Public Good, Private Game: Rethinking the Modell Law

Reece Rosenblatt

Edited by Jordan Perlman, Dillon Murti, Mac Kang, and Sahith Mocharla

Rumbling trucks and beaming headlights greeted residents of Indianapolis, Indiana in the early morning of March 29th, 1984 as a fleet of Mayflower trucks rolled out of Baltimore Memorial Stadium––the home of the Baltimore Colts since the franchise’s inception in 1953. Robert Irsay, owner of the Colts––an NFL franchise at the center of some of the league's most iconic moments––was fed up with the city of Baltimore’s continued inaction towards providing his team with a new stadium. Enticed by plans (and funds) for a new stadium in Indianapolis, Irsay fled Baltimore for what would later become the RCA Dome. [1] In a matter of hours, the city of Baltimore did not have an NFL team for the first time since 1953. With no legal mechanism to prevent the beloved Colts’ relocation, fans, and the city, were left devastated.

The sudden upheaval of the Baltimore Colts remains one of the most shocking and infamous relocations in the history of American sports. Robert Irsay’s action is a prime illustration of the imbalance between the uberwealthy owners of professional sports franchises and their fans. Over the past several decades, the ownership structure of professional sports has shifted dramatically. In the past, wealthy, locally owned business owners largely purchased and managed their teams. Today, however, teams are more likely to be owned by billionaires, investment conglomerates, and global sovereign wealth funds. As a result of the explosion of franchise valuations across all leagues, only the richest individuals and institutions can afford to have a partial stake in a franchise. The influx of money from outside sources have further detached franchises from the local communities that they have been part of for decades. 

The case of the Baltimore Colts, however, is just one link in a long chain of controversial and heated sports relocations. In the 1957, the Brooklyn Dodgers’ and New York Giants’ moves, to Los Angeles and San Francisco respectively, signaled a new era in professional sports—one where traditional loyalty to a city and fans is cast aside for financial opportunity. Since these largely successful moves in the late 1950s, every major North American professional sports league has seen its own version of a controversial relocation. Notable instances include the NFL’s Cleveland Browns move to Baltimore in 1996; the NBA’s Seattle Supersonics departure to Oklahoma City in 2008; and the NHL’s Atlanta Thrashers relocation and rebrand to the Winnipeg Jets in 2011. Even today, in the MLB, the Oakland Athletics are in the midst of a relocation to Las Vegas. Unfortunately universal to all of these relocations is the ineffectivity/impotency of the law to protect both the fans and cities from relocation.

Presently, the arbiter and final authority for a professional sports team to relocate is controlled not by local or even federal jurisdictions, but rather the internal votes of the owners of each respective leagues’s franchises and private (or collectively bargained) agreements. Cities––often after having invested hundreds of millions of taxpayer dollars into stadiums and infrastructure to support the teams––find themselves functionally powerless when a team leaves [2]. As a result, these cities are forced to pick up the emotional toll of their team leaving while simultaneously paying off the debt of their once prosperous sports districts. 

In response to the relocation of the Cleveland Browns in 1996, the state of Ohio enacted the Modell Law (Ohio Revised Code § 9.67) [1]. The law requires teams playing in publicly funded venues to give at least six months notice before relocating. Additionally, the law requires the franchise’s owners to offer local governments and buyers the opportunity to purchase the franchise (and prevent the relocation). The Modell Law, while only applicable to Ohio, is indicative of the idea that sports franchises are not simply private businesses; they are quasi-public institutions that represent a community identity. The Modell Law also offers a framework to mitigate the consequences and devastation of sports relocation. A nationwide adoption of the law can ensure relocation is only pursued when absolutely necessary and reorient the immense imbalance of power between owners and their cities of support, as was the case with the Baltimore Colts in 1984. 

Fan and Community Value of Sports Teams

Most sports teams play in tax-payer funded venues operating as quasi-public trusts rather than private corporations. Since 1990, roughly 80–90% of all major professional sports facilities in the United States have received some form of public financing, whether through direct subsidies, municipal bonds, or tax incentives [3]. These subsidies reflect the widespread belief of sports teams as a public good. Through this definition, franchises generate both measurable and intangible returns. Economically, stadiums create jobs, stimulate tourism from other cities, cultural cohesion, and foster an identity between those who live in the city. A franchise provides a city's collective identity on a national scale, a concept so few institutions can provide. In order to grow the economies of not only cities but states as a whole, governments continue to fund facilities and operations while appealing to the value of creating a greater communal identity. The public, in effect, becomes an investor while providing social and economic capital. Under the current system, however, owners retain unilateral power to relocate their teams once financial incentives end. Under a nationally instituted Modell Law, these subsidies enjoyed by owners would be tied to obligatory notice periods, increased transparency, and an opportunity to keep the franchise in the city.

