loss for the years in question, and plaintiffs Lairds' proportionate share of the corporation's claimed losses was disallowed.  This resulted in the underpayment by plaintiffs of $48,218.99 for the taxable years 1967 and 1968 which is the amount sought in this refund suit, the tax deficiency having been first paid.


8
B. The Pertinent Facts.


9
Five Smiths' entry into the game came at a time of competition and expansion in professional football.  The NFL and its rival, the American Football League, were competing for available talent during the mid-1960's and, as the district court pointed out, the so-called "war" between the leagues drove up the cost to team owners of players and other assets.  In 1965, both leagues were interested in expanding their respective organizations by selling anew team franchise for operation in Atlanta by 1966.  Both contacted potential franchise owners, one of whom approached by the NFL was Rankin M. Smith, the successful majority-interest purchaser herein.  At that time, entrance into the NFL required the approval of twelve of the (then) fourteen member clubs, and an agreement to be bound by League rules and regulations, to pay all League assessments, and to pay a $50,000 membership fee.


10
A June 29, 1965 letter of understanding from NFL Commissioner Pete Rozelle to Rankin M. Smith,3 which was designated as a binding memorandum agreement, included, importantly, the essential elements of the deal, as follows:


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1. The League granted Rankin M. Smith an NFL franchise in Atlanta, commencing with the 1966 football season, for which Smith was to