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The NFL being a non-profit and bilking money from the USA seems to be a weekly meme on Reddit lately. Each team is it's own entity and pays taxes. Roger Goodell

The NFL being a non-profit and bilking money from the USA seems to be a weekly meme on Reddit lately. Each team is it's own entity and pays taxes. Roger Goodell pays taxes on all of his salary. The umbrella corp that is the NFL is a non-profit, they are more like a Chamber of Commerce to promote NFL business. Debunking of this oft repeated incorrect meme in top comments here: http://www.reddit.com/r/politics/comments/1wk64y/senators_try_to_sack_nfls_nonprofit_status/ http://www.reddit.com/r/politics/comments/1wk64y/senators_tr...

_delirium 13y ago
You don't seem to have succeeded in debunking anything relevant to this post. This post is simply pointing out that, in part because the Super Bowl is organized by a nonprofit that is exempt from taxes on its local economic activity (purchases, hotel usage, etc.), its benefit to the city/region hosting the Super Bowl is quite limited. For example, it may generate more hotel usage, but it may also displace some tax-paying hotel usage with non-tax-paying hotel usage, which cancels out some of that added activity. But more generally, the Super Bowl, a for-profit activity mainly aiming to enrich the teams who are NFL members, has structured much of its activity such that the NFL itself, a nonprofit organization, is doing all the organization and purchasing, thereby exempting most of the local economic activity from sales taxes, hotel occupancy taxes, and similar. A proper arrangement would be that the for-profit corporations profiting from the Super Bowl should be organizing it, rather than laundering their signature product through a nonprofit organization. I can't think of another case where a group of companies' main product is run by an umbrella nonprofit. Chamber-of-commerce organizations usually do pretty minor coordinating and lobbying activity, not actual production operations. To get something analogous in tech you'd have to imagine something silly like all the cloud-computing companies getting together and setting up a Cloud Services Association, a 501(c)(6) nonprofit that operates all their datacenters jointly, rather than e.g. Amazon or Microsoft operating their own datacenters on a for-profit basis.
- res0nat0r 13y ago
  Not sure what this is trying to state, but most seem to think that because the word "non profit" is there, it means they should be broke, operating on a shoestring budget, be poor unknown non-profit corps dedicated to human interest campaigns, but this isn't the case. Feel free to read the multiple thread top comments on the various times on /r/politics this topic has been brought up. Also the NFL filing signed by Goodell last year operated at a loss.
  - _delirium 13y ago
    No, I just don't think they should be exempt from regular sales & etc. taxes. They are not a legitimate nonprofit organization or trade organization, but a group of businesses trying to launder their main product's expenses via a 501(c) organization.
    - res0nat0r 13y ago
      There isn't any laundering going on and they are a 501(c)(6). "501(c)(6) — Business Leagues, Chambers of Commerce, Real Estate Boards." http://en.wikipedia.org/wiki/National_Football_League#Corporate_structure http://en.wikipedia.org/wiki/National_Football_League#Corpor...
      - deleted 13y ago
        [deleted]
- jpwright 13y ago
  Do you have a source about how much the NFL itself spends on hotels/etc for the Super Bowl? Because I don't think that's where their claim to economic activity from the game comes from. It also wouldn't matter very much whether the teams or the NFL itself organized the game (and part of the reason for the existence of the non-profit umbrella organization is to overcome the logistical nightmare of coordinating 32 separate entities). A condition for every Super Bowl in the past few years has been some form of sales tax relief for NFL activity. For example, New Jersey gave about $8 million in tax breaks for the game this year: http://www.nj.com/super-bowl/index.ssf/2014/02/nj_gave_nfl_8_million_tax_break_and_pass_on_security_costs_to_land_the_2014_super_bowl.html http://www.nj.com/super-bowl/index.ssf/2014/02/nj_gave_nfl_8... I also don't think it's fair to say the NFL runs the product. The teams (and the games between the teams) are the product. The NFL's tasks are: (1) Decide on a consistent set of rules, fines, etc. (2) Train and provide impartial referees. (3) Organize the Super Bowl/Pro Bowl/Draft. (4) Provide marketing/merchandise/legal stuff for the NFL in general. Everything else (including organizing the 266 other games, the hundreds of employees for each team, and operating the stadiums) are up to the teams themselves. A "cloud services association" doesn't sound too ridiculous to me, but I don't think there's a proper analogy in the tech industry (and U.S. law recognizes this by providing some specific rules for professional sports leagues: http://en.wikipedia.org/wiki/United_States_antitrust_law#Scope_of_antitrust_law http://en.wikipedia.org/wiki/United_States_antitrust_law#Sco...)
  - 001sky 13y ago
    I also don't think it's fair to say the NFL runs the product. You are quite mistaken. You have a source for that? The NFL has revenues exceeding $4B which are nearly all "profit" (that is, revenues>opex). This cash flows through the league and then is distributed to the teams, who all of which run on essentially zero taxable profits. In other words, the revenues of the teams are the "profits" of the NFL non-profit. That is why there is no need for profits--because they distribute the cash out as 'expenditures'. The level of expednitures is aribitrary[1]...it is just set to maximize the flow of funds from the tax-exempt body with the least amount of tax. At the lower level, the Teams are structured to run on nearly zero profits. This is why they can-not "afford" to build stadiums of pay taxes etc. This of course is also a highly-structure tax-avoidance setup, where inflated costs ("sweetheart" deals) are made with affiliate entities, which shelters the teams from paying taxes. The locations and corporate business structures of the "related entities" are likewise set up to be both opaque and tax-optimized in legal structure and jurisdicion. The values of NFL franchises are staggering. Their debt-loads are also staggering. Hint: the banks would never lend them this money if they did not know more than your average punter. In part these investments are "ego-polishing" (like the America's cup), but there is quite a bit more money floating around the NFL, and this money is going to make rich people even richer...very little of it is being paid in tax. [1] There is no "true sale" of the NFL non-profit's product; they take no risk in holding inventory. Their main purpose is to shield the teams from 2 things: (1) anti-trust; and (2) tax. To wit: a tax-exempt monopoly that makes no profits? Something should immediately trigger your sense of the non-obvious being present.
tomByrer 13y ago
"Each team is it's own entity and pays taxes. Roger Goodell pays taxes on all of his salary." Sorry, not only you provided 0 proof of your statement, but it would be easy to assume any good accountant would find tax shelters. Protip: Rich people can hire people to help avoid paying taxes.
- res0nat0r 13y ago
  Read their tax filing.

