On March 31, 2008 Canada's Competition Bureau announced the conclusion of its investigation into the policies of the National Hockey League (the NHL) for the approval of transfers of ownership and relocations of franchises. The Bureau concluded they were not in violation of the civil "abuse of dominance" provisions (s. 79) of the Competition Act. The inquiry had been commenced by the Bureau in June 2007, following media reports that James Balsillie, co-CEO of Research In Motion (makers of the BlackberryT personal communications device), had been foiled in his latest attempt to buy an NHL franchise and move it to southern Ontario (either Hamilton or Kitchener-Waterloo) when the NHL refused to consider the relocation of the Nashville franchise.
The NHL had defended its right to refuse to consider relocation of a team prior to the conclusion of the seven-year non-relocation covenant entered into between new owners and the NHL.
Following similar rulings by U.S. courts in professional sports cases over the years,1 the Bureau cited the NHL's "properly circumscribed restrictions" on the relocation of sports franchises and the legitimate business interests they promote, such as preserving rivalries between teams, attracting a broader audience, providing new franchises with an opportunity to succeed, and encouraging investment in sports facilities and related infrastructure by local municipalities. In particular, the Bureau found that since at least 1993, no incumbent team had exercised a veto to protect its local territory from entry by a competing franchise, and that NHL rules required only a majority vote. The Bureau went on to say, however, that it "may have concerns" about a single team being entitled to exercise a veto to prevent a franchise from entering its local region within Canada.
Footnote
1. Levin v. NBA, 385 F. Supp. 149 (1974), San Francisco Seals v. NHL, 379 F. Supp. 966 (C.D. Ca. 1974), Los Angeles Memorial Coliseum Commission v. NFL, 791 F.2d 1356 (9th Cir. 1986), NBA v. SDC Basketball Club and Los Angeles Memorial Coliseum, 815 F.2d 562 (9th Cir. 1987) and VKK Corporation v. NFL, 244 F.3d 114 (2nd Cir. 2001).
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