Football

• College football assistants making $250,000 or more is up from at least 106 last year to 132 this season [Assistant coaches' salaries continue rise].
• Going with what he uses instead of the “natural fit” – Gatorade [Tebow, The Ultimate Gator, Signs With … FRS?].
• Roughly 140-150 players ask for an evaluation each year [Inside the NFL College Advisory Committee].
• Questioning the punishment handed to Pryor, et al. [Ohio State mess fuels notion NCAA is making up rules as it goes along].
• Anyone have information on Martin Blazer? [UNC releases names of those who provided benefits to players].

Baseball

• No doubt he made an informed decision [The union doesn’t have a problem with Cliff Lee’s deal].
• Scott Boras and the Washington Nationals seem to get along quite well [Symbiotic relationship].

Basketball

• Dave Telep takes aim at agents [High school sports haunted by pay-play scandals].

What makes the NFL championship game more fun than anything else is the huge range of Super Bowl prop bets we salivate upon each and every year. You can bet on anything from the national anthem to the commercials, but perhaps no Super Bowl prop provided by BetUS bet enjoys more love than who wins the MVP. Only eight defensive players have won the award, while receivers and tailbacks combine for just 13 MVP trophies. Yet if you’re going to play this Super Bowl prop bet, the first choice should always the quarterback position, which has won it 52-percent of the time.

Shabbat Shalom/Merry Christmas Friday Wrap-Up (12/24/2010) from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

Over the weekend, I read a copy of a presentation on the recent spike in the IRS examination of professional athlete tax returns, made by Mitchell Halpern at this year’s Sports Financial Advisors Association annual conference.  Halpern is a lawyer who works at O’Connor & Drew, P.C. and specializes in taxation of professional athletes.  He wrote the chapter on State and Local Taxation of Professional Athletes in Gary Uberstine’s Law of Professional and Amateur Sports and is a board member fo the Sports Financial Advisors Association.

Halpern’s presentation focused on the process regarding various deductions typically claimed by athletes.  In November, Lamar Odom sued the IRS after it said that he could not deduct taxes on his $12,000 in fines from the NBA and $178,000 spent working out to get in playing shape.  As Halpern explained in his presentation, the lawsuit existed only because the IRS selected Odom’s 2007 income tax return for what was most likely a correspondence examination, where a taxpayer is asked to provide specific documentation for certain items on their tax return.  Recently, the IRS has focused on examining returns that include “un-reimbursed business expenses” of professional athletes.  In particular, the IRS is focusing on claimed deductions for agent fees.

Usually the biggest item in question, in terms of dollar amount, is the agent fees paid by the athlete during the year.  This should not be too difficult to document by obtaining an invoice from the agent and either cancelled checks showing payment of the invoiced fees or a receipt from the agent showing the amount has been paid.  Properly documenting agent fees will generally substantially reduce any amounts of additional taxes assessed by the IRS.

I have spoken with one CPA that has a sizable practice working with professional athletes that believes it is the deduction claimed for agent fees…that is triggering the examinations.

Halpern has been involved with 8 correspondence examinations; he has received 6 “no change” reports from the IRS and the other 2 are still in the IRS pipeline.

When the IRS is interested in an athlete’s tax return, it usually sends a letter which indicates that Schedule A – Itemized Deductions and Unreimbursed Business Expenses are being examined.  The athlete has 30 days to respond, but may ask for an extension within that window.  If the athlete does not respond at all, the IRS will issue an examination report disallowing deductions for the items it is examining and showing a proposed tax due.  The athlete generally has 30 days from the date of the issuance of this examination report to disagree with the proposed changes and provide support for his allegations.

Failure to respond to the examination report within the time frame allowed will generally result in the issuance of a Notice of Deficiency; the IRS will assess the taxes it believes are owed, and the athlete will have 90 days to either pay the tax or file a petition with the U.S. Tax Court.

Keys for athletes = (1) responding to IRS requests on time and (2) keeping documentation to support each claim.  I will add a (3), which is having an experienced tax professional to aid the athlete in this process.

