On the surface it appears that removing the status would be tax neutral. That is not the case. (critical thinkers would have to wonder why the NFL is so opposed to this change if it was tax neutral).
First off if the NFL was a regular corporation they would fall under different tax laws and different laws regarding shareholders--their owners. If a C corporation they would pay taxes and the owners would pay taxes on any dividends they receive. So they avoid that double taxation. Other IRS rules that corporations are subject too that non profits aren't involve what is and isn't expenses. So there are benefits there too.
In it's current form the NFL owners pay fees into the NFL and those fees are used to make interest free loans to the owners. This is an obvious tool to avoid taxes as the owners are expensing the fees they pay the NFL and the loans make them cash neutral for the owners. Each team pays $6 million annually into the NFL. The NFL recognizes no profit from the loans as they receive no interest. In this aspect all the NFL is doing is creating an expense for the owners to save taxes.
Another thing to consider is that many states and cities exempt tax exempt organizations from many local taxes. Even hotel and motel taxes. Small but none the less a benefit.
There are very good reasons why such non profit status is not available to all of us and these are just a few.
Coburn says the tax exempt status's net effect may be as much as $91 million.
This post was edited on 9/19 at 6:27 pm