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Regulated transactions—when do you need approval?
Jim Juliano - Winter 2009-2010

In the business of baseball, certain transactions must be approved by the president of Minor League Baseball (MiLB) and the team's league—steps that are sometimes ignored at the risk of fine or other penalty.

Under Major League Rule 54, each of the following is a regulated transaction (RT) that requires both approvals:

  • Sale or transfer of equity interest.

  • Loan agreement.

  • Stadium lease.

  • Concession agreement having a potential duration of more than one year (including any options or renewals).

  • Webcast, TV and radio rights agreements.

  • Naming rights agreement.

  • Any contract having a potential duration of five years or longer (including any options or renewals).

Note that an RT may also be considered a Control Interest Transfer (CIT), the transfer of a controlling interest in a team. The president of MiLB may require additional information to determine whether a transaction is an RT or a CIT.

MiLB officials will keep an eye on media reports and other information in order to track RTs.

For any RT, the president will request a cover letter explaining the transaction, a complete copy of the agreement with all attachments and written evidence of league approval. We recommend that the application for approval go to both the league and MiLB at the same time.

MiLB has examples of language required for these agreements and a checklist to assist in the process. Essentially, the language protects the right of MiLB to approve the transaction and to enforce all applicable rules.

A material failure to disclose information may, at the discretion of the president of MiLB, result in a transaction being rendered null and void as well as a fine or other penalty.

All MiLB and league officials are required to keep the disclosures confidential.

 

 

 
 
 
 

This website contains general information that should not be considered legal advice or legal opinion concerning individual situations. Legal counsel should be consulted for specific advice.

Copyright 2009-2010 by L. James Juliano Jr.
Legally Speaking® is a registered trademark of the law practice of L. James Juliano Jr.