The NFL is considering an organizational restructure of the league office that would drop the tax-exempt status that has been the subject of controversy, according to a report from Daniel Kaplan of the Sports Business Journal.
NFL considering dropping tax-exempt status, according to report
The NFL league office is exempt from taxes, but the organization is considering dropping that status.
Kirby Lee-USA TODAY Sports
With the NFL projected to make around $11 billion in 2014, many have pointed to the league office’s tax-exempt status as unfair. Among the detractors are Oklahoma Sen. Tom Coburn and other lawmakers, who have pushed for legislation to remove the tax exemption for the NFL.
In an email to Kaplan, NFL spokesperson Greg Aiello confirmed that the league has had discussions about a change in the tax status. According to Frank Hawkins, a former NFL finance executive, the subject that will draw the most attention from the league is stadium bonds and if they would need to be restructured:
If the NFL wishes to change, Hawkins said, more of an issue is that the league would need the consent of bondholders to alter the organizational structure and bylaws of the entity issuing the bonds.
The bondholders likely would ask the league to pay a fee plus legal costs of changing bond documents if they agree to the switch, Hawkins said.
While the NFL is a multibillion-dollar operation, the actual change likely wouldn’t mean too much for the league, since the majority of the money is made by 32 teams that are each taxable entities. Only the league office, which has earned tax-exempt status for its role as a trade organization of sorts, is not responsible for taxes.
The MLB faced a similar controversy which caused it to drop its tax-exempt status in 2008, yet the financial effect of the switch was minimal.
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