Stadium Swindle

Donald Trump’s One Weirdly Good NFL Idea? Barack Obama Already Had It.

This president is (sort of) right about football team’s tax breaks. There’s almost no chance, though, that he’ll really do anything about them.

Photo Illustration by The Daily Beast

For the 22nd time in the last few weeks, a football thing set off Donald Trump and he took out his anger online.

“Why is the NFL getting massive tax breaks while at the same time disrespecting our Anthem, Flag and Country?” the president tweeted earlier this week, even though nonviolent protests in no way intended to show disrespect for the unnecessarily capitalized anthem, flag, and country. “Change tax law!”

It’s a continuation of his windmill-tilting spat with the NFL, one that really began to pick up steam after a stump speech on Sept. 22, when Trump howled that any NFL athlete taking a knee to protest state-sanctioned violence and structural racism should be bodily dragged from the field.

With regard to the above tweet, it’s not entirely clear what he means. The NFL—as in, the National Football League itself—does not receive “massive tax breaks.” Until 2015, the NFL was a nonprofit corporation, and as such, was not required to pay federal income tax, though 31 of the 32 teams are for-profit businesses, the one exception being the Green Bay Packers, a not-for-profit that is publicly and communally owned by Wisconsinites.

The NFL, however, voluntarily dropped its nonprofit status two years ago because people were getting miffed at Commissioner Roger Goodell’s $44 million salary, which, as a tax-exempt entity, the league was legally required to disclose.

Tweak a couple of words in Trump’s latest tweet, and he may have inadvertently stumbled upon a good and true idea: NFL teams have been taking huge gulps out of the public trough over the last two decades, and Trump does possess the means to at least stanch the tide. The only problem is, he’d have to back a budgetary measure proposed by… wait for it… Barack Obama.

Since 1997, 24 NFL stadiums have been erected or renovated, projects that would not have been possible without a generous contribution of $6.7 billion from the public, per ESPN, with most of that cash coming from states and cities, not the feds.

The NFL is hardly alone. The total giveaway to the four major pro sports leagues has been estimated at $18 billion over the last two decades, and every economist not on the payroll of a team or a municipality in on the shakedown has determined that it’s a massive waste of taxpayer dollars.

Public-funded stadiums generate minimal to no economic growth or plunge cities into debt that they’re still climbing out of, while transferring gobs of wealth from the poor to the uber-rich, full stop. In the most recent and glaring example, the Oakland Raiders were gifted $750 million by Nevada’s Clark County to help build a glittering temple in Las Vegas and lure them out of the Bay Area, a scam destined to screw Vegas residents for years to come.

In both his 2015 and 2016 proposed federal budgets, President Obama tried to cut off a tax loophole dating back to 1996 that cities and states have used to finance stadium-funding projects. Specifically, the interest on municipal bonds floated by a government body and used to pay the costs of building an arena or stadium would no longer have been exempt from taxes. Per a recent study by the Brookings Institution, maintaining this loophole cost the federal government $3.7 billion in potential tax revenue over the last 17 years. Alas, it was rejected by the Republican-controlled Congress both times.

The Daily Beast spoke with Neil deMause, co-author of Field of Schemes: How the Great Stadium Swindle Turns Public Money Into Private Profit, who explained that the tax exemption sponsored by Sen. Daniel Patrick Moynihan was never intended to cover stadium projects. Rather, it was assumed cities would use this exemption to encourage the construction of things people actually need: parks, libraries, infrastructure. Moynihan’s bill made it so any project receiving more than 10 percent of its funding from the public would not be tax-exempt.

But during this century’s stadium boom, with owners threatening to bolt town if they weren’t bestowed massive wads of public money, a municipality scored a major win if it only paid 10 percent. That often meant coming up with all manner of convoluted schemes and financing plans to ensure that by the books, the private entities kept above the 90 percent line, when in reality, the teams were responsible for a lesser chunk of the total costs. Obama’s solution, deMause said, was a relatively simple one: “It would get rid of the question of whether [a sports venue] is funded by tax money or private money and just say, ‘If a private entity is using it, it’s a private building and you can’t use taxes on that.’”

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So does Trump’s—not really, but still—proposal have legs? DeMause doesn’t think so, though he said there has always been an odd coalition of libertarian-leaning conservatives and anti-corporate-welfare liberals in place to support it. Plus, right-wing media companies like Fox Business, The Washington Examiner, and Breitbart are suddenly finding themselves in lockstep with left-leaning sportswriters and outlets in questioning the tax break. A spate of GOP backbenchers has suddenly jumped into the fray too, making loud noises about stadium funding as a way to keep the outrage fires about the flag and anthem stoked.

And yet, Missouri Gov. Eric Greitens, who was elected in 2016 and ran a campaign ad called “Big Guns” that consisted solely of him pumping off round after round from some military-grade hardware, (so, yeah, a Republican) refused to back a plan in that would have gifted $80 million toward the construction of a soccer stadium for a still-nonexistent Major League Soccer expansion team in St. Louis. He called the proposal, which failed, “welfare for millionaires.”

In 2015, Wisconsin Governor and noted budget hawk Scott Walker  wanted to funnel cash to the new owners of the Milwaukee Bucks, but the plan was staunchly opposed by… Americans for Prosperity? Yes, Americans for Prosperity.

“The new Bucks stadium proposal is still a bad deal for Wisconsin taxpayers,” AFP State Director David Fladeboe said in a statement. Though the Bucks did ultimately get the money, Fladeboe was lamenting the proposal’s use of “fuzzy math” and “complicated accounting,” all of which is and was undoubtedly true, even if it’s jarring to see a Koch Brothers-founded and -funded mouthpiece say it.

Conversely, the Democratic mayor of Cleveland and party apparatus moved heaven and earth in order to bequeath Cleveland Cavaliers owner, Trump donor, and subprime-mortgage grifter Dan Gilbert $70 million to spiffy up Quicken Loans Arena. Despite opposition from local grassroots activists, the proposal passed.

Even if an Obama-like bill was brought to the floor today—and there’s zero sign that Congress is so inclined—it would not entirely stop communities from getting ripped off by a friendly neighborhood stadium-hungry owner.

Municipalities regularly beef up proposed projects by offering all manner of taxpayer-funded goodies beyond tax-exempt bonds, like paying for infrastructure and transportation projects in and around a new stadium, offering below-market rent on the facility itself, leasing the team the land for a dollar per year, doling out additional tax breaks to the team, and so on, none of which would have been covered by Obama’s modest proposal.

DeMause has an even more radical solution: a 100 percent excise tax on teams that accept local subsidies, which would basically put an end to public stadium funding altogether. A similar idea died in committee in 1999, and probably wouldn’t get any further today.

Moreover, now that Goodell, Jerry Jones, and the rest of the NFL owners have made their intention to subvert the protests clear, to the point of fiddling with the rules—without telling anyone!—and levying threats, that should be enough winning to let Trump forget about the NFL’s stadium boondoggle. He will, of course, keep yammering about the anthem, because it’s a cheap jingoistic ploy that resonates with the simmering MAGA crowd.

Or, if for some weird reason, it does become part of his legislative agenda, the moment some harried advisor mentions that he’d be siding with Team Obama, expect Trump to punt.