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 And the Utah Republican says his campaign to get rid of the tax
break is not motivated by the recent travails of NFL Commissioner
Roger Goodell, who has been excoriated for turning a blind eye to
domestic abuse by some of his players.
"It's an issue of basic fairness," Chaffetz, his palms turned
upward, said in an interview. "The National Football League should
have to pay taxes like everybody else."
The teams that comprise the NFL, boasting some $10 billion in annual
revenues, pay taxes on their profits, as well as on merchandise and
player salaries. But because it's listed a non-profit trade or
industry association, the league's head office gets a free pass.
Chaffetz, a 47-year-old firebrand who became chairman of the
powerful House Oversight Committee in January, wants that to change.
Section 501(c)(6) of the Internal Revenue Code lists "professional
football leagues" as deserving of tax-exempt status, a vestige of
legislative wrangling that helped the NFL and its upstart rival, the
American Football League, merge in 1966.
The result is the NFL's status is comparable to that of the Chamber
of Commerce when it comes to taxation.
"It doesn't pass the laugh test of being something that's a
not-for-profit trade association," said Ryan Alexander, president of
Taxpayers for Common Sense, a federal budget watchdog organization.
"There's no evidence the NFL would collapse without this exemption."
'PR HIT'
The Joint Committee on Taxation estimates the 10-year cost to the
taxpayer of the NFL exemption is about $109 million.
Not surprisingly, the League sees it differently.
"The league office funded by the teams is a not-for-profit entity
like a trade association," said NFL spokesman Greg Aiello. "All
revenue goes to the teams and is taxed there."
Among the entities joining the NFL as "tax-exempt organizations" are
the National Hockey League, the Professional Golfers Association and
the U.S. Tennis Association.
The National Basketball Association never sought tax-exempt status,
while Major League Baseball in 2008 opted to do away with its
exception because, in part, it would have had to reveal the salaries
of its top executives.
That requirement is how the public knows that NFL Commissioner Roger
Goodell made $35 million in 2013, down from the $44.2 million he
pocketed in 2012.
Andrew Delaney, a sports law expert with Martin & Associates, said
if it became a for-profit entity, the NFL would likely find enough
write-offs to offset the savings it would lose along with its
tax-exempt status.
"When MLB made the switch from a non-profit, they reported that
there was no real change in their tax liability," he said. "If I
were running the NFL show, I'd say, 'This isn't worth it.' It's not
worth the PR hit it takes."
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Chaffetz concedes if the non-profit status is removed, the NFL has
"some very tax savvy people that will figure this all out for them."
He added, however, that he just wants the NFL "to play under the
same rules as everyone else."
FORMER PLACEKICKER
Delaney said similar legislation has "been tried before, and hasn't
made it. But you never know."
Chaffetz is taking the baton from former Republican Oklahoma Senator
Tom Coburn, who retired in January. In 2013 Coburn introduced the
PRO Sports Act, which would prohibit professional sports
organizations with annual revenue of more than $10 million from
filing as non-profits.
Chaffetz, a former placekicker for Brigham Young University, wants
to hold hearings on the issue and have Goodell testify. He hopes to
push the PRO Sports Act to the floor of the House "sooner rather
than later."
When asked of his chances of overturning a policy that's been in
place longer than just about every member of Congress, Chaffetz was
confident - and ready to use his seniority to push the issue. "I'm a
chairman now," he said.
During the NFL's domestic abuse saga, several members of Congress
hinted that the league's coveted antitrust exemption could be
rescinded if it did not revise its personal conduct policy, which it
did.
The threat of removing MLB's antitrust exemption was a catalyst for
the sport strengthening its stance against performance-enhancing
drugs.
There have been none of those threats over the NFL's tax-exempt
status, probably because the antitrust exemption allows the league
to negotiate the billion-dollar television contracts for all teams,
and taking that away would seriously harm the NFL.
"I want to give Roger Goodell a fair shot to explain the
tax-exemption," Chaffetz said. "The NFL by all accounts is the
nation's most profitable sports league.
(Reporting by Steve Ginsburg; Editing by Christian Plumb)
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