June 17th, 2014
12:57 PM ET

The real problem with sports' governing bodies

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By Global Public Square staff

Almost half of humanity will tune in to watch some part of the World Cup spectacle, which kicked off last week in Brazil. The football will be spectacular, but the group that put it together has come under some fire.

Like other big time sports organizations, FIFA, international football's governing body, is a self-appointed, self-regulated body with little accountability and massive revenues. It demands that countries adhere to its every whim when they agree to host the World Cup.

Brazil has spent an astounding $11 billion to host the FIFA tournament. FIFA officials have to be treated like royalty, and there have been accusations of bribery and other forms of corruption, accusations that are also clouding Qatar's winning bid for the 2022 World Cup.

The demands can sometimes be simply grotesque, and according to Brazil's Internal Revenue Service, FIFA is getting tax exemptions worth nearly $250 million dollars. Other estimates are even higher.

Why is an organization with a reported reserve of more than 1.4 billion dollars receiving such huge tax benefits?

Well, because FIFA is a non-profit organization. And, guess what? It's not just FIFA.

The International Olympic Committee also has non-profit status. The IOC generated $5 billion in revenue between 2009 and 2012. And right here at home, the NCAA is tax-exempt, too. According to Bloomberg, its tax break on ticket prices alone cost the U.S. Treasury $100 million annually in uncollected revenue. And that doesn’t get into TV revenues.

And it isn't just the amateurs. Professional American sports leagues are in on the game as well. Indeed, amazingly, the National Football League, The National Hockey League, and the PGA tour are all non-profits and, thus, have tax exempt status.

The PGA tour generated nearly $1 billion in revenue in 2011. The NHL reported record earnings of $3.1 billion in 2011. And the NFL made $9.2 billion in revenue in 2013, according to Forbes. That makes it the most lucrative league in the entire world. The NFL's Commissioner Roger Goodell took home $44 million in 2012.

Why in the world are these leagues considered non-profits?

In September, Oklahoma's Republican Senator Tom Coburn asked just that question. Coburn introduced the PRO Sports Act, which would strip professional sports leagues of their federal tax exemption if they earned more than $10 million. The NFL obviously makes much more than that, but, to be clear, the organization does point out that only the league office is tax exempt. The 32 member teams do indeed pay taxes on their income.

But the chances that Coburn's bill will pass are slim to none. If you want to know just how powerful these leagues are, listen to this:

Last week, the Minneapolis Star-Tribune published what it said was a confidential list of demands provided by its sources, demands that the city had to meet in order for the NFL to award Minneapolis the 2018 Super Bowl.

The Star-Tribune said the NFL and Super Bowl Host Committee declined to comment on the document. The leaked document was 153 pages and it requested among other things:

All travel costs for 180 league officials to take a "familiarization trip" before the game, police escorts for all team owners, and, of course, exemptions from city, county, and state taxes. This on top of the massive subsidy already in place – Minneapolis taxpayers forked over nearly a billion dollars in public funds to help build a new stadium for the game.

This is worse than crony capitalism – its crony socialism.

The NFL, FIFA and the IOC are all large, multi-billion dollar global organizations that make their decisions mostly to maximize their revenues. There's nothing wrong with that. But there is a word to describe them – businesses. And they shouldn't be exempt from the rules, regulations, and taxes that other businesses around the world have to pay

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Topics: Business • GPS Show • Sports

soundoff (13 Responses)
  1. palintwit

    Tea party patriots believe nascar is a real sport and that Dale Ernhardt was a great American athlete. They also believe that Sarah Palin is America's sweetheart, like Shirley Temple.

    June 17, 2014 at 1:08 pm | Reply
  2. chri§§y

    And THATs why your last name is TWIT! Lol

    June 17, 2014 at 2:00 pm | Reply
  3. Ferhat Balkan

    The real problem with sports' governing bodies is excess weight. When you don't have athleticism involved with sports, you get a 'governing' body that's overweight (much like the politicians we have). Chris Christie will set a good example for them🙂

    June 17, 2014 at 6:42 pm | Reply
  4. chri§§y

    Todays Quirkey News: A resterant in the Philipines came up with a new crocodile flavored ice cream. I scream, you scream, we all scream, thats a TERRIBLE idea!

    June 17, 2014 at 7:06 pm | Reply
  5. chri§§y

    Oops meant "restaurant" sorry.

    June 17, 2014 at 7:09 pm | Reply
  6. Joey Isotta-Fraschini©

    Almost half of humanity will watch...huh? What is a world cup?
    Cup of what?

    June 17, 2014 at 8:40 pm | Reply
  7. rupert

    Whenever the mexican broadcasters see someone score a point they yell
    goooooooooooooaaaaaaaaaaaaallllllllllllllllllll.
    for real.
    Oh. I'm out of breath.

    June 17, 2014 at 10:09 pm | Reply
  8. Peter mabas

    Sport unites humanity like nothing else in the world, how i wish all the wars and destructions wil be replaced with sport. What y,all think.

    June 18, 2014 at 5:13 am | Reply
  9. chri§§y

    Oh if wishes were dreams and dreams could come true huh?

    June 18, 2014 at 5:51 am | Reply
  10. j. von hettlingen

    Fifa is being seen by many as a Mafia organisation. It presides over branches of business, that are worth hundreds of billions. Alone the betting business is a trillion dollar pie. Members of the various bodies are corrupt and behave like turf bosses.

    June 19, 2014 at 12:21 pm | Reply
  11. Rick McDaniel

    Let's face it, sports is totally overdone, and totally overexposed, around the world. Too many resources are being wasted in pro sports, too many tax dollars are being wasted in pro sports, to shore the sports up, and too few fans can see the games, because the tickets are too costly, because the players are too highly paid.

    We have created a monster.........world wide.

    June 24, 2014 at 4:22 pm | Reply

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