Agent Fees Often Raise A Red Flag To The IRS from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

Basketball

• Basketball players continue to think global; look for this trend to continue [Kobe Bryant To Endorse Turkish Airlines].
• Two Facebook status updates and three Twitter mentions [Suns First To Offer Social Media Suite Package].
• I agree with Professor McCann…I don’t see the NBPA going ahead with decertification [Implications of an NBPA decertification].
• Mark Bartelstein is advising his clients to vote in favor of decertification [N.B.A. Players Voting on Step Toward Dissolving Union].

Baseball

• As the federal jobless rate hovers around 10% [MLB's average salary eclipses $3M].
• At 41-years-young, he has many years of success ahead of him [Darek Braunecker, Agent for Cliff Lee, Is Getting Noticed].
• Certainly a lot of activity as of late [Weiner: Changes in MLB free agent rules seem to be working].
• Not that many other teams would want to inherit that contract [Jayson Werth has a full no-trade clause].

Shabbat Shalom: Friday Wrap-Up (12/17/2010) from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

Monday’s post about Cliff Lee’s taxes created quite an interesting discussion in the comments section.  Off of the site, I had a good conversation with Robert Raiola, a CPA at Van Duyne, Behrens & Co., P.A. Raiola helps many athletes with their taxes and provided great insight to Darren Rovell of CNBC in his piece on Cliff Lee and taxes from November 4, 2010.  Here are some figures that Lee might have considered when weighing the options of going to play for the Yankees, Rangers, or Phillies:

*State taxes based on top individual income tax rate in Pennsylvania (3.07%), New York (8.97%), and Texas (0.00% – tax listed based on “jock tax”).

I also spoke to Chris Dingman of The Dingman Group to find out where Lee might be looking to move now that he is a member of the Phillies.  Dingman’s Philadelphia clients (MLBers & NHLers) have typically been attracted to Haddonfield, New Jersey. Players also like Rose Tree/Media area in Delaware County, PA.  Both places have great schools with easy access to the stadium.  Single players generally like to live in South Philly near the stadium.

Raiola says the tax play is for Lee to get a place outside the city limits of Philadelphia, since Philly has its own separate city tax rate of 3.9285% for residents (3.4985% for non-residents – Lee would only have to pay this tax on half his income – half his games are played in Philly).  New Jersey has a top individual income tax rate of 8.97%, which is a gross income tax rate (no write-offs).  Lee could live there, but still attempt to remain domiciled in Arkansas as a resident, which has a slightly lower tax rate.

This is why you make guys like Raiola and Dingman a part of your team; your clients will come to you to ask about tax and relocation questions.  It is better to become familiar with the experts in those areas so that you are well prepared to give your clients options immediately.

Did Taxes Have A Role In Cliff Lee’s Decision? from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

Ken Bolson of the New York Times does a good job of briefly highlighting the tax implications of Lee’s decision; however, I am a little confused by the very last sentence of his piece, where he writes,

He could also do what a lot of star players do: Ask the Yankees to pay his local taxes.

Interesting, because I have never heard of a professional baseball team agreeing to pay any of its players’ taxes.  A few accountants who deal with professional athletes’ taxes tell me that no team will ever pay the local taxes for an athlete.  A team may pay a player more money based on an understanding that the player acknowledges the tax consequences of his decision, but that is not a direct payment of taxes.  So where does Bolson get this idea from?

Cliff Lee Thinking About Texas Taxes from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

Sports Business

• It certainly helps when Josh Hamilton and Cody Ross endorse your product for free [Evoshield Gets Big Buzz Before It Hits Stores].

Football

• Under North Carolina law, documents and other information generated by state agencies and institutions should be, with limited exceptions, made public [Triangle media groups seeking football records sue UNC].
• Should the NFLPA be doing more to check the quality of those on its approved list of financial advisers? [NFL players at risk of financial roughing]

Baseball

• Negotiations will probably come down to number of years on the contract [Agent: Derek Jeter has huge value].
• Some good information from my friend Robert Raiola [Cliff Lee & Taxes In Texas].

