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John,
What do you call a nonprofit organization that brings in over $250 million in profit over a four year period? That grossed $1.5 billion in revenue just in 2019? And that now has just announced its merger with another organization not unlike itself, sure to bring in additional billions every year?
Would you really call this a nonprofit? And yet that’s what the PGA Tour is: like other sports leagues, it’s a 501(c)(6) nonprofit with tax-exempt status.
Now that the PGA Tour has announced its merger with LIV Golf, a formerly rival league funded by the government-owned Saudi Arabia Public Investment Fund, which manages $650 billion in assets, eyebrows are being raised.
And it’s not just the PGA Tour that’s under scrutiny. Why should these enormously wealthy sports leagues, such as the NCAA or the NHL, making boatloads of money for some of the world’s richest people, continue to operate as nonprofits with tax-free status?
The answer is simple: They shouldn’t. Sign the petition to tell Congress to eliminate tax exempt status for major sports leagues, and make these multi-million dollar corporations responsible to pay taxes like other profit-making entities.
Not every major sports league continues to take such unfair advantage of our legal loopholes. The NFL and Major League Baseball (MLB) have voluntarily rescinded their nonprofit status, plainly recognizing that they bring in plenty of profits. This sense of good citizenship is to be admired and emulated.
But we shouldn’t have to depend on the good will (or good P.R. sense) of huge corporations to do what is right. We should eliminate the loopholes in our laws that allow these firms to claim they are nonprofits, even as they bring in billions.
With $1 billion in revenues plus another $18.6 billion in media contracts per year, the NCAA is the poster child for the tax free nonprofit with enormous profits. Like the National Hockey League, those contracts are good for almost a decade from today, expiring in 2032. Yet neither of these organizations pays a dime in taxes.
How do these organizations qualify as nonprofits in the first place? The leagues defend their status by claiming the profits don’t go directly to individuals -- even though PGA Tour executives receive millions every year in compensation. Nevertheless, by claiming their “nonprofit” status, the PGA Tour was able to side-step an $80 million dollar tax bill.
Bipartisan bills have been introduced in the past to revoke the sports leagues’ tax exemptions, but they haven’t gone anywhere. Now, new legislation proposed by Representative John Garamendi has the same intent. The PGA / LIV merger ought to be high-profile enough for the bill to gain significant traction in Congress.
Click here to send Congress a message to pass this legislation and revoke the tax-exempt status of these multi-million dollar sports leagues.
Thank you for adding your name to the list. This simple reform will help restore a sense of fairness -- not to mention good sportsmanship -- to the nation’s tax codes.
- Amanda
Amanda Ford, Director
Democracy for America
Advocacy Fund
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