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Vanderbilt Journal of Transnational Law

First Page

1027

Abstract

Modern professional sports leagues are significant economic enterprises, the most prominent of which span the political border between the United States and Canada. In recent decades, local governments in the United States have invested heavily in professional sports franchises by building stadiums and arenas, hoping either to prevent the home team from moving out or to entice someone else's home team to move in. The willingness to pay of U.S. local governments, coupled with apparently disadvantageous economic conditions in Canada, has resulted in a net loss of professional franchises for Canadian cities, in particular franchises in Canada's national game, hockey. This Note inquires whether this process harms Canadian investors in professional sports franchises in a way that implicates the North American Free Trade Agreement (NAFTA), specifically the Agreement's rules governing investment. Although there is a growing body of adjudications under NAFTA Chapter 11, U.S. local assistance to professional sports franchises has not, to date, been the subject of a claim. This inaction may result from the inertia of U.S. municipal investment in professional sports, the confusion created by the unique economic structure of the professional leagues, or the perception that the professional sports industry is somehow less worthy of attention. Based on a survey of the types of aid provided by local governments to professional franchises, the recent movements of teams in the three relevant leagues, and a close examination of the economic relationship between franchises in a single league, this Note argues that Chapter 11 is a potentially relevant, if overlooked, part of the regulatory landscape. After sketching a hypothetical claim under Chapter 11, the Note concludes with an examination of the NAFTA's Cultural Exception in light of the steady migration of National Hockey League franchises out of Canada.

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