Wastebook 2012 Page: 8
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' WASTEBOOK 2012 '
The PGA generated over $900 million in revenue, mostly through television rights,
tournament earnings and sponsorships, and royalties.33 In 2009, the NHL received nearly
$76 million from its member teams.34
League commissioners and officials benefit from the nonprofit status of their organizations.
Roger Goodell, commissioner of the NFL, reported $11.6 million in salary and perks in 2010
alone.35 Goodell's salary will reportedly reach $20 million in 2019.36 Steve Bornstein, the
executive vice president of media, made $12.2 million in 2010.37 Former NFL
commissioner Paul Tagliabue earned $8.5 million from the league in 2010.38 The league
paid five other officials a total of $19.2 million in just one year.39 In comparison, the next
highest salary of a traditional nonprofit CEO is $3.4 million.40
Tim Finchem, commissioner of the PGA Tour, earned $5.2 million in 2010.41 The NHL's
commissioner, Gary Bettman, received $4.3 million in 2009.42
These organizations are taking advantage of the provision of the tax code that allows
industry and trade groups, such as the U.S. Chamber of Commerce or the Natural Resources
Defense Council, to qualify as non-profit and tax-exempt. None of these groups can
promote a specific brand within an industry but each may promote an industry as a whole.
Qualifying organizations pay taxes on few types of income and expenditures, including
lobbying. State and local governments usually exempt these organizations from state
income and sales tax as well, a boon worth an estimated $10 billion to the nonprofit
sector.43
Seeing the advantage in operating largely tax-free, the NFL, NHL, and PGA are registered
with the Internal Revenue Service (IRS) as nonprofit organizations. These leagues assert
they help the professional sport in each of their leagues. For example, on its 2010 tax
return, the NFL described itself as a "trade association promoting interests of its 32
member clubs."44 The NHL said its mission is "to perpetuate professional hockey in the US
and Canada."45 These benign statements aside, major professional sports leagues are
hardly in the business of simply promoting the hockey, football, or golf industry. They are
in fact businesses - designed to make money.
The history of the NFL's tax exemption status stems from the 1966 merger of the then-
American Football League and NFL. Congress passed a law granting specific antitrust
exemptions to the new NFL.46 At that time, it also added "professional football leagues" to
the list of entities eligible for nonprofit status.47 According to the IRS, "Section 501(c)(6) of
the Internal Revenue Code provides for the exemption of business leagues, chambers of
commerce, real estate boards, boards of trade and professional football leagues, which are
not organized for profit and no part of the net earnings of which inures to the benefit of any
private shareholder or individual" (emphasis added).48
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Coburn, Tom. Wastebook 2012, book, October 2012; (https://digital.library.unt.edu/ark:/67531/metadc123537/m1/10/: accessed April 19, 2024), University of North Texas Libraries, UNT Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.