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    #1

    Paragraph on economics

    Hello,

    I came across this phrase in an article and I am not sure I got the meaning of it right.

    "The N.F.L., N.H.L., P.G.A. and L.G.P.A. have chosen to retain their tax exempt status. For the N.F.L., this decision is likely because of a small and idiosyncratic tax liability if the league were to transition out of 501(c)(6) status. The liability would result from a debt forgiveness policy in its previous stadium loan program a program that reduced public financing for new stadiums."

    http://www.nytimes.com/roomfordebate/2014/09/03/should-pro-sport-leagues-get-tax-breaks/the-nonprofit-status-of-sports-leagues-is-irrelevant

    So I understand that those leagues chose to keep their privileged tax exempt status mainly because of a debt they have with the state. If they were to become tax payers, they would also have to cover a loan that they took from the state to do something with some stadiums. So this exchange would not be beneficial for them. But what I don't get is the last phrase: "a program that reduced public financing for new stadiums".

    1. If they had a loan with the state and were forgiven by it, that means they didn't pay the state a dime. Therefore less money for the state.
    2. The program regarding the stadiums was carried on, so the state invested MORE in that program because it never got its money back and had to cover the debt of these leagues on its own.
    From 1 and 2 I deduce that this program actually required MORE public financing resources, not "reduced" public financing resources. How come they say those resources were REDUCED? Since those leagues never payed their loans, and the state had to pay everything FOR them?

    Thank you.

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    #2

    Re: Paragraph on economics

    The league doesn't build stadiums. The individual teams build stadiums, or, more correctly, cajole their home cities/states to build stadiums for them.

    The league must have had a program where the league loaned money to teams in order to allow the teams to contribute money towards the building of that team's stadium. That means that the government in the state where the team and stadium are would have had to have contributed less money to the building of the stadium.

    The league must have allowed certain teams to not pay back all or part of these loans.

    How exactly that changes the tax liability of the league I can not say. I will trust the Times on that part.

  1. MikeNewYork's Avatar
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    #3

    Re: Paragraph on economics

    We don't use periods/full stops in initialisms: NFL, NHL, PGA, LPGA, IBM, etc.

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