Who: Tom Eskey, DPA, is an online faculty member for Johnson & Wales University, teaching in the Nonprofit Management degree programs.
Agree or Disagree with Article: Neither
His Defense: In the 2013 article NFL’s a Nonprofit? Author Says it’s Time for Football Reform, the interviewee author Gregg Esterbrook lays out relevant arguments against nonprofit and tax-exempt statuses for the National Football League (NFL) and for college football, respectfully. While his points and sentiments possess a degree of merit, there are a few inconsistencies that make these issues a bit more difficult to properly diagnose.
The league’s status is separate from individual franchise status. It is true that the NFL headquarters possessed nonprofit status for an extended period of time (the league gained the status in 1942 and gave it up in 2015), but the earnings of individual franchises are generally taxable. For example, public funds cannot be used to finance stadiums unless individual franchises and their associated local governments negotiate a deal.
Possible solution: The NFL HQ has done its part by dropping its tax-exempt status, but more stringent legislation by local or state governments that would require a public vote before public funds could be used towards stadium expenses (which is in place in certain areas) could alleviate the problem of public subsidies for stadium construction, expansion, and maintenance.
Not every college football team has a bankroll like Roll Tide. In regards to college football and the tax deductions that go along with it (and all other collegiate sports), the interviewee may have a point, assuming that every college football program in America possesses a revenue-to-expense ratio of Georgia, Alabama, or Texas. However, a recent study revealed that the vast majority of college football programs lose money on a yearly basis. One could argue that traditional tax-deductible perks be dropped from the more profitable programs, but the can of worms that would ensue from selectively administering tax deductions by sport and by university would be significant.
Possible solution: Instead of targeting all of college football tax deductions, a greater emphasis could be placed on regulating the amount of funds that university-athletic-association-related foundations are able to “funnel” towards expenses, such as coaching salaries and facility upgrades as well as endowed scholarships and other student-athlete aide. These tax-exempt funds allow for donors to burden many of these expenses — with the benefit of a tax write-off. By limiting the amounts that programs could accept, less of these funds would be used to benefit the most popular and successful programs. This would have the effect of “leveling the playing field,” while also ensuring more appropriate use of tax-exempt funds.
The interviewee has obviously done his homework (he did write the book, after all!), but some of his arguments seem to have been crafted at the surface level. I agree, to an extent, with some of his conclusions and suggestions, but in order to responsibly confirm these sentiments, a number of additional factors than those presented in this piece would need to be taken into consideration.