Nonprofit Football League Flap
If the National Football League was a private company, instead of a nonprofit, its $10 billion a year in revenue would put it among the Fortune 500 companies.
Gregg Easterbrook in his new book, “The King of Sports: Football’s Impact on America,” calls for reform. He writes in an article, “How the NFL Fleeces Taxpayers,” in the October issue of The Atlantic Monthly that “it’s time to stop the public giveaways to America’s richest sports league—and to the feudal lords who own its teams.”
Easterbrook, who was also interviewed Sept. 24 by NPR’s Robert Siegel on “All Things Considered,” points out that Virginia’s Republican Governor Bob McDonnell gave $4 million of taxpayers’ money to the Washington Redskins billionaire owner Dan Synder, so the team could upgrade its workout facility.
And in Hamilton County, Ohio, taxpayers were hit with a bill for $26 million in debt service for the Cincinnati stadiums where the NFL’s Bengals and Major League Baseball’s Reds play, plus another $7 million to cover the direct operating costs for the Bengals’ field.
The Ohio taxpayers’ subsidies were made to the professional teams, even though, the county had to cut $23.6 million from health-and-human-services spending and another $119 million from Hamilton County schools.
Easterbrook said on NPR that he is not out to destroy the NFL, just reform it. “I think in our modern polarized debate, we tend to assume that you’re either for something or against it,” he said. “The intermediate position—that you really like something but you’re aware that it has deep-seated problems—is harder to fit into modern discourse. I love football, and I want it reformed.”
Meanwhile, angry critics who argue that professional football has been getting a free pass, have created a petition demanding that the U.S. Congress revoke the tax-exempt status of the National Football League.
Already more than 150,000 people have signed the petition, which calls the NFL the “most profitable sports league in the world.” It points out that top NFL execs are paid tens of millions of dollars a year, including Commissioner Roger Goodell whose salary increased from roughly $11.6 million in 2010 to $29.49 million in 2011. The petition says the NFL “should not be able to hide under a nonprofit status in order to avoid paying federal taxes.”
National Football Conference and the American Football Conference are both classified as trade associations and currently enjoy 501(c)(6) status, a designation reserved for business leagues. While the 32 individual league teams are for-profit ventures, the league itself pays no corporate taxes because it does not technically make a profit.
Meanwhile, Dave Pear, a former NFL offensive lineman who writes Dave Pear’s Blog, adds that the football league “pays for as little as they possibly can when it comes to, well, just about everything. From refusal to accept responsibility in paying their retired players their earned disability and pension benefits to taxes to publicly-financed stadiums that the teams rent for peanuts, while reaping all the rewards from ticket, food, parking and merchandise sales, the Nonprofit Football League manages to generate a $10 billion-a-year revenue stream that would make the Fortune 500 if it weren’t for their nonprofit status.”