NFL abandoning its tax-exempt status
The NFL to abandon its tax-exempt status, according to Commissioner Roger Goodell.
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It looks like the Federal Government will have an extra influx of cash in the near future.
Commissioner Roger Goodell announced via a memo on Tuesday, obtained by Bloomberg, that the NFL will abandon its tax-exempt status. The announcement signifies a change that is far more significant symbolically than it is financially.
Previously, the NFL has argued that is operates as a not-for-profit trade association. The NFL distributes revenue to each of the organizations and, in turn, each team pays taxes. The league office, though, does not.
From the memo:
"“Every dollar of income generated through television rights fees, licensing agreements, sponsorships, ticket sales, and other means is earned by the 32 clubs and is taxable there. This will remain the case even when the league office and Management Council file returns as taxable entities, and the change in filing status will make no material difference to our business.”“[A] change in the tax status will not alter the function or operation of the league office or management council in any way.”"
The memo was distributed to team owners and to members of Congress, including Wisconsin representative Paul Ryan, the chairman of the House Ways and Means Committee.
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The change will, however, mean that the NFL will no longer be required to disclose salaries for Commissioner Goodell or other top executives. So when Goodell’s salary jumps from $44 million to more than $50 million, the general public will have no idea.
People have been pressuring the NFL to make this move for awhile. Recently, a number of politicians, including New Jersey senator Cory Booker and Washington senator Maria Cantell, have espoused their belief that the NFL should in fact pay taxes. Additionally, a Change.org petition to the same effect collected more than 429,500 signatures.
At the very least, this pressure had a minor effect on Goodell’s decision.
The memo discloses the Commissioner’s motivation for finally changing the league’s tax status. In it, Goodell claims that it has “been mischaracterized repeatedly in recent years” and, as a result, the league has, “decided to eliminate this distraction.”
Right. The league’s tax filing status is such a distraction. Not the myriad of player arrests, domestic violence cases, or substance abuse citations. Now that this tax-abatement ship is righted, it’s sure to be smooth sailing for the NFL from here on out.
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