Sports Law

• $25 million lawsuit alleging defamation, false light invasion of privacy, and negligent misrepresentation [Promoter at center of O.J. Mayo scandal at USC sues NCAA].
• Nathan Peake was Steve Francis’s mentor and business manager [Sports agent booked for tax evasion].
• And Florida is supposedly one of the few states “tough on agents” [Records show few agent busts since FSU scandal].

Shabbat Shalom: Friday Wrap-Up (11/5/2010) from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

The MLB postseason is truly one of the best, because unlike football and basketball where the best team usually wins, time and time again we see instances of a wild card or underdog team making a run to the World Series (’08 Rays, ’07 Rockies, ’03 Marlins). There is not a more exciting moment in baseball than the bottom of the 9th inning of an elimination game, where the true character of a team is tested.

• Outdoor October baseball in Minnesota.
• The core 4 Yanks (Rivera, Jeter, Pettite & Posada) going for rings on a second hand.
• The Phillies attempting to make the World Series for the 3rd consecutive year.
• Bobby Cox’s final post-season.

So many great story lines and so much baseball left to play. And with that, I give all you SAB followers a taste of what’s to come this October:

Here are my rankings of the Postseason 8:

1. Philadelphia Phillies – Halladay, Hamels and Oswalt aka H2O (the first release of this new nickname) – A match-up problem for anyone they face. The Phillies have both experience and depth, and have a great chance to repeat as champions of the National League.
2. Tampa Bay Rays – You know the pitching will be there, but this team will go as far as their bats take them. The Rays have played consistently throughout the season despite the lack of support from the hometown fans. Look for Carl Crawford, BJ Upton and Evan Longoria to step up this October.
3. New York Yankees – Struggling as of late, but October in the Bronx is a magical place. The veterans must continue to lead and use their experience as they face an unfamiliar situation as the American League Wild Card team. Jeter batted a career low .270 this season, but it’s not how you start, it’s how you finish. We all know what the captain is capable of in October.
4. San Francisco Giants – This team has the 2nd best pitching staff in the playoffs, and has been playing great in the last month of the season. Jonathan Sanchez may be the key for this team, as he has delivered time and time again for the Giants in big games. I’m curious to see how rookie Buster Posey reacts to his first postseason.
5. Minnesota Twins – The Twins are a different team with Justin Morneau. Minnesota has had the central locked up for a while now, so it will be interesting to see how they come out in game 1 tonight; especially with the recent struggles of Francisco Liriano. New Target Field should be electric tonight.
6. Cincinnati Reds – This could be the sleeper of all postseason teams. The Reds, after not making the playoffs in over a decade, have been leading their division for virtually the entire season. Not much playoff experience on this roster, but look for Scott Rolen to take the responsibility of clubhouse leader.
7. Texas Rangers – With Josh Hamilton’s injury, Cliff Lee is the only thing keeping Rangers fans optimistic. Lee has the ability to win 2 games in a 5 game series, but how they get that other win over a great Rays team remains a big question mark.
8. Atlanta Braves – With yet another playoff berth, Bobby Cox has cemented himself as one of baseball’s greatest managers. Nobody picked the young Braves prior to the season, but they proved doubters wrong. With Martin Prado and Chipper Jones out, though, there is just not enough power at the plate to find success.

Predictions:

Division Series
Phillies over Reds in 4
Giants over Braves in 5

Rays over Rangers in 4
Yankees over Twins in 4

Championship Series
Giants over Phillies in 7
Yankees over Rays in 6

World Series
Giants over Yankees in 7

Your MLB Playoffs Preview from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

Before I begin, I just wanted you all to know that I will try to leave all my sentiments for Cliff Lee aside in this post. Cliff did a great job in the World Series and gave my Phillies the only real chance of winning. However, Roy Halladay was the pitcher that the Phils originally had their eye on and they finally got him. I will not break down the trade because that is not my column. However, I will talk about the financial end of the deal.

