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We're four majors into pro golf's season and we've had four different winners.
But the real winner this season will be the oligarchs of the world—who are still celebrating a huge coup as the Professional Golfers' Association merged with LIV Golf. LIV Golf was created as an attempt at "sports washing" by the Saudi Royal family and is largely owned by the Saudi sovereign wealth fund. Saudi Arabia's history of human rights abuses was part of the reason many players on the PGA tour spoke out against LIV and were shocked by the announced merger in June.
Much has been said about the hypocrisy of this deal on the part of the PGA; how their alleged commitment to expanding the game to women is deeply undermined by taking on their newest investors, known for treading on the rights of women.
To add insult to injury, the PGA is itself being subsidized by American taxpayers even as this deal goes through. This mega-million-dollar operation is exempt from paying taxes.
As an avid golfer and a tax-paying businessman, this distasteful partnership raises an important question: if the PGA is so nakedly and single-mindedly focused on making as much money as possible, why has it been allowed to maintain tax-exempt status for decades? In fact, why does any sports league get away with not paying federal taxes?
The PGA is a 501(c)(6) nonprofit organization, meaning it pays no federal corporate or income taxes whatsoever, and it's not the only sports league where this is the case. The National Hockey League, and the National Collegiate Athletic Association both enjoy this tax-exempt status. And until they voluntarily gave it up to take in more outside investment, so did Major League Baseball and the National Football League. Between 2016-2019, the PGA Tour produced more than $250 million in profits, and it brought in $1.5 billion in revenue in 2019. Its tax-exempt status saved it $80 million over that period. It also pays its executives millions of dollars, with additional spending on first-class and chartered flights, maids, chauffeurs, chefs, and luxury health club fees. That doesn't sound like any of the non-profits I've been involved with. The NCAA, which for years actively fought against players making any money—despite the fact that no players mean no sports—brings in at least $1 billion per year.
I ran a company for 36 years, until my quasi-retirement in 2019, and while that company did quite well, we never generated $1 billion in annual revenue. Yet somehow, I was always expected to pay my taxes. And did. Tax-exempt status should be reserved for organizations that exist for some form of societal benefit. Food banks, shelters, and advocacy organizations (even ones I happen to disagree with) do not and should not exist in the same space as the PGA or NCAA or NHL. At their core, these are massive, popular, and profitable entertainment companies.
Just because their products are enjoyed by millions of people does not mean they exist for any reason other than to make a whole bunch of folks a whole bunch of money. There's zero justification for holding them up as not-for-profit organizations. Professional team owners have become our nation's aristocracy, but that does not exempt them from their financial responsibilities to the nation.
We used to have bipartisan agreement on this. Rep. John Garamendi (D-CA) recently introduced the "No Corporate Tax Exemption for Professional Sports Act" in response to the news of the LIV Golf and PGA Tour merger. Rep. Greg Steube (R-FL) was once a vocal supporter of repealing this tax benefit, and Sen. Joni Ernst (R-IA) also introduced bi-partisan legislation with Sen. Angus King (I-ME) as recently as 2018. Will these Republicans keep their stances now that former President Donald Trump has publicly praised the merger (and stands to profit from it)?
I guess we'll see. But anyone who believes that nurses and teachers shouldn't be paying more in federal income tax—in real terms, as well as a percentage of income—than one of the most elite and exclusive sports leagues in the world should support Garamendi's legislation. In my view, anything else is an open endorsement of oligarchy.
Stephen Prince founded Card Marketing Services in 1993 and is vice-chair of the Patriotic Millionaires.
The views expressed in this article are the writer's own.
CORRECTIONS: There have been four majors in this golf season and Angus King is a senator.
