Experts say NFL is no longer tax-exempt for privacy reasons
INDIANAPOLIS (WISH) — Just because the NFL is no longer tax-exempt doesn’t mean it will start paying millions of dollars in taxes, according to a financial expert.
Matthew Will, associate finance professor at the University of Indianapolis, feels the change is nothing more than a public relations stunt.
By dropping its non-profit status and ability to be tax-exempt, the NFL becomes a private company, meaning it can keep information, like finances, private.
It’s a stack of paper outlining how the National Football League distributed its finances in 2012. The 990 form, a publicly available tax return of a tax exempt organization, outlines expenditures including salaries and charitable donations.
In 2012, the form showed NFL Commissioner Roger Goddell made about $44 million. And the information from that year might be the last time the public ever gets to see it again.
“Once they become a for-profit company they’ll no longer be required to disclose this information,” said Will.
When he learned the NFL was dropping its tax-exempt status, he didn’t see it as a shot in the arm for local taxing bodies.
“I’ve seen a lot of social media posts recently where they were saying, ‘This is a great thing, finally the NFL is paying their fair share.’ That’s very misleading,” said Will. “The fact is the NFL doesn’t pay taxes and they’re not going to pay taxes as a result of this. The taxes are paid by the teams.”
Will said the Indianapolis Colts combined with the 31 other teams in the league are what create the profits, generating $10 billion combined in revenue in a year.
The NFL only serves as their governing body, making rules and organizing events, not raking in cash. Instead, they spend what they make.
“The NFL, they actually lost money two years ago. They lost $77 million,” said Will. “This year they only made a few million dollars. So it’s really not going to have much of an impact on them. They probably wouldn’t pay taxes anyway because they’re a pass through organization.”
Goddell said he dropped the non-profit status because it was becoming a distraction. But to Will, it’s really just “the shield” deciding to guard what it wants.
“It’s nothing more than placating people for PR purposes and hiding information from the public, and that’s what the NFL would like to do,” said Will.
Back in 2007, Major League Baseball also dropped its non-profit status. Will said it was for the exact same reasons at the NFL.
24-Hour News 8 tried reaching out to MLB to see how it affected the league when it comes to reporting financial records and charitable donations but our calls weren’t returned.