While I was at the 49ers, our legal team in concert with our ABC counsel decided that they likely do but are generally not enforced. Given the high value of our sponsorship deal in the beer category, our lobbyists spent 12 months as the stadium was opening to get a tied house exemption for Levi's Stadium. I don't believe other sports teams have taken this step, but it was important for us to do so to protect against long-term business risk.
Moving forward, if any states decide that they don't like the beer advertising covering stadiums and arenas, they could challenge those contracts based on tied house laws. The result could be a loss in ~10-20% of all non-naming rights sponsorships for that team.
I bet enforcement of tied house laws in the context of supplier advertising would meet a First Amendment challenge (see page 9 of the letter to AG Brown in today's readings). 44 Liquormart v. Rhode Island is still good law, so I image you could extend the First Amendment argument to the sports / other advertising contexts.
ReplyDeleteInteresting point--though I don't believe the ABC actually sees it that way. My understanding is that they get comfortable with it generally because no one is complaining and because a concessionaire is the one making the sale (vs. the team who receives the sponsorship dollars). However, it raises an interesting case for the Dallas Cowboys who both get the sponsorship revenue and also serve as their own concessionaire.
ReplyDeleteIt's interesting the disconnect between what laws actually say and whether they ultimately get enforced. Were your lobbyists ultimately successful in getting an exemption?
ReplyDeleteOn a slightly unrelated note, when I worked in investment banking (back in the dark ages) the firm was looking to win an advising mandate for an online retailer of wines looking to sell itself. During our initial work, we discovered that the company was actually illegally shipping product to a number of states. Even more concerning, these states comprised almost 2/3 of its annual sales. When asked about it, the company mentioned that yes, while technically not clear whether or not this was legal, there were no enforcement actions. Ultimately, we decided to withdraw from the assignment. Not sure whatever happened to them...