NFL gives up Tax Exempt Status

[PP2]

From a Time article:

"The league office is tax-exempt, but it generated just $9 million in income during the 2012 tax year."

http://time.com/3839164/nfl-tax-exempt-status/

And this LA Times article has more details:

http://www.latimes.com/business/hil...ropping-its-taxexemption-20150428-column.html

Perhaps they mean taxable income?

Goodell earned $44m plus a $40m bonus, and his VP earned $26m. They, the NFL, additionally paid a NYC and a DC firm $16m. That is just to list a few of their annual expenditures.

 

[PP2]

That money passes to the teams who pay tax on it.

In 2013, each NFL club received $131 million in national TV money (per Sports Business Daily). That is a total of $4.192b, I believe.

The NFL signed deals with FOX, CBS, ABC that pays them $3b annually.

They also signed a deal with ESPN for MNF that pays them $1.9b annually

Also the TNF deal with CBS pays them $275m annually.

This doesn't include licensing, sponsorship, and NFL Network revenue.

I am terrible at math, but I think that is a windfall of pretty much $1b a year, or over, if you include estimates from licensing, sponsorship, and NFL network revenue.

 

[Seacoast Fan]

Depends on the specific nature of the corporation. What you say is true of C-corps. It is not true of S-corps, where there is no double-taxation.

Bingo .

 

[obgod3]

Well one thing for sure, now some dumb senator or congressman won't be able to tell the NFL they want an investigation of this or that...no longer any obligation to the government as an entity. Other than paying taxes.

 

[QuantumMechanic]

Here's the NFL's 2012 Form 990:
http://990s.foundationcenter.org/990_pdf_archive/131/131922622/131922622_201303_990O.pdf

They had $325,884,549 of revenues and $317,886,039 of expenses for a profit of $8,996,039. As a taxable entity, the profit is what they will be taxed on. In 2011 they had a $77,628,857 loss.

 

[QuantumMechanic]

The income is "membership dues and assessments". No TV money or anything like that. So to me that means that the TV money, etc. is paid directly to the teams and then the teams pay dues to the NFL. Oh, there's also $873,889 of "coach/club fines"

 

[PP2]

Here's the NFL's 2012 Form 990:
http://990s.foundationcenter.org/990_pdf_archive/131/131922622/131922622_201303_990O.pdf

They had $325,884,549 of revenues and $317,886,039 of expenses for a profit of $8,996,039. As a taxable entity, the profit is what they will be taxed on. In 2011 they had a $77,628,857 loss.

Part XIV of Schedule D is missing.

That would be where the "administration of bank funds owned jointly by all 32 member clubs" would be listed to the tune of $4b.

Being a 501(c)6 they aren't (if I'm right) required to list the minutiae of said "administration," the loan-outs, etc.

 

[Ring 6]

In 2013, each NFL club received $131 million in national TV money (per Sports Business Daily). That is a total of $4.192b, I believe.

The NFL signed deals with FOX, CBS, ABC that pays them $3b annually.

They also signed a deal with ESPN for MNF that pays them $1.9b annually

Also the TNF deal with CBS pays them $275m annually.

This doesn't include licensing, sponsorship, and NFL Network revenue.

I am terrible at math, but I think that is a windfall of pretty much $1b a year, or over, if you include estimates from licensing, sponsorship, and NFL network revenue.

That money is revenue to the teams, and taxable to the teams.

 

[PP2]

That money is revenue to the teams, and taxable to the teams.

If my math is correct, the annual revenue stream from the TV deals for the NFL is around $5b, but the total revenue for the teams is $4.192b (since each team recieves $131m).

That leaves at least under a billion in surplus, annually.

Where does it go? My guess is that it goes to the "bank funds" that is "administered" by the NFL and is used for a variety of things, including loanouts at "market rates" to build new stadiums in exchange for commitments (such as not moving out of such and such city).

 

[Ring 6]

If my math is correct, the annual revenue stream from the TV deals for the NFL is around $5b, but the total revenue for the teams is $4.192b (since each team recieves $131m).

