Now, the first part of it is just as you'd guess, how local governments cut sweetheart deals to keep NFL franchises happy. Keep in mind that pretty much everyone involved in professional football, from the owners and the NFL executives on down, makes vast sums of money, but they've got the clout to demand taxpayer funds, too.
However, did you know that this wealthy corporation is also officially non-profit? Yeah, and it's something Congress has done just for them:
In his office at 345 Park Avenue in Manhattan, NFL Commissioner Roger Goodell must smile when Texas exempts the Cowboys’ stadium from taxes, or the governor of Minnesota bows low to kiss the feet of the NFL. The National Football League is about two things: producing high-quality sports entertainment, which it does very well, and exploiting taxpayers, which it also does very well. Goodell should know—his pay, about $30 million in 2011, flows from an organization that does not pay corporate taxes.
That’s right—extremely profitable and one of the most subsidized organizations in American history, the NFL also enjoys tax-exempt status. On paper, it is the Nonprofit Football League.
This situation came into being in the 1960s, when Congress granted antitrust waivers to what were then the National Football League and the American Football League, allowing them to merge, conduct a common draft, and jointly auction television rights. The merger was good for the sport, stabilizing pro football while ensuring quality of competition. But Congress gave away the store to the NFL while getting almost nothing for the public in return.
The 1961 Sports Broadcasting Act was the first piece of gift-wrapped legislation, granting the leagues legal permission to conduct television-broadcast negotiations in a way that otherwise would have been price collusion. Then, in 1966, Congress enacted Public Law 89‑800, which broadened the limited antitrust exemptions of the 1961 law. Essentially, the 1966 statute said that if the two pro-football leagues of that era merged—they would complete such a merger four years later, forming the current NFL—the new entity could act as a monopoly regarding television rights. Apple or ExxonMobil can only dream of legal permission to function as a monopoly: the 1966 law was effectively a license for NFL owners to print money. ...
While Public Law 89-800 was being negotiated with congressional leaders, NFL lobbyists tossed in the sort of obscure provision that is the essence of the lobbyist’s art. The phrase or professional football leagues was added to Section 501(c)6 of 26 U.S.C., the Internal Revenue Code. Previously, a sentence in Section 501(c)6 had granted not-for-profit status to “business leagues, chambers of commerce, real-estate boards, or boards of trade.” Since 1966, the code has read: “business leagues, chambers of commerce, real-estate boards, boards of trade, or professional football leagues.”
The insertion of professional football leagues into the definition of not-for-profit organizations was a transparent sellout of public interest. This decision has saved the NFL uncounted millions in tax obligations, which means that ordinary people must pay higher taxes, public spending must decline, or the national debt must increase to make up for the shortfall. Nonprofit status applies to the NFL’s headquarters, which administers the league and its all-important television contracts. Individual teams are for-profit and presumably pay income taxes—though because all except the Green Bay Packers are privately held and do not disclose their finances, it’s impossible to be sure.
For Veterans Day last year, the NFL announced that it would donate cash to military groups for each point scored in designated games. During NFL telecasts that weekend, the league was praised for its grand generosity. The total donation came to about $440,000. Annualized, NFL stadium subsidies and tax favors add up to perhaps $1 billion. So the NFL took $1 billion from the public, then sought praise for giving back $440,000—less than a tenth of 1 percent.
In the NFL, cynicism about public money starts at the top. State laws and IRS rules generally forbid the use of nonprofit status as a subterfuge for personal enrichment. Yet according to the league’s annual Form 990, in 2011, the most recent year for which numbers are available, the NFL paid a total of almost $60 million to its leading five executives.
Can you imagine the uproar if any other 'non-profit' group paid $60 million to it's top five executives? (Salaries a lot less than that get criticized!) Whether you're a football fan or not, you're paying for that. Taxpayers are subsidizing a very, very lucrative business.
Sure, it's entertainment, though not for everyone. So why shouldn't football fans be the ones paying for this, if that's what they want?
Here's something that's kind of interesting, too:
Football fans know the warning intoned during each NFL contest: that use of the game’s images “without the NFL’s consent” is prohibited. Under copyright law, entertainment created in publicly funded stadiums is private property.
When, for example, Fox broadcasts a Tampa Bay Buccaneers game from Raymond James Stadium, built entirely at the public’s expense, it has purchased the right to do so from the NFL. In a typical arrangement, taxpayers provide most or all of the funds to build an NFL stadium. The team pays the local stadium authority a modest rent, retaining the exclusive right to license images on game days. The team then sells the right to air the games. Finally, the NFL asserts a copyright over what is broadcast. No federal or state law prevents images generated in facilities built at public expense from being privatized in this manner.
And the rich get richer, all the way up the line.
There's lots more to the article (although it doesn't even mention how college, and even high school, teams have become preparatory schools for the NFL), but I really enjoyed this small bit:
The reason NFL executives’ pay is known is that in 2008, the IRS moved to strengthen the requirement that 501(c)6 organizations disclose payments to top officers. The NFL asked Congress to grant pro football a waiver from the disclosure rule. During the lobbying battle, Joe Browne, then the league’s vice president for public affairs, told The New York Times, “I finally get to the point where I’m making 150 grand, and they want to put my name and address on the [disclosure] form so the lawyer next door who makes a million dollars a year can laugh at me.” Browne added that $150,000 does not buy in the New York area what it would in “Dubuque, Iowa.” The waiver was denied. Left no option, the NFL revealed that at the time, Browne made about $2 million annually.
Yeah, this poor guy! He claims he only makes $150,000 a year, so his neighbors, who make a million dollars a year (this guy has a lot wealthier neighbors than I do!), will laugh at him if he has to disclose his pitiful salary. And let's face it, he can barely scrape by on $150,000 a year, anyway.
But when - miraculously - their lobbying effort fails, so the NFL does have to say how much it's paying him, it turns out that he's actually making $2 million a year! Well, I guess he can laugh at his neighbors now, huh? (Actually, I think he's laughing at all of us.)
Of course, even at $2 million a year, he's clearly not one of the top executives at this "non-profit" organization. Remember, they split $60 million between the five of them.
Note that this is the only reason we even know how much they make, because the IRS moved to strengthen disclosure requirements. The NFL fought that, of course, but they lost. (Wow, that must be an unusual experience for them, huh?)
I don't like the giveaways to professional sports teams anywhere, but since I don't live in a city with an NFL franchise, I figured that it probably didn't affect me. But it turns out that it does. It turns out that the NFL is really the "Nonprofit Football League" - just not for everyone involved with it.