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Edited by Jerry Kirshenbaum
May 17, 1982
LIVING WITH THE SHERMAN ACT AND (MAYBE) THE LOS ANGELES RAIDERS
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May 17, 1982

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LIVING WITH THE SHERMAN ACT AND (MAYBE) THE LOS ANGELES RAIDERS

Following a five-week trial, a jury of six women ruled in U.S. District Court in Los Angeles last week that the NFL had violated the Sherman Antitrust Act by trying to block the Oakland Raiders from moving to the L.A. Coliseum. The decision was a blow to Oakland fans, who have faithfully supported the Raiders, and it also vexed NFL Commissioner Pete Rozelle, who had staunchly resisted efforts by his archrival, Raider Managing General Partner Al Davis, to relocate the team. Although Rozelle said the NFL would appeal, it was uncertain whether the league would ask the court to restrain the Raiders from leaving until the appeal ran its course. Reason: The Raiders and their co-plaintiff, the L.A. Coliseum Commission, have asked a total of $213 million in damages from the NFL, and any further delay could greatly increase the damages. For his part, Davis indicated that there may not be enough time to move the Raiders by the start of the 1982 season.

Beyond the question of when the Raiders might head south were the implications of last week's verdict for efforts by the NFL, NBA and NHL to win the immunity from federal antitrust law that baseball enjoys as the result of a 60-year-old ruling by the U.S. Supreme Court. Those leagues want Congress to grant them baseball-style antitrust exemptions, arguing that professional sports is a unique business and that teams are not economic competitors but partners whose cooperation is essential. In keeping with this position, Rozelle assailed last week's decision as a threat to the NFL's "basic structure and stability" and warned that it might result "in the relocation of clubs under auction-type conditions."

But Rozelle may be overstating the case. The verdict could indeed weaken the NFL owners' control of the game and cost them money; for one thing, by grabbing the valuable Los Angeles market for himself, Davis would deprive the NFL of a chance to sell L.A.'s "territorial rights" to a new franchise for a whopping expansion fee. The decision might also inspire legal challenges to other features of pro sports that, like league control over the location of franchises, raise antitrust questions, including player drafts and trades. But antitrust immunity should be granted only for the most compelling reasons. While it may make things less cozy for them, forcing NFL owners to abide by antitrust law won't wreak the havoc on the league that Rozelle implies, and the game of football won't suffer. That would happen only if teams weren't allowed to cooperate in establishing schedules and playing rules, areas that the courts have shown no interest in subjecting to antitrust law.

Rozelle is also on shaky ground in warning that the verdict would lead owners to auction their franchises to the highest bidder. In fact, such "auctions" already exist in all pro leagues, witness the game of musical franchises long played in baseball, the sport that has the very antitrust immunity the NFL covets. NFL teams have also sold themselves to the highest bidder—with the league's blessings. Thus, the Giants moved from New York to New Jersey's Meadowlands in 1976 and the Rams from the L.A. Coliseum to Anaheim two years ago. That these relocations are less dramatic than those in baseball is mostly attributable to Rozelle's shrewdness in getting his league's owners to consent to share TV revenues equally, an agreement made possible by a limited exemption to antitrust law that Congress conferred on all pro leagues in a 1961 act permitting them to sell the TV rights of their teams as a package. The NFL's share-the-wealth approach has minimized potential income differences between, for example, Kansas City with its modest TV market and New York with its huge viewing audience. As a result, the Chiefs haven't felt the need to shop for a more inviting locale. In refusing to stay put, Davis was apparently protecting himself against the possibility that cable-TV proceeds might not be covered by the revenue-sharing arrangement, in which case an NFL franchise in a major TV market like Los Angeles would become far more valuable than one in Oakland. Significantly, Rozelle holds to the interpretation that revenue sharing includes cable proceeds. If that view proves wrong, more NFL teams may well move. But that's not automatically bad. It merely means that the NFL franchise market would be governed by the same supply-and-demand forces as other markets.

But what of the Raiders' betrayal of Oakland fans? The Raiders still face a suit before the California Supreme Court, brought by the City of Oakland, that seeks to keep the club there by seizing it under eminent domain. If nothing else, this suit serves as a reminder that sports teams are civic assets in which the public has an emotional and often a financial stake. The same point is made by a bill sponsored by Congressmen Pete Stark, whose district includes Oakland, and Don Edwards of San Jose that would prevent any pro team from moving unless the owner can prove he's losing money or his stadium is inadequate. Stark and Edwards hope the bill can be made retroactive to keep the Raiders in Oakland. Be that as it may, the measure has the virtue of being at once a more direct yet more limited remedy than a blanket antitrust exemption. Last week's court action suggests that the bill, which is languishing in subcommittee, might merit more attention than it has so far received.

NATIVE SON

In his story on Wyoming in this issue, Jim Doherty tells how pell-mell development has left that once-pristine state blighted by pollution, population pressures and the destruction of wildlife. Such dramatic changes appear to concern Secretary of the Interior James Watt, a Wyoming native, less than one might expect. In a question-and-answer interview in the January issue of American Hunter, the National Rifle Association's magazine, Watt was asked about the fears of sportsmen that mineral exploration and similar development might lead to a deterioration of habitat across the U.S. Watt sought to minimize that worry by invoking his own firsthand knowledge of Wyoming. "Mining and hunting are not as incompatible as some people would have you think," he said. "When I was growing up in Wyoming, it was often the timber roads and the mine roads that allowed us to get at the good hunting and fishing areas."

So much for the subject of deterioration of habitat. We refer you now to the story beginning on page 74.

THINKING BIG BY THINKING SMALL

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