Why the PGA tour epitomises corruption in sport

The PGA Tour says its revenues in 2011 were close to $2 billion. Yet they only paid $800,000 in taxes. Hmmm…..

Let’s start off with some numbers. According to the PGA Tour’s 990 tax form, revenues in 2011, which was its most recent available reporting year, were $973 million. Its annual report lists the revenue for that year at just over $1 billion. And the tour itself says its revenues were closer to $2 billion. Either way, depending on who you believe it’s not bad for a ‘not-for-profit’ organization.

However, despite such impressive financial gain, according to an ESPN report, the tour’s U.S based tournaments gave roughly 16 percent of their income to charity, compared to the industry norm of 65 percent.

Source: ESPN
Source: ESPN

So where is the rest of the money going? Well according to Charity Navigator president Ken Berger, the biggest chunk of the profit pie is “going to big prizes, cash prizes for athletes and all the promotion around it, so it’s really pathetic, actually,”

“Every single taxpayer in this country ultimately is bearing the burden of having to pay the taxes for this wildly inefficient organization that’s giving so little to charity.”

Senator Tom Coburn introduced a bill that would strip the PGA Tour, the NFL and the NHL of their non-profit, tax exempt status. Though everybody may think differently on issues of finance and politics, it is my belief that this is firmly the way to go.

Source: Huffinton Post
Source: Huffinton Post

Why? It’s simple really, the fact that the Tour exists on the idea of being a non-profit, tax exempt organisation is almost laughable, to the point where it goes beyond being a fact one simply rolls one’s eyes at, to something that needs to be put right.

For far too long, the PGA Tour has been able to use its tax-exempt status to dodge hefty federal tax payments.

Another aspects of the PGA Tour, in relation to its tax-exempt status, seem to be a bit iffy too, namely the notion of their charity donations, some of which predicate the existence of certain Opens in the first place.

The Tour claims that their tax-exempt status gives them the opportunity to give freely to charities, but their donations, despite sounding substantial, still fall way behind industry standards.

Many charities that run the tournaments often spend far more money on prizes, country clubs and even catering than they do on the sick and the infirm. And, in the case of the Shriners Hospitals for Children Open, they actually lose money. $4.5 million dollars to be exact. Yes, the Shriners Hospitals for Children charity actually lost 4 and a half million dollars by running a PGA Tour event.

Source: www.epacha.org
Source: www.epacha.org

 

This is wrong. It’s plain and simple. I’ve given you a lot of numbers but the fact of the matter is that the PGA Tour cannot go on claiming to be tax-exempt, and they certainly cannot carry on maintaining the fallacy that it enables them to donate generously to charity.

Like most charities interviewed by outlets covering this issue, officials with Shriners Hospitals said the event provides valuable media exposure, and Votaw contends that losing the tax-exempt status would have a “chilling effect on the PGA Tour’s ability to continue to contribute millions of dollars to charity.”

It could be argued that the exposure would help the charity, but that does not outweigh losing $4.5 million in the process, it simply isn’t worth it.

In my opinion, the only chilling effect for the PGA Tour in losing its tax exempt status would be the notion of actually paying the hundreds of millions of dollars in federal taxes they’ve been able to swerve over the past 20 years.

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To put it simply, the PGA Tour’s tax exempt status is a joke, and it’s not a very funny one.