Billionaire's playground: the world of professional sports

[theHandpuppet]

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http://nonprofitquarterly.org/policysocial-context/22178-new-orleans-gives-800k-in-tax-breaks-to-the-nfl.html
New Orleans Gives $800K in Tax Breaks to the NFL

(excerpt)
According to the study, NFL and team personnel and their “parties” directly spent $33.7 million, including $12.7 million on hotels and lodging, $3.9 million on bars and nightclubs, $1.4 million on entertainment, and $1.3 million gambling. As the NPQ Newswire has previously noted, the NFL typically negotiates these deals, some more lucrative in tax exemptions than the deal in New Orleans (such as Indianapolis), and most recently had a tax deal on the table for negotiations with Santa Clara, California, and its bid for the Super Bowl in 2016 or 2017.

But does the NFL (or its member teams) need exemption from local taxes to make the Super Bowl a viable economic activity? Could the $184 million NFL, and its multiple teams valued at a billion dollars or more, have survived paying $800,000 in taxes to local New Orleans governmental units?

There are still plenty of people who think the pro sports tax subsidy—the nonprofit status granted to the NFL, plus the National Hockey League and the Professional Golfers’ Association—is unnecessary, unwarranted, and wasteful. Writing for the Fiscal Times, Steve Yoder lists the pro sports tax exemption as one of the “10 tax laws that hurt the economy the most.” The pro sports tax exemption doesn’t make the NFL a public charity, but in some cases, the NFL is trying to adopt a nonprofit-like posture. In northern New Jersey, where the next Super Bowl will be played in 2014, the NFL is trying to recruit potentially 20,000 volunteers to greet visitors coming to the region. Ten hours of work, in return for being able to wear an NFL volunteer uniform.

The NFL exists to promote the economic interests of some of the nation’s wealthiest sports franchises owned by exceptionally wealthy individuals. While some observers might contend that paying commissioner Roger Goodell more than $10 million a year is simply a matter of market economics, paying him simply what he is worth in the labor market, others might suggest that the NFL’s paying several seven- and eight-figure salaries plus its earning huge economic returns from its programs, ought to make it classifiable as something other than a nonprofit entity. Its tax-exempt status didn’t cost New Orleans much in foregone taxes, but did it need an exemption from local taxes at all?—Rick Cohen

http://www.thebiglead.com/index.php/2013/03/15/the-nfl-loves-local-tax-increases-for-stadiums-except-when-nfl-officials-have-to-pay-them/
The NFL Loves Local Tax Increases For Stadiums, Except When NFL Officials Have to Pay Them

This narrative is familiar. An NFL team wants more money. Team executives raise smoke signals about leaving for, say, Los Angeles. Local politicians respond with an incentive package of public funding to finance renovations or a new stadium. Twenty NFL teams have built or renovated stadiums since 1997. Nineteen of the 20 projects involved public funding (the Meadowlands had a nine-figure public infrastructure project that does not count as a stadium expense).

Eleven of those 19 projects involved tax increases. Many of those taxes are hotel and car rental taxes, designed to defray the cost from the local population. The NFL loves such taxes, except, of course, when league officials would have to pay them.

Miami and Santa Clara are bidding to host Super Bowl L in 2016. The new 49ers stadium involves a two percent hotel tax. Renovations to Sun Life Stadium would necessitate a one percent hotel tax increase in Miami. The NFL has demanded that league employees be held exempt from local taxes. Santa Clara already agreed, meaning Miami must likely do so as well.


But the region’s rival for the 50th game, Santa Clara, last week announced it would waive hotel taxes for NFL executives. That raises the stakes as the Dolphins lobbying team races to obtain state and county approval of the tax-funded renovation by May 22, when NFL owners will pick a winner....

http://taxprof.typepad.com/taxprof_blog/2004/10/pga_golfers_sco.html
PGA Golfers Score Hole-in-One in Tax Bill
By Paul Caron

PgatourToday's Wall Street Journal has a fasciniating article on how the PGA Tour's lobbyists succeeded convincing Congress to exempt pro golfers from the new tax bill's restirctions on defined contribution plans:

On page 598 of the 650-page bill, at the end of a section designed to limit the use of corporate "deferred compensation" plans, is an exemption for any plan "established or maintained by an organization incorporated on July 2, 1974." In other words -- the PGA Tour Inc., the nonprofit association whose members play on the professional golf circuit....

[T]he pension plan -- linked to golfers' performance -- offers a 26-year-old player who began his career in 2001 and plays 17 seasons a retirement nest egg of nearly $43 million even if he ranks No. 75 and never wins a tournament....

The tax bill that Congress sent to President Bush limits the flexibility of deferred-compensation plans to dodge taxes. Among other things, it restricts early withdrawals and withdrawals delayed beyond the date set originally. But the bill exempts the PGA Tour pros.
How did the PGA Tour succeed in having golf plutocrats like Tiger Woods excluded from the provisions in the tax bill? The article includes this tantalizing suggestion: As the bill moved through Congress in June, a crush of influential lawmakers attended the PGA Tour's Booz-Allen Classic at Avenel Country Club in Maryland, where they played with the pros. Ways and Means aides say the boosters of the PGA Tour exemption included Rep. Jim McCrery, a Louisiana Republican. At the tournament, he played with Australian golfer Adam Scott, according to the Hill newspaper....

"I don't know what any of these special breaks have to do with American manufacturing jobs," says Rep. Charles Rangel of New York, the top Democrat on the House Ways and Means panel. "But I do know one thing -- pro golfers and sports-franchise holders won the Washington lobby game, and the American taxpayers have lost." ....