How the NFL Fleeces Taxpayers

Taxpayers fund the stadiums, antitrust law doesn't apply to broadcast deals, the league enjoys nonprofit status, and Commissioner Roger Goodell makes $30 million a year. It's time to stop the public giveaways to America's richest sports league—and to the feudal lords who own its teams.

I wanted to put questions about the NFL’s finances to Roger Goodell. When I was researching my book The King of Sports, from which this excerpt is drawn, I requested interview time with Goodell, and he agreed. When NFL headquarters learned that my questions would cover tax exemptions and health issues in the league, the interview was promptly canceled. League spokesman Greg Aiello told me it was not in the NFL’s “best interests” to discuss safety or subsidies.

One might suppose that with football raking in such phenomenal sums of cash, politicians could win votes by assuming populist stances regarding NFL subsidies and exemptions. Instead, in almost every instance, Congress and state legislatures have rolled over and played dead for pro football. NFL owners pressure local politicians with veiled threats of moving teams, though no franchise has moved since 1998. Public officials who back football-stadium spending, meanwhile, can make lavish (if unrealistic) promises of jobs and tourism, knowing the invoices won’t come due until after they have left office.

Roger Goodell has become the sort of person his father once opposed—an insider who profits from his position while average people pay.

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. Arlen Specter of Pennsylvania, a moderate who served 30 years in the Senate, tried to pressure the NFL to stop picking the public’s pocket, but left Capitol Hill in 2011 and passed away the next year. No populist champion so far has replaced him. Specter told me in 2007, “The NFL owners are arrogant people who have abused the public trust, and act like they can get away with anything.”

Too often, NFL owners can, in fact, get away with anything. In financial terms, the most important way they do so is by creating game images in publicly funded stadiums, broadcasting the images over public airwaves, and then keeping all the money they receive as a result. Football fans know the warning intoned during each NFL contest: 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.

When, for example, Fox broadcasts a Tampa Bay Buccaneers game from Raymond James Stadium, built entirely at the public’s expense, it has purchased the right to do so from the NFL. 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.

Baseball, basketball, ice hockey, and other sports also benefit from this same process. But the fact that others take advantage of the public too is no justification. The NFL’s sweetheart deal is by far the most valuable: This year, CBS, DirecTV, ESPN, Fox, NBC, and Verizon will pay the NFL about $4 billion for the rights to broadcast its games. Next year, that figure will rise to more than $6 billion. Because football is so popular, its broadcast fees would be high no matter how the financial details were structured. The fact that game images created in places built and operated at public expense can be privatized by the NFL inflates the amounts kept by NFL owners, executives, coaches, and players, while driving up the cable fees paid by people who may not even care to watch the games.

In too many areas of contemporary life, public subsidies are converted to private profit. Sometimes, such as with the bailout of General Motors, once the subsidies end, society is better off; sometimes, as with the bailout of AIG, subsidies are repaid. Public handouts for modern professional football never end and are never repaid. In return, the NFL creates nothing of social value—while setting bad examples, despite its protests to the contrary, regarding concussions, painkiller misuse, weight gain, and cheating, among other issues. The No. 1 sport in a nation with a childhood-obesity epidemic celebrates weight gain; that’s bad enough. Worse, the sport setting the bad example is subsidized up one side and down the other.

The NFL’s nonprofit status should be revoked. And lawmakers—ideally in Congress, to level the national playing field, as it were—should require that television images created in publicly funded sports facilities cannot be privatized. The devil would be in the details of any such action. But Congress regulates health care, airspace, and other far-more-complex aspects of contemporary life; it can crack the whip on the NFL.

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.

In 2010, the National Football League moved its annual Pro Bowl away from Honolulu for the first time in 30 years. At the very time Hawaii was cutting its budget for public schools, state lawmakers voted to pay the NFL $4 million per game to bring the event back to their capital. The lawmakers’ gift-giving was bad enough. What was disgraceful was that the rich, subsidized owners of the NFL accepted.

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.

Football is the king of sports. Should the favorite sport of the greatest nation really be one whose economic structure is based on inequality and greed?

Gregg Easterbrook is a contributing editor at The Atlantic. He writes the Tuesday Morning Quarterback column for ESPN.com and has been an on-air football commentator for ESPN and for the NFL Network. This story is adapted from The King of Sports: Football’s Impact on America, out this month.
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Gregg Easterbrook is a contributing editor of The Atlantic. He is the author of The Leading Indicators and The King of Sports: Football’s Impact on America.

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