Leagues See More Power Over Shifts of Teams

An about-face by the Reagan Administration on granting professional leagues the power to control team relocations is being viewed by some league executives as a positive step toward halting city-hopping by club owners.

A Justice Department official testified at a recent Senate Judiciary Committee hearing that the administration no longer opposes granting a shield from anti-trust laws to professional sports leagues to allow them to limit franchise movement.

Several bills now in Congress seek to award leagues that power through limited immunity from anti-trust statutes, which are designed to protect free market competition.

The position represents a complete departure from previous administration policy.

It had maintained that leagues must be fully subject to federal anti-trust laws, holding that giving them the power to restrict franchise moves would be anti-competitive.

The National Football League has been a key player in the relocation issue, most notably with the Oakland Raiders move to Los Angeles. The Ninth Circuit Court of Appeals last year upheld a 1982 ruling that the NFL could not prevent owner Al Davis from moving his club down the California coast.

The NFL embraces the new administration position.

“The Justice Department has plainly stated that league decisions of franchise location matters raise no genuine anti-trust problem,” NFL spokesman Joe Browne said in a statement. “We think that the department’s decision on team relocation is balanced and well-grounded.”

Browne added, “The Justice Department position undoubtedly will be a strong factor in Congress as well as in pending and future cases involving team relocations.”

The NFL is on record supporting legislation that gives it--not the individual owners--power over relocations.

The National Basketball Assn. is currently embroiled in a case over the San Diego Clippers’ move to Los Angeles.

The league’s general counsel, Gary Bettman, said of the administration’s new position: “We think that would be helpful.”

“There is some uncertainty in the area that tends to result in litigation,” Bettman added, pointing to differing court rulings on whether league restrictions of moves are anti-competitive.

The administration position was not well received by some lawmakers.

Sen. Howard Metzenbaum, D-Ohio, said in a statement after the new position was announced: “According to today’s Justice Department testimony, the NFL, which is the country’s only legalized, unregulated monopoly, is a model of capitalism. This is repugnant to my understanding of capitalism and the free enterprise system.”

Charles Rule, the head of the Justice Department’s anti-trust division, said the administration still opposes all four franchise relocation bills now being considered in Congress.

But, in principle, Rule said the administration would not oppose giving the leagues limited anti-trust exemption.

“Because, in the unique competitive context of professional sports leagues, we cannot say that a narrowly-written and non-regulatory anti-trust exemption for franchise relocation rules by itself would have a significantly adverse affect on our nation’s competitive policy, the department would not oppose such an exemption,” Rule said in testimony before the Senate committee.

Rule also said the leagues--rather than the courts--are better able to decide what actions are in the best interests of member teams.

Federal courts have jurisdiction in deciding if league actions to restrict team movements are anti-competitive.

“The department recognizes that judicial second-guessing of a league’s decision to block franchise relocation does not serve the interests underlying the anti-trust laws,” he said. “As a practical matter, the courts are incapable of evaluating the consumer welfare aspects of a franchise relocation decision.”

Rule cited the courts differing interpretations of the competitive nature of leagues in the Raiders case and the 1974 case involving the NHL’s attempt to halt the move of the Golden State Seals.

The courts held in the Raiders case that the teams themselves were competitive units, while the courts maintained in the Seals case that the teams were all a part of a single competitive unit, the league.

“The different conclusions in the Raiders and Seals cases reflect the problems that result from attempts by courts to evaluate the competitive effects of a league’s franchise relocation decisions,” Rule added.