Philip Klein calls the NFL’s tax-exempt status “bad policy that exemplifies the problems with the nation’s disastrous tax code”:
The NFL’s nonprofit status was enshrined into law in a 1966 act meant to protect the league from antitrust issues surrounding its merger with the rival AFL (which was considered a lesser league until my Jets pulled off the greatest upset in football history in the 1969 Super Bowl). The same law added, “professional football leagues” to the part of the tax code listing entities granted nonprofit status.
Though the league distributes lucrative television and licensing revenue among the 32 teams, which do pay taxes on their earnings, the teams also send dues to the NFL league office. The office does not pay taxes on those dues, and the fees could be deducted from the teams’ taxes.
The NFL reported total revenue of $326 million for the 2012 tax year, according to its most recent publicly available filing with the Internal Revenue Service. During that year alone, the NFL paid $44.2 million in compensation to commissioner Roger Goodell. Goodell earned $105 million over the course of the five-year period from 2008 through 2012, according to a CNN report – more than any player.
Well, it might fall under the religious exemption, no? At this point, it requires blind faith to believe in its future. But Jordan Weissmann notes that revoking the NFL’s tax-exempt status “wouldn’t drastically change its finances”: