Oklahoma Sen. Tom Coburn (R) is out with the latest edition of an online chronicle of wasteful government spending, and he is taking aim at several of America’s professional sports leagues. Coburn objects to the fact that the leagues are classified as tax-exempt non-profit organizations, even as they rake in millions of dollars in profits.
The National Football League, National Hockey League, and Professional Golfers’ Association, according to Coburn’s report, could be costing taxpayers at least $91 million a year because of their tax-exempt status, even though they generate billions in revenue, millions in profits, and pay their top executives multi-million dollar salaries:
The National Football League (NFL), the National Hockey League (NHL), and the Professional Golfers’ Association (PGA) classify themselves as non-profit organizations to exempt themselves from federal income taxes on earnings. Smaller sports leagues, such as the National Lacrosse League, are also using the tax status. Taxpayers may be losing at least $91 million subsidizing these tax loopholes for professional sports leagues that generate billions of dollars annually in profits. Taxpayers should not be asked to subsidize sports organizations already benefiting widely from willing fans and turning a profit, while claiming to be non-profit organizations.
The NFL raked in $9 billion in revenue last year and has more than $1 billion in assets, and according to Coburn’s report, it paid eight executives a total of $51.5 million in 2010, including $11.6 million to commissioner Roger Goodell. PGA commissioner Tim Finchem made $5.2 million in 2010; NHL commissioner Gary Bettman made $4.3 million and will reportedly earn nearly $8 million this year.
The leagues, in their non-profit filings, claim to be promotion vehicles for their sports (the NHL’s mission, for instance, is “to perpetuate professional hockey in the US and Canada.”). These statements have little justification, Coburn wrote, as “major professional sports leagues are hardly in the business of simply promoting the hockey, football, or golf industry. They are in fact businesses — designed to make money.”
Though they were unmentioned in Coburn’s report, other sports organizations that file as nonprofits have also faced scrutiny. Many of college football’s biggest bowl games, including the Bowl Championship Series, are classified as non-profit charities. After generating $261 million in revenue in 2009, bowl games gave just $4 million to charity. And in 2007, the New Orleans-based Sugar Bowl made $11.6 million in tax-free profits thanks to its non-profit status.