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“A Protection Racket”: The Corrupt Bargain Between Politicians And The NFL

For a number of years, I have been uneasy about the symbiotic and corrupt relationship between lawmakers and professional sports leagues, especially football. Many years ago, I got a call from a reporter with Sports Illustrated. I returned the call, mostly out of curiosity about why a sports reporter was calling a politics/Congress person. It turned out there was a legitimate reason. The SI reporter had noticed that Senator John Warner of Virginia served on the board of directors of the Washington Redskins; he wondered whether that was allowed under the ethics rules of the Senate—and if so, why?

Of course, as a general matter, members of Congress could not serve on corporate boards. But somehow, the sports team was viewed differently. It should not have been. The Redskins, then owned by Jack Kent Cooke, was a very large for-profit company, with clear and important interests in front of the federal government. Professional football had an antitrust exemption, worth a fortune and even then controversial. The Redskins, like the other National Football League teams, enjoyed very favorable depreciation rules for its players, tax advantages that meant less revenues for the government and more profits for the owners. Warner was a great senator, a man of integrity. But as a member of the board of the team, he had a fiduciary responsibility to look after its interests. And as a senator, he had a duty to look after the interests of Virginia and America. What if those duties clashed?

The Redskins, back then, were the only game in town, an obsession for Washington. Cooke’s owner’s box each weekend was filled with Washington power brokers, including senators, House leaders, the chairman of the Fed, cabinet officers, and others. Cooke reveled in their friendship; they reveled in their access.

The buddy-buddy relationship between the NFL and lawmakers led to the antitrust exemption in 1961. This is a multibillion-dollar business; why should it be given an exemption denied to other businesses and industries not doing professional sports? There was even less legitimacy to the decision Congress made subsequently to enable the NFL itself to function as a nonprofit organization, with all the benefits that accrue to other nonprofits. Nonprofit? Find me a nonprofit that pays its CEO $44 million! Of course, the NFL is not a nonprofit in reality, and it has spun a web of offshoots that pull in bundles of money for licensing and other lucrative businesses.

The unhealthy and unholy relationship the NFL has long maintained with Congress has also been evident with local and state governments that eagerly jump in to make taxpayers pay through the nose to attract or keep teams through separate tax breaks; public financing of stadiums; giveaways or bribes in the form of granting luxury boxes and their huge streams of revenue to the team owners instead of to the taxpayers footing the bill for the stadiums; and so on. If local politicians are not eager enough, team owners bludgeon them into submission with threats to move the teams. As Steve Almond wrote in The Washington Post, this is crony capitalism plain and simple—I would add, along with a dose of a protection racket.

Roger Goodell, the NFL commissioner, has his own links to Washington. His father, whom I knew and deeply admired, was a Republican senator from New York who was courageous in his deep opposition to American involvement in Vietnam, infuriating the Nixon administration—not the only position he took that broke from party orthodoxy. I became disillusioned with son Roger long before the current fiasco, when he quickly blew off the Obama administration’s request to have the NFL help uninsured football fans learn about their access to health insurance under the Affordable Care Act. This was not about endorsing or supporting a political side; it was about informing people about getting insurance. No doubt many younger NFL fans play football themselves—and some otherwise healthy athletes will get concussions, fractures, spinal injuries, and more while doing so; without insurance, they could have their lives devastated. Goodell’s move was a craven one.

Now he is under siege for his stumbles and missteps over domestic violence. He is also facing criticism for the league’s longtime indifference to the brain injuries suffered by so many players in the violent sport. But he is for the moment secure in his job; the owners are firmly behind him. And why not? His stewardship, built on that crony capitalism, makes these very wealthy people even wealthier, and they have been happy to reward him with staggering benefits.

I am a sports nut and an ardent football fan. Whether Goodell stays or goes is not really the issue here. To me, the issue is that it is past time for Congress to reexamine its unhealthy relationship to this huge set of businesses, to reconsider both the antitrust exemption and the farcical nonprofit status of the league. Football is sport, its fan base is huge, including members of Congress. But it is first and foremost a business, and it is simply wrong to ignore that reality in making public policy.

 

By: Norm Ornstein, The Atlantic, September 25, 2014

September 26, 2014 Posted by | Congress, Major League Sports, National Football League | , , , , , , | 1 Comment

“We Just Keep Short-Changing Women”: Same Job, Same Size Budget Equals Less Pay For Women

Hey, married men – wake up! Your working wives are getting shorted on pay and that means your family has less money than it should.

A new report on pay, made public today by Guidestar USA  proves discrimination against women is pervasive.

