Shai Kalansky, Michael Santos, Daniel Irvin, and Susan Mac Cormac authored an article for ABA’s Entertainment & Sports Lawyer on how the use of alternative corporate forms, specifically the use of a Delaware public benefit corporation (PBC) as the ownership vehicle, can explicitly require community interests to be taken into account in corporate decision-making and reduce the threat of team relocation.
The article provides background on PBCs such as dual fiduciary duties and identifying a community good as well as the advantages for sports franchise owners when using a PBC structure. The use of PBCs is well-suited for organizations that want to consider the needs of the community in decision making, such that directors and officers can take actions that balance the team’s “public benefit” along with maximizing a team’s value. A professional sports team, like any other multibillion-dollar organization, has countless stakeholders outside of its investor stockholders that would benefit from the from the use of the PBC, including reducing the risk of relocation.
Read the full article.
