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Did you know that the NFL is a tax-exempt nonprofit?


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#1 bayone

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Posted 21 December 2012 - 05:31 PM

In 2010, the registered NFL nonprofit alone received $184 million from its 32 member teams. It holds over $1 billion in assets. Together with its subsidiaries and teams – many of which are for-profit, taxed entities – the NFL generates an estimated $9 billion annually. Each of its teams are among the top 50 most expensive sports teams in the world, ranking alongside the world’s famous soccer teams. Almost half of professional football teams are valued at over $1 billion….
League commissioners and officials benefit from the nonprofit status of their organizations. Roger Goodell, commissioner of the NFL, reported $11.6 million in salary and perks in 2010 alone.

 

Goodell’s salary will reportedly reach $20 million in 2019. Steve Bornstein, the executive vice president of media, made $12.2 million in 2010. Former NFL commissioner Paul Tagliabue earned $8.5 million from the league in 2010. The league paid five other officials a total of $19.2 million in just one year. In comparison, the next highest salary of a traditional nonprofit CEO is $3.4 million.

The NFL’s exemption stems from a 1966 law, passed at the time of the merger with the old American Football League, specifically allowing “professional football leagues” to enjoy 501©(6) status as tax-exempt trade organizations. Other leagues have piggy-backed on that legislation to claim that status themselves.

 

 

the NFL and its employees would be exempted from paying the tax that everyone else must pay to subsidize stadiums built for a highly profitable industry pending the state but thats usually the case

 

article states how tax exempt staus affected revenue in Indiana with superbowl

 

http://blogs.ajc.com/jay-bookman-blog/2012/10/18/did-you-know-that-the-nfl-is-a-tax-exempt-nonprofit/


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#2 JoKeR

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Posted 21 December 2012 - 06:12 PM

Rich people doing favors for rich people.

#3 Snowglobe

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Posted 21 December 2012 - 07:26 PM

Yes it's been that way for a very long time. Sort of misleading though, the NFL at the corporate level is actually more like a filter. It receives revenue, covers operating expenses, then passes on the revenue to the teams(doesn't happen exactly like this but for simplicity). All the teams pay taxes on all their revenue except for the Packers. They don't have to pay local and state taxes because of state law but have to pay federal taxes. They are publicly owned, not-for-profit. 

 

Now where people get irritated is the salary paid out to NFL executives. If they are non profit, why are the executives paid so much money? Well because the NFL is basically a trade association between all the owners. Not only that, but non profit does not mean employees cannot paid salaries. 


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#4 bayone

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Posted 22 December 2012 - 06:04 AM

Yes it's been that way for a very long time. Sort of misleading though, the NFL at the corporate level is actually more like a filter. It receives revenue, covers operating expenses, then passes on the revenue to the teams(doesn't happen exactly like this but for simplicity). All the teams pay taxes on all their revenue except for the Packers. They don't have to pay local and state taxes because of state law but have to pay federal taxes. They are publicly owned, not-for-profit. 

 

Now where people get irritated is the salary paid out to NFL executives. If they are non profit, why are the executives paid so much money? Well because the NFL is basically a trade association between all the owners. Not only that, but non profit does not mean employees cannot paid salaries. 

 

 

i also thought, talking salaries , what basebal executives of similar positions maake as

 

From same article

 

Major League Baseball also used to enjoy the same tax-exempt protection, but in 2007 it chose to surrender that status in part because as the salary information above illustrates, tax-exempt, non-profit status requires you to report the salaries of your top executives.

 

MLB decided that protecting that information from the public was more important than escaping taxes.


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#5 MAC

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Posted 22 December 2012 - 08:23 AM

Yes it's been that way for a very long time. Sort of misleading though, the NFL at the corporate level is actually more like a filter. It receives revenue, covers operating expenses, then passes on the revenue to the teams(doesn't happen exactly like this but for simplicity). All the teams pay taxes on all their revenue except for the Packers. They don't have to pay local and state taxes because of state law but have to pay federal taxes. They are publicly owned, not-for-profit. 

 

Now where people get irritated is the salary paid out to NFL executives. If they are non profit, why are the executives paid so much money? Well because the NFL is basically a trade association between all the owners. Not only that, but non profit does not mean employees cannot paid salaries. 

Exactly. I had several issues with the way that the info was presented in that article. I suspect that the exemption was made for sound reasons's in the 60's and that we have all in a sense benefited from any advantages it afforded the league. Whether it still makes sense now is entirely contingent on details that we don't have access too, and which I suspect the writer isn't capable of comprehending in the first place.

 

Suffice it to say that corporate income taxes would only be accessed on what's left over after (amongst MANY other things) the payment of salaries - ALL of which are subject to the full complement of payroll and personal income taxes. Goodell's salary is a reflection of the billions in tv contracts and his vital role he plays for his 32 employers. The league's tax status is irrelevant to that. And one can assume that all "income" they receive for the benefit of the clubs (from tv contracts, license fees, etc) flows back out to the clubs virtually immediately upon receipt - not impacting "the leagues' bottom line at all. Their only actual income is likely the membership fees that they are paid by the clubs, which should be enough to cover it's expenses and not a heck of a lot more. The billion is assets may be incredibly misleading if - for example - it includes things like "tv revenue receivable". That could well be 900 million at any given moment by itself. The report fails to mention the offsetting payable.

 

The point is, the league is just a pass-through entity controlled completely by the owners. I can't conceive of any benefit to them in allowing sufficient income to accumulate in the league itself for their to be income taxes accessed even if it WAS a taxable entity. It's their money. Doesn't do them any good sitting in a league bank account.

 

Now being exempt from sales tax does seem a bit ridiculous, but ironically has nothing to do with the federal government, and this "report" was generated by a Senator from Oklahoma.

 

By the way, here is a line from the senator's wikipedia page, regarding something else he is apparently proud of:

 

"On May 23, 2007, Coburn threatened to block two bills honoring the 100th birthday of Rachel Carson. Coburn called Carson's work "junk science," proclaiming that Silent Spring "was the catalyst in the deadly worldwide stigmatization against insecticides, especially DDT."

 

We aren't dealing with a rocket scientist here.








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