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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