WASHINGTON — President Trump threatened on Tuesday to use federal tax law to penalize the National Football League over players who kneel in protest during the national anthem as he sought to escalate a political fight that has resonated with his conservative base.
In one of a series of combative early morning tweets, Mr. Trump said that Congress should eliminate a law that has allowed the N.F.L. central office to avoid paying taxes as a nonprofit entity. “Why is the N.F.L. getting massive tax breaks while at the same time disrespecting our Anthem, Flag and Country?” he wrote. “Change tax law!”
The tax break for the N.F.L. has been a point of controversy for years, and other conservatives have taken up the cause in recent weeks as the president has repeatedly assailed the league over the player protests. But the idea would be more about symbolism than impact. The tax break applies only to the central office, not the teams, which already pay taxes as for-profit organizations, and the N.F.L. voluntarily gave up the tax exemption for its league office in 2015.
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Mr. Trump on Tuesday also focused his fire again on Jemele Hill, the “SportsCenter” host on ESPN who previously called the president a white supremacist. Ms. Hill was suspended on Monday for suggesting that fans boycott advertisers of the Dallas Cowboys after the team owner, Jerry Jones, threatened to bench players who kneeled during the national anthem.
“With Jemele Hill at the mike, it is no wonder ESPN ratings have ‘tanked,’ in fact, tanked so badly it is the talk of the industry!” Mr. Trump wrote on Twitter.
ESPN has faced significant challenges recently and is now available in just under 88 million homes, compared with 100 million homes in 2011. In the first half of 2017, its prime-time ratings were up 1 percent compared with 2016, although its total day ratings were down more than 5 percent. But ESPN is still a ratings behemoth and still highly profitable. In the third quarter, it led full-time cable networks in total day and prime-time ratings among the key demographics of men ages 18 to 54.
The president continued to be animated by his fight with the sports world. He has enthusiastically kept up his attacks on the N.F.L., with which he has a long history of antagonism. A onetime owner of the New Jersey Generals in the upstart United States Football League, Mr. Trump persuaded other owners to sue the N.F.L. using antitrust law. The U.S.F.L. won the suit on the law, but the jury awarded only $1 in damages — tripled to $3 by law — and Mr. Trump’s league ultimately folded.
The N.F.L.’s tax exemption has long been controversial. The league’s 32 teams are for-profit businesses that pay taxes accordingly, but the central office became a nonprofit organization decades ago. In response to the criticism, the league in 2015 voluntarily gave up its tax-exempt status because of what it called the “distraction.”
It is not clear that it cost the league much money. While the league as a whole generates billions of dollars in revenue a year, the league office ran a deficit of $13.5 million in the fiscal year that ended a year before the decision to give up the tax-exempt status. But the change meant the league no longer had to disclose what it paid its commissioner, Roger Goodell.
Last month, after the kneeling controversy erupted, a Republican congressman, Representative Matt Gaetz of Florida, introduced legislation stripping professional sports leagues of tax-exempt status, an idea that has been debated on Capitol Hill for years.
In Louisiana, a Republican state House legislator, Kenneth Havard, said he wanted to take away millions of dollars in subsidies and tax breaks that the New Orleans Saints and the N.F.L. received because they had allowed players to protest during the national anthem.
In a conference call with reporters on Tuesday, Joe Lockhart, the N.F.L. spokesman, said the league receives no “massive” tax breaks, as Mr. Trump contended.
Regarding the player protests, Mr. Lockhart said the league’s 260-page game operations manual has not changed and he highlighted the precise language governing the anthem. The players, he said, “must” be on the sidelines during the playing of the anthem and “should” stand for the anthem. The league, however, has “not chosen to discipline any of the players” who have not stood for the anthem, he said.
That might change next week, though, when the owners meet in New York, where the anthem protests will be on the agenda. Mr. Goodell and the owners want the players to stand “because we think it’s an important part of the game,” Mr. Lockhart said, and “there’s a strong feeling at every level that we ought to be getting back to football.”
Sports teams have benefited in other ways under tax law. Many franchises have built new stadiums in cooperation with cities and states that floated bonds to finance construction. Municipal bonds are exempt from federal taxes, leading critics to complain that taxpayers are subsidizing profitable private businesses. Mr. Lockhart said that local government subsidies hade been an “economic engine” for those communities.
A study by the Brookings Institution last year concluded that three dozen sports franchises from the N.F.L., Major League Baseball, National Basketball Association and National Hockey League had financed stadiums since 2000 using tax-exempt municipal bonds.
The biggest beneficiary was not a football franchise but the New York Yankees, the president’s hometown baseball team, which Brookings estimated saved $492 million as a result. Among the football owners who have benefited from such bonds was Mr. Trump’s friend Mr. Jones, whose Dallas Cowboys saved $88 million in building AT&T Stadium.
It was unclear how Congress might prohibit states, counties and cities from deciding how to spend their tax revenue, or whether it could undo deals that were approved years ago. It is also unclear whether it would be possible for legislators to target teams in one league, like the N.F.L., and not another, like Major League Baseball.
In the short term, the N.F.L. team most at risk from the president’s wrath may be the Oakland Raiders. Legislators in Nevada have agreed to spend $750 million in hotel taxes to help build a domed stadium in Las Vegas to lure the Raiders from California.
The federal government has limited room to act against the N.F.L. in other areas. The league has all but abandoned its policy of blacking out games in home markets when teams fail to sell out their stadiums, giving the Federal Communications Commission less oversight over professional football. The league, however, does have something akin to an antitrust exemption, thanks to a 1966 law, that allows every team to band together to negotiate television deals.
As part of his campaign against sports figures who have criticized him, the president on Tuesday will host the N.H.L. champions at the White House. He invited the Stanley Cup winning Pittsburgh Penguins a day after disinviting the Golden State Warriors of the N.B.A. because its star, Stephen Curry, said he would vote against attending.
Published at Tue, 10 Oct 2017 18:51:52 +0000