A regulatory proposal shows why some NFL team owners cozy up to President Trump

Charles RobinsonNFL columnist
Yahoo Sports

Starting in the campaign period for the 2016 presidential election, Donald Trump began sparring with the NFL. “Sparring” is used loosely here because the exchange was largely one-sided.

Whether it was criticizing a tax-exempt filing status that hadn’t existed since 2015, national anthem player protests, officiating, television ratings or even league leadership, Trump seemed to take glee in measuring up one body shot after another when it came to the NFL.

He did it on social media. He did it at rallies. He did it on television and in radio interviews.

Almost always, the NFL said nothing. And more often than not, the silence was accompanied by money from team owners and social elbow-rubbing. That includes nearly $7.7 million from nine different ownership groups to Trump’s inaugural committee in 2017 and at least another $1.1 million driven by the 2018 and 2020 election cycles. In August, Miami Dolphins owner Stephen Ross hosted a fundraiser for the president. New England Patriots owner Robert Kraft has golfed with Trump and ridden with him on Air Force One. Both of those owners, along with the Dallas Cowboys’ Jerry Jones, are in Trump’s cell phone. New York Jets owner Woody Johnson was tapped by Trump to be his ambassador to the United Kingdom.

There is no other professional sports league in the United States that has closer ownership relations with Trump. And that’s not about public relations. It’s about money, and specific kinds of finance, not just legislative practices that benefit most billionaires in the United States, like the 2017 tax cuts that largely benefitted the richest Americans or corporations.

Mercedes-Benz Stadium, the relatively new home of the Atlanta Falcons, stands in Atlanta. (AP Photo/David Goldman, File)
Mercedes-Benz Stadium, the relatively new home of the Atlanta Falcons, stands in Atlanta. (AP Photo/David Goldman, File)

How NFL stadiums figure in deregulation

Trump showed this week he can be a very beneficial ally to the NFL (and other sports leagues). That was showcased when a pair of financial regulators — appointed by Trump to revamp the Community Reinvestment Act — released some proposed changes to the legislation. Through a somewhat complicated use of three regulatory bodies, the CRA is largely aimed at stimulating banks to offer financial opportunities to poorer communities through loans and investments.

The act has existed since 1977 and Trump has been pushing for an overhaul that appears to be geared toward easier redevelopment of poor and low-to-moderate income areas.

The interesting part of the legislative revamp for the NFL: Deep inside a 239-page document that details some of the proposed changes, one tweak lays out an interesting concept. From page 100, it outlines something that could be considered a form of aid and opportunity from banks to a poor community:

“Investment in a qualified opportunity fund, established to finance improvements to an athletic stadium in an opportunity zone that is also an LMI census tract.”

Here’s how a Bloomberg report summed it up: “For decades, the U.S. has required banks to steer a portion of their money to people in poor neighborhoods. Now, under proposed rule changes, banks may finance upgrades to sports stadiums, call it helping the poor — and potentially even get a generous tax break.”

What this means for the NFL is that if a team owner has a stadium in what the government recognizes as a poor or lower-middle-income area, banks could have a very nice regulatory incentive to provide super-attractive loans to that owner.

Under this policy tweak, this could happen:

• An NFL owner with a stadium located in a lower-income “opportunity zone” needs $200 million to upgrade concessions, a stadium video system and an audio overhaul.

• A bank offers a hefty loan with a bargain-basement interest rate.

• The bank classifies that money as a loan opportunity to a poor community.

• The bank earns a tax break or regulatory advantage because it met a standard for investment in a poor community.

With no judgment of that kind of exchange — and there will be some side-eyes thrown at it — practically anyone can see how this could be a nice advantage to the applicable NFL team owners. Particularly if the legislative change passes and sticks around for a few decades.

What NFL teams could benefit from regulation change?

When a franchise is building or maintaining a stadium that has a multi-billion dollar price tag, the long-term viability of that structure becomes extremely important. It’s why this regulatory reform makes Trump a winner for a league like the NFL, which is constantly pushing to keep its stadium infrastructure in tip-top shape.

The math isn’t hard to understand for the NFL. Stadiums are more expensive than ever, and cities and taxpayers are more reticent than ever to foot the bill. That means more money out of the pocket for owners up front, paired with costlier renovation projects in the decades that follow as teams keep their facilities up to date. With a long-term outlook like that, few things are more welcome than a president who is willing to push for regulatory reform that will make borrowing money easier and likely cheaper for team owners in the long run. It’s precisely what this kind of incentive could do for banks and their future NFL clients.

This isn’t about a small pool of teams, either. According to an opportunity zones database, no fewer than 15 franchises have stadiums that will fall in areas qualifying as poor or lower-middle-income community tracts. That means 15 franchises could qualify to borrow money from banks for renovations — allowing the banks to then potentially qualify for tax breaks for issuing loan opportunities inside poor communities. Among the teams that could qualify in the coming decades if this regulatory rewrite happens:

• Atlanta Falcons (Mercedes-Benz Stadium)
• Baltimore Ravens (M&T Bank Stadium)
• Cincinnati Bengals (Paul Brown Stadium)
• Cleveland Browns (FirstEnergy Stadium)
• Denver Broncos (Broncos Stadium)
• Detroit Lions (Ford Field)
• Houston Texans (NRG Stadium)
• Indianapolis Colts (Lucas Oil Stadium)
• Jacksonville Jaguars (TIAA Bank Field)
• Las Vegas Raiders (Allegiant Stadium)
• New Orleans Saints (Mercedes-Benz Superdome)
• Seattle Seahawks (CenturyLink Field)
• Tampa Bay Buccaneers (Raymond James Stadium in Tampa, FL)
• Tennessee Titans (Nissan Stadium)
• Washington Redskins (FedExField)

Two teams also have stadiums located adjacent to tracts of real estate in opportunity zones: The Green Bay Packers and Miami Dolphins. Both franchises could develop this adjacent real estate as part of their stadium complex, with banks also qualifying those loans as investment in poor communities.

This means in total 17 franchises could have an investment advantage under the regulatory changes. And of those 17, seven owners or ownership groups have been significant Trump donors. They include the Dolphins, Redskins, Browns, Texans, Buccaneers, Rams and Jaguars.

That’s a large swath of owners that could benefit from Trump-sponsored regulatory changes in the CRA. And that’s just one example, never mind the 2017 tax cuts that helped keep money in the pockets of virtually every ownership family in the league.

This is something to keep in mind when Trump lashes out at the NFL and the league shrugs off the criticism. The president’s words are far less important than his regulations. And in that respect, he’s more a friend than foe.

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