Should the NFL Maintain Its Tax-Exempt Status?

October 4, 2013 - 2 minute read

Football moneyFootball season is officially upon us.  One need not be an avid football fan to have a general understanding of the vast amounts of revenue the National Football League (“NFL”) generates in one season.  However, not everyone knows that the NFL is a § 501(c)(6) organization, meaning that it receives tax-exempt status, is not organized for profit, and no part of its net earnings benefit any private shareholder or individual.  In 1966, professional football leagues were specifically added to Internal Revenue Code section 501(c)(6) to enable the NFL and American Football League to merge without fear of an antitrust challenge under either the Clayton Antitrust Act or the Federal Trade Commissions Act.

Over the years, the tax-exempt status has been hotly debated.  Peter J. Reilly of Forbes magazine explained that although the NFL is tax-exempt, it is not a charitable organization, because its 32 member leagues are trying to make money for themselves.  Brian Frederick of wrote, “The NFL may technically be a non-profit, but it sure as hell isn’t acting in the public interest.”

In September, 2012, the NFL announced that it was granting the Foundation for the National Institutes of Health $30 million in unrestricted funds for medical research on brain injuries.  In 2009, NFL Charities, NFL’s charitable foundation, awarded a three-year $1.8 million grant to The Cooper Institute to support youth health and prevent childhood obesity.

From 1966 to 2007, Major League Baseball (“MLB”) maintained the same 501(c)(6) status as the NFL.  However, after filing a 2006 tax return that failed to disclose its executives’ salaries, MLB lost its tax-exempt status.  The National Hockey League and Professional Golf Association are both § 501(c)(6) organizations.

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