The sale of the Connecticut Sun once seemed a done deal to a group led by former Boston Celtics co-owner Steve Pagliuca. The WNBA quickly said not so fast, and now the process has grown increasingly complicated mainly to the the pushback from the league.
The Mohegan Tribe, which has owned the Sun since 2003, currently has two offers on the table for the team — one from Pagliuca’s group and the other from a Hartford-based group led by former Milwaukee Bucks co-owner Marc Lasry. But the WNBA has reportedly told the Tribe its Board of Governors would not approve a move to either Boston or Hartford, raising questions of whether things could end in a legal challenge from either current ownership or one of the potential buyers.
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One of the most notable successful antitrust suits against a professional sports league was launched by Raiders owner Al Davis against the NFL in 1982. The team was then based in Oakland, and Davis wanted to relocate to a new stadium in Los Angeles after the Rams moved to Anaheim in 1979. Davis sued after league owners voted 22-0 against the move, arguing that blocking the relocation was a violation of the Sherman Act, a federal antitrust law that prohibits anticompetitive practices. Because the L.A. market was large enough to support multiple franchises, the court ruled in Davis’s favor that the league was engaging in restraint of trade by denying Davis’ ability to field a competing team in the city.
In the Sun’s case, the team is not looking to move into another market as competition to an existing WNBA franchise, so it would be hard-pressed to find a viable antitrust argument in court. As long as the WNBA maintains that relocation to Boston or Hartford is not in the best interest of league, it seems that there is little that either the Mohegan Tribe or a prospective ownership group could do to legally refute that claim.
Where the Tribe may have a case in court is if the league tries to restrict it from selling the team at its fair market value. The Boston bid that was originally agreed to in July was for $325 million, plus a $100 million commitment to build a dedicated practice facility. The Hartford bid matched the offer of $325 million with its own plans to construct a new downtown facility. ESPN reported that the WNBA made its own counteroffer in July to purchase the team for $250 million without charging a relocation fee thus allowing the league to facilitate the sale and relocation to the city of its choice.
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A group in Houston led by Rockets owner Tilman Feritta is thought to be the WNBA’s preferred buyer for the Sun after that city was passed over during the most recent round of expansion. The Houston Chronicle reported that Feritta’s bid wasn’t approved for an expansion franchise because it was at least $50 million short of the $250 million fee paid by Cleveland, Detroit and Philadelphia. The league has repeatedly emphasized that nine cities who submitted unsuccessful expansion bids currently have priority over Boston, which is considered a candidate for the next round of expansion projected for 2033.
If the WNBA rejects both $325 million offers and leaves its own $250 million offer as the only viable option for a sale, the Mohegan Tribe could argue that the league is violating the implied covenant of good faith and fair dealing in its membership agreement. This is a rule used by most U.S. courts that requires parties in a contract to implement the agreement as intended without attempting to undercut the purpose of the transaction.
“It’s a contractual relationship. You buy a franchise in a league, and there’s certain rights and responsibilities you have … and this is a type of joint venture, because the clubs collectively produce a product of women’s professional basketball that no one of them could produce (alone),” said Marquette professor Matthew Mitten, the executive director of the National Sports Law Institute. “Most courts would say,’ Well, you’ve got an implied duty of good faith and fair dealing to make sure you don’t deprive any of your co-venturers of the legitimate fruits of their investment,’ for example.
“I could see a claim where the owner of the Sun would say (the WNBA) is doing that by not giving them, they would argue, what’s the fair market value, because you’ve got two independent bidders. They might say (the WNBA) ought to at least offer the same amount, that $325 million, so that would be a very interesting claim there, and they could win.”
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But while the process has been contentious, it still does not seem likely that it will escalate to the point of litigation. According to ESPN the Tribe is set to present multiple proposals to the WNBA in the coming weeks, including an option for the league to purchase the franchise by matching the $325 million offers. Connecticut Governor Ned Lamont is also lobbying both the WNBA and NBA commissioners on behalf of the Hartford bid, which would keep the Sun in-state and leave Boston available as a market for a future expansion team.
“My initial reaction is that this will be settled internally (without litigation), by all the players involved, amicably,” said Bill Dowling, former Yankees general counsel and long-time owner of the minor league New Britain Rock Cats. “I think Hartford is in a good position in this. It’s ideal because it’s within the Connecticut Sun’s territory and there is no issue at all of expansion or relocation, in my opinion. If their offer is accepted with the practice facility and everything else, it would increase the value of all the franchises in the league.”
