> 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 t

> 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. Well, at one level the NFL mysteriously making $4B despite doing mostly organizational/marketing/legal work would seem to support the argument that the teams/games are the product. The NFL makes that money from giant TV contracts, licensing deals, and merchandise that are only popular because the sport is popular. The revenue distribution is somewhat unique -- and granted, opaque -- but not necessarily a tax-avoidance scheme. One relevant example is the MLB giving up its tax-exempt status in 2007, which had no impact on its annual taxes. > 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. If you don't consider the money they receive from the NFL, then each team runs at a huge loss. Of course, they have gigantic payrolls to their athletes and operating expenses for a stadium (this does vary by team, although the NY Jets & NY Giants funded the construction of MetLife stadium using zero public funding, for example). If you take into account the NFL's revenue distribution, then most teams make millions each year[1]. I am not sure what other tax-avoidance setups you're referring to and would be curious to read about that. Optimizing your business structure to minimize taxes doesn't seem particularly criminal. > 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. Of course they take risk. It's not particularly likely the NFL would go out of business anytime soon, but every investment they make carries risk. I think the one questionable aspect of the NFL's setup is that each team writes off its NFL membership dues (~$6m/year) as a business expenditure while the NFL's operating expenses (Goodell's salary, marketing, etc) are untaxed. [1] http://www.forbes.com/nfl-valuations/list/ http://www.forbes.com/nfl-valuations/list/