“The NFL Is Not A Nonprofit”: So Why Does It Get To Act Like One?
The National Football League generates about $9.5 billion in revenue each year. It is, by Forbes’ estimate, the most valuable sports league in the world. Its commissioner, Roger Goodell, makes $44 million in a year. And yet, the NFL’s head office has long been allowed to operate as a tax-exempt nonprofit—as if its sole purpose for existence wasn’t to extract wads of cash from the wallets of American sports fans.
This week two Democratic senators have announced bills that would put this obvious farce to an end. In response to the outrage swirling over the NFL’s apparent tolerance of domestic abuse, New Jersey’s Cory Booker introduced legislation that would prohibit tax-free status for all major sports leagues. (The National Hockey League and PGA Tour are also nonprofits.) Washington state’s Maria Cantwell, meanwhile, is offering a bill targeted directly at the NFL’s tax-exempt status, prompted by its refusal to force the Washington, D.C., franchise to change its name from a racial slur against Native Americans.
Even if it’s taken a series of national scandals to give this idea a fresh push, it’s nice to see common sense gaining more steam. Previously, Republican Sen. Tom Coburn of Oklahoma (whose state lacks an NFL team) and the House Ways and Means Committee have proposed legislation that would strip sports leagues of their nonprofit status. But if senators representing Giants, Jets, and Seahawks fans suddenly feel comfortable getting behind this idea, that’s progress.
Chances are, yanking away the NFL’s tax exemption wouldn’t drastically change its finances. Only the league office, which considers itself a trade association for its clubs—just like the U.S. Chamber of Commerce or the National Dairy Council—is a nonprofit; the teams themselves are purely for-profit. As a result, pro football’s copious TV revenues are taxed once they’re passed down to the franchises. A separate, for-profit company called NFL Ventures, co-owned by the teams, handles the league’s merchandising and sponsorship earnings. Finally, the league office often operates at a loss—in 2011 it finished more than $77 million in the red, while in 2012 it only had $9 million left at year’s end. Without profits, of course, there’s nothing for the government to tax.
The case of Major League Baseball is instructive for what might happen to the NFL if it were to lose its exemption. In 2007, MLB gave up its nonprofit status, reportedly because of new IRS rules that would have required public disclosure of its executives’ salaries. Later, it said the move was “tax-neutral.”
Congress itself doesn’t think the NFL’s tax bill would be that big. Coburn has suggested that taxing the NFL and NHL alone would raise about $91 million per year. But the Congressional Joint Committee on Taxation—probably a bit more credible in this instance—believes ending tax exemptions for all sports leagues would bring in just under $11 million per year. Booker hopes his bill would raise about $100 million over a decade, which would go to support domestic abuse programs. That’s a mere trickle compared with the geyser of cash the NFL generates each year.
So if money isn’t really the issue, what is? It’s about principles. Letting the NFL operate tax-free makes a mockery of the entire concept behind nonprofits, which is that we should give a special break to organizations that do the useful, unprofitable work normal corporations won’t.
The NFL’s lawyers like to point out that the IRS has a long history of treating sports leagues as tax-exempt. The government first gave the league office its nonprofit status in 1942, they note, and hasn’t questioned it since. Citing this history is a reasonable response to critics, such as Gregg Easterbrook, who claim that the NFL is simply benefiting from a special tax loophole that came about thanks to some brilliant lobbying in the 1960s—Congress actually inserted “professional football leagues” into the list of nonprofit trade groups covered by Section 501(c)(6) of the tax code. The code had previously covered “business leagues, chambers of commerce, real-estate boards, or boards of trade.” But this legislative carve-out doesn’t explain why, for instance, pro hockey and pro golf also get to operate tax-free.
The problem is that the NFL should never have been considered a trade association in the first place. Love or hate the lobbying they do in Washington, trade groups are supposed to work for the benefit of entire industries, and be open to any business in that industry that would like to join. If you own a butter-making factory, then by God, you can pay dues and become a member of the American Butter Institute. The NFL, in contrast, operates a legally sanctioned sports cartel. It’s not in the league’s interest to let in more teams, because that could hurt the value of existing franchises.
“To be a 501(c)(6) organization, anyone who meets your requirements for who’s part of the industry has to be allowed to join the association as a member,” Jeffrey Tenenbaum, chairman of the nonprofit organizations group at the law firm Venable, explained to ESPN last year. “With professional sporting leagues, that’s not the case; it’s a very closed circle. You can’t start a professional football team and join the NFL.”
