January 30th, 2014
12:33 PM ET

The NFL is Really Considered a Non-Profit?

The NFL is gearing up for the Super Bowl this Sunday and the league is projected to make a record profit. That's bringing to light a little-known secret.  The NFL league office is considered, by the IRS, a non-profit organization.

That's right,  the league office falls under a tax code that exempts things like business leagues and trade associations.

But does that make sense? Two senators don't think so, and they've proposed a bill to change it.

Independent Main Senator  Angus King and Republican Senator from Oklahoma, Tom Coburn,  have crafted a bill to end the NFL's $9 billion-per-year tax-exempt status.

On "New Day" Thursday Sen. Coburn said: “This is a directed tax cut that to the league office, which means every other American pays a little bit more every year because we give  the NFL league office a tax break and call them a non-profit. In fact, they’re not."

It doesn't help the NFL's cause that its commissioner makes $29 million a year.

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  1. Vexious

    Coburn has it wrong when he says `“This is a directed tax cut that to the league office, which means every other American pays a little bit more every year because we give the NFL league office a tax break and call them a non-profit. In fact, they’re not." Since there is no connection whatever to a budget, or the government spending only what they take in, there is no mechanism by which, if the NFL were suddenly taxed, that ANY taxpayers taxes would be reduced whatever, or that government spending would change one iota. Why do they all insist on talking bullcrap?

    February 27, 2014 at 1:48 pm | Reply
  2. Paul Botts

    This is pretty silly even by American politics standards.

    The NFL is not a 501(c)(3) not-for-profit, it's a 501(c)(6). That's a normal and limited legal status held by many trade associations, one which is not comparable to the status that is granted to arts organizations and the like. You cannot make a tax-deductible contribution to the NFL, it cannot seek foundation grants, etc.

    The profit-making NFL teams are not non-profits, they pay normal business income taxes on their profits. Only the operation of the league itself, which is not a profitable activity in any professional sport, has organized as a trade association having limited not-for-profit status.

    Senator Angus King stated clearly on CNN on January 30th: “The teams are separate entities — they pay taxes and they have their whole situation. The league has a foundation, charitable — wouldn’t affect that. This is talking about the money that goes into the league office.” The money that King and Coburn are talking about is about $180 million per year, which at one level is plenty...but it's actually a tiny slice of the league's $9 billion/year in total revenue.

    The NFL already pays business income taxes on its profits on most of that $9 billion. Having the league office be a 501(c)(6) does lower their collective tax bill by a teeny amount, it's a way to more efficiently deduct certain expenses, but by a small factor in their overall picture. A business-taxes expert explained it here:
    http://www.samachar.com/Flap-About-NFL-Tax-Exempti...

    I do get the optics of this but that's actually about all that it is - optics. In substance this fuss is much ado about very little and one might question whether it's something that is worth the time and attention of the U.S. Senate.

    February 13, 2014 at 12:11 pm | Reply
  3. Jon

    "It doesn't help the NFL's cause that its commissioner makes $29 million a year." And he pays 10 million in taxes.

    January 31, 2014 at 9:20 pm | Reply
  4. Chris

    People need to understand there are three separate, distinct components to what is called the NFL: The League Office, NFL Ventures, and the 32 individual teams.

    The League Office is responsible for the rules and administration of the game itself. It is the organization that pays the Commissioner, executive staff, and referees. The League Office is funded through membership dues paid by the 32 teams. It is operated as a 501(c)(6), and it makes no profit.

    NFL Ventures is owned collectively by the 32 NFL teams and operates as a limited partnership. NFL Ventures is responsible for the licensing of TV contracts, merchandise, video games, etc. Because it is a limited partnership, all of the profit is allocated to the 32 limited partners (the NFL teams themselves). Those teams then pay tax on that profit.

    Finally, the 32 individual teams are responsible for local operation of their club. They pay taxes on things like ticket sales, concessions, and local sponsorships. They also pay taxes on the profits from NFL Ventures.

    To say that the NFL does not pay taxes is simply inaccurate.

    January 31, 2014 at 3:40 pm | Reply
  5. Eric

    Someday soon America will have a backlash against the NFL, and it will be a beautiful day.

    January 31, 2014 at 9:08 am | Reply
    • FarFlung

      That day will not come, not in our lifetime, nor in the lifetimes of either of our great-great grandchildren.

      February 3, 2014 at 12:34 am | Reply
  6. Tim Meyer

    As a Soldier, I find it reprehensible that Congress proposed and enacted a 1% cut of working-age military retirees' COLA to save $6.3 billion over ten years, when the NFL, with all the profit it makes, could easily help to cut the national budget deficit by simply paying taxes. I imagine that most business leagues and trade associations don't make millions selling television rights, game tickets, food and beverages, and official logo products every year. I think it's crazy that people who don't watch football pay higher cable TV fees because the cost the networks pay to the NFL to broadcast games is passed on to all cable TV consumers.

    January 30, 2014 at 4:58 pm | Reply
    • Jon

      NFl TEAMS pay hundreds of millions in taxes. Taxing the NFl Trade association would net the govt nearly nothing because it doesn't make profit. They spend everything they make on organizing and promoting the industry and salaries which are taxed.

      January 31, 2014 at 9:21 pm | Reply
  7. stlmk802

    Reblogged this on stlmk802 and commented:
    What are you thoughts on this matter???

    January 30, 2014 at 4:10 pm | Reply
  8. rockofma

    Coburn should talk about the Oil & Gas tax breaks too if he honestly cares ....Hess the former owner of the NY Jets was bosom buddies with the Ayotalla Khomeni and no one batted an eye....BYE BYE not so good ole boy network !

    January 30, 2014 at 3:05 pm | Reply
  9. rockofma

    Coburn should talk about the Oil & Gas tax breaks if he is really honestly trying to change...my gosh Hess from the NY Jets was a great friend of the Ayotalla Khomaine and no one blinked an eye....bye bye not so good ole boys !

    January 30, 2014 at 3:03 pm | Reply
  10. Billy Bob

    Uhhhhh... What's taxuhgzemped? GO SEAHAWKS!
    Now whered my dadgum beer go?

    January 30, 2014 at 2:32 pm | Reply
  11. Richard M Nixon (Deceased)

    Reblogged this on Dead Citizen's Rights Society.

    January 30, 2014 at 1:12 pm | Reply
  12. Brittius

    Reblogged this on Brittius.com.

    January 30, 2014 at 1:09 pm | Reply

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