And the off season begins (2018-19)

[BillyWilliams]

Heck, we all cross ethical lines in our lives.

 

As accountants we're trained to help our clients pay as little tax as possible while staying within the law. And that is considered to be the right of every taxpayer.

 

What moon's talking about is felony.

 

What moon's talking out of is his ass.....

[sk7326]

 

 

Do teams make any money from concessions, etc.? I honestly don’t know. It might even vary from team to team depending on the contract with the vendor...

 

It varies but of course they do. They contract with their aramark/HMS/whomever (or local restaurants in some cases) to operate the facilities. Now, I am whether they pay said vendor a flat fee or get share profits is a case by case thing. But the teams definitely get revenue from the concessionaire.

[sk7326]

 

Are you saying that most (larger) businesses cheat on their taxes and other filings? That's a really big accusation.

 

I don't think he means (I hope!) hide from the IRS. But perhaps he means hiding profit from the Red Sox in some other part of Fenway's portfolio. (like Liverpool FC or whatever other entities the hold company owns)

 

Now, in terms of the relevant point (getting more money to players and avoiding a strike in 2021), like the NBA or NFL, the players and teams have to come up with an auditable, mutually agreed on definition of "revenue" for determining what should be spent on major league players. I agree with skepticism of, say, Forbes' evaluation of team revenue, that it is possible that some of Steinbrenner's revenue from the Yankees might be reported on another one of his holdings. But that means that the players share might be even lower than the 44% I could calculate. Management needs to get ahead of this, because two more offseasons like this will not be good for player-owner relations (and thus, the probability of us watching people play major league baseball)0.

[harmony]

That's a rather large difference from committing fraud and tax evasion.

The only thing I remember about my law school tax course is the difference between tax avoidance and tax evasion.

[notin]

The only thing I remember about my law school tax course is the difference between tax avoidance and tax evasion.

 

 

Taxes are a form of blackmail. It’s all money I give the government so that they don’t throw me in jail...

[Slasher9]

 

 

That’s my question - is any percentage of sales going to the team?

 

I assume whoever owns the park leases out the stand to companies like Aramark or Chili’s or Uncle Blood’s Taco Hut for a flat amount, say $10,000 per month. I don’t know if any of them even tack on, say, plus 5% of all sales.

 

And even then, not all teams own the ballpark, do they? If they don’t, do they get any concession revenue even if there is a percentage in the lease agreement?

 

I’m not sure about MLB, but in Chicago, the Bears do not own Soldiers Field; it’s part of the Chicago Park District. Do the Bears get anything from concessions or does it all go to the city?

in addition to the "rent" all teams get a % of the concession sales made at their stadium. just like they get a % for every Red Sox jersey sold at Dicks....

[notin]

in addition to the "rent" all teams get a % of the concession sales made at their stadium. just like they get a % for every Red Sox jersey sold at Dicks....

 

 

Do all MLB teams own their stadiums?

[Bellhorn04]

The only thing I remember about my law school tax course is the difference between tax avoidance and tax evasion.

 

As far as key concepts go, that's a biggie!

[BillyWilliams]

in addition to the "rent" all teams get a % of the concession sales made at their stadium. just like they get a % for every Red Sox jersey sold at Dicks....

 

Yes and no.

 

I remember this debate years back when the sox signed dice k and the sox fans claiming that the sox would make up any money in the jersey sales in Japan.

 

MLB teams receive a percentage of merchandise sales from what is considered their "home market" and team stores. Any of their merchandise sold outside of these places goes to an MLB fund which is then divided equally amongst all teams.

 

It is one of the reasons that George Steinbrenner made a deal with Manchester United to put a Yankee team store in their stadium and a MU team store in Yankee Stadium. That way the Yanks captured the higher % of all merchandise sales sold there than if it had to go into the MLB general fund.

 

But either which way, it is all MLB licensed merchandise, very difficult for the teams to "hide" it as moon claimed.

[moonslav59]

 

Are you saying that most (larger) businesses cheat on their taxes and other filings? That's a really big accusation.

 

Some do for sure, but some can hide profits legally or sink the money back into the company making it more valuable for when it is sold.

