No Tax Benefits, Club Owner Says: Busch Denies Brewing Firm Using St. Louis Cardinals to Promote Beer Monopoly, Daily Racing Form, 1954-05-26


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►— No Tax Benefits, Club Owner Says Busch Denies Brewing Firm Using St. Louis Cardinals To Promote Beer Monopoly By JOHN A. GOLDSMITH By the United Press WASHINGTON, D. C, May 25.— Brewer August A. Busch, Jr. said today Anheuser-Busch, Inc., gets no tax benefits from its control of the St. Louis Cardinals baseball club. He said his big brewing firm has not used the Cardinals to promote a beer monopoly as charged by Sen. Edwin C. Johnson D-Colo.. In testimony prepared for delivery before a Senate judiciary subcommittee on monopoly, Busch said he bought the ball club because it was "the only means known" to keep the Cardinals in St. Louis. Busch made the statement after Johnson charged that "selfish interests have moved into the control of professional baseball and openly and without shame have prostituted and exploited it." Johnson called on Busch to "make the necessary sacrifice" and "separate yourself promptly from the brewing industry and devote all your talents to baseball." t The Senator said the present operation of the Cardinals" is "menacing professional baseball" — both the major and minor leagues. He said the operation is "in open violation" of the Clayton anti-trust law and threatens to make baseball, itself, subject to such anti-monopoly statutes. Tax Lawyers Support Denial Busch devoted a considerable part of his statement to Johnsons previous assertions that the Cardinals represented a tax benefit to the brewing company. Busch supported his denial with a memorandum from his tax; lawyers. He said the money his companies have put into the Cardinals represents profits on which taxes have been paid. He said the Cardinals showed a "considerable operating . loss" last year, but Anheuser-Busch, Inc., got "no tax benefit." He said the brewing company controls another company, August A. Busch, Inc., which, in turn, controls the Cardinals. Busch said" the companies did not file a consolidated tax return, so that "the losses of the baseball club were not and could not be deducted from the profits of Anheuser-Busch." Baseball commissioner Ford Frick told the subcommittee there is a "healthy state of competition" in baseball with rivalry "closer, better and keener than it has been in a long time." ■Frick said that to his knowledge there is "ho monopolistic trend" in baseball today. Under questioning by Sen. Thomas C. Hennings, Jr. D.-Mo. Frick said there has been "close association" in the past between the brewery industry and organized baseball, particularly in sponsorship of radio and television programs. Asked whether he believes this association is "detrimental" to baseball, Frick said it is not his function as baseball commissioner to pass on or control the outside activities of baseball club owners. He said he has no authority to dictate to a club owner what sponsor he may have for broadcasting ball games. Johnson came under critical crossfire from Sen, Everett M. Dirksen R. 111., who told Johnson he was "going off on a tangent" and "seeing dangers and phantoms under the bed that do not exist." Dirksen said Johnsons proposal is an "open invitation" to "complete restriction" on ball clubs and said he would do all in his power to block its approval by congress. Johnson asked Busch, at one point, whether Anheuser-Busch could not have claimed tax benefits under a consolidated return if it had wished. Tax attorney H. M. Stolar replied that the brewery could not have done so — because it did not own enough of the voting stock of the August A. Busch, Inc., a subsidiary. Stolar also said he was sure tax officials would crack down if the brewing company tried to make excessive payments to the ball club for various advertising rights. Busch said Johnsons bill "has all the appearance and the intent of a discriminatory and punitive law." He said Anheuser-Busch was a leader in the industry long before it acquired the Cardinals and — in fact — long before baseball. But he said the brewing companys leadership in the industry gave it. only about 8 per cent of the nations beer production last year. "This can hardly be called a monopoly," he said. He defended the Cardinals radio operations and said they are substantially what another hrewing company sponsored last year. i

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