The Corrupt Bargain Between Politicians and the NFL
Why does the league have nonprofit status? Why is it exempt from antitrust laws? It's hard to justify any of it.
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.