If NFL executives were out lobbying on behalf of college football teams or arena football, we might have a different story. But they’re not. The league office is the enforcement wing and rule-making body of a profit-making operation. The same goes for leagues like the NHL, which exist for the express purpose of excluding competition.
The deeper issue at play here is that nonprofits exist to do things for the public good—things that for-profit companies generally don’t do. That’s why we give nonprofits a break from the IRS. And it’s why the government should be stingy about which kinds of organizations count and which don’t. We know that sports leagues won’t suddenly disappear if we treat them like normal corporations and ask them to pay, at most, a few million dollars to the government. Major League Baseball certainly hasn’t gone anywhere. The NFL won’t either.
“Federal Crime”: Judge Mark Fuller, A Man Who Clearly Has No Business Being On The Federal Bench
For the past few weeks, the indispensable investigative journalist Brad Friedman has covered the case of George W. Bush-appointed US District Court Judge Mark Fuller of Alabama, who’s notorious for his role in the railroading of former Alabama Governor Don Siegelman. Last month, Fuller was arrested for allegedly attacking his wife in a Georgia hotel in a manner reminiscent of the National Football League’s paragons of family values. However, as Friedman has noted, there’s a creepy possibility that Fuller could avoid any real legal accountability for his alleged behavior.
This horrifying story has, unfortunately, stayed under the radar of the mainstream media, with the recent exception of MSNBC’s All In with Chris Hayes. Now, in an explosive follow-up, Friedman has revealed new details about a man who clearly has no business being on the federal bench:
…Fuller is not necessarily off the hook for prosecution in a court of law yet. The terms of his plea deal, reportedly, require that, in addition to attending once-a-week domestic abuse counseling for 24 weeks, Judge Fuller must also receive an evaluation concerning drug and alcohol abuse by a court-approved entity.
If he successfully completes those requirements, only then will his arrest record be permanently expunged.
Fuller’s attorney, after the plea deal was approved in state court with the consent of Fuller’s wife Kelli, the victim in this case, stated that the federal judge “doesn’t have a drug or alcohol problem and never has.”
That, like the claim that he is a first time offender in regard to domestic abuse, does not appear to be true, at least according to Fuller’s first wife Lisa who filed a damning Request for Admissions during their 2012 divorce, after Fuller was allegedly discovered to have been having an affair with his court bailiff, Kelli, who he eventually married (and subsequently beat the hell out of last month, after she similarly accused him of having an affair with his law clerk.)
According to the Reporters Committee for Freedom of the Press in 2012, the first wife, Lisa Boyd Fuller, “submitted an objection to her husband’s motion to seal their divorce file…She agreed to redact certain sensitive information but ‘strenuously object[ed] to sealing the entire file,’ according to her response. Her initial complaint and request for admissions accuse Fuller of extramarital affairs, domestic violence and prescription drug abuse.”
Friedman’s coverage of the Fuller horror has been extraordinary. After reading the gruesome details of this story, how can one not join the growing chorus of those demanding that Fuller resign or be impeached?
By: D. R. Tucker, Washington Monthly Political Animal, September 20, 2014
“The Not-So-Soft Racism of Tom Cotton”: A Deliberate Divisive Form Of Racial Politics
Reagan adviser Lee Atwater:
Atwater: You start out in 1954 by saying, “N—–, n—–, n—–.” By 1968 you can’t say “n—–” — that hurts you. Backfires. So you say stuff like forced busing, states’ rights and all that stuff. You’re getting so abstract now [that] you’re talking about cutting taxes, and all these things you’re talking about are totally economic things and a byproduct of them is [that] blacks get hurt worse than whites. And subconsciously maybe that is part of it. I’m not saying that. But I’m saying that if it is getting that abstract, and that coded, that we are doing away with the racial problem one way or the other. You follow me — because obviously sitting around saying, “We want to cut this,” is much more abstract than even the busing thing, and a hell of a lot more abstract than “N—–, n—–.”
GOP representative Tom Cotton, telling a gross lie:
“(My dad) taught me early: farmers can’t spend more than they take in, and I listened,” Cotton said in the ad. “When President Obama hijacked the farm bill, turned it into a food stamp bill, with billions more in spending, I voted no.”