_delirium 13y ago

You don't seem to have succeeded in debunking anything relevant to this post. This post is simply pointing out that, in part because the Super Bowl is organized by a nonprofit that is exempt from taxes on its local economic activity (purchases, hotel usage, etc.), its benefit to the city/region hosting the Super Bowl is quite limited. For example, it may generate more hotel usage, but it may also displace some tax-paying hotel usage with non-tax-paying hotel usage, which cancels out some of that added activity. But more generally, the Super Bowl, a for-profit activity mainly aiming to enrich the teams who are NFL members, has structured much of its activity such that the NFL itself, a nonprofit organization, is doing all the organization and purchasing, thereby exempting most of the local economic activity from sales taxes, hotel occupancy taxes, and similar. A proper arrangement would be that the for-profit corporations profiting from the Super Bowl should be organizing it, rather than laundering their signature product through a nonprofit organization. I can't think of another case where a group of companies' main product is run by an umbrella nonprofit. Chamber-of-commerce organizations usually do pretty minor coordinating and lobbying activity, not actual production operations. To get something analogous in tech you'd have to imagine something silly like all the cloud-computing companies getting together and setting up a Cloud Services Association, a 501(c)(6) nonprofit that operates all their datacenters jointly, rather than e.g. Amazon or Microsoft operating their own datacenters on a for-profit basis.