[Slasher9]

 

 

Do all MLB teams own their stadiums?

 

change "their" to "the" for any team that doesnt "own" the stadium that they play their home games in.....

[Bellhorn04]

Some do for sure, but some can hide profits legally or sink the money back into the company making it more valuable for when it is sold.

 

How exactly can they hide profits legally?

[S5Dewey]

How exactly can they hide profits legally?

 

I don't think this is germane to the question you asked but I remember reading that the reason there are so many concerts, etc. at Fenway now is because the money raised from concerts isn't considered "baseball money" and is therefore separate from any baseball revenue.

[S5Dewey]

 

I'm sure money is being made, if you look at the prices of the stuff they sell. My point is that the vendor contract doesn't have to be with the team, it could be a separate contract with the owner of the team or facility (with maybe some money being kicked to the team owner as a non team entity).

 

Here's a novel approach to concessions. Treat people like customers.

 

http://www.aol.com/article/finance/2019/01/23/atlanta-host-to-sell-dollar5-beers-dollar2-hot-dogs-at-super-bowl/23650874/

 

This BTW is in direct comparison to the large DD iced tea I bought at Fenway last season for $6.00. The surly attitude from the lady serving it was free.

Edited January 23, 2019 by S5Dewey

[Nick]

Moon, just stop and move on.

 

"Hide profits legally".....you mean by legit expenses? You're talking non sense.

 

"Hiding profts legally = less profit"

 

JBJ has tendency to hide his batting average legally by getting less hits. Got it.

[kenmeister]

I think they will have enjoyed a team with a realistic shot at 90 wins more - which was possible. I do not blame them for the moves, but the system which incentivizes it.

 

My point exactly. There's no incentive to come in anywhere but first or last.

[moonslav59]

Moon, just stop and move on.

 

"Hide profits legally".....you mean by legit expenses? You're talking non sense.

 

"Hiding profts legally = less profit"

 

JBJ has tendency to hide his batting average legally by getting less hits. Got it.

 

When the teams report how much they make, it is often less than the full amount the owner actually makes off the team, after everything related to the team is counted.

 

Some profits are sunk back into the team, so it is not actually a profit anymore, but the re-investment into the team greatly increases the value of the team. When the owner sells the team, a fantastic profit is earned. That profit does not go to the players and is not reported as anual team income.

 

These are just two ways money made by the owner is not counted as team profits when players are asking for a bigger share.

 

I'll stop now, it you will.

[moonslav59]

How exactly can they hide profits legally?

 

Talk to a tax lawyer. There's a long list.

[Bellhorn04]

Some profits are sunk back into the team, so it is not actually a profit anymore, but the re-investment into the team greatly increases the value of the team. When the owner sells the team, a fantastic profit is earned. That profit does not go to the players and is not reported as anual team income.

 

That's capital gains. But it's not hidden. I think you're using the wrong terminology when you call it 'hiding'.

[Bellhorn04]

Talk to a tax lawyer. There's a long list.

 

We need 700hitter here. He is a tax lawyer.

[moonslav59]

That's capital gains. But it's not hidden. I think you're using the wrong terminology when you call it 'hiding'.

 

Okay, maybe my terminology is wrong, but when the CBA is negotiated, this money is never part of the pie to be split up.

 

It's not "hidden" in the sense that most is known, but it's not part of the equation.

 

Many owners probably make more money when they sell their team than they did all the years owning it combined.

 

(BTW, I still think owners have ways to hide revenue or profits. The players unions of all sports often have a hard time believing the numbers the owners give them.)

 

[Bellhorn04]

Okay, maybe my terminology is wrong, but when the CBA is negotiated, this money is never part of the pie to be split up.

 

It's not "hidden" in the sense that most is known, but it's not part of the equation.

 

Many owners probably make more money when they sell their team than they did all the years owning it combined.

 

(BTW, I still think owners have ways to hide revenue or profits. The players unions of all sports often have a hard time believing the numbers the owners give them.)

 

 

Market value gains shouldn't be part of the equation. For one thing, at any point in time they're only estimates. They're not realized until an actual sale take place.

 

The other thing is that ownership should have some reward in return for the risk.

