Easterbrook exemplifies the level of gauging that the NFL and its owners get away with by explaining that since the NFL has obtained a not for profit status and receives tax exemptions from the government, the public is stuck with the burden of paying off the tremendous debts associated with the construction of coliseum like marvels. Easterbrook then provides the reader with an argument for a solution to the end of taxpayer fleecing by the NFL.
The NFL has government Backing and Non Profit Status. This came effect with Public Law 89-800. The 1966 law was effectively a license for NFL owners to print money. This sweetheart deal [for Non-profit status] was offered to the NFL in exchange only for its promise not to schedule games on Friday nights or Saturdays in autumn, when many high schools and colleges play football.
The non-profit status applies to the NFL’s headquarters, which administers the league and its all-important television contracts. Individual teams are for-profit and presumably pay income taxes—though because all except the Green Bay Packers are privately held and do not disclose their finances, it’s impossible to be sure.
The NFL burdens the tax payers with the cost of the stadiums while keeping profits to themselves.In a typical arrangement, taxpayers provide most or all of the funds to build an NFL stadium. The team pays the local stadium authority a modest rent, retaining the exclusive right to license images on game days. The team then sells the right to air the games. Finally, the NFL asserts a copyright over what is broadcast. No federal or state law prevents images generated in facilities built at public expense from being privatized in this manner.
Politicians seem more interested in receiving campaign donations and invitations to luxury boxes than in taking on the football powers that be to bargain for a fair deal for ordinary people that use of the game’s images “without the NFL’s consent” is prohibited. Under copyright law, entertainment created in publicly funded stadiums is private property. Public officials who back football-stadium spending, meanwhile, can make lavish promises of jobs and tourism, knowing the invoices won’t come due until after they have left office. Pro-football coaches talk about accountability and self-reliance, yet pro-football owners routinely binge on giveaways and handouts.
NFL’s non-profit status should be revoked and congress should require that television images created in publicly funded sports facilities cannot be privatized. The result would be that the related costs incurred to the public are minimized and the league owner’s would become accountable to cover the funds the public previously funded (given the tremendous revenue generated by the NFL, Easterbrook does not see that as an issue).
If football images created in places funded by taxpayers became public domain, the league would respond by paying the true cost of future stadiums—while negotiating to repay construction subsidies already received. To do otherwise would mean the loss of billions in television-rights fees. Pro football would remain just as exciting and popular, but would no longer take advantage of average people.
Until public attitudes change, those at the top of the pro-football pyramid will keep getting away with whatever they can. This is troubling not just because ordinary people are taxed so a small number of NFL owners and officers can live as modern feudal lords and ladies. It is troubling because athletics are supposed to set an example—and the example being set by the NFL is one of selfishness.
Roger Goodell and the free market “so-called” defense
The National Football League is about two things: producing high-quality sports entertainment, which it does very well, and exploiting taxpayers, which it also does very well. Goodell should know—his pay, about $30 million in 2011, flows from an organization that does not pay corporate taxes.
His [Roger Goodell’s] windfall has been justified on the grounds that the free market rewards executives whose organizations perform well. But almost nothing about the league’s operations involves the free market. Taxpayers fund most stadium costs; the league itself is tax-exempt; television images made in those publicly funded stadiums are privatized, with all gains kept by the owners; and then the entire organization is walled off behind a moat of antitrust exemptions.
Specific Team of Examples of Fleecing Taxpayers
In Virginia, Republican Governor Bob McDonnell, who styles himself as a budget-slashing conservative crusader, took $4 million from taxpayers’ pockets and handed the money to the Washington Redskins, for the team to upgrade a workout facility. The Redskins’ owner, Dan Snyder, has a net worth estimated by Forbes at $1 billion. But even billionaires like to receive expensive gifts.
The Minnesota legislature, facing a $1.1 billion budget deficit, extracted $506 million from taxpayers as a gift to the team, covering roughly half the cost of the new facility. Principal owner, Zygmunt Wilf, had a 2011 net worth estimated at $322 million; with the new stadium deal, the Vikings’ value rose about $200 million, by Forbes’s estimate, further enriching Wilf and his family.
San Francisco 49ers
The City of Santa Clara broke ground on a $1.3 billion stadium for the 49ers. Officially, the deal includes $116 million in public funding, with private capital making up the rest. At least, that’s the way the deal was announced. A new government entity, the Santa Clara Stadium Authority, is borrowing $950 million, largely from a consortium led by Goldman Sachs, to provide the majority of the “private” financing. Who are the board members of the Santa Clara Stadium Authority? The members of the Santa Clara City Council. In effect, the city of Santa Clara is providing most of the “private” funding. Should something go wrong, taxpayers will likely take the hit. The 49ers will pay Santa Clara $24.5 million annually in rent for four decades, which makes the deal, from the team’s standpoint, a 40-year loan amortized at less than 1 percent interest. At the time of the agreement, 30-year Treasury bonds were selling for 3 percent, meaning the Santa Clara contract values the NFL as a better risk than the United States government. the new stadium is being underwritten by the public, most football revenue generated within the facility will be pocketed by Denise DeBartolo York, whose net worth is estimated at $1.1 billion, and members of her family.
New Orleans Saints
Taxpayers have, in stages, provided about $1 billion to build and later renovate what is now known as the Mercedes-Benz Superdome. The Saints’ owner, Tom Benson, whose net worth Forbes estimates at $1.2 billion, Though Louisiana Governor Bobby Jindal claims to be an anti-spending conservative, each year the state of Louisiana forcibly extracts up to $6 million from its residents’ pockets and gives the cash to Benson as an “inducement payment”—the actual term used—to keep Benson from developing a wandering eye.
CenturyLink Field, where the Seattle Seahawks play, opened in 2002, with Washington State taxpayers providing $390 million of the $560 million construction cost. The Seahawks, owned by Paul Allen, one of the richest people in the world, pay the state about $1 million annually in rent in return for most of the revenue from ticket sales, concessions, parking, and broadcasting (all told, perhaps $200 million a year). Average people are taxed to fund Allen’s private-jet lifestyle.
Pennsylvania taxpayers contributed about $260 million to help build Heinz Field—and to retire debt from the Steelers’ previous stadium. Most game-day revenues (including television fees) go to the Rooney family, the majority owner of the team. The team’s owners also kept the $75 million that Heinz paid to name the facility.
Dallas Cowboys play, with its 80,000 seats, go-go dancers on upper decks, and built-in nightclubs, has been appraised at nearly $1 billion. At the basic property-tax rate of Arlington, Texas, where the stadium is located, Cowboys owner Jerry Jones would owe at least $6 million a year in property taxes. Instead he receives no property-tax bill, so Tarrant County taxes the property of average people more than it otherwise would.
Easterbrook, G. (2015, December 8). How the NFL Fleeces Taxpayers. Retrieved October 03, 2016, from http://www.theatlantic.com/magazine/archive/2013/10/how-the-nfl-fleeces-taxpayers/309448/
Lehman, M. (2015, December 8). Image. Retrieved October 03, 2016, from http://www.theatlantic.com/magazine/archive/2013/10/how-the-nfl-fleeces-taxpayers/309448/