S. 4522 — Let Kids Play Act

This section defines terms used throughout the Act, including covered firms as private equity funds or companies they own or control, vulture investors as covered firms engaging in specified harmful practices or with multiple insolvent acquisitions, vulture practices as tactics that extract value from acquired entities through debt imposition, asset transfers, roll-ups, or operational degradation, and youth sports entities and facilities as organizations and athletic venues serving individuals under age 18.

This section prohibits vulture investors from investing in any youth sports entity. It also bars covered firms from engaging in vulture practices with respect to such entities, including consolidating control through roll-ups of multiple entities or essential suppliers, creating integrated networks that require use of affiliated services, conditioning participation on designated vendors, imposing undisclosed or excessive junk fees, enforcing exclusivity clauses or multi-year noncancelable commitments, restricting participation in competing events or use of nonaffiliated platforms within 150 miles, claiming intellectual property rights over youth sports broadcasts, athlete biometrics, or related data and algorithms, or violating the Protecting Young Victims from Sexual Abuse and Safe Sport Authorization Act of 2017.

This section designates any covered firm invested in a youth sports entity as a vulture investor, with presumptive designation upon enactment and automatic designation 91 days later unless certified. It requires sworn certifications attesting that the firm has never engaged in vulture practices, that no more than one acquired entity has become insolvent within 5 years of acquisition, and that the firm will not engage in such practices, with submissions due within 60 days of enactment or 60 days before any new investment and subject to Commission approval within 31 days or automatic denial. It imposes civil penalties of at least $1 million per false certification, applied jointly and severally on the firm and its executives without indemnification, and criminal penalties of up to 1 year imprisonment, while barring any judicial stay of designations.

This section requires any vulture investor to divest all ownership stakes, contracts, and exclusivity arrangements in youth sports entities, return all assets and intellectual property (or pay the higher of sale proceeds or market value for non-reversible sales), and remove its installed executives within 2 years of designation. It directs the Commission to issue divestiture milestones within 30 days, imposes monthly escrow of 10 percent of attributable revenue for missed milestones (returned on timely compliance or deposited in the Youth Sports Fund otherwise), mandates reporting and competition reviews of each divestiture, authorizes blocking of harmful sales, and permits appointment of a paid trustee to complete divestiture. It further authorizes remedies including disgorgement of extracted profits and fees, full debt forgiveness, 5-year continuation of pre-acquisition scholarship funding, technology and data transfers, and refund of junk fees.

This section authorizes the Commission and the Assistant Attorney General to enforce the Act, including any divestiture or remedy imposed under section 5, through administrative authorities or civil actions in federal district court. It incorporates the Federal Trade Commission Act's enforcement powers, penalties, and privileges; treats violations as unfair methods of competition or deceptive acts; permits state attorneys general to sue as parens patriae; creates a private right of action for adversely affected individuals or classes; allows prevailing plaintiffs to recover treble damages, restitution, attorney fees, and other relief; guarantees a jury trial; and invalidates pre-dispute arbitration agreements and joint-action waivers.

This section holds a vulture investor, including any control person or affiliate, jointly and severally liable with a youth sports entity for all liabilities incurred during the period of the investor’s control. The liabilities covered include debt obligations, legal judgments, pension-related obligations, and infractions involving child safety, labor violations, or facility codes.

This section establishes a youth sports fund to receive any disgorged funds from actions under the Act that lack a specified recipient. The Commission sets distribution terms to serve youth sports needs in harmed communities, including by reducing family participation costs, providing free facility access, increasing financial aid and scholarships, and funding divested entities to maintain safe operations.

This section authorizes the Commission to issue orders, requirements, guidance, rules, processes, or procedures to implement this Act by publishing notice in the Federal Register, without regard to the notice-and-comment rulemaking requirements under section 553 of title 5, United States Code.

This section preserves state and local authority to enact laws providing greater protections against vulture practices or covered firms than those in the Act, imposing higher civil or criminal sanctions or penalties, or creating public or private rights of action.

This section prohibits any person from structuring a transaction, relationship, or agreement to evade the requirements of this Act. It authorizes the Commission and the Assistant Attorney General to disregard the form of any transaction and consider its substance for compliance purposes. It deems any entity created or reorganized to avoid designation under this Act to be a covered firm.