The Modell Law can also prevent ‘stadium blackmail.’ When needing subsidies, owners will threaten relocation and send cities scrambling to meet the needs of their teams [4]. Referring to the former St. Louis Rams, the city was millions of dollars in debt due to losing a tenant for the Dome at America's Center (the Rams’ former stadium) long after the team departed for Los Angeles [5]. Recent relocations out of Oakland by both the Athletics and Raiders also show how the lack of legal protection without statutory passage can have a city––like Oakland––go from two sports teams to zero in just five years. While the Modell Law cannot prevent relocation outright, it places procedural safeguards and offers recourse by allowing other channels of purchase.

Background - Relocation

In the United States, professional sports teams are considered private business, which leaves fans and local governments––who have adopted these teams as members of their communities, at the mercy of leagues and franchise owners when it comes to relocation. Furthermore, each league maintains internal mechanisms that not only consolidate power among owners but curtail the influence of external powers. In the NFL, for example, a simple 3/4ths majority amongst the owners/governors is required to approve relocation, with the NHL and NBA following a similar approval procedure. However the MLB has been shielded from outside interference by a century old Supreme Court decision. In Federal Baseball Club v. National League (1922) Justice Oliver Wendell Holmes writes that baseball games are ‘purely state affairs,’ reasoning that traveling across state lines by franchises did not qualify as ‘interstate commerce’ under the Sherman Antitrust Act [6]. This ruling has been upheld twice in Toolson v. New York Yankees (1953) and Flood v. Kuhn (1972) where the Supreme Court blamed Congress for failing to keep the MLB protected from antitrust law [7][8]. In Toolson v. New York Yankees (1953) specifically, the Supreme Court initiated a brief per curiam opinion emphasizing that any change to baseball’s exemption should come from Congress, not the judiciary. Together, these cases solidified the MLB’s unique antitrust exemption, effectively removing the judiciary from serving a check on the league’s internal decision-making. 

The implications of these three decisions loom over the modern sports landscape, as the MLB is the only professional sports league exempt from antitrust law. The MLB’s owners, not courts, Congress, or local governments, serve as the final determinant of relocation. This issue of relocation once again came to a head in 1992, when the MLB blocked the San Francisco Giants from relocating to Tampa Bay [9]. By contrast, in leagues such as the NFL or NBA, where there is no exemption, the Modell Law can be a path for legal intervention while rendering the MLB’s exemption invalid.

As previously mentioned, other professional sports leagues do not enjoy the autonomy the MLB has enjoyed for the past century. Radovich v. National Football League (1957) holds that professional football is covered under the Sherman Antitrust Act, thereby distinguishing the NFL from the MLB’s exemption to anti-trust laws [10]. This decision placed the NFL firmly within the reach of anti-trust oversight. As a result, the NFL remains subject to judicial scrutiny when threatening competition or public interest, notably unlike the MLB. Almost three decades later, Los Angeles Memorial Coliseum Commission v. National Football League (1984) challenged NFL relocation procedures [11]. Then Oakland Raiders owner, Al Davis, argued that the NFL’s requirement of unanimous owner approval to move a franchise was an unlawful restraint of trade. The Ninth Circuit agreed that the rule violated the Sherman Act, as the NFL’s relocation restrictions were deemed unlawful in terms of trade; thereby allowing the Raiders’ relocation to Los Angeles. In the twenty-first century, American Needle, Inc. v. National Football League (2010), the Supreme Court revisited the question of whether the NFL functioned as a single entity or a collection of competing economic factors [12]. The Supreme Court (once again) held that NFL teams are separate and independent economic factors, and league-wide decisions can constitute action subject to antitrust laws. American Needle effectively reaffirmed collective league decisions being subject to judicial review.

