The AFL's tax exempt status and freedom of press

The_Steadier

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Thread starter #1
So I was thinking about how horrible the standard of journalism in the AFL and how it is ripe for disruption...

The problem being of course, is the AFL tightly controls access to information and players/coaches by only allowing 'AFL Accredited' journos and outlets access.

Which then of course means the AFL can threaten to kick anyone out of the tent who doesn't play nice- hence why we get stuck with buffoons like Damian barrett and the like reporting their shallow, gutter crawling news and 'scoops'.

Nothing too critical or deep really ever gets reported- it's a very closed shop full of dopes stating the bleeding obvious.

This control over the AFL media effectively results in tangible restriction on a fundamental right to freedom of press.

Which in my view would be fine if the AFL was a regular 'for profit' business... but they aren't right?

My layman understanding is that the AFL take advantage of an old, obscure law from the 50's or something where they are tax exempt and a 'not for profit' organisation.

Which while dubious, is clearly legal. :think:

But my thinking is- surely the Australian public are entitled to expect the fundamental right to free press be observed by the league?

Given the public effectively pay the league ~30% of its billions of dollars (in lost tax intake)?
 

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#3
The AFL is not just the organizer of a very expensive competition, but it is also the custodian of the game, therefore it meets all the requirements of Section 50-70 of the 1997 Income Tax Assessment Act.

If the Constitution of any sporting organisations says you can't pay dividends on profits to individuals or commercial organisations then the tax exempt status wont change.

Put the AFL or one of its clubs on an ASX as a listed company that pays dividends then it will pay tax. See most EPL and next division down clubs in the UK, they are on the stock exchange or owned by commercial organisations, they pay dividends when they make profits so they are taxed.

If the government changed the legislation and said they had to pay tax on their profits, then the AFL would very easily avoid tax by making bigger annual distributions to the clubs, spending more on game development and setting up a Foundation(s) that they are for charitable activities, education activities or funding genuine amateur clubs who have no problem being assessed as a true not for profit and driving their taxable income to $NIL

Removing the tax exempt status of the AFL would make SFA difference to how much income tax the government would be able to collect from the AFL. There are hundreds and thousands of ways to avoid paying income tax. The AFL would just employ their biggest broadcaster/partners tax lawyers ie News Corp's tax lawyers and they would make sure that the AFL, like Rupert's media organizations, haven't paid income tax on profits in Oz for about 40 years.
 

NoobPie

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#5
I know, but what about organisations that are substantially (~30%) subsidised by the public by way of tax exemption?
The AFL isn't being subsidised at ~30% of billions of dollars. Even if we imagined the AFL was a for profit entity with shareholders who were distributed profits, you are making a 101 error in confusing revenue with profit.

The AFL's total revenue was $750M last year and announced a profit of $60M. But that was a massive outlier in the first year of a new TV deal. Over the 5 years of the previous TV rights the AFL itself (ex related companies (?)) had an aggregate profit of around $20M.....so $6M in missed taxes over 5 years in a parallel universe where the AFL is a for profit entity. As a NFP, a positive P&L merely increases its balance sheet bottom line
 

jatz14

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#6
So I was thinking about how horrible the standard of journalism in the AFL and how it is ripe for disruption...

The problem being of course, is the AFL tightly controls access to information and players/coaches by only allowing 'AFL Accredited' journos and outlets access.

Which then of course means the AFL can threaten to kick anyone out of the tent who doesn't play nice- hence why we get stuck with buffoons like Damian barrett and the like reporting their shallow, gutter crawling news and 'scoops'.

Nothing too critical or deep really ever gets reported- it's a very closed shop full of dopes stating the bleeding obvious.

This control over the AFL media effectively results in tangible restriction on a fundamental right to freedom of press.

Which in my view would be fine if the AFL was a regular 'for profit' business... but they aren't right?

My layman understanding is that the AFL take advantage of an old, obscure law from the 50's or something where they are tax exempt and a 'not for profit' organisation.

Which while dubious, is clearly legal. :think:

But my thinking is- surely the Australian public are entitled to expect the fundamental right to free press be observed by the league?

Given the public effectively pay the league ~30% of its billions of dollars (in lost tax intake)?
As Russell said, it would be simple for the AFL to make no profit, and therefore, pay no tax. The reason it would be easy is, it doesn't need to make a profit, it doesn't have owners expecting a return, it doesn't need to generate dividends to maintain a share price. Herein lies the reason it is tax exempt, its genuinely a not for profit, even when it makes an excess, it isnt `profit` It would need a major rewrite of laws to enable the government to collect tax from the AFL, and that would effect a lot of organisations beside the AFL, or even sports organisations in general.
 
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#7
So I was thinking about how horrible the standard of journalism in the AFL and how it is ripe for disruption...

The problem being of course, is the AFL tightly controls access to information and players/coaches by only allowing 'AFL Accredited' journos and outlets access.

Which then of course means the AFL can threaten to kick anyone out of the tent who doesn't play nice- hence why we get stuck with buffoons like Damian barrett and the like reporting their shallow, gutter crawling news and 'scoops'.

Nothing too critical or deep really ever gets reported- it's a very closed shop full of dopes stating the bleeding obvious.

This control over the AFL media effectively results in tangible restriction on a fundamental right to freedom of press.

Which in my view would be fine if the AFL was a regular 'for profit' business... but they aren't right?

My layman understanding is that the AFL take advantage of an old, obscure law from the 50's or something where they are tax exempt and a 'not for profit' organisation.

Which while dubious, is clearly legal. :think:

But my thinking is- surely the Australian public are entitled to expect the fundamental right to free press be observed by the league?

Given the public effectively pay the league ~30% of its billions of dollars (in lost tax intake)?
No it doesn't.
 
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