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7/1/09
New Player's Association boss DeMaurice Smith educates NFL players
Did you know the NFL was a non-profit organization? Probably not... and neither did the players.
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NFL, Tagged as:  DeMaurice Smith
submitted by Pat more posts by author
21
Read Article: (online.wsj.com)
New NFLPA boss DeMaurice Smith is going around the league educating the players on the ins and outs of the financial aspect of their jobs, and it's becoming rather obvious that this is something that someone should have done a long time ago.

From the article:
“How many people here know the National Football League is a non-profit?” DeMaurice Smith, the longtime Washington, D.C., lawyer asks 75 members of the Seattle Seahawks. No hands rise.

“How many people here know that the NFL has a special antitrust exemption granted to them by Congress?” Again, no hands. “We all understand the difference between a strike and a lockout?” Silence and blank stares.
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7/1/09
6

The NFL is a non-profit organization? Well it ranks right up there with the Washington Nationals being a major league club. You know it just looks and sounds so wrong but yet it is true.

Well it looks like Mr. Smith is not going to mess around. I just fear the owners are going to make this a bloodbath that will kill the salary cap, possibly end the draft and make 2011 a year to forget in the NFL.

7/1/09
2
First off, its clear that Smith is going to be good for the NFL Players.  Secondly, if the NFL is a non-profit organization, where are those massive profits going?

7/1/09
1
kantwistaye wrote:
First off, its clear that Smith is going to be good for the NFL Players.  Secondly, if the NFL is a non-profit organization, where are those massive profits going?
I was wondering the same thing. It's clear that there are a LOT of people making a LOT of money... I guess the definition of "non-profit" is rather loose.

7/1/09
2
The part about "strike versus lockout" sounds like he is prepping the players for the very real possibility of a work stoppage.  The fact that the NFL is a non-profit is what allows them the anti-trust exemption, I believe.  With the new collective bargaining agreement up in the air, this could be ominous foreshadowing of things to come.

7/1/09
6
somewhere in the dark distance, Jerry Jones is throwing his head back laughing...as he toasts a vodka sour with Satan.

7/1/09
6
At least my $12 beers are going to support charity, right? Right?

7/1/09
4

How is it even remotely possible that the NFL is a non profit organization? They don't file a collective 503c, do they? Is it somehow that the owners can make a profit but the league itself is not for profit?

I just don't get it. Just like I don't get how states that bring in hundreds of billions of dollars in tax revenue can somehow go bankrupt and then can't pay state employees, or how states with a huge pie of billions of dollars can't figure it how to slice it such that they can actually produce a budget in the time that the state constitution says they have to.

7/1/09
5
Maybe the fact that the NFL doesn't have a bank account under their name makes it justifiable to call them a not-profit, but every entity under the NFL umbrella is rolling around in lots and lots of money.  Not sure what Smith is trying to get at with that question, but I like the fact that he is trying to educate the players on the underpinnings of the league, whether or not the players are receptive of the information is another story.

There is a good chance at the reality of a strike (players initiate) or a lockout (owners initiate) but all parties involved know there is far too much at stake to allow that to happen.  I think the owners, the players, Goodell, and Smith will start cracking down soon on some sort of CBA extension, but all sides involved are incredibly stubborn ($$ will do that), so some you know what is bound to hit the fan.

7/1/09
6

The NFL is a non-profit organization? Well it ranks right up there with the Washington Nationals being a major league club. You know it just looks and sounds so wrong but yet it is true.

Well it looks like Mr. Smith is not going to mess around. I just fear the owners are going to make this a bloodbath that will kill the salary cap, possibly end the draft and make 2011 a year to forget in the NFL.

7/1/09
2
That last sentence sums it up perfectly, and everything you said is completely valid and true.  However, the tag "non-profit organization" is just a tag when it comes to tax reporting since because the NFL is structured as a "Business League" it is exempt from some (but not all) federal income taxes.  So the tag "non-profit organization" is a bit of a misnomer. 

Yes the league makes revenues, some of which create a profit to pay the staff members, maintain facilities, hold activities, functions, or meetings, all in some very exorbitant ways.  Goodell tries to gain good publicity by taking a pay cut in light of the bad economy, but also has used the excuse of a downtrodden economy to lay-off a 20% of the league's workforce.  So while the league is tagged as a "non-profit" for tax purposes, the league and it's employers are being somewhat misleading by referring to itself as that.

