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Foreign Investment in Sports Foreign Investment in Sports Teams in the United StatesTeams in the United States
Robert J. Caldwell, Esq.Robert J. Caldwell, Esq.Kolesar & LeathamKolesar & Leatham
400 South Rampart Boulevard, Suite 400400 South Rampart Boulevard, Suite 400Las Vegas, Nevada 89145 – United States of AmericaLas Vegas, Nevada 89145 – United States of America
+1 (702) 362-7800+1 (702) [email protected]@KLNevada.com
Major Professional LeaguesMajor Professional Leagues(Listed by Average Attendance per Game)(Listed by Average Attendance per Game)
National Football League (68,397)National Football League (68,397) Major League Baseball (30,504)Major League Baseball (30,504) Major League Soccer (19,149)Major League Soccer (19,149) National Hockey League (17,721)National Hockey League (17,721) National Basketball Association (17,407)National Basketball Association (17,407)
Noteworthy Foreign InvestorsNoteworthy Foreign Investors
Jacksonville Jaguars (NFL): Shahid Khan (Pakistan)Jacksonville Jaguars (NFL): Shahid Khan (Pakistan) Seattle Mariners (MLB): Nintendo (Japan)Seattle Mariners (MLB): Nintendo (Japan) New York Islanders (NHL): Charles Wang (China)New York Islanders (NHL): Charles Wang (China) San Jose Sharks (NHL): Hasso Plattner (Germany)San Jose Sharks (NHL): Hasso Plattner (Germany) Brooklyn Nets (NBA): Mikhail Prokhorov (Russia)Brooklyn Nets (NBA): Mikhail Prokhorov (Russia) Sacramento Kings (NBA): Vivek Ranadive (India)Sacramento Kings (NBA): Vivek Ranadive (India) D.C. United (MLS): Erick Thohir (Indonesia)D.C. United (MLS): Erick Thohir (Indonesia) Orlando City F.C. (MLS): Flavio Augusto da Silva (Brazil)Orlando City F.C. (MLS): Flavio Augusto da Silva (Brazil) New York City F.C. (MLS): Joint venture between Manchester New York City F.C. (MLS): Joint venture between Manchester
City (Sheikh Mansour/UAE) and New York YankeesCity (Sheikh Mansour/UAE) and New York Yankees Miami (MLS/Pending): David Beckham (England)Miami (MLS/Pending): David Beckham (England)
Foreign Investment in the USForeign Investment in the US
Alexander Hamilton wrote (1791):Alexander Hamilton wrote (1791): “ “It is not impossible that there may be persons disposed to It is not impossible that there may be persons disposed to
look with a jealous eye on the introduction of foreign capital, look with a jealous eye on the introduction of foreign capital, as if it were an instrument to deprive our own citizens of the as if it were an instrument to deprive our own citizens of the profits of our own industry; but, perhaps, there could never be profits of our own industry; but, perhaps, there could never be a more unreasonable jealousy. Instead of being viewed as a a more unreasonable jealousy. Instead of being viewed as a rival, it ought to be considered as a most valuable auxiliary, rival, it ought to be considered as a most valuable auxiliary, conducing to put in motion a greater quantity of productive conducing to put in motion a greater quantity of productive labor, and a greater portion of useful enterprise, than could labor, and a greater portion of useful enterprise, than could exist without it.”exist without it.”
Restricted BusinessesRestricted Businesses
ShippingShipping AircraftAircraft MiningMining EnergyEnergy CommunicationsCommunications BankingBanking Government Government
ContractingContracting
National SecurityNational Security The Committee on Foreign The Committee on Foreign
Investment in the United States Investment in the United States (CFIUS) may review when foreign (CFIUS) may review when foreign control would result when it might control would result when it might affect national security.affect national security.
Major League SoccerMajor League Soccer
Started in 1996 with 10 teamsStarted in 1996 with 10 teams Part of bid to host 1994 FIFA World CupPart of bid to host 1994 FIFA World Cup Single-entity structureSingle-entity structure League investors operate all teamsLeague investors operate all teams League holds all contracts League holds all contracts Single table, no promotion/relegationSingle table, no promotion/relegation Lower: NASL, USL Pro (Reserve Teams)Lower: NASL, USL Pro (Reserve Teams)
Major League SoccerMajor League Soccer
League winner: Supporters’ ShieldLeague winner: Supporters’ Shield Playoffs: MLS CupPlayoffs: MLS Cup Cup: US Open Cup (includes amateurs)Cup: US Open Cup (includes amateurs) 2015-2016: 20 teams in 2 divisions2015-2016: 20 teams in 2 divisions 36 games/”unbalanced schedule”36 games/”unbalanced schedule” 2017: 2 additional teams (LA2, Atlanta)2017: 2 additional teams (LA2, Atlanta) League expects 24 teams by 2020League expects 24 teams by 2020
Major League SoccerMajor League Soccer
Salary cap: $3.1 million per team/seasonSalary cap: $3.1 million per team/season $387,500/season for any player$387,500/season for any player 3 “designated player” slots3 “designated player” slots Average: $226,000 (median $92,000)Average: $226,000 (median $92,000) Minimum: $48,500 ($36,500 <25 years)Minimum: $48,500 ($36,500 <25 years) Nearly 1/3 to top 7 players: Kaka ($7.1m), Nearly 1/3 to top 7 players: Kaka ($7.1m),
Dempsey ($6.7m), Bradley ($6.5m), Dafoe Dempsey ($6.7m), Bradley ($6.5m), Dafoe ($6.1m), Donovan ($4.5m), Keane ($4.5m), ($6.1m), Donovan ($4.5m), Keane ($4.5m), Henry ($4.3m)Henry ($4.3m)
Fraser v. Major League SoccerFraser v. Major League Soccer284 F.3d 47 (1st Cir. 2002)284 F.3d 47 (1st Cir. 2002)
Antitrust lawsuit filed by 8 playersAntitrust lawsuit filed by 8 players Not a monopoly because MLS competes with other Not a monopoly because MLS competes with other
leagues in the US and around the worldleagues in the US and around the world ““MLS and its operator/investors compromise a hybrid MLS and its operator/investors compromise a hybrid
arrangement, somewhere between a single company arrangement, somewhere between a single company [and] a cooperative arrangement between existing [and] a cooperative arrangement between existing competitors.”competitors.”
The “creation of MLS did not reduce competition in an The “creation of MLS did not reduce competition in an existing market” because there was no existing top-tier existing market” because there was no existing top-tier professional league in the US when MLS was formed.professional league in the US when MLS was formed.