Of course, Cotton isn’t even in the ballpark of truth here. Food stamp bills have long been attached to farm bills in a cat’s cradle knot to encourage urban and rural legislators to vote for each others’ programs. It was the GOP who dissociated them in the hope of cutting food stamps. Obama had nothing to do with it.
But it’s worse than that. It’s no secret that food stamps (now called the SNAP program) have long been racial code for Republicans, even though a large plurality of SNAP recipients are white. When a Republican politician tells his base that he favors cutting food stamps but not farm subsidies, he’s using Atwater’s dog whistle, promising to deliver the pork to rich (white) agribusiness to boost their profits, while stiffing a lot of minorities (most of whom do work at least part-time) who would actually benefit the broader economy by receiving spending money.
Republicans bristle at being called racist in their policies: they feel that Democrats use every opportunity to brand any conservative policy as racist. But that’s because they’ve grown so used to their own dog whistles that they don’t even realize that other people can hear them and take offense.
Tom Cotton isn’t just lying to rural voters about the history of the farm bill. He’s also playing a deliberately divisive form of racial politics that has no place in modern America.
By: David Atkins, Washington Monthly Political Animal, September 20, 2014
“The President Decides”: The Difference Between Military Commanders And The Commander In Chief
The Washington Post reported overnight that when it comes to U.S. efforts to combat Islamic State terrorists, President Obama and military leaders aren’t necessarily on the same page.
Flashes of disagreement over how to fight the Islamic State are mounting between President Obama and U.S. military leaders, the latest sign of strain in what often has been an awkward and uneasy relationship.
Even as the administration has received congressional backing for its strategy, with the Senate voting Thursday to approve a plan to arm and train Syrian rebels, a series of military leaders have criticized the president’s approach against the Islamic State militant group.
It’s hard to say with confidence just how widespread the disagreements really are. For that matter, even among those military leaders voicing disagreement, there’s a variety of opinions.
For his part, Defense Secretary Chuck Hagel told the House Armed Services Committee yesterday that Pentagon leaders are in “full alignment” and in “complete agreement with every component of the president’s strategy.”
And that’s fine, but let’s not forget that it’s not really their call. Pentagon leaders don’t actually have to be in “complete agreement with every component of the president’s strategy.”
NBC’s First Read noted yesterday, “Remember the battle cry of some Democrats during some of the darkest days of the Iraq war – that Bush and Cheney were not listening to the commanders? Well, given where all the military leadership is on this strategy, it is now Obama, the Democrat, who is open to criticism that he is not listening to his commanders.”
But there’s no reason to necessarily see that as “criticism.”
I understand the political dynamic. In theory, many may like the idea of military decisions being made by military leaders with military expertise.
But the American system is designed a specific way for a reason. As NBC’s First Read went on to say, “Of course, again, it is Obama that is commander-in-chief. Not anyone at the Pentagon.”
That’s exactly right. The fact that the president and some military leaders disagree is fine. The fact that elements of this debate are unfolding in public is healthy in a democracy. The fact that Congress has heard different positions from various officials within the executive branch is valuable as part of a broader debate.
All of this should be seen as a feature, not a bug, of a nation exploring the possibility of war. Military leaders can bring the president options, and in response, the president will give those leaders orders. When our system is working well and as intended, the scope of those orders will be shaped in part by Congress, which is supposed to be directly involved in authorizing the use of military force.
The fact that some military leaders may disagree with Obama is not a sign that Obama is wrong – or right. The president in this case may not be listening to his commanders, but in our system, they’re required to listen to him.
As Rachel explained on Tuesday’s show, “The military makes military recommendations to the president and the president decides whether to accept them or not. That is not a scandal. If they recommend something to him and he says no to that, that’s not a scandal. That’s actually a America. That is our system of government. It’s one of the best things about it. That’s sort of a whole civilian-control-of-the-military thing and how that works…. This is like first day of What’s America Class.”
It’s a fair point to say Democrats were critical of the Bush/Cheney White House for failing to listen to commanders during the height of the crises in Iraq, but it seems to me those criticisms were based on (a) the fact that some of these military were giving the White House good advice that wasn’t being followed; and (b) the fact that Bush said he was listening to his commanders, even when he wasn’t.
By: Steve Benen, The Maddow Blog, September 19, 2014
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