While the Miami Dolphins beat the Oakland Raiders at Wembley Stadium on 28 September, their sports league, the National Football League, was fending off press and public attacks threatening its tax-exempt status. The tax structure of US sports is confusing. The NFL, the Professional Golfers' Association and the National Hockey League are tax-exempt trade associations but, unlike charities, they cannot accept tax-deductible donations. However, Major League Baseball switched to for-profit status in 2007 and the National Basketball Association has always been for-profit.
The NFL's trade association status has long been controversial, because it was awarded not by the Internal Revenue Service but as a result of legislation passed by the US Congress in 1966 in exchange for a promise by its then commissioner to put an NFL franchise in New Orleans to please two powerful legislators.
For the past couple of years, Oklahoma's Republican Senator, Tom Coburn, has promoted legislation to strip the NFL of its tax-exempt status, suggesting that it is not a real trade association because it exists not to benefit the entire football industry, but only its 32 member teams. Unlike most trade associations, the NFL earns significant revenues from marketing deals, TV contracts, licensing and other sales activities. This income is passed through a for-profit subsidiary to the 32 member teams and taxed, with a portion then returned to the NFL as tax-exempt "membership dues and assessments": in fiscal 2013 this totalled nearly $326m. In addition, the NFL paid its commissioner a salary of $44.1m (about £27.5m).
Although Coburn has long suggested that removing the tax exemptions of the NFL, the NHL and the PGA would benefit federal tax coffers, the current challenge to the NFL's tax status is based on social issues: legislation proposed by Senator Cory Booker (New Jersey) is in response to widespread disgust over the NFL's actions regarding a domestic violence case involving a player; and a separate bill proposed by Senator Maria Cantwell (Washington) concerns the NFL's defence of the Washington franchise's use of a racial epithet for Native Americans as the team's nickname and mascot. By the time the next NFL game – the Dallas Cowboys vs the Jacksonville Jaguars – takes place at Wembley on 9 November, the NFL's lifespan as a tax-exempt entity might be as shaky as the Oakland Raiders' defence.
Rick Cohen is national correspondent for the Nonprofit Quarterly in Boston, Massachusetts