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Saturday, September 27, 2014
Article in this week's issue of Sports Illustrated on NFL Tax exempt status

I hope you have a chance to check out this week's issue (September 29, 2014) of Sports Illustrated - I have an article on new legislative proposals in Congress to end the NFL's tax exempt status. My piece is on page 28, right before Tom Verducci's cover story on Derek Jeter. While I'm often critical of the NFL, I'm not convinced that amending 501(c)(6) to punish the NFL for domestic violence issues or to force a change to the Redskins name is the best vehicle of addressing those issues.

Keep in mind, almost all of the $9.5 billion generated annually by the NFL is already subject to income taxes (the NFL uses four for-profit subsidiaries to generate most of the league's revenue, and the 32 for-profit teams generate almost all of the rest of the revenue; the NFL itself--which is the tax-exempt entity--has reported losses in two of the last three years). Also, other pro leagues, including the U.S. Golf Association and PGA Tour, would likely be more affected by some of these legislative changes, and they are not the primary intended targets of the legislative proposals. Lastly, non-sports entities protected by 501(c)(6) operate similarly to the NFL as trade associations of for-profit companies.

To read the article you'll need to subscribe to SI or pick up this week's issue.

Here's an excerpt of the article:

Taxing the league office would lead to modest tax income at best. In the last three tax filings that are publicly available, the NFL reported income of $9 million in 2012, and losses of $77.6 million in 2011 and $52.2 million in 2010. How could the NFL lose money? Because the NFL doesn’t make money. The NFL’s main source of revenue is the membership dues paid by the teams, approximately $6 million each. This revenue is used to pay the hefty salaries of league executives, including commissioner Roger Goodell, who earned $85 million in compensation from 2010 through ’12 (on which he paid personal income tax). The dues also pay rent for the NFL’s New York City offices.


Read it in SI great piece can I find it online?

Blogger Jesse Lieberman -- 10/16/2014 1:11 PM  

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