In an abrupt decision, the National Football League announced that it will voluntarily relinquish its tax-exempt status, thereby presumably satisfying the handful of lawmakers who have called for the league to be stripped of the privilege.
NFL commissioner Roger Goodell circulated a memo to team owners Tuesday with the news, insisting that “a change in the tax status will not alter the function or operation of the league office or Management Council in any way.”
From the Associated Press:
It isn’t known exactly how, if at all, the league’s switch from tax-exempt to taxable would affect the total amount paid in taxes by the NFL, its teams and all their affiliated entities. What is clear is that Tuesday’s change does not affect the NFL’s antitrust exemption, created in the Sports Broadcasting Act of 1961. That allows clubs to negotiate radio and TV broadcast rights together.
Washington lawmakers have already begun to weigh in on the decision, with Sen. Richard Blumenthol (D-Conn.) asserting it “seems more like a PR stunt than a real gain.”
“The tax-exempt status produces a pittance compared to its congressionally granted antitrust exemption — enabling billions in broadcast revenue,” said Blumenthol.
Other politicians were more forgiving. Reps. Jason Chaffetz (R-Utah) and Elijah Cummings (D-Md.), both of whom are leaders of the House Oversight and Government Reform Committee, labeled the move “an important and positive step toward restoring basic fairness.”
In his memo, Goodell insisted that the league’s tax-exempt position has been consistently “mischaracterized,” presumably meaning by the lawmakers who have called for its end.
“The effects of the tax-exempt status of the league office have been mischaracterized repeatedly in recent years,” wrote Goodell. “The fact is that the business of the NFL has never been tax exempt. Every dollar of income generated through television rights fees, licensing agreements, sponsorships, ticket sales, and other means is earned by the 32 clubs and is taxable there. This will remain the case.”
For football fans curious to see how this decision will affect the 2015 season, they’ll have to wait a few more excruciating months until play commences in September.