 

I haven't heard complaints from baseball players about ownership trying to hide profits. The complaints all seem to be about the owners not spending the profits.

[jacksonianmarch]

Exactly. The players want 50% of the revenue. The way the lux tax is set up, the Yanks and sox will never reach 50%

[Hitch]

Taxes are a form of blackmail. It’s all money I give the government so that they don’t throw me in jail...

 

Unless those taxes go to making a safety net so people don't lose homes in hard times and it funded free healthcare and schooling.

 

That would be too sensible, though.

[BillyWilliams]

Unless those taxes go to making a safety net so people don't lose homes in hard times and it funded free healthcare and schooling.

 

That would be too sensible, though.

 

Oh hell no!!

[sk7326]

Exactly. The players want 50% of the revenue. The way the lux tax is set up, the Yanks and sox will never reach 50%

 

The Sox - if the Forbes numbers are a worthwhile indicator - are over 50%. The Yankees are at around 29%. These are choices.

 

How the league can get to a leaguewide 50% will be the interesting thing - without more revenue sharing it will be hard. If you used a traditional salary cap, a floor number would still be about $140M which some teams would have trouble sustaining.

[moonslav59]

Market value gains shouldn't be part of the equation. For one thing, at any point in time they're only estimates. They're not realized until an actual sale take place.

 

The other thing is that ownership should have some reward in return for the risk.

 

I haven't heard complaints from baseball players about ownership trying to hide profits. The complaints all seem to be about the owners not spending the profits.

 

Can you name one time an owner sold a MLB team for a loss? I guess you can say there is a risk, but it never happens.

 

I know it's problematic to count rising team value as a profit or something the players should get a share of. The players won't give back money, if the team owner loses money on a sale of the team. I get that.

 

My point is, the owner are making way more profit than is reported. I'm not sure why you seem to want to neglect that piece of the debate.

 

It's been a while, but I clearly recall the player's union arguing over the fudged numbers MLB gave them concerning their profit numbers, and how they left out certain revenue streams.

[moonslav59]

The Sox - if the Forbes numbers are a worthwhile indicator - are over 50%. The Yankees are at around 29%. These are choices.

 

How the league can get to a leaguewide 50% will be the interesting thing - without more revenue sharing it will be hard. If you used a traditional salary cap, a floor number would still be about $140M which some teams would have trouble sustaining.

 

One way to help even the playing field a bit would be for the visiting team to share the gait for games they play away. They could also share the TV money, for the games they play in all stadiums.

 

When the Yanks play the Rays in Yankee stadium, the Rays get squat, and they are half the players on the field.

 

Teams that draw a lot away would be rewarded.

 

Home TV revenues would be slashed in half, but teams would get half of the gait and TV revenues from their away games. This would help the small market teams, and it just seems fair to me as well.

[notin]

One way to help even the playing field a bit would be for the visiting team to share the gait for games they play away. They could also share the TV money, for the games they play in all stadiums.

 

When the Yanks play the Rays in Yankee stadium, the Rays get squat, and they are half the players on the field.

 

Teams that draw a lot away would be rewarded.

 

Home TV revenues would be slashed in half, but teams would get half of the gait and TV revenues from their away games. This would help the small market teams, and it just seems fair to me as well.

 

 

I’m pretty sure away teams do get 50% of gate revenue...

[Bellhorn04]

Can you name one time an owner sold a MLB team for a loss? I guess you can say there is a risk, but it never happens.

 

I know it's problematic to count rising team value as a profit or something the players should get a share of. The players won't give back money, if the team owner loses money on a sale of the team. I get that.

 

My point is, the owner are making way more profit than is reported. I'm not sure why you seem to want to neglect that piece of the debate.

 

Because I firmly believe the gain or loss in market value is completely separate from the operating profits.

 

Gain or loss on market value belongs to the owners. That's part of the incentive to buy a sports team in the first place. Capital gains are given preferential tax treatment based on this very principle. You have to encourage investment because of the risks that are entailed. Like them or not, we need rich people to invest.

 

And as you said, players are not going to kick in anything if the market value goes down.

 

It's an amazing thing that the team values continue to rise. It can't go on forever, I don't think. s*** does happen, eventually, it's inevitable.