Ohio suit could be latest roadblock in effort to move Crew to Austin

  • Chris Bils
  • American-Statesman Correspondent
3:00 p.m Wednesday, March 7, 2018 Sports
Columbus Crew SC fans show their support for the team before the start of their MLS Eastern Conference semifinal against visiting New York City FC in late October. Anthony Precourt, the club’s owner, continues to pursue efforts to shift the team from Ohio to Austin. (AP Photo/Jay LaPrete, File)

Precourt Sports Ventures is not backing away from its pursuit of moving Columbus Crew SC to Austin, despite a lawsuit levied by the state of Ohio and its capital city.

In a statement released Tuesday evening, PSV and Major League Soccer mounted a counterattack against allegations that they are in violation of Ohio law, saying they “strongly disagree with the (attorney general) and City’s interpretation of the Modell Law, its applicability to Columbus Crew SC, and the remedies they seek.”

Additionally, PSV and MLS lobbyist Richard Suttle said the lawsuit will not immediately affect proceedings in Austin.

“We’ve read about the lawsuit,” Suttle said. “We’re going to be reviewing it, but it doesn’t change anything about the way we’re working toward getting a site in Austin.”

The law in question is Ohio Revised Code 9.67, an untested and apparently unprecedented statute enacted in 1996 after the Cleveland Browns’ move to Baltimore under owner Art Modell. It is designed to prevent sports owners whose teams play in tax-supported facilities and receive financial assistance from the state or local governments from ceasing play at those facilities unless they receive permission from the state and local governments or give six months’ advance notice of their intentions to move, during which time the political subdivision or local investors are given an opportunity to purchase the team.

It reads as follows:

No owner of a professional sports team that uses a tax-supported facility for most of its home games and receives financial assistance from the state or a political subdivision thereof shall cease playing most of its home games at the facility and begin playing most of its home games elsewhere unless the owner either:

(A) Enters into an agreement with the political subdivision permitting the team to play most of its home games elsewhere;

(B) Gives the political subdivision in which the facility is located not less than six months’ advance notice of the owner’s intention to cease playing most of its home games at the facility and, during the six months after such notice, gives the political subdivision or any individual or group of individuals who reside in the area the opportunity to purchase the team.

The law was invoked in December by Ohio Attorney General Mike DeWine in a letter to Crew owner Anthony Precourt, notifying him that DeWine was prepared to take legal action if Precourt continued to pursue moving the team to Austin.

The attorney general and Columbus filed the suit Monday, in response to a statement released by PSV last week touting the financial benefits the Crew and a new 20,000-seat soccer stadium could bring to Austin.

“Providing notice and an opportunity for local investors to purchase the team would allow for compliance with the statute,” DeWine spokesman Dan Tierney told the American-Statesman when asked why Ohio decided to sue Precourt when no move to Austin has been officially announced.

“Our complaint alleges the various efforts to secure potential soccer stadium sites, including the statement from PSV last week regarding Austin (and omitting Columbus and Ohio), are evidence that the defendants are not complying with Ohio law. Given those recent statements, Attorney General DeWine felt it was an appropriate time to file the litigation.”

The complaint filed requests “continuing oversight by the Court to ensure that PSV and MLS negotiate in good faith with the City of Columbus and any individual or group of individuals residing in the Columbus area a reasonable opportunity to buy the Crew.”

As to whether the so-called “Modell Law” will hold up in court, several legal experts interviewed by the Statesman offered differing potential outcomes and solutions.

All agreed that the first thing Ohio will have to do is prove that the law applies to Crew SC, which could be difficult because of how the law is worded, said Steven Bank, a UCLA professor specializing in sports law.

“The statute itself may be void for vagueness,” Bank said.

To start, Bank said, Ohio must prove that Mapfre Stadium where the team has played since 1999 qualifies as a “tax-supported facility.” While the stadium was not built using taxpayer money, the complaint outlines more than $6 million in financial assistance in the form of tax exemptions, parking lot improvements and other subsidies.

RELATED: Read the entire complaint filed by DeWine and the city of Columbus

The court also must settle on the definition of “opportunity to purchase.” Bank said it could mean a right of first refusal or simply keeping lines of communication open for a possible offer.

Either way, Bank said, limiting that opportunity to the political subdivisionor individuals who “reside in the area” of Columbus could have larger repercussions.

“It’s a statute that would have great significance well beyond the Crew or Austin or MLS or soccer. Frankly, all businesses,” he said. “… You could imagine lots of states and localities being interested in enacting a similar kind of statute because they all provide tax benefits to businesses to move in.”

Assuming the law is deemed to be valid, the next step calls for proving that by breaking it, Precourt and MLS would cause “irreparable harm.” To prevent a move of Crew SC, the court would have to grant a preliminary or permanent injunction, which is requested in the complaint.

“Is there another adequate remedy of law that would support this restraining order and injunction? In most circumstances, especially with something along these lines, the other adequate remedy of law would be financial compensation,” said Brian K. Duncan, a Central Ohio lawyer who specializes in business, real estate and sports. “That’s going to be a very difficult hurdle to overcome.”

Difficult, but not impossible, said Scott Andresen.

“If you put a gun to my head, I guess I’d lean in favor of the state,” said Andresen, a Chicago-based sports lawyer. “They’ve got a law in place meant to protect the taxpayers, it would seem to have a rational basis and it’s not overly burdensome.”

The state will argue that repayment of taypayer-provided assistance would not adequately repair the damage caused by the team leaving.

“On its face, the harm of losing a professional sports team is fairly obvious, including lost revenue, lost economic impact as well as the loss of a team whose fans have been supporting for it for 22 years since it became MLS’ first franchise,” Tierney said.

Even if Ohio wins in court, Andresen predicts the outcome wouldn’t necessarily prevent Crew SC from departing from Columbus. It would simply require Precourt to give six months notice for the move and give local investors an opportunity to buy the team.

However, a legal victory for DeWine and Ohio could further complicate matters in Austin, Bank said.

“I think it’s an uphill case for the state of Ohio to win ultimately, but they could win at the lower level,” he said. “Which for Austin, would be enough to prevent this all from happening because who in Austin wants to start financing a stadium for a club that’s in limbo?”

Pete Reid, an Austin-based sports lawyer who has been following the potential Crew move closely, laid out a scenario in a blog he posted Tuesday that has Ohio winning the suit and keeping the Crew only to have MLS succeed in moving the team. Reid wrote that the league’s single-entity structure could allow MLS to revoke PSV’s license to play in Ohio, and issue a new license for a team to play in Austin.

“I don’t think it’s the biggest obstacle that they have to overcome,” Reid told the Statesman. “If they really want to move I think there are ways to move. I think the bigger obstacles are here in Austin, not in Ohio.

“By the sounds of it, they are willing to fight. That’s a positive for Austin presumably.”