NFL’s tax-exempt status ends

NFL Commissioner Roger Goodell said Tuesday that the league would relinquish its tax-exempt status this year.

Goodell characterized the criticism that the NFL has received in the past as a distraction for the league.

The NFL earns roughly $10 billion a year and has held tax-exempt status since 1942, back in the days when players were paid so little that they had to take part-time jobs to make ends meet.

As a tax-exempt organization, the NFL had to report on the earnings of its highest paid officials. Goodell for example made $44 million in 2012. By relinquishing their tax-exempt status, the pay-checks of officials like Goodell, will no longer be required to be made public.

“The effects of the tax-exempt status of the league office have been mischaracterized repeatedly in recent years,” Goodell said in a statement to club owners. “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.”

One thing that will not change is the NFL’s antitrust exempt status, which the NBA, NHL and MLB also have and means that they can negotiate media rights as a block. The sports leagues received antitrust exemption from the government in the Sports Broadcasting Act of 1961.

“[It] seems more like a PR stunt than a real gain.” said Sen. Richard Blumenthal (D-Conn.) of the tax-exemption announcement. “The tax-exempt status produces a pittance compared to its congressionally granted antitrust exemption — enabling billions in broadcast revenue.”

The NBA is not tax-exempt. Major League Baseball relinquished its tax-exempt status in 2007, while the NHL is still free from public liabilities.

 

[AP]