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Author Topic: For-profit hockey rink operator Black Bear sues AHAI  (Read 477 times)

Description: Alleges anti-trust over non-profit sponsor rules
For-profit hockey rink operator Black Bear sues AHAI
« on: April 11, 2019, 07:56:18 AM »


AHAI and it's problems extend beyond allegations of inflated hockey program prices.

Black Bears Sports Group Inc. is suing an Illinois amateur hockey governing body, claiming the Amateur Hockey Association of Illinois is improperly trying to block it out of the market.

Black Bear Sports Group Inc. claims in its lawsuit that the Amateur Hockey Association of Illinois (AHAI) has denied a charter and otherwise tried to keep amateur hockey in the state confined to not-for-profit organizations.

"Since Black Bear's arrival in the relevant market, AHAI has misused its regulatory authority to injure Black Bear," the lawsuit said.

Among other things, Black Bear claims AHAI unilaterally created a new by-law early last year specifically to prevent the Chicago Bulldogs youth hockey club from using Black Bear's Center Ice Arena in DuPage, according to the lawsuit.

"This rule demonstrates AHAI's intent to maintain its monopoly power and to injure Black Bear," the lawsuit said.

Black Bear alleges AHAI is in violation of federal antitrust law and has interfered with Black Bear's prospective business relations. Black Bear asked for an injunction to "restrain the AHAI's efforts to maintain a monopoly," the lawsuit said

Black Bear filed its 16-page complaint in late December in Chicago federal court.

AHAI is headquartered in Bensenville. Black Bear is based in Chevy Chase, Md., and wholly owns and manages Center Ice Arena, which the lawsuit lists as a second plaintiff. AHAI derives its authority to govern amateur hockey in Illinois from USA Hockey, which is itself an official representative to the U.S. Olympic Committee and the International Ice Hockey Federation, according to the lawsuit.

"In the state of Illinois, virtually every organized amateur hockey team, including Tier I, Tier II, and Tier III teams, and virtually every high school hockey team, is a member of AHAI," the lawsuit said. "Each AHAI member team is subject to AHAI's by-laws and rules and regulations."

Members who don't comply with AHAI's by-laws and rules and regulations face sanctions such as loss of eligibility to participate in AHAI-sponsored tournaments, insurance coverage and membership, according to the lawsuit.

Hockey participation in Illinois for players 18 and younger has grown faster in the state than in the rest of the nation since the 2013-14 season, according to figures in the lawsuit. Almost 19,700 under-18 players participated in hockey in Illinois during the 2013-14 season, but almost 23,400 participated during the 2017-18 season, a growth of almost 19 percent, according to the lawsuit.

"However, despite the significant growth in participation and demand for Tier II play over the last five years, AHAI has not approved a single new Tier II club during this period," the lawsuit said. "Moreover, although the demand for Tier I play in Illinois is comparably strong, AHAI has not allowed supply of Tier I clubs to increase. Currently, there are only four Tier I youth hockey clubs in Illinois of which all are located in the Chicago area."

That amounts to one Tier I club for every 5,837 players in the state, a far higher ratio than in Pennsylvania and New Jersey where there are eight Tier I youth clubs or one Tier I club for every 2,201 youth players.

Black Bear owns 10 ice rinks in the U.S., including rinks in Glen Ellyn, Woodridge, Lincolnwood and Crestwood, in Chicago's suburbs.

In 2016, Black Bear began to acquire Chicago-area rinks, including Seven Bridges Ice Arena in Woodridge, Heartland Ice Arena in Lincolnwood, Southwest Ice Arena in Crestwood, and the Center Ice facility in DuPage. Black Bear claims to have made about  $3.3 million in improvements to its newly acquired rinks in Illinois.

About a year ago, Black Bear also tried to obtain an AHAI charter for a new Tier II club at Center Ice. Without that AHAI charter, Black Bear can expect to take in lower revenue and experience other difficulties, according to the lawsuit.

AHAI allegedly responded by enacting rules and "taking other actions to prevent Black Bear from entry into the relevant market," telling Black Bear that a Tier II club at Center Ice "is unnecessary and that there are already enough teams in the relevant market," the lawsuit said.

AHAI also objected to Black Bear as a for-profit enterprise as its rules "require sponsors to be charitable organizations," the lawsuit said. "This rule lacks any procompetitive justification as demonstrated by the lack of universal adoption of a non-profit rule among other local governing bodies within USA Hockey. Nor is the nonprofit status of AHAI-approved clubs serving to reduce prices for participants."

Black Bear is represented in the action by attorney Paul Olszowka, a partner with Barnes & Thornburg in Chicago.

The AHAI has yet to respond to the lawsuit, according to federal court records.

U.S. District Court for the Northern District of Illinois Case No. 1:18-cv-08364

 

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