In 2015, the National Football League gave up its tax-exempt status, which it had held since 1966. This move seemingly should have been a watershed moment that triggered a hefty annual tax bill and negatively impacted the NFL’s finances, right? Wrong.
Most of the NFL’s income is passed on to the individual teams, leaving very little for the organization itself. So, while the NFL’s income is now taxable, there’s none remaining within the organization to tax. The teams are, of course, still highly profitable and will continue to be taxed. But little has changed for the NFL.
So why, after all this time, would the NFL give up its tax-exempt status? For one, it’s a good headline, and the NFL can use all the positive press it can get. At first glance, it appears that a large, profitable entity is voluntarily paying taxes. But as previously explained, that’s hardly the case.
But the kicker is that non-profits must report executive compensation to the IRS, which then makes that information publicly available. So while we know that Roger Goodell made $44 million in 2012 and $35 million in 2013, that information is no longer reported a private, “tax-paying” entity. Well played, Roger. Well played.