... I did not know that the National Football League, the colossus of professional sports, is classified as a non-profit — a tax-free non-profit, to be more specific. That’s right: The NFL has its own exemption, written into federal law, that makes it exempt from federal corporate taxes.
The Professional Golf Association and the National Hockey League, among others, enjoy a similar exemption although in their cases, it is not an exemption specifically written into the law.
As described in Waste Book 2012 — compiled by the staff of U.S. Sen. Tom Coburn, a conservative Republican from Oklahoma:
In 2010, the registered NFL nonprofit alone received $184 million from its 32 member teams. It holds over $1 billion in assets. Together with its subsidiaries and teams – many of which are for-profit, taxed entities – the NFL generates an estimated $9 billion annually.... Almost half of professional football teams are valued at over $1 billion….
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. Goodell’s salary will reportedly reach $20 million in 2019. Steve Bornstein, the executive vice president of media, made $12.2 million in 2010. Former NFL commissioner Paul Tagliabue earned $8.5 million from the league in 2010. The league paid five other officials a total of $19.2 million in just one year. In comparison, the next highest salary of a traditional nonprofit CEO is $3.4 million.
The NFL’s exemption stems from a 1966 law, passed at the time of the merger with the old American Football League, specifically allowing “professional football leagues” to enjoy 501(c)(6) status as tax-exempt trade organizations. Other leagues have piggy-backed on that legislation to claim that status themselves.
Major League Baseball also used to enjoy the same tax-exempt protection, but in 2007 it chose to surrender that status in part because ... tax-exempt, non-profit status requires you to report the salaries of your top executives....
As the Coburn report points out, “state and local governments usually exempt these organizations from state income and sales tax as well….” As the Indiana Business Journal reported, that proved to be a nice little perk when the Super Bowl was held in Indianapolis this year, because “hotels and restaurants … won’t be taxing National Football League employees. They’re exempt from paying, according to an Indiana Department of Revenue directive. The NFL is using its tax-exempt status as a 501(c)(6) to avoid paying the taxes, in addition to fuel, auto rental and admissions taxes.”
...The article doesn't mention it, but the NBA is also classified as a tax exempt, non-profit organization. The Pacers play in an arena exempt from property tax because it is technically owned by the Capital Improvement Board. Although the public have paid to run the place to the tune of $10 million a year, the Pacers receive 100% of the revenue from the building.