The acquisition of an NFL stadium’s naming rights by a credit union raises the question of why a large tax-exempt institution should have an advantage over its tax-paying competitors, James Freeman, assistant editor for the Wall Street Journal, wrote in a recent column for the newspaper.
Earlier this year, the Washington Commanders announced that the Virginia-based Northwest Federal Credit Union was awarded the naming rights to the team’s stadium in Maryland. While details of the deal were not disclosed, the Washington Post cited an anonymous source stating that the agreement was for eight years and exceeds the average annual value of the previous naming rights deal with FedEx, which was roughly $7.5 million a year.
In his column, Freeman didn’t doubt Northwest would get its money’s worth from the deal. He instead questioned why a large credit union with the resources to enter into such an agreement doesn’t pay federal taxes even though many of the smaller, tax-paying banks it competes with “could never afford to buy the naming rights to an NFL stadium.”
“Northwest isn’t even one of the biggest of the tax-exempt giants,” Freeman wrote. “Credit unions have sponsored various sports venues, and also advertise frequently during sports broadcasts.”
“As Republicans work next year to prevent further tax increases on companies that actually do pay federal taxes, they should not ignore outfits that have managed to avoid them,” he added.
American Bankers Association President and CEO Rob Nichols raised similar questions in a September letter to the editor in the Washington Post about the stadium deal.
“Absent regular congressional oversight, credit unions have expanded far beyond their statutory mission and nonprofit structure at the expense of their member-owners and American taxpayers,” Nichols wrote. “The fact that a not-for-profit, tax-exempt credit union just spent more than $7.5 million to stick its name on our local NFL stadium should encourage lawmakers to continue asking tough questions.”
