NFL Surrenders Tax-Exempt Status

Much has been made over the years about the NFL’s status as a tax-exempt non-profit, but the league’s headquarters are making the change from tax-exempt to taxable, according to Daniel Kaplan of SportsBusiness Journal (via Twitter). Per Scott Soshnick of Bloomberg News (TwitLonger link), commissioner Roger Goodell sent out a memo to owners today announcing the change.

“As you know, the effects of the tax exempt status of the league office have been mischaracterized repeatedly in recent years,” the statement reads, in part. “The fact is that the business of the NFL has never been tax exempt. 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. As a result, the Committees decided to eliminate this distraction.”

Another “distraction” that will be eliminated as a result of the NFL surrendering its tax-exempt status is the need to publicly reveal Goodell’s salary. Because the league will no longer be a non-profit, it won’t have to disclose that figure, tweets Soshnick. According to Kaplan (Twitter link), Goodell’s salary figure will be public one more time when the league’s final public tax return is released next February, so we’ll know how much the commissioner earned for 2014.

While the NFL had held its tax-exempt status for decades, the change doesn’t come as a total shock. Major League Baseball dropped its tax-exempt status in 2007, after reportedly finding that the financial savings that came with that status were only marginal. It makes sense that the NFL would make such a decision for PR purposes, particularly given the outcry regarding Goodell’s salaries in recent years.

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