By John Considine
Coventry City FC and the Oakland A’s are not two teams one would usually group together. The former is an English League One football club while the latter is an American baseball franchise. However, both have legal battles hanging over their heads about planned relocations. The issues at stake highlight some of the differences between the American and European models of sport. With rare exceptions, there is no tradition of English football teams relocating whereas franchise relocation is a more normal feature of life in the US sports leagues. Now, a planned temporary move by an English football club could end up in Courts while delays with moving a baseball franchise has resulted in proceeding being issued.
The twenty-first century has been a turbulent time for Coventry City. In 2001 it was relegated from the Premier League after over three decades of playing in the top flight of English football. In 2005 the team relocated to the larger capacity Ricoh Arena from Highfield Road. Two years later, it avoided being placed in administration when it was taken-over at the eleventh hour by SISU (a Hedge Fund). Unfortunately, another relegation for the club followed in 2012. In early 2013 the club entered administration. (The details of this particular administration are not the easiest to understand as it seems to involve separate elements of Coventry City.)
As a result of the administration process the owners successfully applied to the Football League to play Coventry City’s home games at a new venue over 40 kilometres away for the next three years. The proposed move from the Ricoh Arena to Northampton’s Sixfields Stadium has brought the threat of legal action from the owners of the Ricoh Arena.
The stadium move was reluctantly approved by the Football League. The reluctance arises because the Football League does not want teams to move from the traditional areas from which the teams take their names. English football has been slower than US sport to see its sport primarily as a business. This is largely because the sport was governed by the FA that had responsibility for amateur and professional elements of the sport. Separation of the governance of different levels of the game was much slower to arrive in Europe than it was in America. And, these professional US leagues prioritised the business side of their sports to a greater degree. As a result, the number and location of teams is carefully regulated by the US leagues.
In the US it is more common for teams to relocate. Location is a business decision. A team like the Baltimore Colts can move cities and become the Indianapolis Colts. Or the Montreal Expos can move cities and become the Washington Nationals. These moves are relatively common compared to the situation in English football (admittedly, Wimbledon moved and became the MK Dons but this was one of the very rare exceptions). If there is a better market for a franchise then the US Sports League will facilitate team relocation provided it does not clash with the interests of the other teams. Moreover, by keeping the number of teams lower than the number of cities wanting a team, the sports
leagues can extract monopoly rents.
For the last number of years it seems that the Oakland A’s wanted to move. Initially the proposed move was to Fremont. For the last four years they have signalled their intention to move to San Jose. San Jose have signalled their desire for the franchise. Now, San Jose believes the move is being hindered by potentially anticompetitive practices. As a result, they have taken Office of the Commissioner of Baseball to court to settle the issue. San Jose argue that MLB is the mechanism whereby teams divide up the market to maximise their interests. They argue that San Francisco Giants believe they have the territory rights over the San Jose area and that this is holding up the relocation of the Oakland A’s.
It would be an overstatement to say that the whole structure of US sport is on trial. That said, the case does challenge the exemption baseball has from US antitrust law. The exemption is based on a 1922 decision by the Supreme Court. Ninety years ago the Supreme Court decided baseball did not involve interstate commerce and therefore was exempt from antitrust legislation. The decision was reaffirmed in 1953 and 1972. An unlikely success by San Jose could shake the US Sport Leagues to their core and make the Oakland A’s more famous in sports economics than did the book/movie Moneyball.
What is more likely is that Oakland A's and Coventry City settle their dispute outside rather than inside the Court house and business continues as normal.
The stadium move was reluctantly approved by the Football League. The reluctance arises because the Football League does not want teams to move from the traditional areas from which the teams take their names. English football has been slower than US sport to see its sport primarily as a business. This is largely because the sport was governed by the FA that had responsibility for amateur and professional elements of the sport. Separation of the governance of different levels of the game was much slower to arrive in Europe than it was in America. And, these professional US leagues prioritised the business side of their sports to a greater degree. As a result, the number and location of teams is carefully regulated by the US leagues.
In the US it is more common for teams to relocate. Location is a business decision. A team like the Baltimore Colts can move cities and become the Indianapolis Colts. Or the Montreal Expos can move cities and become the Washington Nationals. These moves are relatively common compared to the situation in English football (admittedly, Wimbledon moved and became the MK Dons but this was one of the very rare exceptions). If there is a better market for a franchise then the US Sports League will facilitate team relocation provided it does not clash with the interests of the other teams. Moreover, by keeping the number of teams lower than the number of cities wanting a team, the sports
leagues can extract monopoly rents.
For the last number of years it seems that the Oakland A’s wanted to move. Initially the proposed move was to Fremont. For the last four years they have signalled their intention to move to San Jose. San Jose have signalled their desire for the franchise. Now, San Jose believes the move is being hindered by potentially anticompetitive practices. As a result, they have taken Office of the Commissioner of Baseball to court to settle the issue. San Jose argue that MLB is the mechanism whereby teams divide up the market to maximise their interests. They argue that San Francisco Giants believe they have the territory rights over the San Jose area and that this is holding up the relocation of the Oakland A’s.
It would be an overstatement to say that the whole structure of US sport is on trial. That said, the case does challenge the exemption baseball has from US antitrust law. The exemption is based on a 1922 decision by the Supreme Court. Ninety years ago the Supreme Court decided baseball did not involve interstate commerce and therefore was exempt from antitrust legislation. The decision was reaffirmed in 1953 and 1972. An unlikely success by San Jose could shake the US Sport Leagues to their core and make the Oakland A’s more famous in sports economics than did the book/movie Moneyball.
What is more likely is that Oakland A's and Coventry City settle their dispute outside rather than inside the Court house and business continues as normal.
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