Report questions whether AFL’s tax exemption should be scrapped

A new report has questioned the AFL’s tax exemption and says it cannot be justified while the league’s bosses are being paid more than $11m a year. HAVE YOUR SAY.

The $1 billion-a-season AFL is facing calls for the abolishment of its golden tax-free status.

Generous taxation laws dating back to the early 1950s mean Australia’s richest sport is exempt from paying income tax as a “not-for-profit” entity.

But experts say the league’s ties to corporate bookmakers and “exorbitant” salaries being paid to its top executives make the financial free kick redundant.

“The tax exemption given to the AFL is not justified based on the size of the league’s revenues,” a report in the Journal of Australian Taxation concludes.

“The tax exemption was designed for community sporting clubs and leagues with low levels of income and not wealthy professional sports entities.

AFL boss Andrew Dillon speaking at the 2025 AFL Season Launch. Picture: Getty Images

“In 2023 the AFL earned $1 billion in revenue and the clubs between $50 million and $105 million.”

The report by Melbourne-based sports law academic, Dr Matt Nichol, from Central Queensland University, says “one of the strongest arguments against the AFL and its clubs receiving tax exemption is the sport’s relationship with the gambling industry and resulting revenue”.

“The public benefit aspect of the AFL and its clubs as not-for-profit entities is not being met … due to the relationship with the betting industry and the general promotion of gambling on AFL games,” Dr Nichol says.

“There are also issues about the social harms caused by gambling and the reliance of the AFL and some clubs on the gambling industry for revenue.”

The league has numerous ties to corporate bookmakers. Picture: AAP Image

The report adds: “Another reason the taxation exemption should not apply to the AFL is it pays its chief executive officer millions of dollars and has a high executive payroll that exceeds $11 million.

“Former AFL chief executive officer Andrew Demetriou received a salary of $4.38 million in 2013 …

“In 2022, 11 AFL executives were paid $11.8 million. These exorbitant salaries divert the profits of the AFL from its not-for-profit activities and are in part possible due to the government subsidy. It can be argued that the government should not be subsidising organisations with such large payrolls.”

The report places the AFL “in Australia’s 30 largest charities by revenue”.

The AFL’s revenues are tipped to top $1.25b this year.

But Dr Nichol warns the league’s exemption is “no longer guaranteed” due to new Australian Taxation Office self-reporting rules.

In March 2024, the ATO “announced that not-for-profits with an active Australian business number must submit a self-review to self-assess as to whether the exemption applies”, he says.

“It can be assumed the reforms were introduced to prevent rorting of the tax exemption by sports clubs and leagues.

“The AFL and its clubs will now have to annually demonstrate that they are promoting Australian rules football and not engaging in general commercial activities or providing entertainment.”

However, Dr Nichol said the league’s tax exemption could be justified “on the basis of the charity work they undertake”.

“The AFL and clubs promote sport, Australian rules football and the associated health benefits of physical activity and team sport,” he says.

The work the AFL does in the community could justify the exemption. Picture: Phil Hillyard

“The AFL has 526,000 registered players in community and professional competitions and now invests 10 per cent of revenues into community football.

“Sport has a positive impact on the lives of all of these groups of people and contributes constructively to society.”

Dr Nichol told the Herald Sun an abolishment of the exemption would require the AFL to pay tax on the $45 million profit it declared in 2024.

“But the issue is whether the $45 million is an accounting profit or tax profit,” he said.

“If the AFL had to pay income tax it would probably not make a profit as it would create deductions by reinvesting the money into the sport through clinics, stadiums and higher wages for players.

“This would benefit the public as the AFL would then be spending its income on promoting its sport.”

The rival NRL and its clubs also enjoy tax-free concessions.

Originally published as Report questions whether AFL’s tax exemption should be scrapped