But to be completely correct and legal (and to back up your points made), franchises in the NFL are officially titled as such, "The Oakland Raiders is a Professional Football team owned by Al Davis, with a membership in the National Football League (NFL), which is an unincorporated association governed by its own constitution and bylaws."

7/1/09
0
The NFL is a non-profit organization?(Scoffs) That's a big laugh!

7/2/09
2
Raider_Dave wrote:
That last sentence sums it up perfectly, and everything you said is completely valid and true.  However, the tag "non-profit organization" is just a tag when it comes to tax reporting since because the NFL is structured as a "Business League" it is exempt from some (but not all) federal income taxes.  So the tag "non-profit organization" is a bit of a misnomer. 

Yes the league makes revenues, some of which create a profit to pay the staff members, maintain facilities, hold activities, functions, or meetings, all in some very exorbitant ways.  Goodell tries to gain good publicity by taking a pay cut in light of the bad economy, but also has used the excuse of a downtrodden economy to lay-off a 20% of the league's workforce.  So while the league is tagged as a "non-profit" for tax purposes, the league and it's employers are being somewhat misleading by referring to itself as that.

But to be completely correct and legal (and to back up your points made), franchises in the NFL are officially titled as such, "The Oakland Raiders is a Professional Football team owned by Al Davis, with a membership in the National Football League (NFL), which is an unincorporated association governed by its own constitution and bylaws."
that whole paragraph was not only extremely impressive but also it made my head hurt. Good stuff!

7/2/09
2
drn0iswatr wrote:
that whole paragraph was not only extremely impressive but also it made my head hurt. Good stuff!
Thank you sir.  My specialty is the economics of the NFL (or the business of sports), I wrote a 50+ page analysis of it in college, and actually had a good time with it.

Now go help out the economy and buy some aspirin for that headache!

7/2/09
2
Raider_Dave wrote:
Thank you sir.  My specialty is the economics of the NFL (or the business of sports), I wrote a 50+ page analysis of it in college, and actually had a good time with it.

Now go help out the economy and buy some aspirin for that headache!
 I think I am going to do you one better and buy some alcohol to help out...much more expensive. 

7/2/09
2
drn0iswatr wrote:
 I think I am going to do you one better and buy some alcohol to help out...much more expensive. 
Me and Uncle Sam approve!

7/2/09
0
I wish my clinics were as "non-profit" as the NFL

7/2/09
1
Raider_Dave wrote:
Me and Uncle Sam approve!

 bring him along, he can help pay.

7/4/09
1
Pat wrote:
I was wondering the same thing. It's clear that there are a LOT of people making a LOT of money... I guess the definition of "non-profit" is rather loose.

I am not a lawyer or an account but my understanding is that the NYSE, NFL, United Way and lots of other rich organizations are officially 501 C(3) organizations or have a not-for-profit entities as well as fiduciary entities that are allowed to hold or distribute revenues that exceed operating expenses.  If the funds received by the "Business League" are not held collectively but used for expenses, salaries, benefits, leases, etc, with the rest flowing through to other entities they have not violated the letter of the law.  Raider_Dave as Fan IQ's resident expert is that about right?

7/4/09
0
elevenbravo138again wrote:

I am not a lawyer or an account but my understanding is that the NYSE, NFL, United Way and lots of other rich organizations are officially 501 C(3) organizations or have a not-for-profit entities as well as fiduciary entities that are allowed to hold or distribute revenues that exceed operating expenses.  If the funds received by the "Business League" are not held collectively but used for expenses, salaries, benefits, leases, etc, with the rest flowing through to other entities they have not violated the letter of the law.  Raider_Dave as Fan IQ's resident expert is that about right?

Yes Bill, that is exactly correct.

"...[A]re not held collectively but used for expenses, salaries, benefits, leases, etc."

And that sums it up perfectly to what the NFL can do to remain a "non-profit organization".  There are lots of loopholes and legal terminology that can allow things to be categorized in many different ways, to get away with many different things.  As long as it stays within the letter of the law, the IRS and the government won't bat an eyelash at it.

7/4/09
0
drn0iswatr wrote:
 I think I am going to do you one better and buy some alcohol to help out...much more expensive. 
and with more taxes!

 
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