The NFL: 32 reasons why this $9 billion league is tax-exempt
With the NFL season in full swing, it’s become apparent to many people that the NFL has become huge. Very huge. “This year revenues for the National Football League will be somewhere just north of $9 billion, which means the league remains the most lucrative in the world.” according to Forbes. The NFL plans to generate over $25 billion in revenue by 2027. This is all well and good except for one small detail: The NFL is listed as a 501(c)(6) non-profit organization.
It’s not an oversight, or a mistake, it’s an insult. The NFL deserves to be tax-exempt as much as Walmart or Coca-Cola. Speaking of Coke, Ahmet M. Kent, the CEO of the soda giant made almost 2.5 times less money ($18m), last year, than NFL commissioner Roger Goodell ($44m). To put this whole anomaly into perspective, let’s take a look at the official description of what a 501(c)(6) organization is.
“Internal Revenue Code 501(c)(6) provides for exemption of business leagues, chambers of commerce like the U.S. Chamber of Commerce, the real estate boards, boards of trade, professional football leagues such as the National Football Leagues (whether or not administering a pension fund for football players), and organizations like the Edison Electric Institute and the Security Industry Association, which are not organized for profit and no part of the net earnings goes to the benefit of any private shareholder or individual.”
The important part to note here is the wording of the description, take a look at how the NFL is specifically named in the statement: “Whether or not administering a pension fund for football players”. These pension funds are a major source of income for the NFL, in fact, the NFL has fined $21,884,212.50 in the first half of the 2014 season.
By now you’re probably wondering how the NFL got it’s non-profit designation in the first place. One of the major issues with this classification is how old it is. The NFL has been tax-free since it’s founding in 1920. The problem here is that the NFL has grown exponentially since then. Almost 100 years later, the league manages TV contracts, advertising, sponsorships, and more teams. To put it simply, the NFL has greatly outgrown this non-profit classification, and a reclassification is long overdue. The classification did make sense back in the 20s though, as the NFL was much smaller and actually didn’t have much revenue. Additionally, the NFL argues that they don’t generate much revenue themselves, but the individual teams did. With 32 teams all worth over $850 million, that business model is obviously no longer in use.
Thankfully, opposition to this tax status is quickly building. The NBA and the MLB have already given up tax-exemption, which greatly lowers tax increases every time a new stadium or arena is built. Of course, in this age of communication it’s not hard to get a massive response from people all around the nation. This petition on Change.org has collected over 400,000 signatures and the support of multiple members of Congress. But for now, only time will tell whether the NFL will fumble their tax breaks.