U.S. News and World Report recently asked SFC Buffalo Chapter Chair Matt Sabuda to submit an op-ed on blackouts and asked the National Football League to provide an opposing op-ed. If the NFL believes that its blackout policy is sound, why won’t it justify the policy in a neutral forum? This follows on the heels of the NFL’s refusal to allow a reporter into its meetings with FCC Commissioners the day after Sports Fans Coalition welcomed a reporter into its meeting with FCC Commissioner Robert McDowell.

The NFL continues to want to keep its blackout policy hidden from the public and pretend that it’s not unethical and counterproductive. But you can still read one Buffalo Bills’ fan’s perspective here.

Based on the recent statements of the five major conference commissioners, it appears that there is support for a four-team playoff of some sort. The lone exception is Big 10 Commish Jim Delaney, who has historically been opposed to a playoff. As the commissioners and university presidents create a new plan for college football’s postseason, it’s important to keep track of where things stand. Here are the most recent comments from conference commissioners. (And be sure to check out Andy Staples’ article on where nine individual university presidents stand on a playoff.)

SEC Commissioner Mike Slive

On a four-team playoff consisting of only conference champions:

I’m willing to have a conversation about (only conference champions), but if you were going to ask me today, that would not be the way I want to go…It really is early in the discussions, notwithstanding what some commissioners say publicly. There’s still a lot of information that needs to be generated.

On the possibility that the top two seeds would host home games:

There are plusses and minuses to that concept…One is that you’re playing a couple games to determine the national champion and to make it a home game for somebody has always been perceived as a competitive advantage. The NCAA men’s basketball tournament is not played at the homes of the higher seeds. So you have to look at that…The other side is there would be the question of fan travel and the ability to travel to one or more games. You guarantee good attendance (at a campus stadium) — for one team. It needs to be looked at carefully. It’s on the table and it should be on the table.

Source: The Birmingham News, 03/07/12

ACC Commissioner John Swofford

Q: In 2008, you and [the SEC’s] Mike Slive were the only commissioners from BCS conferences to support a four-team football playoff. Now, there seems to be broad support. What changed?

A: What is evident is the collective feeling within the room that change is needed beyond tweaking…I think there’s a collective realization that there’s enough dissatisfaction with the current system that it’s really important to step back and make it better…Now, where that will lead us, I don’t know. Over the next few months, the [BCS] commissioners will continue to have meetings and ultimately will take the leaning of our group to our respective conferences and get the feedback of conference [members] and presidents. That’s where the decisions ultimately will be made, but we’ve got a lot of work to do between now and then.

Q: Is it fair to say the group is leaning toward a four-team playoff?

A: It’s a little early to say that. I don’t think we’re going to see an NFL-type playoff, [but] there is a receptiveness to discuss more teams being involved beyond just the [current] two. A four-team approach can be done in multiple ways.

Q: Is there an inclination to limit the field to conference champions?

A: Not yet. That would be part of the discussion. I think winning your conference championship is important in the overall scheme of things and maintaining the quality of the regular season.

Source: Atlanta Journal-Constitution, 03/05/12

Big 12 Interim Commissioner Chuck Neinas (leaves post July 1)

On a four-team playoff:

Looking at it very broadly, we’ve agreed, we’ve got to do something to maintain public interest…We want a vibrant postseason. We have to explore ideas that will make it better. There’s obviously strong support of a four-team arrangement.

On a four-team playoff with conference champions:

I like the idea, if you’re going to take four, take four champions…They’re not hard to identify…The selection process is one that would concern me. The easiest is taking four conference champions.

Source: The Oklahoman, 03/03/12

Big 10 Commissioner Jim Delaney

It sounds like you are opposed to the “Plus-1” BCS format for college football?

We have historically been opposed to it, but we also have a lot of colleagues who are opposed. I think the last time it came up, there were five of the seven founders discussed it, and now most people want to discuss it. We’re curious and engaged, but I think what a lot of people don’t understand is underlying any of our positions are university presidents, athletic directed and coaches. I’m engaging with them over the next 60 days.

