National Football League presses to preserve tax-exemption for stadiums
6 min readWith the municipal market’s prized tax exemption
The use of tax-exempt bonds to build sports stadiums, which have been subject to several legislative attacks over the years, appears to be a top priority for the NFL. In April, the league hosted a dozen Congressional aides in Detroit during the 2024 Draft. The
The move comes as municipal market lobbyists are gearing up for a fresh fight to preserve the tax exemption across all markets. Congress next year will tackle expiring tax provisions in the 2017 Tax Cuts and Jobs Act and on the hunt for so-called “pay-fors” to avoid deepening the deficit. Muni lobbyists will be working to “support maintaining tax-exempt financing authority under current law,” including stadium bonds, said Brett Bolton, senior vice president of Bond Dealers of America.
The use of tax-exempt bonds to build stadiums on behalf of wealthy team owners has faced near-constant criticism since the Tax Reform Act of 1986, when Congress eliminated them from the category of private activity bonds eligible for federal tax exemption. In order to be eligible for the exemption, stadium bonds must now be structured so that no more than 10% of debt service is secured by interest in the stadium and no more than 10% of the bond proceeds are from payments derived from the stadium.
Despite having to take the debt onto their own books, cities and states are often eager to finance costly stadiums in order to hang onto high-profile teams and say that the facilities spur economic development and jobs. Critics including
Congress has floated several bills over the years to eliminate the perk, all of which have failed to gain traction. The most recent bill came during the last Congress from Oregon Democrat Rep. Earl Blumenauer, who
“It’s always been an issue that a handful of elected representatives and senators will take up, and it never really goes anywhere because the league lobbies really, really hard against it,” said Neil deMause, who wrote Field of Schemes: How the Great Stadium Swindle Turns Public Money Into Private Profit and writes the
DeMause, who testified on the topic before a House committee in 2007, said the issue’s lack of traction on Capitol Hill indicates “somebody important doesn’t want it to be discussed,” he said. “Actually having a vote on it is beyond the pale because nobody wants to have to take sides against saving taxpayers money or helping the sports leagues — and this is clearly a major priority by the sports leagues.”
The federal tax exemption on stadium bonds, he added, is the “gift that keeps on giving from the U.S. Treasury to sports teams owners.”
The NFL, considered the most active lobbyist among the sports leagues, spent more than $1.3 million on federal lobbying in 2022,
One of its external lobbying firms, Capitol Counsel LLC,
Of the 11 House representatives who sent one or more aides to the NFL’s Detroit draft, only one responded to a Bond Buyer request for comment. A spokesperson for Rep. Jim Jordan, R-Ohio, chair of the Judiciary Committee, said in an email that the NFL’s legislative briefing was “a widely attended bipartisan event that has zero impact on our committee’s work.” He noted that Jordan voted against the
Two of the aides who went to the draft work for officials who are on the House Municipal Finance Caucus: Rep. Richard Neal, D-Mass., and Rep. Doria Matsui, D-Calif. Neal,
An aide for House Majority Leader Rep. Steve Scalise, R-La., said in a
Other representatives whose aides attended include a mix of Republicans and Democrats, none of whom sit on key tax committees. They include Rep. Mark Green, R-Tenn.; Rep. Frank Pallone, D-N.J., ranking Member of the House Energy and Commerce Committee; Rep. Mark Veasey, D-Texas, who sits on the Energy and Commerce Committee; Rep. Bennie Thompson, D-Miss., a ranking member on the Committee of Homeland Security who sits on the Congressional Gaming Caucus. A staff director for the Committee on Natural Resources also attended the briefing.
A March 2020
Several sports franchises since 2020 are pursuing pricey stadiums backed at least in part by tax-exempt bonds, according to
The $2.1 billion Nashville Titans stadium, set to open in 2027, will
Blumenaur’s legislation last year marked the latest in a long series of measures aimed at eliminating the tax break. Former President Obama took a stance against taxpayer funding for stadiums and arenas in his fiscal 2016 and 2017 budgets, followed by several bills from both chambers over the ensuing years, including
The nearest the effort came to fruition was in 2017, in the House version of the TCJA. The provision, which included state or private college athletic stadiums, was dropped during the House-Senate conference committee on final legislation.
“Who knows, maybe this will be the year when Congress takes a serious looking at getting rid of the tax-exempt bond loophole,” deMause said. “But I’m certain the leagues, which have plenty of money for lobbyists, are going to be leaning really hard on why we need you to keep it.”