HOUSE BILL REPORT
RESB 5955
BYSenators McDermott, Talmadge, Fleming, Warnke, Rinehart, Moore, Bender and Garrett
Authorizing city, county, and state ownership of professional sports franchises.
House Committe on Trade & Economic Development
Majority Report: Do pass. (17)
Signed by Representatives Vekich, Chair; Wineberry, Vice Chair; Amondson, Beck, Braddock, Cantwell, Doty, Grant, Hargrove, Holm, Kremen, McMullen, Moyer, Rasmussen, Schoon, B. Williams and J. Williams.
Minority Report: Do not pass. (1)
Signed by Representative McLean.
House Staff:Stephen Hodes (786-7092)
AS PASSED HOUSE APRIL 10, 1987
BACKGROUND:
Professional sports franchises draw many visitors to the area in which they are located. The existence of a franchise is a factor that some firms consider in determining the location of a business facility. A number of professional sports franchises have moved their locations in recent years, including two professional football teams, the Oakland Raiders and the Baltimore Colts. Such moves have resulted in a loss of income as well as prestige to the former host areas.
The state has authorized the creation of public corporations by local governments in the state. The most notable example is the preservation and development authority (PDA). PDAs have been used to: supervise the rehabilitation of and to manage the Pike Place Market; to construct housing and to undertake commercial rehabilitation in urban distressed areas; to manage the construction of a new art museum; to construct and manage a public tourism attraction; to manage a public health facility; and to undertake the preservation of historic buildings. There is no existing authority for a city or county to own and operate a professional sports franchise.
The City of Oakland, California attempted to utilize the power of eminent domain to retain the Oakland Raiders professional football team in the city in the early 1980s, but the action was challenged in state courts and was not ultimately not sustained by the Supreme Court.
Residents of Green Bay, Wisconsin have owned and operated the Green Bay Packers professional football team for many years. Green Bay citizens are stockholders in the team, which does not return dividends to local stockholders. Other examples of public ownership of sports teams may be found in minor league baseball teams in Toledo, Ohio and Visalia, California. Pittsburgh, Pennsylvania made a twenty million dollar equity participation loan to the private firm that purchased the Pirates in 1986 to assist in the purchase of the team and the raising of operating capital. The mayor of the city sits on the board, and the city would receive a share of any profits made by the firm and a portion of the sale price, if a sale occurs.
SUMMARY:
Any city, code city, or county may own and operate an existing professional sports franchise, either individually or collectively, when the owners of such a franchise announce their intention to sell or move a franchise. If a city, code city, or county purchases a professional sports franchise, a public corporation must be created to manage and operate the franchise. The public corporation would have the same powers as other public corporations created by cities and counties. These powers include the right to sue and be sued, to enter into contracts, and own real and personal property. Such powers do not include the right of eminent domain, the power to levy taxes, or the power to levy special assessments.
Fiscal Note: Attached.
House Committee ‑ Testified For: Senator McDermott; Tim Hill, King County Executive; and Ron Main, King County.
House Committee - Testified Against: None Presented.
House Committee - Testimony For: Mariners management is not interested in remaining in Seattle. New tax laws prevent losses on sports franchises from being applied to more profitable enterprises. Need to offer tool to local government to retain team. King County is exploring ways of retaining team and is looking at a public corporation as a valuable option.
House Committee - Testimony Against: None Presented.