In My Opinion

Fred Grimm: We all pay the cost of sports “non-profits”

The term “non-profit” fits the NFL about as snuggly as a Randy Stark jersey draped across my wimpy shoulders.

Something about that $9 billion a year the NFL collects in operating revenue.

Something about a questionable federal non-profit tax exemption for an association that spends $1.14 million a year on lobbyists, and another $900,000 in campaign contributions, to keep Congress from asking those hard questions.

Something about a non-profit association in which the owners of almost half the teams could sell and cash out with more than a billion bucks.

Something about a so-called non-profit that pays its league commissioner more than any of his star athletes — with considerable less risk of concussion, unless his compensation package happens to fall on his head. Deadspin reports that Commissioner Roger Goodell’s annual salary and compensation jumped from a very generous $11.6 million in 2010 to — in your face, Peyton Manning — $29.49 million in 2011.

Execs who run less gaudy non-profits have found themselves the objects of considerable public scorn for “scandalous” salaries a fraction of what Goodell makes. Hell was raised in 2008 with the news that the chief executive of the Boys & Girls Clubs was paid $988,591 and her counterpart at the March of Dimes was getting $627,104. Oh, the outrage.

Try to find rationalization for a $29.49 million executive salary and a passel of billion-dollar franchises in the IRS definition of a 501(c)(6) — an association “not organized for profit and no part of the net earnings of which inures to the benefit of any private shareholder or individual.”

Last year Tom Coburn, the very conservative, very Republican senator from Oklahoma, listed the professional sports non-profit loophole as the second item in his infamous government Wastebook. Coburn figured that in 2011 the NFL, along with the Professional Golfers Association and the National Hockey League, which also finagled the non-profit designation, dodged $91 million in federal taxes.

Lately, in Miami-Dade County, angry citizens have railed about the cost to Miami-Dade taxpayers stuck with paying for the Marlins’ new baseball arena and the additional burden if the county agrees to toss $200 million toward the renovation of Sun Life Stadium. A poll released this week indicated that 70 percent of the voters, if asked to approve the hand-off to the Dolphins, would say no.

But isn’t it nice to know that it won’t be just Miami-Dade citizens paying for these follies? The bonds cities and counties issue to pay for their sports arenas offer federal tax exemptions. We all pay. Bloomberg reports that the tax exemptions for the interest paid by municipal bonds that finance sports structures cost the U.S. Treasury $146 million a year. Bloomberg calculated that over the life of the $17 billion in exempt debt on stadiums built since 1986, bondholders will have avoided $4 billion in taxes.

That lovely canopy the Dolphins, with $200 million help from the public, plan for Sun Life Stadium isn’t just designed to keep out the rain and tropic sun. It’s a great looming tax shelter.

Big-time college sports also bask in their own insidious IRS designation as non-profits embarked on an “educational mission.” Some mission. Rich alums can deduct 80 percent of their “contributions” to lease luxury skyboxes or buy season tickets or to make ostentatious contributions to the athletic department. They get to watch the game in enviable circumstances. And all of us pay.

Same as we pay for the insane, ever-escalating $4 million and $5 million and $6 million salaries for coveted football and basketball coaches, as university athletic departments and booster clubs exploit the federal tax code to filch coaches from other universities. It’s hard to imagine that anyone in Congress envisioned that one school stealing a coach from another could be defined as a non-profit educational purpose.

Of course, the NCAA’s very profitable non-profit business plan hinges on maintaining a pool of unpaid labor, zealously refusing to share even the profits schools enjoy by exploiting athletes’ names and numbers and likenesses.

NCAA President Mark Emmert, who has done a famously bumbling job overseeing the investigation of the University of Miami athletes suspected of taking gratuities from a would-be sports agent, has been awarded $1.6 million a year for his ineptitude, courtesy of the great sports tax dodge.

And we all pay.

Read more Fred Grimm stories from the Miami Herald

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