As everybody knows (or should know!), the NFL as the majority of sport organizations , is a non-profit organization thus falling under the American Internal Revenue Code part which “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.”
Oklahoma Senator Tom Coburn (R.) just introduced an amendment to the Marketplace Fairness Act that would end the practice that allows professional sports leagues to qualify for tax-exempt status.
Doug Ferrar reported in his excellent paper ( Yahoo sport blog) that in the Senator’s Coburn 2012 “Waste Book” tome, Coburn outlined his theory by stating that ‘the National Football League (NFL), the National Hockey League (NHL), and the Professional Golfers’ Association (PGA) classify themselves as non-profit organizations to exempt themselves from federal income taxes on earnings. Smaller sports leagues, such as the National Lacrosse League, are also using the tax status. Taxpayers may be losing at least $91 million subsidizing these tax loopholes for professional sports leagues that generate billions of dollars annually in profits. Taxpayers should not be asked to subsidize sports organizations already benefiting widely from willing fans and turning a profit, while claiming to be non-profit organizations.’Doug Ferrar further states that ‘Coburn’s amendment makes an important delineation — professional sports leagues are not out for the betterment of their sports as a whole; they’re out for the betterment of their own leagues. Anyone familiar with the NFL’s battles with the AFL and USFL, or Major League Baseball’s fights with the Federal League and other rogue organizations, or any number of other antitrust-related bullyings in the last 100 years, could tell you that. By the way, Major League Baseball surrendered its own tax-exempt status in 2007, in part because it didn’t want to reveal the salaries of its top executives.’
In fine, he concludes by stating ‘But fair is fair, and the NFL’s claim that it operates as anything but a near-bulletproof money machine is ludicrous as best, and near-criminal at worst.’
What do you thing? Regarding the NFL but also almost all sport organisations around the world that are classified as non-profit organizations, going from the CIO to FIFA to the NHL and beyond?
To read Ferrar’s paper, please click HERE.