That leaves at least under a billion in surplus, annually.

Where does it go? My guess is that it goes to the "bank funds" that is "administered" by the NFL and is used for a variety of things, including loanouts at "market rates" to build new stadiums in exchange for commitments (such as not moving out of such and such city).

It doesn't go anywhere, your math is using estimates from different sources as if they are fact.
Bank funds administered would be assets not revenue. I assume it is money belonging to the teams that the league holds on to for some reason, probably shared expenses. The actual IRS filing shows 326 mill of revenue. That is exactly what they had, they cannot hide it or call it something else.

 

[primetime]

Depends on the specific nature of the corporation. What you say is true of C-corps. It is not true of S-corps, where there is no double-taxation.

That's true. My mind wasn't in the small business space when we were talking about the NFL.

 

[PP2]

It doesn't go anywhere, your math is using estimates from different sources as if they are fact.

These are not estimates. These are facts. For example, the MNF deal being $1.9b/year:

http://www.nytimes.com/2011/09/09/s...xtends-deal-with-nfl-for-15-billion.html?_r=0

 

[PatsFanInVa]

NFL to Surrender Tax Exempt Status

According to this story, the NFL has announced it will forego its tax-exempt status for the first time in 70 years - and become even less transparent.

http://www.motherjones.com/politics/2015/04/nfl-roger-goodell-tax-exempt-change

Just wow. If this is elsewhere please merge... I did not see it on the first page of threads.

 

[Ring 6]

These are not estimates. These are facts. For example, the MNF deal being $1.9b/year:

http://www.nytimes.com/2011/09/09/s...xtends-deal-with-nfl-for-15-billion.html?_r=0

That was an extension of a deal that ended in 2013. It was 15.2b for 8 years. It was probably not an even 1.9 each year, it almost certainly increased over time, but more importantly, it was not in effect for the period we are analyzing.
The others are probably similar. Perhaps estimates was the wrong word, but they are certainly not accurate numbers of what the TV revenue in 2012 was.

 

[primetime]

Look, I've got Karl Marx as my avatar, so my politics are on my sleeve... the NFL makes ungodly amounts of money. Its profits are definitely publicly subsidized through either tax breaks and cash and in-kind subsidies.

In this case, though, the league office's tax-exempt status was really always a total non-issue.

 

[PP2]

That was an extension of a deal that ended in 2013. It was 15.2b for 8 years. It was probably not an even 1.9 each year, it almost certainly increased over time, but more importantly, it was not in effect for the period we are analyzing.
The others are probably similar. Perhaps estimates was the wrong word, but they are certainly not accurate numbers of what the TV revenue in 2012 was.

Even if not accurate, I think it warrants a picture where we can suspect an annual windfall that is not reported as income.

Back to the point of my original post- keeping in mind the recent controversy over the breast cancer awareness campaign when it was discovered that only 5-8% of income generated by pink NFL merchandise actually goes towards cancer research, a business entity (the NFL) with such a barbaric mindset, in my belief, would only go from non-profit to profit status if some loophole or method could be exploited where it could continue profiteering as before.

 

[Ring 6]

Even if not accurate, I think it warrants a picture where we can suspect an annual windfall that is not reported as income.

So they are breaking the law by not reporting income that is known to the public? Come on, thats a wild claim.
Not accurate means you are comparing a report saying how much TV money the teams received in some year to various reports citing the value of contracts with different networks in different time periods.
Your math is inconsistent. I think its a stretch to use that math to say the NFL is committing tax fraud right out in the open.

Back to the point of my original post- keeping in mind the recent controversy over the breast cancer awareness campaign when it was discovered that only 5-8% of income generated by pink NFL merchandise actually goes towards cancer research, a business entity (the NFL) with such a barbaric mindset, in my belief, would only go from non-profit to profit status if some loophole or method could be exploited where it could continue profiteering as before.

