1 / 10

Ownership Restrictions

Ownership Restrictions. NFL Cross-Ownership Rule. Key factual findings: 1) Growing inter-sport competition between football and soccer concerning TV and local live gate 2) Limited availability of investors 3) No evidence of "confidential" information or of abuse of position by cross-owners

ria-pickett
Download Presentation

Ownership Restrictions

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Ownership Restrictions

  2. NFL Cross-Ownership Rule • Key factual findings: 1) Growing inter-sport competition between football and soccer concerning TV and local live gate 2) Limited availability of investors 3) No evidence of "confidential" information or of abuse of position by cross-owners 4) rule overly restrictive

  3. 2/ NASL v NFL • Restraint of trade • Do you agree with 2nd Circuit’s factual finding of a slim market for sports investors? • Why do other NFL owners have a legitimate interest in approving sale of teams to new owners?

  4. 3/ NASL v NFL • NFL response to MLS – allowing owners to own MLS teams in own city but not someone else’s – further illustrates the antitrust complexities of the issue • Why did the league create these exceptions? • Horizontal agreement to protect selves from competition • Vertical agreement to limit animosity and reprisals among ‘partners’ • ad hoc for Paul Allen

  5. Ban on Public Stock Offering • In what market does the NFL rule restrain trade? • What is the effect on the rule on the price/ value of NFL stock?

  6. /2 Sullivan • Would corporate owners behave differently than family owners? In what ways? • Are the NFL owners really concerned that co-owners are smart entrepreneurs committed to long-term success?

  7. /3 Sullivan • Parties agree that price for ownership interests is depressed, rather than artificially raised, by this rule • So why would owners adopt a rule that reduces the overall value of their franchise? • According to the plaintiffs’ theory, who is harmed by the NFL rule?

  8. Problems with 1st Circuit’s Reasoning • Court accepts NFL claim that its rule contributes to efficiency by precluding owners who will place short-term dividend interests of individual club s-holders instead of long-term interests of league [597] • but court still finds rule overbroad b/c NFL has a LRA: it could allow corporate minority ownership while protecting long-term interest by insisting on majority control by non-corporate owner • Do you agree with this reasoning? • In what market is trade restrained if league allows minority ownership? • Real problem: unwillingness of league to get rid of incompetent owner, the way a separate competition organizer would if not controlled by the owners

  9. Ironies in Sports Law • Benefits to Steelers of going public

  10. Who Should Own Sports Teams? • Member-owned teams • Capital investment or leveraged debt • Refuse highest bid unless owner is civic-minded • Member /private partnership

More Related