Professional sports team owners sometimes issue ultimatums to their team’s home city, demanding that a new stadium be built using public funds or the team will move elsewhere. Even though this is usually bad for the city’s economy, according to ESPN, it's hard for cities to fight back.
Cities can be held hostage because sports leagues operate like monopolies. To counteract this, ESPN is calling for government oversight.
Nathaniel Grow, a professor of legal studies at Terry, explains: "Usually, if Congress gives someone a monopoly and hundreds of millions of dollars in public funding, you'd expect some ability to monitor how the business is being run," he told ESPN.
Grow, who specializes in antitrust law, recently wrote that the sports industry uses its "largely unchecked monopoly power to injure the public in various ways."
Typically, when a business becomes too powerful, its customers and rivals sue it under the Sherman Antitrust Act, which prohibits collusion and anticompetitive measures. But that law "doesn't really work" against leagues, Grow says. Collusion is an intrinsic part of sports; teams must agree on rules in order to play a game. And anticompetitive behavior rarely occurs because rival leagues don't exist. (MLB has an official antitrust exemption.)
The article's author calls for a small bureau inside the Department of Commerce to oversee sports. Grow suggests limiting the commissioners' oversight to a few areas, like franchise relocation, so that teams would have to prove financial hardship before extorting cities for giveaways.
The full article is available online.