Because you’re paying for it:
If you’re a U.S. taxpayer then you’re subsidizing the wildly profitable National Football League, regardless of whether you’re a fan.
Those massive profits are made possible in part by the billions of taxpayer dollars that local governments spend on teams, coupled with tax breaks worth hundreds of millions for the teams, the league, their sponsors and fans.
Here’s a rundown:
Stadium construction: Twenty new NFL stadiums have opened since 1997 with the help of $4.7 billion in taxpayer funds, according to an analysis by the advisory firm Conventions, Sports and Leisure. Local governments pony up to build these venues to attract or keep teams in their towns.
Two more stadiums now under construction in Minneapolis and Atlanta are being built with $700 million in government funds.
Taxpayers paid for most of the University of Phoenix Stadium, which opened in 2006 and is home to this Sunday’s Super Bowl — to the tune of about $300 million.Teams even get tax breaks on the money they actually do spend on construction. Most of that spending is financed with tax free municipal bonds, which were originally created by Congress to help fund roads and schools.
A 2012 analysis by Bloomberg showed that U.S. sports teams will save $4 billion over the life of those bonds, with the NFL being the largest beneficiary. The owners of the Arizona Cardinals saved an estimated $125 million on the bonds issued to build the University of Phoenix Stadium.
Hidden help: The league also gets a financial boost in a less obvious ways, said Eckstein. Elected officials vying for a team to come to their town often serve up discounted city services, such as utilities or police patrolling a stadium on game day.
Teams also often get big breaks on their property taxes.
That’s right—extremely profitable and one of the most subsidized organizations in American history, the NFL also enjoys tax-exempt status. On paper, it is the Nonprofit Football League.
This situation came into being in the 1960s, when Congress granted antitrust waivers to what were then the National Football League and the American Football League, allowing them to merge, conduct a common draft, and jointly auction television rights. The merger was good for the sport, stabilizing pro football while ensuring quality of competition. But Congress gave away the store to the NFL while getting almost nothing for the public in return.
The 1961 Sports Broadcasting Act was the first piece of gift-wrapped legislation, granting the leagues legal permission to conduct television-broadcast negotiations in a way that otherwise would have been price collusion. Then, in 1966, Congress enacted Public Law 89‑800, which broadened the limited antitrust exemptions of the 1961 law. Essentially, the 1966 statute said that if the two pro-football leagues of that era merged—they would complete such a merger four years later, forming the current NFL—the new entity could act as a monopoly regarding television rights. Apple or ExxonMobil can only dream of legal permission to function as a monopoly: the 1966 law was effectively a license for NFL owners to print money. Yet this sweetheart deal was offered to the NFL in exchange only for its promise not to schedule games on Friday nights or Saturdays in autumn, when many high schools and colleges play football.
The phrase or professional football leagues was added to Section 501(c)6 of 26 U.S.C., the Internal Revenue Code. Previously, a sentence in Section 501(c)6 had granted not-for-profit status to “business leagues, chambers of commerce, real-estate boards, or boards of trade.” Since 1966, the code has read: “business leagues, chambers of commerce, real-estate boards, boards of trade, or professional football leagues.”
The insertion of professional football leagues into the definition of not-for-profit organizations was a transparent sellout of public interest. This decision has saved the NFL uncounted millions in tax obligations, which means that ordinary people must pay higher taxes, public spending must decline, or the national debt must increase to make up for the shortfall. Nonprofit status applies to the NFL’s headquarters, which administers the league and its all-important television contracts. Individual teams are for-profit and presumably pay income taxes—though because all except the Green Bay Packers are privately held and do not disclose their finances, it’s impossible to be sure.
Remember this as you sit on your ass watching the 10 hours of pregame shows, the 5 hours of game time, Katy Perry’s boobs at halftime, and all of those funny commercials. After all, Joe Taxpayer, you are paying for it all.