To amend the Internal Revenue Code of 1986 to require a sports franchise to provide for all of the games played by the franchise to be available for local television broadcasting in order to be subject to the presumption that 50 percent of the consideration in the sale or exchange of a sports franchise is allocable to player contracts.

July 15, 2003

Mr. KUCINICH (for himself, Mr. RANGEL, Ms. BORDALLO, and Mr. HINCHEY) introduced the following bill; which was referred to the Committee on Ways and Means

To amend the Internal Revenue Code of 1986 to require a sports franchise to provide for all of the games played by the franchise to be available for local television broadcasting in order to be subject to the presumption that 50 percent of the consideration in the sale or exchange of a sports franchise is allocable to player contracts.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Baseball Fan Protection Act'.

SEC. 2. LOCAL TELEVISION BROADCAST REQUIREMENT IN THE CASE OF SALES OR EXCHANGES OF SPORTS FRANCHISES.

(a) IN GENERAL- Subsection (d) of section 1056 of the Internal Revenue Code of 1986 (relating to presumption as to amount allocable to player contracts) is amended to read as follows:

`(d) PRESUMPTION AS TO AMOUNT ALLOCABLE TO PLAYER CONTRACTS-

`(1) IN GENERAL- In the case of any sale or exchange described in subsection (a), it shall be presumed that not more than 50 percent of the consideration is allocable to contracts for the services of athletes unless it is established to the satisfaction of the Secretary that a specified amount in excess of 50 percent is properly allocable to such contracts. Nothing in the preceding sentence shall give rise to a presumption that an allocation of less than 50 percent of the consideration to contracts for the services of athletes is a proper allocation.

`(2) ZERO PERCENT ALLOCATION UNLESS GAMES FIRST MADE AVAILABLE FOR BROADCAST LOCALLY-

`(A) IN GENERAL- For purposes of the first sentence of paragraph (1), an allocation of zero percent shall be presumed unless, as part of the sale or exchange, the transferee agrees--

`(i) to provide notice to, and a reasonable opportunity for, local television stations to make bids to license or otherwise purchase the rights to broadcast the games to be played by the franchise before offering others the opportunity to make such bids, and

`(ii) to accept the highest reasonable bid from a local television station for such rights.

`(B) FREQUENCY OF LOCAL BIDDING OPPORTUNITIES- The notice and opportunity provided to local television stations shall be provided each time the transferee sells broadcast rights during the period that the transferee owns the franchise.

`(C) LOCAL TELEVISION STATION- For purposes of this paragraph, a local television station is a television broadcast station (as such term is defined in section 325(b)(7) of the Communications Act of 1934 (47 U.S.C. 325(b)(7)) having a local market (as such term is defined in section 122(j) of title 17, United States Code) that includes the entire central city of the metropolitan statistical area within which, or closest to which, the home stadium, arena, or other facility of the franchise is located.'.

(b) EFFECTIVE DATE- The amendment made by this section shall apply to sales or exchanges of franchises after December 31, 1999, in taxable years ending after such date.

END