NFL will give up its tax-exempt status

Posted by Michael David Smith on April 28, 2015, 12:52 PM EDT
AP

The NFL has often faced scrutiny over its status as a tax-exempt organization. Now the league is deciding to give up that status.

According to Daniel Kaplan of Sports Business Journal, the NFL will change its status to taxable from tax-exempt. The federal government has granted tax-exempt 501(c)(6) status to the NFL since 1966.

That may reduce the criticism the league takes for being a tax-exempt organization, but more important to the league, it removes the requirement that the NFL disclose the compensation of Commissioner Roger Goodell and other top executives. So Goodell’s salary will no longer be public record.

Although the league has been classified as a tax-exempt organization, the 32 teams are all taxable, for-profit businesses, which means the money made by the league is taxed. This move will not affect the tax burden faced by the teams.

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49 responses to “NFL will give up its tax-exempt status”

  6. Smart move by the NFL. Wait until you see the article on PFT next year about how much the NFL actually paid in taxes due to this change. It’s is going to be a much smaller number than you think.

  10. No this will make no difference in your daily lives. The NFL essentially no longer has to do NFL Play 60 and other charitable causes. They’ll get out of their tax burdens but using other tax loopholes.

  11. I hope they didn’t do this soley to keep the public from finding out the embarrassingly large and increasing salary Goodell will be paid for his incompetence yearly.

  12. it’s a step in the right direction but they wouldn’t have done it if there wasn’t something in it for them

  13. If there’s one thing Roger Goodell’s continued employment proved in the past year, it’s that the NFL does not make changes because of external pressure, they make them because of their own incentives…. So, what is the NFL’s incentive for taking themselves off the tax-exempt list? Campaign spending?

  14. Good. Roger can now get that significant raise he deserves without a bunch of public outcry. Who can live on $44 million a year?

    But, also, like most corporations they’ll just figure out how to get around paying their taxes anyway.

  15. All this does is take the 1% execs off the books.

    They can now make a ton more, and ruin the game at a faster pace.

    Typical.

  16. This isn’t good, folks. That exemption kept the league in check. No more blackout rule and now no tax exemption. There will be an impact on CBA stuff and pay per view status will be here soon.

  17. Yah. Ok. The league chose to pay taxes over disclosing what everyone already knows. They still won’t pay one red cent.

  19. .,.but more important to the league, it removes the requirement that the NFL disclose the compensation of Commissioner Roger Goodell and other top executives. So Goodell’s salary will no longer be public record.

    Right. But that cat is out of the bag, man. $44 million. FORTY-FOUR MILLION DOLLARS!. For what? For whom ?

  20. Well billionaires won’t give the exception if they aren’t benefiting from it somehow. They have something up their sleeves, maybe something isn’t kosher with the TV deals.

  21. Great, now instead of $1,000 for a family of 4 to go watch a game, it’ll be $2,000….

  23. Interesting in that the league has some very smart accountants with law degrees. That alone does not mean the NFL always makes the right decisions as the Ray Rice saga shows. Roger will still make more in two weeks than most fans make in a year (based on $34,000,000.00).

  27. Now just need to incorporate in Ireland and then do an inversion and poof, magically your tax burden become almost nil.

    The IFL doesn’t have that same ring to it though.

  29. Nobody will know what this means until the next CBA. Quit the speculation unless you are a lawyer who has read the entire agreement

  30. From the desk of Roger Goodell:
    Now that I don’t have to disclose how much I make, memo to self to increase my salary to $28 million per year. Yeahhhh… that’s the ticket!

  31. I’m surprised they didn’t do this sooner. With profits shared between all 32 teams, the NFL has the ability to distribute profits to stakeholders/shareholders, and to only pay tax on what is left after operating costs. Which will be virtually nothing.

    Multi-Billion dollar organizations don’t suddenly offer to pay huge sums of tax money out of the blue. If it’s good for public relations and it doesn’t cost them much (or anything), it’s a smart move. Like I said, surprising that the NFL hadn’t pursued this avenue before now.

  33. Other than reporting requirements this has very little impact on the league. Don’t count on spending your tax refund checks just yet.

  34. Okay, now pay 49 years in back taxes since you were a for-profit business that was tax-exempt for absolutely no reason.

