Politics

NFL Makes 9 Billion a Year: How Do They Get Away with Not Paying Taxes?

September 13th 2014

By:
Adam Rotstein

Huddle up everyone, here’s the plan. The NFL will continue to reap over 9 billion dollars a year in revenue while not paying Federal income taxes on account of it technically being a not-for-profit organization. Ready? Break.

If you’re like most Americans, you’re not on board with this play. In fact, you’re probably not even aware of it. According to a recent survey by Fairleigh Dickinson University, only 13 percent of Americans correctly identified the NFL as a nonprofit.

So what exactly is this crazy technicality that gives a tax break to a massively profitable American pastime? The NFL League Office. While the 32 football franchises in the NFL pay taxes on their revenues, the NFL League Office operates as a separate, tax-exempt nonprofit.

As a “trade organization”, the NFL League Office aims to “further the industry or profession it represents”.  Basically, that means they establish rules and practices and hire referees. The NFL League Office also pays the salary of commissioner Roger Goodell—a cool 29 million dollars a year.

But this is hardly the NFL’s only stiff-arm to federal taxes.  In fact, there’s a whole barrage of football related puns to be made about their crafty evasion of the IRS. Put simply, your local mom-and-pop store has to pay taxes – and they presumably don’t receive hundreds of millions of dollars in taxpayer subsidies to build new stadiums then black-out some games in local markets unless you pay for the NFL’s cable network, all while generating billions of dollars in annual revenue.

So if only 27% of self-described NFL fans believe the league should be allowed to maintain its non-profit position, why doesn’t Congress call an audible on the NFL’s tax status? Simple: Last year alone, the NFL spent 1.5 million dollars lobbying in Washington. Senator Tom Coburn tried to attach an amendment to the Marketplace Fairness Act that would not allow sport leagues to be tax exempt. It wasn’t even considered.

Whether or not you’re a diehard football fan, there is something fundamentally crooked about a sports league with nonprofit perks. Coburn, told USA TODAY Sports, "It's one of the striking examples in the tax code where middle- and lower-income Americans are essentially subsidizing salaries for multimillionaires."