SAN FRANCISCO (CN) – A federal judge Thursday dismissed a lawsuit over the Oakland Raiders’ move to Las Vegas, finding the city of Oakland failed to show the National Football League’s relocation rules and 32-team structure are anticompetitive.
“Oakland cites no case recognizing a market comprised of cities seeking to attract professional sports franchises,” U.S. Magistrate Judge Joseph Spero wrote in a 30-page ruling.
In lawsuit filed last year, Oakland accused the NFL and its teams of acting as a “cartel” that bullies local governments into paying exorbitant costs for sports stadiums that would never occur in a truly competitive market.
Spero found the city could not sue over lost tax revenue resulting from the Raiders’ move because those claims must be based on “commercial interests,” rather than taxes derived from economic activity.
“The taxes Oakland claims to have lost would have been assessed on transactions involving countless third parties, any of whom might (or might not) be entitled to their own claims if, as Oakland contends, the Raiders’ relocation arose from violations of the Sherman Act,” Spero wrote.
The judge rejected Oakland’s claim that it could have hosted another NFL team if not for the league’s “anticompetitive” 32-team limit. The city did not say if it ever tried to court another team or “what number would be an allowable limit, and would Oakland have fared differently if the limit had been set at that number,” Spero wrote.
Oakland argued a team relocation fee paid to the NFL all but ensures the league will approve a team’s request to change locations. The Raiders paid a $378 million relocation fee to move to Las Vegas in 2017. Spero found the fee actually serves as an obstacle to relocation that favors existing host cities.
The judge also shot down claims that the NFL violated its own relocation policies by approving the move. The city claimed the NFL failed to “work diligently and in good faith to obtain and to maintain suitable stadium facilities in [each NFL Club’s] home territor[y],” as required by its own guidelines.
Spero ruled that Oakland lacks standing as a third-party beneficiary to enforce the NFL’s policy because the policy was intended to advance NFL business interests, not protect host cities.
Spero gave the city until Sept. 9 to file an amended complaint.
The Oakland Raiders’ lawyer and Oakland City Attorney’s Office did not immediately respond to emails and phone calls seeking comment Thursday. The Raiders are represented by Daniel Asimow of Arnold & Porter Kaye Scholer in San Francisco.
The Raiders were based in Oakland, where the franchise started, from 1960 to 1982 and returned to Oakland in 1994 after a 12-year stint in Los Angeles.
The Raiders had been pushing for a new stadium in Oakland since 2008 to replace the one built in 1966. In December 2016, the city of Oakland pledged $350 million toward building a new $1.3 billion stadium, along with $400 million coming from an investor group and $500 million from the Raiders.
In January 2017, Raiders owner Mark Davies announced the team would move to Las Vegas, where the state of Nevada committed $750 million toward the construction of a new stadium.
The Raiders will play their 2019 season in Oakland. The $1.9 billion, 65,000-seat stadium in Las Vegas is still under construction.