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The Real Super Bowl Question: Should The NFL Be A Nonprofit?

The Real Super Bowl Question: Should The NFL Be A Nonprofit?

Jan 30 2014, 9:38pm CST | by

The National Football League takes in more than $9.5 billion per year and is exempt from Federal taxes. As a nonprofit, it earns more than the Y, the Red Cross, Goodwill, the Salvation Army or...

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25 weeks ago

The Real Super Bowl Question: Should The NFL Be A Nonprofit?

Jan 30 2014, 9:38pm CST | by

The National Football League takes in more than $9.5 billion per year and is exempt from Federal taxes. As a nonprofit, it earns more than the Y, the Red Cross, Goodwill, the Salvation Army or Catholic Charities – yet it stands as one of the greatest profit-generating commercial advertising, entertainment and media enterprises ever created.

For the love of Richard Sherman, how can this be?

An arcane tax code change that eased the 1966 merger of the NFL with the old American Football League landed the new combined entity in section 501(c)6 of the tax code, designated as an industry association. The designation actually covers “chambers of commerce, real estate boards, boards of trade, and professional football leagues.” This does not cover the league’s 32 individual franchises, which also rake in billions.

Now a national survey by Fairleigh Dickinson University is shining a light on this strange situation, and perhaps getting Americans to check off that nonprofit coverage faster than Peyton Manning can shout “Omaha!”

“The public’s love for the game clearly doesn’t trump their fiscal restraint when it comes to big time sporting events,” said Krista Jenkins, director of the polling unit and professor of political science at Fairleigh Dickinson University. “Even teams who don’t make it to the Super Bowl generate millions from licensing and ticket sales. The public says taxpayers shouldn’t be hit up for support when there’s enough in the NFL coffers to pay their own way.”

The survey found that people are both surprised by the NFL’s tax-exempt status – and generally opposed to it. Only 13 percent correctly identified the league as not-for-profit.

“Since the NFL is generally associated with wealthy owners and players, not to mention the tremendous revenue that each team generates year-round, the public would not be expected to know the League is a non-profit organization,” said Jenkins. “With billions likely to flow from the Super Bowl, it would seem a contradiction that the organization behind it all would be technically a not-for-profit, but that is indeed true about the NFL.”

With face values of as much as $2,600 for Sunday’s game in New Jersey, the NFL may be facing a serious challenge to its below-the-radar nonprofit status. A few months ago, Senators Tom Coburn (R-Maine) and Angus King (I-Maine) introduced a bill to strip the NFL of its status.

Coburn told CNN : “This is a directed tax cut that to the league office, which means every other American pays a little bit more every year because we give  the NFL league office a tax break and call them a non-profit. In fact, they’re not.”

For real nonprofits out there trying to raise fund for crucial social missions, the NFL’s exempt status has to be as galling a blocked punt. Writes Philadelphia Inquirer columnist Karen Heller :

Its Park Avenue offices feature a reception desk shaped like a silver football. In 2011, commissioner Roger Goodell reaped nearly $30 million in compensation. In his latest contract, Goodell’s base salary will eventually double – most likely because he has vowed that, by 2027, the NFL will yield $25 billion.

The revenue will be achieved largely through lucrative broadcast rights that will be passed along to you, the non-luxury-suite consumer.

And the NFL is not alone. Also in the Senate’s crosshairs – should the Coburn-King bill pass – are the “nonprofit” Professional Golfers Association Tour, the National Hockey League and the Professional Rodeo Cowboys Association. Wrote Coburn in U.S. News and World Report: “Americans are paying artificially high rates in order to subsidize special breaks for sports leagues. That means you may be paying a slightly higher tax rate than is necessary to subsidize Jerry Jones or Tiger Woods .”

When you consider how many pro stadiums – like MetLife Stadium in the swamps of Jersey – are at least partially subsidized by public dollars, a Federal tax exemption for the professional league – really a joint venture of 32 other businesses and their investors – seems obscene. As Nina Ippolito wrote in PolicyMic :

As a 501(c)6, the NFL isn’t supposed to engage in business “ordinarily carried on for profit.” Apparently, licensing exorbitantly priced apparel, granting broadcast rights, and running an entire television network don’t count as profitable endeavors.

So if you don’t agree with a ref’s call on Sunday, if you think it was a gift to one team at the expense of another, just keep in mind there’s another kind of philanthropy at work for the NFL: the taxpayers’ donation to the richest sports league in U.S. history.

Source: Forbes Business

 
Update
10

6 weeks ago

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KUALA LUMPUR: About RM47 million of contributions in the Teachers Provident Fund (KWSG) still remain unclaimed, the Dewan Rakyat was ...
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Update
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6 weeks ago

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Update
7

6 weeks ago

MH370 Tragedy: Hisham: RM27.6 mil spent on 1st phase of SAR

Jun 9 2014 2:11am CDT | Source: Business Times Malaysia

KUALA LUMPUR: Malaysia spent some RM27.6 million in its first phase of the search operations for missing Malaysia Airline flight MH370, said Acting Transport Minister, Datuk Seri ...
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Update
6

6 weeks ago

9.1m litres of diesel seized in a month

Jun 8 2014 1:11am CDT | Source: Business Times Malaysia

INDIA-CHINA-DIPLOMACY-TRADE
PUTRAJAYA: The Domestic Trade, Cooperatives, and Consumerism ministry has seized some 9.1 million litres of diesel and property worth RM58 million since mounting ‘Operasi Diesel Selatan’ in the ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
5

7 weeks ago

Girl, 9, awarded RM2.78m compensation for medical negligence

Jun 6 2014 4:56am CDT | Source: Business Times Malaysia

Government Weekly Cabinet Meeting
KUALA LUMPUR: A nine-year-old girl who suffered brain damage during her birth at a government hospital was awarded over RM2.78 mil ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
4

7 weeks ago

Malaysia's total trade in April up 12pc

Jun 5 2014 11:52pm CDT | Source: Business Times Malaysia

KUALA LUMPUR: Malaysia's total trade in April 2014 rose by 12 per cent from a year ago to RM123.86 billion due to growing trading activities, International Trade and Industry Minister Datuk Seri Mustap ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
3

7 weeks ago

Works Ministry to spend RM20m for upgrading works at 50 accident black spots

Jun 4 2014 11:35pm CDT | Source: Business Times Malaysia

Iskandar Johor Open - Previews
JOHOR BARU: The Works Ministry will implement upgrading works at 50 accident prone locations in the country that have been identified this year involving an allocation of RM ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
2

7 weeks ago

Najib launches loan scheme for Ramadan traders

Jun 4 2014 10:24pm CDT | Source: Business Times Malaysia

EurAsia Cup presented by DRB-HICOM - Day One
PUTRAJAYA: Prime Minister Datuk Seri Najib Razak today launches RM45 million Ramadan Bazaar Scheme 2014 ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
1

7 weeks ago

Residents bring up objection against Kidex to Suhakam

Jun 4 2014 4:49am CDT | Source: Business Times Malaysia

PETALING JAYA: A group of 20 Petaling Jaya residents held a meeting with the Human Rights Commission of Malaysia (Suhakam) over their objection against the proposed RM2.2 billion Kinrara Damansara Skyway ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 

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