Sports Tax is Getting Out of Hand

By Ken Reed

Pro sports franchise owners and big-time college sports administrators have long been masters at getting taxpayers to pay for a big chunk of their expenses. The most obvious example is publicly-funded stadiums and arenas for wealthy NFL, NBA, MLB and NHL franchise owners. These owners have regularly teamed with local politicians to create schemes in which local taxpayers end up paying for sports palaces so rich owners can get richer. These sports barons enjoy many other financial benefits because of favorable tax treatment and the fact that our major pro sports leagues are in effect allowed to operate as unchecked monopolies.

In a new column on salon.com, columnist David Sirota uses the term Sports Tax as a catch-all label for key levies the “little guy” is being forced to pay. Sirota identifies four aspects of the Sports Tax.

The first one is direct handouts. Sirota cites a Bloomberg Businessweek report that reveals “taxpayers have committed $18.6 billion since 1992 to subsidies for the NFL’s 32 teams, counting the expense of building stadiums, forgone real estate taxes, land and infrastructure improvements, and interest costs on public bonds.” Add in NBA, MLB and NHL handouts and that figure soars even higher.

“The second Sports Tax comes in the form of a rigged tax code, which effectively compels honest taxpayers to bankroll professional teams,” writes Sirota. He cites research that taxpayers subsidize at least $91 million worth of tax loopholes for pro sports leagues.

The third Sports Tax involves our cable and satellite TV bills. Sirota refers to a Los Angeles Times story that says up to half of cable bill payments are for the sports services incorporated into most basic cable packages. Ratepayers aren’t allowed to opt out. As such, non-sports fans are forced to subsidize the sports fans who watch cable TV sports.

The fourth piece of this Sports Tax involves big-time college sports. We end up paying more taxes for higher education and higher tuition bills to help fund the athletic departments at major universities. These athletic departments have the advantage of operating under the non-profit umbrella of their universities. Yet, due to the incredible arms race we’re experiencing in college sports — e.g., football coaches are now making upwards of $5 million a year, and plush athletic dorms and workout facilities are popping up across our college campuses — 93% of athletic departments are losing money today. All of us, in one way or the other, are making up the difference.

As Sirota concludes, even most sports fans can agree that the Sports Tax has gotten out of hand, especially in this era of reduced household incomes, and declining budgets for things like schools, police and fire protection.

— Ken Reed, Sports Policy Director, League of Fans