust exemption, has opposed all legislation, even while making it clear that he will work to prevent franchise relocations.

“Obviously when a fragile franchise is not in good shape, then there’s the problem that the other cities are going to try to buy (it), like they did the Minnesota Twins,” Ueberroth said. “Bobby Brown (the American League president) and others led the way to keep the Twins in Minnesota. They were able to find solutions (rejecting a sale to Tampa interests and finding a local buyer) and they’re there, and the Twins are very healthy. That’s our policy. We’ll do about everything to keep a franchise from moving.”

The most sweeping legislation to be advanced so far is authored by Sen. Slade Gorton (R-Wash.). Entitled the Professional Sports Team Community Protection Act, it would create an ad hoc arbitration panel in cases where cities objected to a move, with one member coming from the league involved, one from the government authority that runs the stadium in the city and one from the American Arbitration Assn. to decide whether a proposed move meets criteria allowing a move.

The arbitration panel would permit only moves made for economic reasons, including such factors as the adequacy of the stadium being used, fan support and operating revenues as compared to other teams. Its decision could be appealed to the courts.

The apparent aim of the Gorton bill is to gather support from members of Congress representing localities that do not have teams and are seeking them. It would also require the NFL to add two teams by 1988, including one in Baltimore, and two others by 1990, including one in Oakland. Major-league baseball also would be required to add two teams by 1988.

Gorton said: “Every member who represents Phoenix or Louisville and wants to get a franchise is hurt by stability, because there’s no longer a city they can raid. . . . We’re giving those cities a crack at it.”

Gorton is not new to the franchise relocation issue. Aide David Endicott recalls that Gorton, attorney general of the state of Washington 15 years ago, “saw the American League come in and request municipal funding for a stadium. This led to approval of the Kingdome. But a year later they pulled the Seattle Pilots out of Seattle and sent them to Milwaukee. He sued, and the eventual result was a new team being assigned to Seattle.”

The Gorton legislation is opposed by the NFL, as it is by baseball. But both Rozelle and Ueberroth have indicated that their organizations will agree on their own to expand in the next few years.

Another approach is incorporated in a bill introduced by the two Missouri senators, Republican John Danforth and Democrat Thomas Eagleton, who are concerned over the threat to the St. Louis football franchise.

This legislation, according to Danforth spokesman Steve Hilton, offers “somewhat more latitude to the leagues and owners” and sets “fewer hoops through which a decision (to move a franchise) has to move.”

Baseball is totally exempted, and no expansion clubs are mandated in any sport. But either an owner or a municipality could still appeal a relocation decision they did not like to federal district court, which would then be empowered to decide whether a move was, according to Hilton, “fair and reasonable on the balance of the evidence.”

Sen. Arlen Specter (R-Pa.) has introduced a bill that would allow cities to sue in federal court to prevent economically viable pro football teams from moving to more profitable locations. It would also force the NFL to restrict franchise shifts, and would mandate that it repay Philadelphia for the money the city spends to keep the Eagles.

Such proposals as Specter’s prompted Wilson, the Bills owner, to get up at a recent NFL owners meeting in New Orleans and accuse Rozelle of leading the owners, through their ill-fated lobbying campaign, into an ever more costly morass that threatens to put professional football under more and more government regulation in the years ahead.

As the University of Maryland expert, Johnson, writes: “If franchises were obligated to remain in their present locations, the balance of negotiating power (on taxpayer subsidies) obviously would shift (from owners) to local officials.”

But Clipper president Rothenberg said recently that his analysis indicated that under any of the bills, moves would be permitted if the team that wanted to move could prove financial hardship at the old location.

He said he thought the Clippers’ move, which was initiated by owner Donald Sterling, would have been allowed under any of the proposals. “We were going broke in San Diego,” he said. “We couldn’t draw 4,000 fans to a game. We had a lousy stadium. We’re better off in Los Angeles, and so is our league.”

Of all the legislative alternatives, the NFL prefers a proposal by Sen. Dennis DeConcini (D-Ariz.)--who of course represents a city, Phoenix, that has long pressed to get an NFL franchise. This would simply empower the league to decide whether a team can move.

Testifying before a Senate hearing Feb. 4, Rozelle supported granting an antitrust exemption to the NFL that would allow it to control franchise shifts.

The NFL’s attorney in the Raider case, Pat Lynch, said: “If the government gets into the picture, it would take away from everybody the options they had.”

Lynch explained that in many cases the economic interest of the league is far different from that of an individual owner.

“If you put the Eagles in the Phoenix market, from a television standpoint that is a significantly less attractive market to sell the national package than having them in Philadelphia,” he said. “The Raiders’ move to Los Angeles also adversely affected the national package. . . . Attendance receipts are just the tip of the money in the NFL, a constantly declining percentage of the take.”

