Society

Nonprofit Football League: NFL Enjoys Tax-Exempt Status, But One Senator Wants To Take It Away

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The National Football League grossed $9.5 billion in 2012, $9.4 billion the year before that. NFL Commissioner Roger Goodell (pictured) pulls in a paycheck of about $30 million per year. Of the league’s 31 individual team owners, 17 are billionaires.

But here’s a fun fact. Did you know that the NFL is officially a nonprofit organization?

You read that correctly. The NFL enjoys the same tax-exempt “nonprofit” status as, for example, the Red Cross, the ASPCA or the Make-A-Wish Foundation. But one Republican senator is trying to strip the league of the nonprofit status that it has enjoyed for 47 years.

Oklahoma Senator Tom Coburn says that the NFL, and other professional sports leagues that have nonprofit status, “are clearly organized for profit to promote their specific brands.”

Tax-exempt businesses are supposed to promote an industry as a whole, not individual brands. The NFL, Coburn says, is not set up to promote the sport of football, but rather the NFL “brand” alone.

Coburn has introduced a Senate bill, S. 1524 titled the PRO Sports Act, that would do away with this cushy status for the NFL as well as for the National Hockey League, the Professional Golfers Association, the Association of Tennis Professionals Tour, the Women’s Tennis Association Tour, the U.S. Tennis Association, the National Hot Rod Association, and the Professional Rodeo Cowboys Association.

Major League Baseball voluntarily gave up its “nonprofit” classification in 2007, allowing the league to avoid revealing the salaries of Commissioner Bud Selig and its other top executives to the public, as required by laws regulating nonprofits.

The National Basketball Association has never held tax-exempt status.

The story goes back to 1966 when Congress passed Public Law 89-800, a law that apparently they were so embarrassed to consider that they didn’t even give it a catchy name. The law expanded the antitrust exemption already granted in 1961 to what was then the two major pro football leagues, the NFL and its upstart competitor, the American Football League.

If the two leagues ever merged, the law said, the new, single league would be granted a legal monopoly for sale of its television rights. Adding nonprofit status to the monopoly was also part of the deal.

What did the pro football leagues give up in return? They agreed not to schedule games on Fridays or Saturdays when high school and college football is in season.

The two leagues merged in 1970 forming the nonprofit, legal monopoly today known as the NFL.

SOURCES: Atlantic Monthly, Non Profit Quarterly, ESPN.com, Forbes, Sports Business Journal, CBS Sports