I would say the No.1 factor for us is: What is the impact on the athlete and then the regular season because that’s everything that we’ve been about for a long time. Three, is what is the impact on the Rose Bowl and the bowl system? Lastly, what is competitively fair? We have strong opinions on it internally, which are not always aligned. [Former Wisconsin football coach and current AD] [Barry] Alvarez has spoken favorably about it and [AD] Dave Brandon of Michigan has spoken strongly against [the BCS]. [Northwestern football coach] Pat Fitzgerald has spoken against it and others are in favor. I would say that for us to move or change it, it needs to work for [all four of those elements] and that the competitive fairness is somehow tied to the regular season because we play that for 13 weeks and average 70,000-plus. That’s why I say it’s regional; Michigan-Ohio St, Illinois-Michigan State; those games have been meaningful for a long, long time, and we want to make sure they maintain their meaning.

Source: Huffington Post, 02/20/12

Pac 12 Commissioner Larry Scott

On a four-team playoff with conference champions:

So much of the passion of a move to a playoff is to see it earned on the field… What more clear way to have intellectual consistency with the idea of a playoff than to earn it as a conference champion? It would de-emphasize the highly subjective polls that are based on a coach and media voting and a few computers. [He added that any formula “based more on results” would be good for the sport.]

On the possibility that the top two seeds would host home games:

There’s a reason that in the N.F.L. they only play the Super Bowl as a neutral-site game…There’s a reason they play playoffs and A.F.C. and N.F.C. championships with home hosting.

Source: New York Times, 02/25/12

You may not know it, but the National Football League is a nonprofit organization. It may seem absurd that a collection of teams that generated at least $9 billion in revenue last season would be given tax-exempt status, but the NFL is technically classified as a 501(c)6 organization. Here’s how the IRS describes 501(c)6 tax-exempt status:

Section 501(c)(6) of the Internal Revenue Code provides for the exemption of business leagues, chambers of commerce, real estate boards, boards of trade and professional football leagues, which are not organized for profit and no part of the net earnings of which inures to the benefit of any private shareholder or individual.

It’s obviously notable that only professional football leagues are included here, as opposed to all sporting leagues. The exemption for football stems from lobbying efforts by Pete Rozelle in the 1960’s to earn an antitrust exemption for the merger of the NFL and AFL. The antitrust and tax exemptions were cleverly attached to an uncontroversial 1966 bill to “suspend the investment credit and the allowance of accelerated depreciation in the case of certain real property.” The NFL-AFL merger language was included at the end of the bill that had nothing else to do with football.

Here’s the meat of the IRS’ explanation of how these tax-exempt leagues are supposed to work:

A business league is an association of persons having some common business interest, the purpose of which is to promote such common interest and not to engage in a regular business of a kind ordinarily carried on for profit. Trade associations and professional associations are business leagues. To be exempt, a business league’s activities must be devoted to improving business conditions of one or more lines of business as distinguished from performing particular services for individual persons. No part of a business league’s net earnings may inure to the benefit of any private shareholder or individual and it may not be organized for profit to engage in an activity ordinarily carried on for profit (even if the business is operated on a cooperative basis or produces only enough income to be self-sustaining).  The term line of business generally refers either to an entire industry or to all components of an industry within a geographic area.  It does not include a group composed of businesses that market a particular brand within an industry.

It seems inconceivable that the NFL is not “engag[ing] in a regular business of a kind ordinarily carried on for profit.” How are their efforts to maximize profits any different than those of Major League Baseball, the National Basketball Association or the National Hockey League? As far as the NFL’s “net earnings,” the nonprofit was actually in the red in 2009, according to its latest available return. Virtually all of the leagues $192.3 million in revenue in 2009 came from “membership dues & assessment.” While the NFL doesn’t explain how much each clubs pays in dues, it averages to about $6 million per team. NFL owners don’t have to pay taxes on those dues, as they are considered donations to a nonprofit. Meanwhile, the NFL had $234.6 million in expenses in 2009, but the “nonprofit” paid $53.6 million to 8 individuals. NFL Commissioner Roger Goodell earned $9.9 million in 2009 (and will earn $20 million by 2019) but he wasn’t even the highest paid individual. NFL Network President Steve Bornstein was paid $12.6 million by the “nonprofit” even though NFL Network is part of NFL Enterprises, LLC. In other words, the only reason the NFL is operating in the red is because of the massive salaries it’s paying its key executives.