The new report compares men and women with the same positions at similarly sized nonprofit enterprises, so the fact that women often work in lower-paid occupations such as waitressing, retail and clerical work is irrelevant in this study.

While women who become waitresses or retail clerks should expect to make less than lawyers and executives, there is no reason that women executives and lawyers should make less than men doing the same jobs — but they do.

Men holding the top spot at nonprofits averaged between 10 percent and a third more than women in the same jobs, Guidestar found.

In general, the bigger the organization and the bigger the job responsibilities, the greater the gap between what women and men are paid — and the greater the share of top jobs held by men.

Guidestar is a nonprofit organization that compiles data reported to the IRS, and the public, by all nonprofits. The 2010 data cover not just charities that solicit donations, but trade organizations, small mutual insurance operations and social welfare organizations among the 29 types of nonprofits authorized by Congress.

This is Guidestar’s 12th annual Nonprofit Compensation Report and it draws on disclosures by more than 77,000 nonprofits.

The report used names to determine sex. Androgynous names like Pat or Chris were excluded from the analysis, Charles McLean, Guidestar’s research director, told me.

At small nonprofits, those with an annual budget of less than $250,000, men in the top job averaged $53,389. That is 10 percent more than the $45,038 paid to women.

More than half of these small nonprofits, 57 percent, were led by women.

At the top, these gaps grew to chasms.

Among organizations with budgets of $50 million or more, men in the top job averaged $644,375. That is almost a third more than the $488,249 average for women CEOs.

Even more telling, women held just 1 in 6 of the CEO jobs at the biggest nonprofits.

The only CEOs who made more than $1 million a year on average were men at $50 million-plus nonprofits who, at the 90th percentile, averaged almost $1.2 million, compared to less than $924,000 for women at the same percentile of pay.

The pattern is pretty much the same for the top legal and finance jobs at nonprofits. However, pay disparities are smaller for public relations.

The same pattern of men dominating in the highest-paid jobs is found in the latest ORS data on wages reported on income tax returns.

Among people with wages of $10 million or more, just one in 29 was a woman. These 60 highly paid women workers averaged $18.8 million in wages in 2010, IRS data shows.

Men accounted for more than 96 percent of all top wage earners. The 1,664 men were paid on average $20.1 million or almost 7 percent more than the highest-paid women workers, the IRS data shows.

The IRS data also shows that as workers get older, the pay disparities between men and women increase. Among workers under age 26, the average pay of men was $16,000 in 2010, just 22 percent more than women of the same age.

But for workers ages 45 to 60, men averaged about $67,000, which was 70 percent more than women, who averaged slightly less than $40,000.

This may reflect occupational choices, but it may also indicate that as time passes, the gap between what men and women make will narrow.

Guidestar gets its figures from the Form 990 tax returns that all nonprofits must file with the IRS. It then analyzes them in many ways, including pay by gender and size of organization budget.

The data is exceptionally robust because Congress micromanages nonprofit pay, a cause championed by Senator Chuck Grassley of Iowa, a Republican who is the only pig farmer in the Senate and a longtime antagonist of charities and other nonprofits.

One benefit of Grassley’s instinctive suspicion of nonprofits is that he persuaded Congress to require much more complete disclosures on what nonprofits pay than corporations. Profit-making enterprises only have to disclose what their top five executives were paid, and then only if they have publicly traded stock or bonds.

Even more significant, Congress requires rigorous and costly review of pay comparability for nonprofit leaders.

The zone of discretion for paying nonprofit executives under the laws Grassley sponsored and rules the IRS issued is exceedingly narrow, unlike the wide-open rules for profit-making corporations. For nonprofits with budgets of $5 million to $10 million, the zone of discretion is perhaps $10,000 above or below what the Guidestar and other pay studies show, compensation consultants have advised me when I sought their advice because nonprofit boards on which I volunteered assigned me to recommend the top executive’s pay.

Discrimination against women is pervasive and significant. It is also only slightly less severe than it was in Guidestar’s first pay study in 2001.

McLean, the Guidestar research director, said, “There is progress being made, but it is very slow.”

Two ways to speed up that process:

—Women who are married should make sure their spouses know how much money the family loses because of gender discrimination.

—Men should be in the forefront of demanding for equal pay for women, especially the majority of married men with a working wife.

Or we could do nothing, and just keep shortchanging women.

 

By: David Cay Johnson, The National Memo, September 16, 2013

September 18, 2013 Posted by | Economic Inequality, Gender Gap | , , , , , , , | Leave a comment

   

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