I loathe football. So when I heard a couple weeks ago on the evening news that the NFL was a non-profit organization with a tax exempt status, I told my husband, to quote myself, "I'm going to take down the NFL and make them pay." Of course, I said that prior to doing any actual research. The amount of money that flows in and out of the NFL is dizzying, as is the U.S. tax code.
The IRS classifies the NFL as a 501(c)6 tax exempt non-profit 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 shareholder or individual.
Is the NFL not organized for profit? NFL revenue in 2011 was 9 billion dollars and the league paid 8 top executives over $53 million in salary and bonuses in 2009. The "nonprofit" just signed a $2.3 billion deal with Pepsi. The number that got my attention was the $1.62 million that the NFL paid on federal lobbying last year. Not only has the NFL spent record numbers on lobbying congress, but other major football interest groups have also spent historically lofty amounts of money in recent years on lobbying. These lobbyist negotiate with congress on many topics, including concussions, drug testing, Internet gambling, broadcast policies and maybe a new college playoff system.
Are these the issues that consume congress? Representative Steve Cohen, D-Tenn., co-creator of the Congressional Collegiate Sports Caucus, defends the involvement of Congress on the issue of a playoff system, saying "Americans care about sports, and they care about fairness. If something like this isn't fair, it is the prerogative of Congress, and its job, to address it and fashion remedies."
The right to petition government is one of our fundamental precepts and our country's founders wanted to have all interests competing in a free and open marketplace of ideas. I'm not sure this is what James Madison had in mind, though.
Wouldn't congress's time be better used focusing on the social realities affecting our country such as; homelessness, poverty, increasing gun violence, hunger, racism, classism, sexism, our faulty prison system, unemployment and most importantly fixing public education especially among inner-city and low income youth. Or closing loopholes and shutting down tax shelters that house "nonprofits" like the NFL and millionaires who don't want to pay taxes. I don't know, maybe I just hate football.
2 comments:
I do not claim to be an avid football watcher. However, I wouldn't go as far as to say I loathe it either. I certainly don't agree with giving such a large organization a tax break, considering the massive amount of revenue it could be generating for the United States. Jura-Myrick correctly outlines the 501(c) Tax Code as described by the IRS which specifically identifies "professional football leagues" in the code itself. Next, she goes on to list examples of NFL revenue and spending practices to support her argument. One key thing that was left out here however was: what does it mean to be a non-profit organization?
A non-profit organization (or NPO) is officially defined below:
"A non-profit organization (abbreviated as NPO, also known as a not-for-profit organization) is an organization that does not distribute its surplus funds to owners or shareholders, but instead uses them to help pursue its goals."
The NFL is actually operating within those guidelines often times, in fact, operating at a net loss. Obviously the net loss is due to the extremely high salaries of the players, coaches, owners, and commissioners, but they nonetheless operating in such a way that shows no economic "profits." There is an interesting article about this which can be found Here. The author of that post brings up an interesting point claiming that the NFL isn't technically doing anything wrong but it certainly is not in the right spirit either. I agree.
When I think "non-profit" I usually think of charities and outreach programs, all of which have owners, managers, and employees just like the NFL with the key difference lying in the enormous difference of salaries among those aforementioned owners, managers, and employees (players). Usually these "non-profit" organizations have some special interest they are trying to advance. But, as unfortunately outlined in the beginning of my comment,Jura-Myrick's, as well as my own, previous knowledge regarding Non-Profit Orgnanizations was incorrect. I cannot help but wonder though: why does only the NFL get this tax break and not the NBA, the MLB, the PGA, or any other sports league? I personally feel they should all get it, or none should get it.
Nice critique! I think the PGA and National hockey league are nonprofit as well.
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