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Roddy White calls out Goodell / how the hell is the NFL "nonprofit


poptart
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"Roger Goodell is getting over never seen anything like it 20 million for looking over the league with tremendous help I guess the NFL is banking," he continued. "The NFL is not a company it's a nonprofit organization that makes a lot of profit."

http://espn.go.com/nfl/story/_/id/7574523/roddy-white-atlanta-falcons-rips-roger-goodell-reported-salary

 

I had no idea the NFL was considered "nonprofit." that's ridiculous. I looked into this more, and there's no way they should be considered nonprofit.

Section 501©(6) of the Internal Revenue Code provides for the exemption of business leagues, chambers of commerce, real estate boards, boards of trade and professional football leagues, which are not organized for profit and no part of the net earnings of which inures to the benefit of any private shareholder or individual.

 

No part of a business league's net earnings may inure to the benefit of any private shareholder or individual and it may not be organized for profit to engage in an activity ordinarily carried on for profit (even if the business is operated on a cooperative basis or produces only enough income to be self-sustaining).

 

 

Roger Goodell makes $20m/year and I'm sure there's other NFL executives making bank. they're clearly only classified as nonprofit so they're exempt from taxes.

 

or am I missing something?

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pay corporate taxes on what? the salaries that they pay their employees?

that's what I'm not getting, I guess.

clearly the leaders of the organization are profiting heavily.

 

Part of the definition of a nonprofit organization is that it does not have to pay corporate income tax on its profit. For example, if the NFL were not a non-profit and it had profits/net income of $10 billion, it would pay taxes at the appropriate rate on the $10 billion profit. However, since it's a non-profit, it doesn't pay any tax on its profits/net income.

 

However, the NFL's employees obviously get paid a salary. And those salaries/income are not exempt from taxes, even though the NFL's net income is exempt from taxes.

 

As to why, it's a complicated issue. I took nonprofit organizations, but we didn't spend much time on 501©(6) organizations -- we focused on 501©(3) and 501©(4) ones, instead.

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They're an entity. The businesses are the franchises themselves. The league is just one gigantic promotion for the franchises, if I'm not mistaken.

 

I mean of course I'm dumbing it down to my level, but aside from all of the technical and legal stuff I can understand why the league is 'non-profit'. Nobody owns the NFL. It's an association used to hold together the 32 businesses that run within it.

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pay corporate taxes on what? the salaries that they pay their employees?

that's what I'm not getting, I guess.

clearly the leaders of the organization are profiting heavily.

 

Part of the definition of a nonprofit organization is that it does not have to pay corporate income tax on its profit. For example, if the NFL were not a non-profit and it had profits/net income of $10 billion, it would pay taxes at the appropriate rate on the $10 billion profit. However, since it's a non-profit, it doesn't pay any tax on its profits/net income.

 

However, the NFL's employees obviously get paid a salary. And those salaries/income are not exempt from taxes, even though the NFL's net income is exempt from taxes.

 

As to why, it's a complicated issue. I took nonprofit organizations, but we didn't spend much time on 501©(6) organizations -- we focused on 501©(3) and 501©(4) ones, instead.

so that $10b isn't taxed and is then spread out amongst the 32 teams and employees of the NFL?

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The league it's self is not the member teams ....... it's an organization that has member entities and it manages things for the collective entities

 

Keep in mind that the $10B that is being discussed is in no way, shape or form "profit" for the NFL entity - it's not profit for anyone.

 

It's revenue that comes from a variety of sources, many of which do carry a tax and is used based on the agreement between the league entity and the member organizations.

 

There are many very large non-profits out there, that have high paid board members, etc.

 

White's comments about his salary are idiotic - the guy is running an entity that brings in over $11B and continues to work to increase that revenue for both the owners (to whom he is beholden) and the players (as they get a portion of the revenue pool).

 

In many circles people would find it crazy that a person is paid tens of millions to run, jump and catch..........

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