In March 2006, Halladay signed a three year extension with the Blue Jays worth $40 million. $14.25 was to be paid in 2009, $15.75 in 2010 and he was scheduled to hit the market in 2011.

However, the recent trade to the Phillies has given Halladay a new 3-year, $60 million extension which will take him through 2013. It gets a bit confusing on this end, so let me break it down for you:

• Along with Halladay, the Blue Jays sent the Phillies $6 million in cash to use on his 2010 salary. This will knock the price down to $9.75 million, which was almost equivalent to what the Phils would have paid Cliff Lee this upcoming season.
• Halladay will earn $20 million in each 2011, 2012 and 2013.
• An option for 2014 is available for $20 million and is guaranteed if Halladay can complete all of these tasks:
• Pitch 225 innings in 2013
• Pitch 415 innings in 2012, 2013 combined
• Not be on the disabled list after the 2013 season

This is a deal that seems complex at first, but in reality, it is very simple. Also, good move by the Phillies in getting that extra $6 million from the Blue Jays. Halladay will have to work hard to achieve that guaranteed money since he is only averaging 170 innings pitched over his 12 season career.

Breaking Down the Halladay Deal from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

This is my first post on Sports Agent Blog after getting my start at Entertainment Agent Blog.  Being from outside the Philadelphia area, I’m heartbroken the Phillies lost to the Yankees.  But now that the season is over, the Phillies should reflect on their season and think about who will be returning next year.  The Phils got Cliff Lee along with Ben Francisco on July 29^th, in a trade for SS Jason Donald, P Jason Knapp, P Carlos Carrasco, and C Lou Marson in no doubt the best bargain of the season.  Without question, the trade paid immediate dividends for the Phils and at a bargain price.

The Phils didn’t give up that much in return for Lee.  None of the prospects did much of anything this year.  Carrasco went 0-4 for the Indians with an ERA close to 9.00.  Lou Marson batted .250 in 14 games, Knapp went 0-0 with an ERA of 5.40 in the minors and struggled with injuries, and Donald batted .257 with one R.B.I.  In 10 games for the Indians AAA affiliate. While some of these prospects may make it to the Majors, none of them have really shown potential to be everyday players.  On the other hand, Lee had a stellar second half with the Phillies and arguably one of the best postseasons in recent memory, all for a bargain price of their share of the $5.75 million he was due this year.

What makes the deal even sweeter for Philadelphia is that Lee also has an $8 million club option for 2010.  That means the Phillies could have at least one more year with Lee before he becomes a free agent.  The club option is relatively cheap for someone who went 7-4 with a 3.39 ERA in the regular season and 4-0 with a 1.56 ERA in the postseason.  Management would be stupid to not pick up the option.  Letting Lee become a free agent will almost assuredly mean that he can command big money in the free agent market.

I think it is inevitable that the Phils will pick up the club option for next season.  The real concern for management is locking him into a long-term deal with the club.  If he performs next year like he did during the later part of this season and postseason, there is no telling what kind of price he is likely to demand in free agency.  He could demand a contract similar to what C.C. Sabbathia received from the Yankees.  There are only a handful of teams able to dish out that kind of cash.  If it comes to that, I hope the Phillies are one of them.

Cliff Lee: The Phillies Bargain Ace from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

In Game 1, Cliff Lee went a full 9 innings to pick up a complete game win.  He gave up 1 unearned run and fanned 10 batters, while walking none!  Then, yesterday in Game 2, the Yankees were desperate for a big game from Burnett.  And he delivered.  Burnett went 7 innings, giving up only 1 earned run, fanned 9, and walked 2.  Braunecker is definitely happy with both pitcher’s strike-out/walk ratio.

So now Braunecker can relax for a few days…until Lee takes the hill again.  Next time, Darek won’t have to worry about Lee actually making it to the game he is scheduled to pitch.  NY traffic can really make things difficult.

Darek Braunecker Is A Fan Of This World Series from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules