Articles matching tag: Sport Finance
- Column: NFL Facing Pension WoesFebruary 11, 2016
The NFL generated an estimated $12 billion dollars this year, far and away the most of any professional sports league in the country. But despite that embarrassment of riches, the NFL is facing a decidedly American problem: a substantial funding gap in its pension plan. According to league and union officials the players’ pension plan has only 72% of the assets necessary to cover liabilities owed to former and current players. Experts generally consider a funding ratio of 80% or more to be satisfactory. But the deficit in the NFL plan pales in comparison to many pension plans, including a number in the public sector.
- Column: Should Students Be Funding the College Arms Race?December 17, 2015
It takes lots of money to field college athletic teams. But few college athletic programs are generating their own funding. To support their programs, college athletic departments have received $10.3 billion in student fees and other subsidies in the past five years, with student fees accounting for nearly half that total. Those numbers come from a joint study conducted by The Chronicle of Higher Education and the Huffington Post. The study reviewed financial data submitted to the NCAA by 201 public schools in Division I (most private schools are exempt from filing such information). The authors of the study found that students at some schools pay as much as $1,500 annually to help finance athletic programs.
- Column: Arizona Diamondbacks Surprise Baseball WorldDecember 10, 2015
With one swipe of a pen, the Arizona Diamondbacks made a franchise altering move, one that also sent reverberations throughout the baseball industry. One day after unveiling a new line of uniforms, Arizona shocked the baseball world by signing pitcher Zack Greinke to a six-year, $207 million contract. Greinke, this year’s runner up for the Cy Young award in the National League, spent the last three years with the Los Angeles Dodgers, amassing a 51-15 record. Greinke and teammate Clayton Kershaw, a three-time Cy Young winner, led the Dodgers to the playoffs in all three seasons. At the end of this season, Greinke exercised an opt-out clause in the six-year, $147 million contract he signed with the Dodgers in 2012.
- Column: Tax Exempt Status of The NFLOctober 5, 2014
If you’ve ever wondered why references to “Congress” are oftentimes preceded by the words, “do-nothing,” read on. In the wake of repeated reports of domestic violence committed by NFL players, New Jersey Senator Cory Booker introduced a bill designed to repeal the league’s tax-exempt status. As if that move doesn’t embarrass him enough, Booker included nine other professional sports leagues in his bill. Days later, three of Booker’s senatorial colleagues, no doubt as publicity starved as he is, introduced a second bill to scrap the NFL’s tax-exempt status because of the continued refusal of the Washington Redskins to change their name.
- Column: Orioles & Nats Spar Over Rights FeesAugust 4, 2014
During the recent MLB All-Star Game in Minneapolis Commissioner Bud Selig, in response to a reporter’s question, emphatically said that Montreal would be a viable market for a Major League team. Despite those comments, the odds of MLB returning to Montreal range from slim to non-existent. Selig has made it clear that he is opposed to relocating existing franchises and the league has repeatedly said it has no plans to expand. But Selig has good reason to lament the 2005 move of the Expos to Washington, D.C. where they became the Nationals. In order to facilitate the Expos’ relocation to what the Baltimore Orioles claimed as their territory, MLB and the Nationals were forced to make a number of concessions to Baltimore owner Peter Angelos. The feisty, unpredictable and litigious Angelos threatened to sue MLB until Selig and company sweetened the offer to the point where Angelos couldn’t refuse. One aspect of the resolution included the formation of the Mid-Atlantic Sports Network (MASN) for the purpose of broadcasting both Orioles’ and Nationals’ games.
- Column: To Sign or Not To SignJune 16, 2014
For most of us, a working career can last upwards of 40 years, into our mid-60’s or beyond. For athletes, a career lasting 10-15 years is the exception. Given that, here’s one athlete’s conundrum. Houston Astros’ first base prospect Jon Singleton was offered a choice: Spend the rest of this season toiling in the minors working for approximately $40,000 and the next three for the Major League minimum, $500,000 (which is effectively the maximum salary). If he makes it that far, he will be eligible for salary arbitration for three years which will boost his salary at least four-fold in the first year, up to ten-fold in the third year. All told, he could earn as much as $10-15 million before he reaches free agency after six years of Major League service when he could auction himself off to the highest bidder.
- Column: Taxing Olympic Gold...And Silver and BronzeFebruary 24, 2014
There are two things all Americans can agree on: We love our Olympic athletes and we hate taxes. That means we can all agree on exempting Olympic athletes from paying taxes on their Olympic winnings, right? Well, maybe not. The first thing you should know is that Olympic gold medals are a misnomer. Although the medals weigh 531 grams, there are only six grams of actual gold in each medal. The balance is silver. At today’s street value for both metals, a gold medal is worth approximately $550. That amount is considered taxable income to medal winners.
- Column: MLB Allows Teams to Drop PensionsFebruary 17, 2014
On the eve of spring training, Major League Baseball owners voted to give clubs the option of eliminating pension plans for some uniformed and all non-uniformed employees. Reaction to the move was almost unanimously critical. Prior to the vote, MLB clubs were required to offer traditional pension plans to Minor League employees - coaches, trainers, scouts - and non-uniformed MLB personnel, those who toil away in the front office. Traditional pension plans, known as defined benefit (DB) plans, guarantee retirees a fixed pension amount based on a formula that considers an employee’s earnings, years of service and age at retirement. In most cases, employees get what they are promised. However, if an employer goes bankrupt or the company pension plan goes belly up, the “guarantee” could be in jeopardy. Fortunately for private sector employees, the federal government maintains an insurance fund for such occasions, although pension payments are subject to being reduced.
- Column: Jock Tax UnfairFebruary 10, 2014
Denver Broncos quarterback Peyton Manning took two beatings last week, one from Seattle in the Super Bowl and a second one from the New Jersey taxman. And unlike the game itself, no matter how well he played, there’s no way he would have beaten the tax collector. It’s called the “Jock Tax,” a tax on the income of professional athletes who live in one state and play games in another. Here’s how it works. Take Peyton, he of the $15 million annual salary. The Broncos spent eight days in New Jersey preparing for and playing in the Super Bowl. New Jersey tax law maintains that a portion of Manning’s salary is therefore earned while on state soil. The NFL season is approximately 235 days – referred to as “duty days” - long. Therefore, approximately 3.4 per cent of Manning’s $15 million salary, or $510,000, is taxable in New Jersey.