The WNBA’s Connecticut Sun offers an important twist to the dynamic of relocation. Originally the Orlando Miracle, the Mohegan Tribe purchased the franchise in 2003 and relocated to Uncasville, Connecticut. This purchase marked the first professional sports team owned by a sovereign Native American nation. The ownership arrangement of the Connecticut Sun raised complex questions about jurisdictional oversight and public accountability. The Sun, benefiting from federal and state partnerships, play on tribal land while intersecting with public and private investment. With this relocation, there is an increasing entanglement of sports, governance, and questions of sovereignty. Unfortunately for Orlando, the creation of the Connecticut Sun highlights the ineffectiveness to protect fans and cities from the consequences of franchise relocation. 

Yet despite these prior rulings, cities have had limited success in recuperating the effects of prior relocations. In 2016, when the St. Louis Rams relocated to Los Angeles, the city of St. Louis sued the NFL, alleging fraud and a breach of contract in the relocation process. The case eventually ruled in favor of St. Louis, and the city was awarded damages of $790 Million [13]. Crucially, the lawsuit revealed internal NFL communications proving league officials were aware of relocation violations; a clear demonstration of how far the league was willing to go to ensure greater financial success.

However, despite some instances of success, St. Louis' case remains the exception versus the norm when it comes to sports relocations; although there has been inconsistency in enforcement. While antitrust laws can penalize uncompetitive relocation, they rarely protect a city's public interest when a team decides to leave. Additionally, provisions in antitrust laws that only exempt MLB create greater inconsistency across the four major sports leagues. One solution to such an issue is the federalization of Ohio’s Modell Law, which could provide consistent and encompassing protection for all fans of all leagues.

The Modell Law (Ohio Revised Code § 9.67)

In December 1996, after a fierce battle surrounding the relocation of the Cleveland Browns, one of the NFL’s oldest franchises, the Modell Law was passed [14]. Named after the then-Browns’ owner Art Modell, the statute was a direct response to public outrage over the Browns’ abandonment of five decades of support and millions in taxpayer dollars.

In addition to the requirements of six months notice for professional sports teams (potentially) leaving Ohio, is the provision that the team must give the city or local government, or any party residing in the area of dispute the opportunity to purchase the franchise to prevent the relocation. The right of refusal asserted by the Modell Law reflects the principle that a publicly supported team owes a duty to its original host city.

In the almost thirty-year history of the Modell Law, it has rarely been invoked in Ohio. Its importance is reflected in its uniqueness as one of the only statutes regulating sports relocations. However, despite the prior rarity of invocation, there have been recent developments concerning Ohio Revised Code § 9.67. On April 9, 2024, the new iteration of the Cleveland Browns filed a federal lawsuit challenging the constitutionality of the Modell Law on the basis that it violated property rights and the Dormant Commerce Clause [15]. This new iteration refers to the modern Cleveland Browns franchise who were re-established by the NFL in 1999 after their move to Baltimore. While there has not been a final decision, the Ohio State Assembly amended the Modell Law in July 2024 to clarify its application to only out-of-state relocations. As a result, Ohio Attorney General Dave Yost moved to dismiss the Browns’ suit on the basis that the Ohio State Assembly rendered the case moot following action.

Despite recent claims and incessant murmurs about its constitutionality and a lack of usage in Ohio up to this point, the Modell Law represents an unseen but important safeguard in the realm of sports relocations. Under the law, sports franchises are treated as quasi-public institutions embedded in the fabric of their host city and state. On the basis of community welfare and public good, the terms and provisions of the Modell Law offer national application.

Framework for a National Modell Law

The Modell Law offers an important protection for states and cities from sudden sports relocations. If adopted nationwide, this law could facilitate a balance between public interest and private ownership rights of sports owners.

Ultimately, the case for a nationwide application of the Modell law is not solely emotional, the legal basis under the Commerce Clause almost encourages it. Under the clause, Congress has the ability to regulate professional sports teams as interstate enterprises involving national media contracts, travel, and labor markets [16]. As a result of professional sports teams operating across state lines––through league structures, multi-state fan bases, and interstate economic activity—Congress could justify a federal version of the Modell Law. Furthermore, this justification could align with existing precedents in other similar intrastate industries, such as transportation and telecommunications. Through nationwide implementation, the Modell Law can advocate for local communities against corporate greed when billions of public funds are at stake.

