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Why does this tick you off? "Non-profit" doesn't mean it has to be a charity. It just means that they make no profit... All profits are divided among the teams
by ozi 13y ago
Why does this tick you off? "Non-profit" doesn't mean it has to be a charity. It just means that they make no profit... All profits are divided among the teams and taxed accordingly. The money is being taxed, just not at the "top" level.
- lukeschlather 13y agoNon-profit also doesn't mean it has to be tax-exempt. The NFL doesn't smell to me like something that should have tax-exempt status.
- tuxracer 13y agoTax-exempt status or not only profits are taxed anyways. As ozi mentioned they send their profits to the individual teams (where it is then taxed).
- _delirium 13y agoNo, they avoid may other taxes via this strategy as well, such as sales taxes and hotel-occupancy taxes.
- honksillet 13y agoIt's not like our government wouldn't horribly squander any additional tax receipts.
- yeukhon 13y agoLook at this: http://www.change.org/NFLnonprofit http://www.change.org/NFLnonprofit
- 001sky 13y agoIt just means that they make no profit LOL. They make plenty, they just funnel cash to affiliates via the cost structure. Having a non-profit status enables this shell game by eliminating economic entropy. Its 2013...this is not "news", its is standard operating procedures in many walks of life. Have you seen the television contracts for the NCAA? Oh, wait...those are just a bunch of amateurs =D The players, maybe. But not the accountants, coaches, boosters, and administrators.
- Zarathust 13y agoIt is only a confusion of terminology. They have a lot of revenues which they spend before they can be taxed, so they declare a lot of expenditures but no profits. Many charities and religious institutions work like this.
- 001sky 13y agoThis is true, to an extent. By design so-called "non-profits" are truly just restricted from paying dividends (which can only be paid from profits). This is illsutrative, however, in the broader sense most taxable corporate entities forgo dividends for a variety of reasons. That is to say, they find the payment of dividends to required subsequent re-capitalizations via finacial markets to have economic entropy. Companies retain their profits, as a result, for the benefit of management (avoiding market benchmarking) and to a lesser extent, shareholders. A non-profit and a for-profit company are not that much different it turns out once this is considered a point of equivalence. If you take that argument to its logical conclusion, its makes sense also not to pay taxes (more operating cash flow retention). Thus, from the perspective of principal-agent theory, an eefficientnon-profit structure fully capitalized and run equivalently a "non-dividending" but "operating profit" maximizing entity. The purpose of maximizing revenues less costs is to opportunistically extract economic rents.
- ozi 13y agoThis is a late reply, but your point is exactly spot on and why I assume all of us are "hackers." In America at least, when you're an employee you don't get to decide when you pay taxes. Taxes come off of the top and THEN you get your earnings which can be reimbursed later if you qualify for a credit. There has always been an advantage as a business of being able to spend money and pay taxes later on whatever is left. But complaining about this in the case of the NFL is just silly because it is an advantage enjoyed by literally every business making enough money to justify itemizing their tax return (which isn't much).
- ryguytilidie 13y agoI feel like before you make this argument you should probably do a basic check to see how much profit the NFL makes. Hint: It is a lot. Certainly more than 0.