On the NFL’s Tax Exempt Status and Roger Goodell’s Obscene Salary

In response to a question posed regarding the NFL’s tax exempt status during a reddit AMA (Ask Me Anything) today with NFLPA spokesperson George Atallah, Atallah answered by simply directing the public to “Page 7” of Senator Tom Coburn’s 2012 Waste Book

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Page 7 points out that:

The National Football League (NFL), the National Hockey League (NHL), and the Professional Golfers’ Association (PGA) classify themselves as non-profit organizations to exempt themselves from federal income taxes on earnings. Smaller sports leagues, such as the National Lacrosse League, are also using the tax status. Taxpayers may be losing at least $91 million subsidizing these tax loopholes for professional sports leagues that generate billions of dollars annually in profits.28 Taxpayers should not be asked to subsidize sports organizations already benefiting widely from willing fans and turning a profit, while claiming to be non-profit organizations.

OK. Big deal. The NFL uses a loophole to avoid paying taxes. Good for them.  But to classify themselves as a nonprofit?  It’s no surprise that Goodell is making a pretty penny.  Actually, last week his salary was blasted all over the web.  But, what the Waste Book points out that SBJ and other didn’t is that the Commish isn’t alone.  While they mention Bornstein, Paul Tagliabue is pulling in a nice dime.  In addition to Goodell, Bornstein and Tagliabue, five other league officials in this non-profit organization were paid a total of $19.2 million in a year.  So in 2010 alone, 7 individuals in the NFL front office made $51.5 million.  Emphasis ours…

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…

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. 

Interesting that baseball chose to be for profit, for among other reasons, not wanting to disclose such payouts.

One major sports league – Major League Baseball – filed as a nonprofit for years, but chose to become a for-profit limited liability corporation in 2007. At least partly motivating the change was an opposition to the IRS’ new salary transparency rules for nonprofits, which require releasing information on salaries above $150,000. The NFL lobbied strenuously in Washington against an expansion of the disclosure reporting, but found little support.