What are the prospects in Congress? Some think legislation will be passed in the Senate that is more restrictive than either the NFL or organized baseball wants. But, it is questioned whether the same interest or commitment exists to pass a bill in the House of Representatives.

Hilton, the Danforth spokesman, noted: “The Gorton bill, in its 1984 version, came out of committee last fall only by the narrowest of margins, and it reached the Senate floor too late for action. The general point of view in Congress is that the sports franchise issues are far from being mature.”

In the meantime, officials in Oakland and Baltimore, faced with the loss of their football teams, have adopted another tactic in a last-ditch effort to get them back--the use of the eminent domain laws to take possession of the teams in the public interest.

The claim being made is that a professional team is so important to the prestige and business of a community that it can legally be purchased by the municipality for an appropriate sum and retained to provide these public uses.

If the Oakland and Baltimore attempts are ultimately successful, all franchise relocations could be sharply restricted, if only by giving many owners pause.

In the Raider case, the city of Oakland has been in court since 1980 in an effort to get authorization to buy the team. The Superior Court in Monterey County has not been sympathetic, but other higher California courts located in Northern California have been holding for Oakland on appeals and remanding the matter to the lower court.

The case remains in doubt. Last month, an Orange County attorney and sports law instructor, Jim Grier, who conducted an independent analysis, concluded that the case ultimately might be decided against the Raiders.

Raider owner Al Davis has occasionally expressed concern about the eminent domain matter and has in the past used it as a reason for delaying construction of planned luxury boxes on the rim of the Coliseum.

Meanwhile, efforts in the California Legislature to advance bills that would restrict the eminent domain power so as to specifically rule out using it to buy sports teams have so far gone nowhere. State Sen. Joseph Montoya (D-Whittier) recently withdrew a call for committee hearings on the matter.

A background staff report that had been drafted for the canceled hearing concluded that: “Some city officials are concerned that in responding to the Oakland Raider case, the Legislature’s reaction may be overly broad. While a city may not have any interest in condemning a professional sports franchise or a runaway factory, it may wish to condemn a company which is in the same line of business that other cities provide directly: cable television service, garbage collection, taxi service, amusement parks, marinas, hospitals and theaters. . . . At least one California city (Visalia) has owned a professional sports franchise (a minor league baseball team).”

In Baltimore, soon after the Colts had moved, Maryland’s legislature passed a bill specifically permitting that city to use eminent domain against the Colts. Lawyers for Baltimore almost immediately filed an eminent domain suit against the Colts and an antitrust action against the NFL. The case is pending in federal court, but, just as in the Oakland matter, it is not expected to be resolved soon.

Neither Oakland nor Baltimore has been able to get the courts to issue restraining orders to keep the teams from moving until the case is resolved.

The federal court decisions allowing the Raiders to move and levying $49 million in damages against the NFL for illicitly trying to block the move did suggest that the NFL and other professional leagues could set standards for such moves that would be upheld. The initial decision stated, however, that merely establishing a requirement that three-fourths of the owners had to approve a move for it to take effect, as the NFL had done, was not a permissible standard.

On Dec. 21, the NFL decreed some voluntary standards, predicated on financial and stadium conditions, fan support and the like. Within days, however, both the New Orleans Saints and St. Louis Cardinals informed the NFL that they reserved the right to move despite the standards. Some observers question how serious Rozelle was in advancing the standards, which he has not widely publicized.

“The Raiders’ (move) would not have met any set of standards,” NFL spokesman Dick Maxwell said recently.

In January, Rozelle appealed to either Congress or the courts to create guidelines that the NFL could use to mandate whether a franchise could move or not. He warned that any attempt by the NFL to set standards would likely lead only to protracted litigation.

Meanwhile, the pressure continues to mount on both the NFL and organized baseball to expand the number of their franchises. Denver, Indianapolis, Tampa, Vancouver, New Orleans, Buffalo and Memphis are among those most active in seeking either expansion franchises or relocated franchises from baseball. And, it has been widely reported that the fondest hope of organizers of the U.S. Football League is that USFL franchises in cities not holding an NFL franchise will ultimately be merged with the NFL.

Since the greater the number of franchises, the smaller the revenue for each from national television packages, it is understandable that the leagues and many owners don’t want to proceed too quickly or too far with expansion. In fact, the experience of the National Basketball Assn. gives both baseball and the NFL pause.

The NBA expanded so rapidly at one point that the quality of many of its franchises became relatively poor, television viewer interest lagged and the fall in ratings hurt future prospects for big television contracts. Now, with NFL viewer ratings having fallen as much as 20%, there is debate within football as to whether expansion would ease or compound the problem.

Rozelle, however, has indicated that the NFL, currently at 28 franchises, is prepared within a reasonable period to go to 30, and Ueberroth has hinted that major league baseball, with 26 franchises, could go as high as 32.