It seems fitting with the Super Bowl in Glendale only two weeks away and the Packers/Seahawks and Colts/Patriots games on today, January 18, 2015 that the NHL and its nonprofit status merits another look.
Many of you may not know that the NFL has nonprofit, 501 (c) 6 status. What other types of organizations enjoy 501 (c) 6 status? Chambers of Commerce and Boards of Trade. Hmmm, which one of these is not like the others? It originally received its tax exempt status in 1945. It’s doubtful if anyone remembers why. In 1966 Congress reaffirmed the NFL’s tax exempt status in return for a merger between the AFL and the NFL; the promise to locate a team in New Orleans and other miscellany.
The NFL is a billion dollar industry. This year the media is reporting that it will earn well north of over $10 billion dollars (that’s billion with a ‘b’ and not a typo). To be fair it does pay some taxes through a subsidiary, NFL Ventures, for its TV deals and some merchandise sold.
The NCAA, NHL and PGA Tour do have a similar non-profit status. Other sports organizations with the same stature as the NFL do not share in this form of congressional largesse. Major League Baseball gave up its nonprofit status in 2007 and the National Basketball Association has never been tax-exempt.
What makes the NFL nonprofit status so obscene to so many people? It revolves around the ever growing and greedy, very detailed and specific stipulations required to be met by state host committees. It’s gotten to the point that nearly everything, down to the towels used by the players, must be comped or deeply discounted. The bid always requires the payment of no taxes by governments – local, county and state. State host committees are forced to solicit more and more dollars from the public/private sectors to offset the costs of promotion and hosting. For example, the City of Scottsdale ponied up a million dollars to the Host Committee. In 2008, the last time Arizona hosted a Super Bowl, the Arizona Host Committee’s budget was approximately $18 million dollars. This year its budget is over $30 million dollars.
In November of 2014 legislation was introduced in Congress to remove the NFL’s tax exempt status. Don’t expect it to go anywhere. This time it is spite legislation and an attempt by some Democratic congressional members to provide pay back because of the NFL’s refusal to change the name of the Washington Redskins and its failure to address the issue of domestic violence (ala Ray Rice) in a more appropriate fashion. The legislation was offered under the guise of earning the federal government over $100 million dollars in tax revenue over the next ten years.
Congressional efforts to rein in the NFL will, as in other years, die quietly. The NFL spends millions, reportedly over $2 million in the past two years, in support of various congressional candidates. They will not willingly kill their golden goose. Throw in the dollars spent on pure lobbying efforts to kill any such legislation and the NFL’s nonprofit status will remain intact.
So, it seems the big gorilla will remain the big gorilla, for now, as the league and team owners enjoy tremendous profits on the backs of you, me and every other taxpayer in the country.
© Joyce Clark, 2014
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