res0nat0r 13y ago
Not sure what this is trying to state, but most seem to think that because the word "non profit" is there, it means they should be broke, operating on a shoestring budget, be poor unknown non-profit corps dedicated to human interest campaigns, but this isn't the case. Feel free to read the multiple thread top comments on the various times on /r/politics this topic has been brought up. Also the NFL filing signed by Goodell last year operated at a loss.
- _delirium 13y ago
  No, I just don't think they should be exempt from regular sales & etc. taxes. They are not a legitimate nonprofit organization or trade organization, but a group of businesses trying to launder their main product's expenses via a 501(c) organization.
  - res0nat0r 13y ago
    There isn't any laundering going on and they are a 501(c)(6). "501(c)(6) — Business Leagues, Chambers of Commerce, Real Estate Boards." http://en.wikipedia.org/wiki/National_Football_League#Corporate_structure http://en.wikipedia.org/wiki/National_Football_League#Corpor...
    - deleted 13y ago
      [deleted]
jpwright 13y ago
Do you have a source about how much the NFL itself spends on hotels/etc for the Super Bowl? Because I don't think that's where their claim to economic activity from the game comes from. It also wouldn't matter very much whether the teams or the NFL itself organized the game (and part of the reason for the existence of the non-profit umbrella organization is to overcome the logistical nightmare of coordinating 32 separate entities). A condition for every Super Bowl in the past few years has been some form of sales tax relief for NFL activity. For example, New Jersey gave about $8 million in tax breaks for the game this year: http://www.nj.com/super-bowl/index.ssf/2014/02/nj_gave_nfl_8_million_tax_break_and_pass_on_security_costs_to_land_the_2014_super_bowl.html http://www.nj.com/super-bowl/index.ssf/2014/02/nj_gave_nfl_8... I also don't think it's fair to say the NFL runs the product. The teams (and the games between the teams) are the product. The NFL's tasks are: (1) Decide on a consistent set of rules, fines, etc. (2) Train and provide impartial referees. (3) Organize the Super Bowl/Pro Bowl/Draft. (4) Provide marketing/merchandise/legal stuff for the NFL in general. Everything else (including organizing the 266 other games, the hundreds of employees for each team, and operating the stadiums) are up to the teams themselves. A "cloud services association" doesn't sound too ridiculous to me, but I don't think there's a proper analogy in the tech industry (and U.S. law recognizes this by providing some specific rules for professional sports leagues: http://en.wikipedia.org/wiki/United_States_antitrust_law#Scope_of_antitrust_law http://en.wikipedia.org/wiki/United_States_antitrust_law#Sco...)
- 001sky 13y ago
  I also don't think it's fair to say the NFL runs the product. You are quite mistaken. You have a source for that? The NFL has revenues exceeding $4B which are nearly all "profit" (that is, revenues>opex). This cash flows through the league and then is distributed to the teams, who all of which run on essentially zero taxable profits. In other words, the revenues of the teams are the "profits" of the NFL non-profit. That is why there is no need for profits--because they distribute the cash out as 'expenditures'. The level of expednitures is aribitrary[1]...it is just set to maximize the flow of funds from the tax-exempt body with the least amount of tax. At the lower level, the Teams are structured to run on nearly zero profits. This is why they can-not "afford" to build stadiums of pay taxes etc. This of course is also a highly-structure tax-avoidance setup, where inflated costs ("sweetheart" deals) are made with affiliate entities, which shelters the teams from paying taxes. The locations and corporate business structures of the "related entities" are likewise set up to be both opaque and tax-optimized in legal structure and jurisdicion. The values of NFL franchises are staggering. Their debt-loads are also staggering. Hint: the banks would never lend them this money if they did not know more than your average punter. In part these investments are "ego-polishing" (like the America's cup), but there is quite a bit more money floating around the NFL, and this money is going to make rich people even richer...very little of it is being paid in tax. [1] There is no "true sale" of the NFL non-profit's product; they take no risk in holding inventory. Their main purpose is to shield the teams from 2 things: (1) anti-trust; and (2) tax. To wit: a tax-exempt monopoly that makes no profits? Something should immediately trigger your sense of the non-obvious being present.

tomByrer 13y ago

"Each team is it's own entity and pays taxes. Roger Goodell pays taxes on all of his salary." Sorry, not only you provided 0 proof of your statement, but it would be easy to assume any good accountant would find tax shelters. Protip: Rich people can hire people to help avoid paying taxes.

res0nat0r 13y ago
Read their tax filing.