Tell Your Congress members: It’s Time to Eliminate Tax Exempt Status for Major Sports Leagues
The world’s autocratic, human-rights abusing oligarchs just had another huge PR win -- and this one is subsidized by your tax dollars.
The PGA Tour just announced its merger with LIV Golf -- an upstart golf league that is funded by the Saudi Arabia Public Investment Fund. The fund is controlled by Saudi Crown Prince Mohammed bin Salman (MBS), the man responsible for the murder of journalist Jamal Khashoggi. In recent years, the Saudis and MBS have spent billions on LIV Golf in an effort to “sportswash” their reputation around the globe, hoping their affiliation with golf, a respectable sport played by society’s elites, will distract from their history of human rights abuses, brutal political repression, and close ties with violent religious extremists.
Despite all this, the PGA Tour is happy to accept their money. And because the PGA Tour, like many other sports leagues, is a 501(c)(6) nonprofit, the PGA is also happy to continue paying no income taxes whatsoever on the billions in revenue it earns.
Enough is enough. Multi-billion dollar sports leagues have skated by without paying taxes for far too long, and we certainly should not permit the PGA Tour to sell out in such a disgraceful way. There is no reason for it to continue benefiting from tax-exempt status. Our tax laws must be changed to eliminate the loophole that allows these entities to claim tax-exempt nonprofit status when they earn billions of dollars each year.
Between 2016-2019, the PGA Tour produced more than $250 million in profits, and it brought in $1.5 billion in revenue in 2019 alone. And it’s not just the PGA Tour that’s getting away with this: the NCAA is a sports juggernaut that brings in $1 billion per year -- with a significant portion coming just from March Madness. Throw in the value of its media contracts, and their non-taxable winnings come to $19.6 billion per year. Those lucrative contracts, it should be noted, don’t expire until 2032. The same sweet deal also applies to the National Hockey League (NHL).
The sports leagues defend their not-for-profit status by arguing that their income doesn’t benefit any particular person. But a closer look shows that plenty of people are becoming very rich operating these “not-for-profit” organizations. In the PGA alone, executives receive millions of dollars in compensation , yet their “non-profit” status allowed the PGA to avoid $80 million in taxes.
If the PGA Tour, NCAA, NHL, and other sports leagues won’t follow in the steps of the NFL and Major League Baseball (MLB) and voluntarily give up their tax exempt statuses, Congress must do it for them.
Pro sports are always a tough target for lawmakers due to their popular support, but even the most passionate golf fans can agree that the PGA Tour’s decision to merge with LIV Golf is indefensible. This open embrace of the worst excesses of global oligarchy should open the door for real legislative change. Legislation has been introduced in the past with bipartisan support to revoke the tax-exempt status of sports leagues, and Representative John Garamendi has just put forward a bill in response to the PGA/LIV merger that would do the same. Now it’s up to Congress to come together to get it done once and for all, and put an end to this unjustifiable rule.
Eliminate tax exempt statuses for major sports leagues and make these multi-million dollar corporations finally pay what they owe.