Saturday, July 17, 2004
Antitrust lawsuit against Bengals could reverberate across NFL
By John Nolan
The Associated Press
CINCINNATI - A favorable court decision for county officials fighting the Cincinnati Bengals about the costs of building and operating the team's stadium could have implications across the NFL.
Hamilton County officials argue that the Bengals and the NFL improperly used their monopoly power and threats to leave for another city to get taxpayers' money for the stadium. If a judge upholds that argument in the antitrust case, the decision could help local governments when new stadiums are built in the future, an expert said.
![[img]](pbs.jpg)
A federal judge ruled this week that Hamilton County could proceed as the main party in a lawsuit against the Cincinnati Bengals that challenges the lease for Paul Brown Stadium.
(AP photo)
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By limiting the number of available teams, the NFL can force cities and counties to pump money into stadium projects, said Andrew Zimbalist, an expert who has written and consulted extensively on sports economics.
"They're able to get cities to compete against each other - and extort large sums of public money," said Zimbalist, an economics professor at Smith College in Northampton, Mass. "If the court upholds that argument, it pretty much affects everybody in the NFL."
A federal judge ruled this week that Hamilton County could proceed as the main party in the lawsuit that challenges the lease for Paul Brown Stadium, which the team started using in 2000. County officials say the judge has allowed them to proceed to obtain Bengals' financial records needed for the lawsuit - documents generally closely guarded by sports franchises.
County officials and their lawyer say that, at a minimum, the county will want to see Bengals and NFL financial records and operating documents related to the lease negotiated in 1997. They also plan to take statements from key Bengals executives.
"Certainly there will be things beyond that," commissioner Todd Portune said, adding that those decisions will be up to the county's lawyer, Stanley Chesley.
"Presumably, the county lawyers won't stop at just the financial statements. They'll want to go beyond that and get some detailed records," Zimbalist said.
Sports franchises typically contend that they are private businesses and their records are not available for public inspection. In some cases, unions for professional athletes are allowed access to teams' financial information in the course of collective bargaining, but the public doesn't get to see it, Zimbalist said.
Public release of such information might undercut a team's public position, Zimbalist said.
He said, for example, that a review of the Bengals' books might show that the team was financially strong enough to be competitive before Paul Brown Stadium was built - even though team owner Mike Brown said the Bengals needed a new, bigger stadium with revenue from luxury boxes in order to stay competitive in the NFL.
The Bengals could ask the judge to allow county lawyers to privately inspect the financial records without publicly releasing them, Zimbalist said.
U.S. District Judge S. Arthur Spiegel has rejected efforts by the Bengals and the NFL to dismiss the lawsuit. The county's lawyer hopes it could go to trial early next year.
Lawyers for the Bengals and the NFL on Thursday asked the 6th U.S. Circuit Court of Appeals to dismiss the lawsuit. They contend it cannot proceed because it was originally filed as a taxpayer lawsuit before the county took it over and that the taxpayer had no standing to pursue the case. The appeals court has not ruled.
Spokesmen for the Bengals and the NFL declined to discuss the case. The Bengals' team policy is not to comment on litigation, spokesman P.J. Combs said.
"Our attorneys will represent us and speak for us in court," NFL spokesman Greg Aiello said.
Taxpayers approved a half-cent county sales tax increase in 1996 to pay for new stadiums for the Bengals and baseball's Cincinnati Reds. The stadiums were built at a combined cost of almost $750 million, rather than the $540 million originally promised to the county's taxpayers.
County officials say revenues from the stadium tax increase are falling behind projections, raising the prospect that the county may have to dig into its general fund in coming years to pay the debt. The county wants to renegotiate the stadium lease with the Bengals to give the county more money so that it can repeal the tax increase in 20 years as taxpayers were told originally, Portune said.
"We want a deal that's fair," Portune said. "No one's trying to punish the NFL or the Cincinnati Bengals."
The NFL has made millions of dollars available through loans to its teams in some cities to help pay for building new stadiums, Portune said. The Bengals didn't bring that to the attention of local government officials in Cincinnati, he said.
Hamilton County wants that same benefit from the NFL in order to pay down some of the stadium debt, Portune said.
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