How Is the NFL a Non-Profit? And Why Aren’t the NHL, MLB, and NBA?

Not to rain on the parade of the many New Englanders celebrating the Patriots’ Super Bowl win, but you do have to wonder whether it’s right that the National Football League holds not-for-profit status.

Here at Freed Marcroft, we are honored to guide charitable organizations through the legal aspects of acquiring non-profit status, most frequently under Section 501(c)3 of the Internal Revenue Code.  Among our clients are arts and community organizations — and not a single, solitary professional sports organization.

NFL & Non-Profit Status

So why the heck does an organization like the NFL — with its annual revenues north of $9 billion — warrant non-profit status?  Mother Jones credits “a classic tale of political influence and lobbying ingenious.”  (If you’d like to read the whole story, check out the excerpt in the Atlantic from Gregg Easterbrook’s book The King of Sports: Football’s Impact on America.)

Legally speaking, the devil is in the details not of IRS Code Section 501(c)3, but instead of Section 501(c)6.

Section 501(c)6 formerly granted not-for-profit status to “business leagues, chambers of commerce, real-estate boards, or boards of trade.” However, thanks to successful lobbying by the NFL, since 1966 Section 501(c)6 has read: “business leagues, chambers of commerce, real-estate boards, boards of trade, or professional football leagues.”

You read that right.  The coup the taxpayers gave to the NFL is specific to football.  No dice for Major League Baseball, or the National Basketball Association, or even Hartford’s white “whale,” the National Hockey League.

Apparently, the MLB, NBA, and NHL should have sprung for the NFL’s lobbyists.