How to Hold Onto Your Sports Franchise

The Oklahoma City Thunder had a nice run in the recently concluded NBA playoffs, but it was nothing compared to their run from Seattle.  The story of the escape of the former SuperSonics from Seattle is the central case study in a new paper on the retention of major league franchises by Paul Anderson and William S. Miller.  

Anderson and Miller point to the sports facililty lease agreement as the key legal document by which communities attempt to secure long-term commitments from their teams.  However, as the City of Seattle discovered, there are significant legal and practical impediments to enforcing these commitments.  It may be especially difficult to obtain the remedy of specific performance, i.e., a court order requiring a recalcitrant team to continue playing in a city it wishes to desert.

Anderson and Miller helpfully survey a range of non-relocation agreements that have been negotiated between different cities and sports franchises.  They identify the agreement between Bexar County, Texas, and the San Antonio Spurs as a model of a strong agreement that seems much better designed than the Seattle contract to keep a franchise in its city over the long run.  Among other things, the contract includes a liquidated damages clause that starts at $250,000,000 and declines to $106,000,000 over the term of the lease.

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