BILL ANALYSIS
AB 1041
Page 1
Date of Hearing: May 3, 2005
ASSEMBLY COMMITTEE ON ARTS, ENTERTAINMENT, SPORTS,
TOURISM, AND INTERNET MEDIA
Ed Chavez, Chair
AB 1041 (Umberg) - As Introduced: February 22, 2005
SUBJECT : Advertising disclosures
SUMMARY : Enacts The Truth in Sports Advertising Act.
Specifically, this bill :
1)Requires a professional sports franchise (franchise) that
includes a geographic location in its name but does not play a
plurality of its games in the location used in its name, to
include on all tickets, advertisements, and promotional
materials a notice indicating that the franchise does not
regularly participate in sporting events in the location
indicated by its name.
2)Specifies placement and size of the notice on print media,
billboards, transportation vehicles, and television.
3)Directs that the notice be read on radio advertisements or
promotional materials at an understandable pace, without
competing loud music or sound effects.
4)Exempts a franchise from the notice requirements if a city,
county, or city and county, where the franchise plays a
plurality of its games excuses the franchise from the
requirement.
EXISTING LAW : Includes both a general prohibition against false
and misleading advertising in general, and a number of
specialized statutes aimed at deceptive advertising of
particular services and products.
FISCAL EFFECT : None. This bill is not keyed fiscal.
COMMENTS :
1)Purpose . The author writes that "AB 1041 promotes integrity
AB 1041
Page 2
and honesty for professional sports franchises. Currently a
professional sports franchise does not necessarily have a
statutory relationship with its home-city. A contractual
relationship may exist encompassing a wide variety of issues
ranging from concessions income to the naming rights for the
stadium or team itself. However, in the event of a contract
dispute, the city, the fans, and residents are subject to the
vagaries of the courts."
He also indicates that the bill "requires that advertising
conducted by a professional sports franchise shall not be
deceptive regarding the geographic home of the team.
Specifically, it specifies that if a professional sports
franchise does not play a plurality of its games in the
geographic location included in the team's name, then any
advertising for the team shall clearly state the actual home
of the team. AB 1041 allows the governing body of the
geographic location to waive this requirement."
On behalf of the City of Anaheim, Mayor Curt Pringle writes that
"[w]e believe that professional sports teams, who partner with
cities to deliver sports entertainment, should not confuse the
public with multiple geographic references in their name or
venue location. Any such inaccurate or misleading advertising
would be properly clarified with this bill."
2)Angels History . The Angels franchise was authorized by Major
League Baseball in 1960. From 1961 to 1964 the team played in
Los Angeles and was known as the Los Angeles Angels. In 1965
the Angels moved to Anaheim and, until 1996, were promoted as
the California Angels. In 1996, The Walt Disney Company
purchased the team and negotiated a 30-year lease of the
facility with the City of Anaheim.which remodeled the stadium
to a "baseball only" facility as part of the deal (it was
previously used for football as well). The contractual
arrangement between the City and Disney also included an
agreement to "change the name of the team to include the name
'Anaheim therein.'" In late 1996, the team announced that its
name would be the "Anaheim Angels" beginning in the 1997
season.
AB 1041
Page 3
Now under new ownership, the team announced on January 3, 2005
that the team's name would change immediately to the Los
Angeles Angels of Anaheim. The Angels play most games in
Anaheim and will play in Los Angeles only three times during
the 2005 season - against the Dodgers at Chavez Ravine.
According to the author, "Anaheim" has been "removed from the
team's uniforms, tickets, merchandise, promotional materials,
and advertising."
In its press release announcing the name change the team stated
that:
The inclusion of Los Angeles reflects the original
expansion name awarded by Major League Baseball in December
1960 and again returns the Angels as Major League
Baseball's American League representative in the Greater
Los Angeles territory that Major League Baseball expects
the team to serve.
3)Litigation . Immediately after the team's announcement of the
name change, the City of Anaheim sued the team, claiming that
the name change was in violation of the lease agreement
entered into between the City and the team in 1996. As part
of the suit, the City is seeking an injunction to prohibit the
team from using Los Angeles in its name until a full trial on
the issue, which is scheduled for Nov. 7, 2005. The City's
request for an injunction was denied by the trial court; an
appeal was filed in the Fourth District Court of Appeals which
heard oral arguments on March 28th. A ruling is expected by
June 27th. Although the appellate court justices urged the
parties to work towards a settlement agreement, none has been
reached.
The author believes that "regardless of the outcome of that
case, clearly the Angels have violated the spirit of the
agreement. They have compounded that sin by engaging in
deceptive advertising and marketing of the team by inferring
that the team has any kind of relationship with Los Angeles.
While AB 1041 was born of the battle in Anaheim, similar
situations could occur anywhere in the state. AB 1041 seeks
to remove the economic incentive for this type of deception by
AB 1041
Page 4
requiring that advertising for professional sports franchises
include the actual geographic location where the plurality of
their games are played."
4)Impairment of Existing Contracts . The constitutions of the
United States and California generally prohibit legislative
action that interferes with current contractual obligations.
The language of the bill is not clear as to whether it is
intended to affect contracts entered into before the statute's
effective date. To avoid impairment of existing contracts and
affecting the current litigation between the City and the
team, the committee may wish to consider an amendment that
applies the provisions of this bill strictly to contracts
entered into on or after the effective date of this bill.
REGISTERED SUPPORT / OPPOSITION:
Support
City of Anaheim
Los Angeles City Council
Opposition
None on file.
Analysis Prepared by : Kellie Smith / A.,E.,S.,T. & I.M. /
(916) 319-3450