The relationship between the Walt Disney Company and the state of Florida offers a comparable regulatory framework that blends public infrastructure, private ownership, and entertainment value. For example, Disney’s Reedy Creek Improvement District (now the Central Florida Tourism Oversight District) was created under Florida law to give Disney self-governance over land use, infrastructure, and taxation within its resorts. In 2022, Florida Governor Ron DeSantis moved to dissolve the district. Thereafter, the U.S. Securities and Exchange Commission and federal bond regulators reviewed the change due to nearly $1 billion in federally tax-exempt bonds tied to Disney’s district, underscoring how entertainment enterprises that cross state and economic boundaries are subject to overlapping jurisdictional oversight. [17]. This model directly parallels sports franchises who also depend on public investment, interstate commerce, and management of facilities that have both private and public character. To resolve the matter, in 2023, the district was restructured as the Central Florida Tourism Oversight District, thereby preserving the bond guarantees and satisfying state and federal compliance requirements. The Reedy Creek case represents how state created entities in the entertainment industry can trigger federal involvement. Conditions of large-scale public funding, bond obligations, and interstate commerce offer a clear parallel to the need for a comprehensive standard in professional sports relocations. 

Broader Implications

The long and painful history of relocation in professional sports has left communities vulnerable to being taken advantage of. As recently as the 2024 relocation of the former Oakland Athletics, no equivalent of the Modell Law existed in California to prevent their departure. Echoes of the Raiders relocation in 2019 remind Oakland residents of their helplessness in preventing the losses of beloved sports teams. Similarly, the relocation of the St. Louis Rams to Los Angeles and ensuing legal action shows that despite securing a 790 million dollar settlement with the NFL, the loss of the Rams is priceless to their St. Louis community both economically and as a means of expressing the city’s identity. After the Rams’ relocation, a study by local economist Patrick Ishmael found measurable declines in stadium-adjacent business revenue and hotel tax collections [18]. In Oakland, the losses of the Raiders and Athletics have already contributed to job layoffs, vacancies in commercial properties in the downtown area, and the collapse of fan-driven community programs [19]. Without enacted statutes, the only prevention by cities is through uncertain and costly legal means.

The Modell Law is more than just a simple statute. Enacting it nationwide would reduce a power imbalance that has plagued leagues for a century. An enactment of its protections can help ensure that a community will never wake up to find its team gone overnight with stadiums permanently empty and decades-long support disregarded.

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[1] Modell Law (Ohio Revised Code § 9.67).

[2] Judith Grant Long, Public/Private Partnerships for Major League Sports Facilities (New York: Routledge, 2012).

[3] Andrew Zimbalist and Roger G. Noll, “Sports, Jobs, and Taxes: Are New Stadiums Worth the Cost?” Brookings Review (June 1, 1997), https://www.brookings.edu/articles/sports-jobs-taxes-are-new-stadiums-worth-the-cost/.

[4] See [2]

[5] Jim Salter, “$790 Million Settlement in Lawsuit over Rams’ St. Louis Departure,” Associated Press, November 24, 2021, https://apnews.com/article/nfl-sports-business-los-angeles-st-louis-1cff28235e3d10777a86103d983cd2f1.

[6] Federal Baseball Club of Baltimore, Inc. v. National League of Professional Baseball Clubs, 259 U.S. 200 (1922).

[7] Toolson v. New York Yankees, Inc., 346 U.S. 356 (1953).

[8] Flood v. Kuhn, 407 U.S. 258 (1972).

[9] Tampa Bay Area Sports Foundation v. Major League Baseball, No. 92-12345 (S.D. Fla. 1992).

[10] Radovich v. National Football League, 352 U.S. 445 (1957).

[11] Los Angeles Memorial Coliseum Commission v. National Football League, 726 F.2d 1381 (9th Cir. 1984).

[12] American Needle, Inc. v. National Football League, 560 U.S. 183 (2010).

[13] See [3]

[14] See [1]

[15] Cleveland Browns Football Co. v. City of Cleveland, No. 1:24-cv-00712 (N.D. Ohio Apr. 9, 2024).

[16] U.S. Const. art. I, § 8, cl. 

[17] Jim Walker, “The Mouse That Roared: Disney – A Municipal Bonds Blog,” BondView, April 26, 2022, https://blog.bondview.com/the-mouse-that-roared-disney-bonds/.

[18] Patrick Ishmael, The Economic and Civic Fallout of the Rams’ Departure (Show-Me Institute Policy Study, 2018).

[19] Scott Ostler, “Oakland Loses Again: The Human Cost of Sports Departures,” San Francisco Chronicle, Dec. 2023.