WEAR - Search Results

The following is an archived video story. The text content of that video story is available below for reference. The original video has been deleted and is no longer available.

Nonprofit vs Profit among sports teams


Non-profit versus profit margin. 
Several professional sports teams, worth hundreds of millions of dollars, are considered non-profit organizations. 
While that status may not be new, as Kai Jackson reports, there is a new effort to end the practice. 

Their combined revenue is billions of dollars. Despite that financial reality several major sports organizations, haven't paid one penny of federal taxes in decades.  In fact many are considered non-profits with a tax status known as  501(c)(6).

Mike Joyce, a Sports Bar Manager said, "I don't know if I can say it's fair. When I think about a non-profit you know you think about the bea gaddy's of the world here in Baltimore. You know you think about our daily bread or Catholic charities or things like that.

The tax breaks go, not to individual teams or players,  but to the  league offices.
The list includes the National Football League, the PGA tour and LPGA and the National Hockey League. 

The league offices, which are separate from the teams they represent, have combined revenue of roughly $2 billion dollars.

It was a practice started in the 1960's to encourage the growth of the NFL. Though some argue now, it's out of control.

Daraius Irani is an economist.  He says this non-profit practice started in the 1960's,
To promote business and encourage the growth of the NFL.

Though he believes it's has gotten out of control.       
    "The NFL is promoting benefits for a very select few individuals and entities. Is that, should that be a tax-exempt status probably not."

Some theorize the tax breaks encourage the sports organizations to donate millions to charity.

Oklahoma Senator Tom Coburn doesn't buy it.  In fact he says it's time for these billion dollar businesses to pay their fair share of taxes.
    He's introduced a bill called the Pro Sports Act.  Pro stands for properly reducing over exemptions.

Peter Schweizer leads a watchdog group called the Government Accountability Institute.
    "This is not a non-profit organization. This is an organization that makes huge sums of money from merchandising, from franchising, from other streams of revenues."

"Changes to the tax exempt status of some pro sports teams won't come without a fight. In fact the NFL has spent more than a million dollars lobbying congress on its behalf.

In 2012 alone the NFL spent 1.5 million dollars lobbying congress.

John Matthews, a taxpayer, said "For a business that's as lucrative as say football, baseball those businesses make enough money we probably should ask ourselves whether they can stand on their own."