As with most of the president’s two-thumbed policy directives, sussing out the exact meaning is tough. The NFL voluntarily gave up its tax-exempt status two years ago to keep its internal financials a secret, so that’s not it. More likely, Trump was referring to the use of tax-exempt government bonds to help finance NFL stadiums, something other anthem-loving GOP elected officials have been calling attention to of late.
Whatever he meant, it got an immediate reaction from the NFL, as Commissioner Roger Goodell responded within hours with a letter stressing that “we believe that everyone should stand for the national anthem” and promising that coming weeks will bring a new “in-season platform” to address the issue. (He probably can’t unilaterally declare a leaguewide policy, because that would require approval of the players union.) If the league succeeds in restoring the routine of all players standing before the flag before each game — a practice that dates all the way to, uh, 2009 — presumably the president will back down on his threat to the league’s bottom line.
That would be a shame, because the use of tax-exempt bonds for sports stadiums is a problem that goes back to a time when Trump was still a USFL owner suing the NFL. The practice, which effectively provides sports franchises with low-interest loans at the expense of the federal treasury, has cost taxpayers an estimated $3.2 billion across all pro sports since the turn of the millennium.
For years, economists have complained that providing federal tax breaks for stadium construction is daft policy — it shouldn’t matter to the U.S. economy as a whole whether the Raiders play in Oakland or Las Vegas — and Congress even briefly held hearings on the matter in 2007. (I got to testify.) But it wasn’t until Obama took aim at the loophole two years back that it started to get national attention, though Republicans in Congress, not willing to give him a win on anything, made sure to keep the tax breaks in place.
And that stadium tax break — if it was what Trump was getting at (even his own press secretary seemed unclear which public money he was talking about) — is only the tip of the sports-subsidy iceberg. Even at $200 million a year, the public cost of tax-exempt bonds is dwarfed by the flood of cash flowing from state, county and city governments to sports teams. Here are some of the NFL’s greatest stadium hits:
- Atlanta Falcons owner Arthur Blank got $200 million in state money toward his team’s new $1.6 billion stadium, then snuck in a clause that will net him “close to $700 million” worth of additional tax money over the course of the next 30 years. If the team stays that long, that is: Blank abandoned his old stadium, the Georgia Dome, before it even turned 25.
- When sales-tax revenue that was supposed to pay for a new Cincinnati Bengals stadium fell short, Hamilton County, Ohio, sold off a public hospital to make its payments. And taxpayers there may have more expenses in their future: A clause in the team’s lease requires the public to provide for any upgrades that half of other NFL teams have, up to and including a holographic replay system.
- New Orleans Saints owner Tom Benson not only got Louisiana taxpayers to spend $376 million to renovate the Superdome, he arranged to be paid an additional $18 million a year for deigning to allow his team to play football there. His team execs built a 13-foot-high statue of Benson for this, as they could well afford to do.
If the party in control of Washington really wanted to put an end to all these stadium games, it could do so in an instant by passing an excise tax on all local-level subsidies, as Rep. David Minge (D-Minn.) proposed in 1999, instantly making stadium subsidies undesirable. What’s the point of getting a wad of cash for your stadium if you just have to pay it right back out to the IRS? Minge’s bill didn’t even make it out of committee before it was stymied by sports league lobbyists. If there’s something to be outraged about, it’s not who chooses to protest how; it’s that Congress has the power to nip sports subsidies in the bud, but it never seems to find the backbone to do it.