In 2010, Andrew Delaney, a Vermont Law School student, put together a fascinating paper examining the tax status of the NFL and found that the NFL was working like a “glorified tax shelter.” Delaney explains:

Through for-profit companies, the NFL sells licenses to use NFL intellectual property, broadcast games, etcetera, making a ton of money. That money is then distributed to the individual teams. The individual teams, in turn, pay their “dues and assessments” to the NFL. I don’t intend to mislead—some taxes certainly get paid here. The teams are considered for-profit and pay regular taxes. The teams’ tax liability is significantly reduced, however, when they pay their tax-deductible “dues and assessments.” How much and what gets taxed is just not publicly available. And it should be if the NFL is going to enjoy tax-exempt status.

Delaney ultimately concludes that “if the NFL isn’t violating the letter of nonprofit status, it’s certainly violating the spirit.”

The important thing here is that WE THE PEOPLE granted the NFL this tax exemption, even if it was decades ago. (Just as we granted the leagues the anti-trust exemption for negotiating television broadcast contracts.) As a result, we can revoke that exemption if the league blacks out its fans, forces fans to pay for personal seat licenses, extorts public money from municipalities by threatening to move teams, etc. The NFL may technically be a “nonprofit,” but it sure as hell isn’t acting in the public interest.

Brian Frederick is the Executive Director of Sports Fans Coalition. He holds a Ph.D. in Communication and is an adjunct professor at Georgetown University. Email him at brian@sportsfans.org and follow him on Twitter here.

Meet Arthur MacDonald. He is one of the many disabled fans who finds himself unable to attend the games of his beloved Buffalo Bills. When the game is blacked out on television (3 out of 7 Buffalo games were blacked out last season) he has no way of seeing the games. Here’s what he wrote to the FCC:

I am completely disabled now. My teaching career as a High School Band Director afforded me the opportunity to have my Kemore West Sr HS Band the opportunity to be featured at three Bills Half time shows. My late brother & I had season tickets, but now due to disability I can’t walk from the car nor navigate the crowds. Please note so many of the “crowds” show no concern for the disabled. I pay taxes that go to support the upkeep as well as the original construction. The ability to see games on tv is the very least to be give back to those who have given their all to support the team and the league.

Mr. Goodell, what do you say to Mr. MacDonald and the countless disabled and elderly fans like him? How can you possibly justify blacking these fans out, especially when, as nine top sports economists have shown, blackouts “have no significant effect on ticket sales in the NFL”?

Many of you are wondering what comes next in the fight to end the FCC’s sports blackout rule. Monday was the deadline for “responses” to the petition filed by Sports Fans Coalition and other public interest groups calling on the agency to eliminate its blackout rule. For the next two weeks (until February 28), the agency will seek “replies” to the initial responses filed. So Sports Fans Coalition is poring over the comments filed by the NFL, Major League Baseball and the National Association of Broadcasters, all of whom are lobbying to maintain the government’s blackout rule. We intend to file a response soon and will share it with you when we do.

In the meantime, if you would like to read the comments filed by all these groups — and submit your own reply to them — you can find them below. To submit a reply, you will need to click here, enter 12-3 for the proceeding number, change the “Type of Filing” to “REPLY”, and attach your reply as a Word document.

Sports Fans Coalition, et al: http://apps.fcc.gov/ecfs/document/view?id=7021859832

NFL: http://apps.fcc.gov/ecfs/document/view?id=7021860097

MLB: http://apps.fcc.gov/ecfs/document/view?id=7021860023

NAB: http://apps.fcc.gov/ecfs/document/view?id=7021859916

Top Sports Economists: http://apps.fcc.gov/ecfs/document/view?id=7021860132

Five U.S. Senators: http://apps.fcc.gov/ecfs/document/view?id=7021860015

4,155 Individual Comments from Fans: http://apps.fcc.gov/ecfs/document/view?id=7021860172

Handwritten Letters from Fans: http://apps.fcc.gov/ecfs/document/view?id=7021858304

Related: Open Letter to the National Association of Broadcasters