Despite the amount of money the National Football League rakes in, the league is actually a nonprofit, thanks to certain tax rules, according to Dr. Mary Feeney.
Feeney spoke Saturday evening at “Night of the Open Door: Lightning Talks,” hosted by ASU’s Downtown Phoenix campus. The talk discussed the NFL, which brought in $6 billion in revenue in 2013 as a nonprofit organization.
The league’s commissioner, Roger Goodell, made $44 million in 2014, and the league has been called the most valuable sports league in the world by Forbes magazines.
“In general, people think nonprofit organizations are charities,” Feeney said. “I think you should understand intuitively why the NFL seems like a for-profit organization.”
Feeney, whose research focuses on public and nonprofit management, public values and sector comparisons, dove deep into what type of nonprofit status the NFL declares and how it contrasts from other nonprofit organizations. She explained how the NFL benefits as a nonprofit, primarily due to tax rules, and what kind of changes policy experts have recommended that would affect the NFL’s nonprofit status in the future.
The difference between nonprofit and for-profit organizations is that nonprofits use their profits to advance their program, while for-profits distribute their profits to their owners or stockholders, according to the Society for Nonprofits.
However, there are sectors of the NFL that are not included in the nonprofit organization. The league has multiple subsidies and ventures, including the for-profit NFL Network and 32 separate teams. It is these member teams that finance the NFL, which considers itself a trade association.
Only the league office, which is headed by Goodell, is considered to be an unincorporated nonprofit 501(c)(6) association. This means that it is not subject to income tax.
“There is a strong debate on whether or not the NFL should remain a nonprofit organization, as other professional leagues such as the NBA and MLB are for-profit. By removing its current status, the playing field for all other leagues would be level and fair,” Feeney said.
Sen. Tom Coburn (R-Okla.) is pushing for the Properly Reducing Overexemptions for Sports Act (PRO Sports Act), which would do away with the tax break of which the NFL has taken advantage.
Many people agreed with Coburn’s bill and think the system is skewed, including ASU Exercise and Wellness student Joe Berlow.
“The NFL already makes more than us and it’s not fair that they don’t have to pay taxes but the average working man does,” Berlow said. “If anything they should have to pay more.”
Inspired by TED Talks, the purpose of “Lightning Talks” was to make ideas and knowledge accessible to the community, Heather Beshears, director of strategic marketing and communications of the College of Public Service and Community Solutions, said.
“I wasn’t even sure what this event was supposed to be about but I was interested to learn more,” attendee Chris Bernard said.
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Correction: Feb. 2, 2014: This article previously stated the incorrect revenue of the NFL in 2013. The number should be $6 billion, not $6 million.