Back to this? It is only the misconception of people who thought the NFL was donating its merchandise to the cancer society that led to this. Most people understand that when you sell merchandise to support a cause you donate a percentage of the profits. I do not understand how donating millions of dollars to a worthy cause is barbaric.

The NFL exists to make money, just like 99% of the businesses in America. I think it is wrong to try to act as if they did something wrong by choosing the tax classification that is best for them. Of course they think changing it either helps them make more money or helps their image (you are calling them tax cheats because they were not for profit) but why is that anything they should not do? What is wrong with that? Do you file single or married? Are you just filing married to get a loophole and pay less taxes? Its really the same thing.

 

[PP2]

So they are breaking the law by not reporting income that is known to the public? Come on, thats a wild claim.
Not accurate means you are comparing a report saying how much TV money the teams received in some year to various reports citing the value of contracts with different networks in different time periods.
Your math is inconsistent. I think its a stretch to use that math to say the NFL is committing tax fraud right out in the open. .

Don't think I ever mentioned the NFL was breaking the law, but that they are eagerly finding ways to get around paying taxes any way they can. If there is a loophole, they are taking advantage of it.

Why else would they pay so much money to lobbying firms in Washington?

Back to this? It is only the misconception of people who thought the NFL was donating its merchandise to the cancer society that led to this. Most people understand that when you sell merchandise to support a cause you donate a percentage of the profits. I do not understand how donating millions of dollars to a worthy cause is barbaric.

The NFL exists to make money, just like 99% of the businesses in America. I think it is wrong to try to act as if they did something wrong by choosing the tax classification that is best for them. Of course they think changing it either helps them make more money or helps their image (you are calling them tax cheats because they were not for profit) but why is that anything they should not do? What is wrong with that? Do you file single or married? Are you just filing married to get a loophole and pay less taxes? Its really the same thing.

Naturally it is common knowledge that a merchandiser will take a cut to cover the expenses of creating such merchandise that are sold to promote awareness, and there will be entities in the food chain that will take their cut. But for the actual amount donated, to end up being only 5-8%? That is astonishing and insulting.

They did not chose a tax classification that best suited them; they were awarded the most convenient (per the 1966 limited antitrust exemption "sweetheart deal"). They are only giving it up under enormous pressure.

And it is my opinion that they are only finally giving it up, after years of said pressure, because they must have found a way to continuing functioning as before.

 

[PatsWickedPissah]

Answer is simple want to avoid public scrutiny over stuff like Rogers salary & also misguided rants by fans clueless about the NFL front office vs teams which do pay taxes on their profits

 

[Ring 6]

Don't think I ever mentioned the NFL was breaking the law, but that they are eagerly finding ways to get around paying taxes any way they can. If there is a loophole, they are taking advantage of it.

You implied that they hid revenue, that would be against the law.

Why else would they pay so much money to lobbying firms in Washington?

Not for tax purposes, since they were a not for profit, and now will just pass 100% through. There are many things they could be lobbying for that are not tax issues.

Naturally it is common knowledge that a merchandiser will take a cut to cover the expenses of creating such merchandise that are sold to promote awareness, and there will be entities in the food chain that will take their cut. But for the actual amount donated, to end up being only 5-8%? That is astonishing and insulting.

I don't find it that way. I find it generous to donate that large amount of money.

They did not chose a tax classification that best suited them; they were awarded the most convenient (per the 1966 limited antitrust exemption "sweetheart deal"). They are only giving it up under enormous pressure.

I disagree. They were added to the type of organziations that are allowed to be not for profit because they fit the critieria, and I'm sure they asked, why wouldn't they?
What 'enormous pressure' are they under? This was not even a topic until they made the announcement. 99.99% of everyone doesnt care.

And it is my opinion that they are only finally giving it up, after years of said pressure, because they must have found a way to continuing functioning as before.

There is nothing to find. You seem to want to lump the league and its teams together. The league isn't making money. If it were, it would just end up going to the teams anyway. The owners of the teams own the league. Ultimately any dollar that comes into the league gets transfer to the teams (after expenses).
There never was a financial benefit to the designation, which is why they don't care to change it.