The National Football League’s central office will become a taxable entity, ending its tax-exempt status in a move with minimal financial effect and significant symbolic value.
Commissioner Roger Goodell informed team owners and members of Congress of the decision in letters dated Tuesday, saying he was eliminating a “distraction.”
“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,” Goodell wrote. “This will remain the case even when the league office and Management Council file returns as taxable entities, and the change in filing status will make no material difference to our business.”
The league had been under pressure from some U.S. lawmakers who had been questioning whether the NFL deserved a tax exemption.
The move will make the league more opaque, because it will no longer need to disclose Goodell’s salary and other financial information. The U.S. requires that nonprofits file annual tax returns and make portions of them public.
The NFL is the biggest sports league in the U.S. with a record $10 billion in revenue in 2013, up from $7 billion when Goodell took over as commissioner in 2006. Much of that revenue goes to the teams, which are taxable. Goodell received $35 million in salary and bonuses in 2013.
According to Goodell’s letter, the league has been studying its tax status for more than a year and the full ownership gave its approval to the decision in March.