A CNN report by Sean Kennedy and Drew Griffin attempts to answer the question of whether the National Football League (NFL) made a $10.5 billion profit in 2013, paid $44.2 million of it to its CEO Roger Goodell, but paid nothing in taxes to the US government.
Although the NFL pays taxes on revenue generated through its NFL Ventures and NFL Properties, it does not pay any taxes from its league headquarters located in Manhattan. This is because, according to an IRS ruling of 1942, the NFL with its 32 teams is a trade organization and therefore does not need to pay taxes. In 1966, the NFL was merged with the American Football League (AFL), and Pete Rozelle, the then commissioner of the NFL, confirmed that the league office would always be exempted from paying taxes.
Brian McCarthy, a spokesman for the NFL, says that taxes are paid on every dollar that the NFL earns from TV rights fees, tickets to games, sale of jerseys, and national-level sponsorships. But Senator Tom Coburn, a Republican from Oklahoma, does not agree. He says that individual teams and their owners pay taxes, but there is nothing to stop them from pooling their finances at the NFL as a nonprofit organization, adding that this “means they’re not paying taxes like every other business that would be in a trade business like they are.”
The NFL made over $326 million in 2012-13, and Goodell would be one of the top 20 highest paid CEOs for public companies in the US.