Unfortunately, a dead hand cannot hold the Bucks in Milwaukee

Gery Woelfel, the diligent and often informative Milwaukee Bucks beat reporter, recently assured his readers that the Milwaukee Bucks would not move from Milwaukee.

Woelfel based his assurance on two assertions. One, that Senator Kohl would never move the team while he owned it and, two, that Kohl would not sell the team to any buyer unless the buyer promised to keep the team in Milwaukee. I am sure both assertions are true. Nevertheless, Woelfel’s conclusion does not follow.

The conclusion relies upon the assumption that a “Kohl Clause” could be enforced in a court of law.  I think that assumption is wrong. American courts and American legislatures do not like agreements that limit the way a business owner can run his business.  Courts consider such agreements “restraints on trade” and therefore contrary to the operation of an efficient free market economy.  As a result, courts will not generally enforce such agreements. 

A court of jurisdiction would probably consider the Kohl Clause an agreement in restraint of trade.  The leading case in the field of sports team relocation (Raiders I), recognized the existence of a competitive market among “stadia” (their phrase, not mine) for the right to host sports events.  The clear intent of the Kohl Clause would be to circumscribe and thereby restrain such competition when it comes to the Bucks. Thus the Kohl Clause would cause injury to any stadium that wanted to host the Bucks, and it would also injure any future owner by limiting his ability to operate the Bucks in a manner he sees fit. (In “Raiders I”, the court summarized the last issue this way: ”[W]hether a [co-contractor] can enforce an agreement with one of [its] co-contractors to the detriment of that co-contractor’s right to do business where he pleases“ See, Los Angeles Memorial Coliseum Commission v NFL). 

I am almost certain either of the two would-be “injured” parties would prevail against any attempt to enforce the Kohl Clause. That is, unless someone more clever than me could construct an argument that would convince a court that the Kohl Clause reasonably served the NBA’s ability “to produce and promote its product” and through that service improved the NBA’s competitive position in the overall entertainment market (That’s not the only hurdle. Once you’ve established an entertainment market “competitive necessity” rationale for the Kohl Clause then you must persuade the court that the competitive necessity outweighs any damage done to competition to the stadiums seeking to compete for the Bucks in the “franchise location” market described above). I frankly cannot think of any convincing and arguably necessary entertainment market “competitive rationale” for the Kohl Clause, so I would not even be able to reach first base.

More on this topic in future texts (like how easy the Kohl Clause would be to circumvent).

Footnote: The “dead hand” metaphor I used in the title refers to a testator’s attempt to control the use of the property he devises to his heirs. I don’t want anyone to think I used it to wish any ill fortune upon Senator Kohl — the literal savior and benefactor of pro basketball in the State of Wisconsin. 


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: