The Lasting Legacy of Art Modell Is Felt As The Columbus Crew Seeks To Set Sail For Austin
By Scott Andresen, of Andresen & Associates, P.C.
The Move.
While that phrase may have very little import throughout the sporting world generally, it has had a lasting impact in state of Ohio that is still being felt 23 years later. The Move refers to the decision by team owner Art Modell to move his Cleveland Browns team to Baltimore during the 1995 NFL season. Subsequent litigation seeking to prevent The Move (see City of Cleveland v. Cleveland Browns, et al., Cuyahoga County Court of Common Pleas Case No. CV-95-297833) was ultimately settled via a compromise that kept the Browns name, colors, history, records and the like in Cleveland, while allowing Modell to take his talents to the city of Baltimore.
Not wishing to relive the Modell Experience, the Ohio state legislature enacted Ohio Revised Code §9.6 a year later on June 20, 1996. Officially titled Restrictions on owner of professional sports team that uses a tax-supported facility, the law is less-than-affectionately known as the “Art Modell Law.” The law states as follows:
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.
Essentially, if a team owner receives assistance from local taxpayers, that team owner has to provide at least six months’ notice prior to moving his or her team to another locale so as to provide local parties the opportunity to purchase the team and keep it in its current location.
This, then, brings us to the ongoing explorations for new horizons currently taking place in Columbus. Last October, the owner of the Columbus Crew Major League Soccer team, Anthony Precourt, announced a desire to move the Crew from Columbus to Austin, Texas. Despite playing in the first soccer-specific stadium built for any MLS team, Precourt is unhappy with the lack of support to build a replacement for his 19 year old facility. Precourt’s desire to relocate has, as one would suspect, been met with a level of unpopularity by fans and elected officials alike. These feelings are further exasperated on a local and state level as the city and state have provided considerable benefits to the Crew in the nature of approximately $5 million in state taxpayer-funded improvements to team parking facilities, a state property tax exemption for the land on which the team’s stadium sits, a land lease from the state at a below-market rate, more than $300,000 in city taxpayer-funded reimbursements of team costs in moving portions of a storm sewer and constructing a water line, and a Tax Increment Financing and Economic Development Agreement with the city of Columbus to increase access to the team’s stadium currently costing the $1.3 million in tax revenue.
As a result of Precourt’s ongoing efforts to relocate to Austin, the state of Ohio and the city of Columbus filed suit on March 5, 2018 (subsequently amended) seeking to enforce the provisions of the Art Modell Law against Precourt Sports Ventures, Team Columbus Soccer and Major League Soccer. The lawsuit filed in the Court of Common Pleas for Franklin County, Ohio seeks a declaratory judgment that the defendants are bound by the provisions of the law, injunctive relief preventing the defendants from moving the team from Columbus to Austin absent compliance with the law, and continuing oversight of the court to ensure that the defendants negotiate in good faith with the city of Columbus and/or any third-party locals desiring to purchase the Crew.
The defendants responded with a motion to dismiss on April 19, stating that the court “should decline Plaintiffs’ invitation to weaponize” the Ohio law. As a preliminary matter, the defendants argued that the law applies only to a team “owner” that meets both of two, separate, criteria. First, the owner’s team must play in a “tax-supported facility.” Second, the owner must “receive[] financial assistance” from the state or a political subdivision. The defendants allege that Major League Soccer is the only defendant that could possibly be subject to the law as it is the “owner” of the Crew—but that MLS is not subject to the law as there was no allegation by the plaintiffs that MLS currently receives the financial support necessary to trigger a strict reading of the exact language of the statute.
Defendants’ motion to dismiss goes on state that the law “is also blatantly unconstitutional” in that it violates the dormant Commerce Clause of the United States Constitution (as it both discriminates against out-of-state residents and impermissibly interferes with Defendants’ abilities to conduct their business operations in interstate commerce) and the Privileges and Immunities Clause of the United States Constitution (as it limits potential prospective purchasers to Ohio citizens at the expense of the citizens of every other state). Defendants further state that the law is void for vagueness, violates the Ohio Constitution and Ohio law to the extent Plaintiffs seek the authorization of the unconstitutional taking of intangible property, and would violate the Contracts Clause of the United States Constitution and its Ohio counterpart by attempting to interfere with the ownership structure of MLS (a Delaware limited liability company).
Though the office of Ohio Attorney General Mike DeWine released a statement in response to the defendants’ motion to dismiss stating that “[the plaintiffs] will strongly oppose this motion to dismiss and respond further in court,” this lawsuit presents a number of issues that could see it settled well before a final judicial determination on the merits. Foremost among these issues is that the lawsuit is a case of first impression in that the law has not previously been subject to judicial scrutiny and tested as to its validity. As such, there is a considerable level of uncertainty- and risk- on both sides. Further, there would seem to be a business solution that would work for the benefit of all involved parties. For purposes here, it will be assumed that Austin would prove to be a viable location for a MLS team, and that there would be a party willing and able to pay the approximately $125-150 million that the Crew is currently valued at. Precourt is currently in a situation where, should he lose the current litigation, he would be forced to field a team in a city (at least for another season) that he tried to abandon- meaning that fan support would be dwindling, if an outright hostile environment wasn’t present. To that end, it would be worthwhile for Precourt to secure a purchaser for the Crew, and then relocate to Austin as an expansion team. This way, Columbus would keep its team under ownership that wants to be in the city, Austin would get a MLS team on a timeline that would allow for the creation of a proper facility, Precourt would not be biding time in Columbus until a move to Austin was possible, MLS would add another team, the state of Ohio would have the ongoing threat of a valid statutory provision, and the litigation would be resolved in a manner controlled by the parties rather than a court.
While a negotiated settlement of the current lawsuit would seem to be in the best interests of all involved parties, this will be a fascinating case to watch should it voyage through increasingly-higher courts on its way to a final determination.
Scott Andresen can be reached at scott@andresenlawfirm.com