  35. Now what will the politicians in Washington use as a reason when they think they know more and should be running professional football instead of the private sector? Senators are not happy when their are people who do not feel the need to suck up to them.

  36. The league is essentially a pass thru entity. All of the taxable profits get passed on to the teams. The league will have no profits to tax and the teams are already paying taxes on the profits passed to them from the league office.

    This is a PR move and does allow them to shield financial information from public disclosure.

  38. If shielding Goodells salary was at the heart of this, why not have each team pay 1 million a year for a Chief Exective of Operations officer…aka Goodell’s position?

  39. It really isn’t going to make any difference at all. The teams pay dues to the NFL. Currently, those dues are not tax deductible because the NFL is a trade association that doesn’t pay taxes. When the NFL gives up its tax exempt status, the dues the teams pay will become deductible. For the government, it will be a wash.

  40. Waiting for Brian Touhy of “thefixisin.com” to weigh in on this…but now he doesn’t have a conspiracy theortist rant topic anymore…

  41. The “NFL is tax exempt” media propaganda diatribe has always been used to incite the uninformed dupes. Just read the posts above this one.

    The NFL is a pass through business entity. The income it generates is passed to each of the 32 teams who pay the taxes. Low information voters who pay no taxes always take this to mean that the league has some sort of special tax break.

    It doesn’t. The income is taxed. Period.

    Now the league will not have to complete those pesky public filing forms required of not-for-profit entities. We won’t get to see how much the Commissioner makes or how much they donate to this cause or that or what the network contracts are.

    It’s all going dark because stupid people don’t understand our incredibly complex and idiotic tax regime.

  42. This would seem to take all of the leverage the government had to try and push the NFL on issues. Remember when they said they would form a committee about drugs, well they just lost their big chip.

    And like a couple of the posters said above – this will really hit hard in the next CBA agreement. Since they won’t have to report earnings, it will be increasingly hard for the Union to actually track the earnings.

  43. Prior to the 1973 season, no NFL game was broadcasted in the local market in which the game was being played. Not even the Super Bowl.

    In 1973, POTUS Richard Nixon wanted to watch the Redskins playoff game. Pete Rozell said “NO”. So United States Attorney General Richard Kleindienst suggested to Rozelle that Congress would re-evaluate the NFL’s antitrust exemption. It made Rozelle offer to broadcast the Super Bowl in the city it was being played as an “experimental basis”.

    The government realized they were dealing with a snake, and swiftly passed Public Law 93-107 which resulted in The Blackout Rule and forced the NFL to locally broadcast games.

    Last season we saw the NFL refuse to broadcast the Cardinals/Panthers playoff game. Earlier this year, we saw the Blackout Rule get thrown away. Today we see the NFL is giving up their tax-exempt status.

    Why would they give up their tax-exempt status? Simple: to follow MLB and NBA to pay-TV, and eliminate broadcasting. There’s way more money in cable deals.

    And by giving up exemption status, the government has no teeth to stop them from doing it.

    Cord cutters lose.

  44. Guaranteed this is about way more than them being able to keep Goodell’s salary private.

  45. The beginning of the end of the NFL, as predicted by Cuban. A bittersweet situation for true fans who love the game juxtaposed with true fans who hate how the game has been ruined by fixed outcomes, etc…all in the name of entertainment/profit.

    I fully expect this post to be censored and removed, as so many are for exposing the truth. Who’s paying PFT salaries, after all.

  47. I am curious what prompted this move out of the blue because it wasn’t just so the didn’t have to reveal Goodel’s compensation. If they are going to pay anyone millions of dollars it is because it costs them far more not to in some way.

    I really wonder what it is.

    Also, don’t be shocked if their 2015 returns show an income of $x.xx billion but their tax liability to be something along the lines of $138.26 .

  48. I would assume the taxes are paid at the team level. The NFL is a service company that passes on its administration, marketing and expertise services to the teams in some form of management fee. All they have to do is adjust the fee to make it result in no taxes payable at the NFL level.

    This is a window dressing story for all those ignorant souls that just read ticker-long articles.

  49. Doesn’t all nfl profit go to the owners thru their teams which are already taxed anyway? Unless I am missing something, I don’t think this amounts to anything except fixing the perception they don’t pay tax. Plus they no longer have to disclose salaries, sounds like the nfl is better off now.

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