S. 4522: Let Kids Play Act

This bill, known as the Let Kids Play Act, aims to prohibit certain investment practices in youth sports that are deemed harmful to the well-being and operations of youth sports entities. Here are the key components of the bill:

Definitions

The bill defines several terms essential for understanding its provisions:

• Vulture investor: Refers to private equity funds or firms that engage in harmful practices that risk the financial stability of the youth sports entities they invest in.
• Youth sports: Encompasses any organized athletic activity for individuals under 18, including leagues, teams, facilities, and related technology.
• Vulture practices: Practices that financially exploit youth sports, such as imposing debt, excessive fees, or using predatory management tactics.

Investment Prohibition

The bill makes it illegal for vulture investors to invest in youth sports entities. It prohibits them from:

• Consolidating multiple youth sports entities under their control.
• Creating networks that force participation in their services or goods.
• Imposing undisclosed fees or conditions on participants.
• Imposing restrictions that limit competition among youth sports entities.

Certification of Firms

Covered firms that wish to invest in youth sports entities after the bill's enactment must obtain a certification ensuring they have not engaged in any prohibited vulture practices. The bill outlines:

• A presumption that any firm invested in youth sports at the time of the bill's enactment is a vulture investor unless proven otherwise.
• Requirements for firms to submit a sworn statement to certify compliance.
• Consequences for false certifications, including civil penalties and potential criminal charges.

Divestiture Requirements

Firms designated as vulture investors must divest their interests in youth sports entities within two years. This includes:

• Unwinding ownership stakes and returning assets to the youth sports entity.
• Providing community support to restore any harms caused during their ownership.

Establishment of a Youth Sports Fund

The bill establishes a Youth Sports Fund to allocate resources for:

• Reducing youth sports participation costs.
• Providing free access to youth sports facilities.
• Increasing scholarships or financial aid for participants.

Enforcement and Penalties

Enforcement responsibilities fall to the Federal Trade Commission (FTC) and the Assistant Attorney General, who can:

• Impose civil penalties for violations of the bill.
• Take legal action against individuals and firms that harm youth sports entities.
• Issue orders for compliance and restitution.

Protection of Local Laws

The bill does not preempt state or local laws that provide more stringent protections against vulture practices.

Anti-evasion Measures

It prohibits the structuring of transactions intended to evade the bill’s requirements, ensuring that the essence of the law is upheld.

Relevant Companies

None found