Congress Might Snuff Out The Green Bay Packers

JBlood

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There's a lot of unmet "competition" for season tickets.

You're right about the inequality, another result of today's economic environment. But "Unmet competition" is not my experience with our tickets. If there is such a demand for tickets, why are there so many for sale? We travel out of the state after November, and put our tix (that our children don't want) for sale through the Packers. More often than not they go unsold at face value. Preseason games are given away by season ticket holders. There are multiple tickets for sale around Lambeau now where it was not unusual 25 years ago to find ZERO tickets for sale on game day.

I see that for this year, the Packers have 107% of attendance at Lambeau. Maybe they're counting the same seat being sold several times. There have been empty seats around us at every game the past few years. So I don't think attendance figures are the same as turnstile figures.
 

TJV

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HardRightEdge

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The league thinks nothing of avoiding taxes while charging the tax paying public an average of 70% of capital expenses for new stadiums. It's a multi-billion dollar business accepting welfare. Who knows, if the antitrust exemption were eliminated, it might result in a new league, which might charge less for games. That's what competition is all about. And I think Green Bay would do just fine.
There is a common misconception about the taxation issue.

I've heard some in the media mention the $10 billion in annual NFL revenues and the league's tax exempt status in the same breath, as though the $10 billion is not taxed. That's a wild distortion.

While the league enjoys tax exempt status the teams do not. Even the Packers, classified as a not-for-profit organization, are not tax exempt. While the league retains a certain percentage of the revenues to pay Goodell his excessive salary, pay the league office staff, pay the lawyers, pay the refs, fund the pensions, cover the overhead expenses, and whatever else the league puts on it's books, it is a small percentage of the NFL's $10 billion take.

There's another way to look at it that might clarify things. Let's say instead of the current arrangement an unwieldy process were established whereby the league maintained a minimal amount of starting operating cash and then billed 1/32 of their ongoing expenses to each team each month. Those billed expenses would be deductible on each team's tax return as business expenses that any other business would declare. The end result is the same.

Now, that's not say there are no tax advantages to the current arrangement. If, for example, the league retained excessive revenues then a tax bite to the teams might be deferred. Or, to take just one more example, if the league uses it's untaxed revenues to pay lobbyists there would be an advantage because an individual team could not treat it as a deductible business expense. But on the whole, relative to the loopholes exploited across corporate America, the NFL's arrangement is somewhere between tame and innocuous.

Certain Congressmen seem to be seeking press coverage on this issue to placate what must be some popular heat coming from their districts while also conveniently deflecting from the pressing issues of the day that can't seem to be managed.

The hedge fund industry enjoys a tax advantage unique in the code, unlike the NFL. They are able to treat fee income as capital gains at the much lower tax rate. The tax revenue that would be generated from taxing just one of the largest hedge funds like everybody else would far exceed what they'd get from the NFL league office.

As for paying state or local taxes to fund stadiums, that's a local matter, not a federal tax issue. If one does not like it they need to take it up with their state and local legislatures. Even then, it's not much different than the property tax abatements, cheap leases and other inducements local and stage governments spread around to many and sundry private enterprises. It just so happens a big old stadium is a more conspicuous tax expenditure than the page 3 story about paying some corporation a pile dough to keep a facility in town.
 
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HardRightEdge

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The latest number I found on the waiting list puts it at nearly 90,000. If each person waiting can buy 2 tickets, the waiting list alone could fill the stadium twice. In an unconstrained free market (not saying it should be), that would put upward pressure on ticket prices.

Waiting list approximation: http://www.foxsports.com/wisconsin/story/things-only-a-packers-fan-would-understand-091814
And you called me a liberal! ;)

I view the waiting list with some measure of skepticism.

To start with, it costs nothing to get on it. Second, when the team is in it's winning days the spread between the ticket cost and the resale value is significant, and nowadays reselling is easy through on-line brokers. Given these two facts alone, I would have some question as to how many of those 90,000 would intend to purchase the tickets for personal us if presented with the opportunity today, or to resell if the spread was not so generous.

While that's hardly an issue as it stands now, if there was a meaningful increase in ticket prices to compensate for reduced revenue sharing coupled with the team hitting an extended dry spell, the spread between the ticket face value and the aftermarket value could be expected to shrink considerably. That would be a double whammy...fewer who could afford the season ticket package for personal use and a strong disincentive to buy them for resale.
 
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HardRightEdge

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You're right about the inequality, another result of today's economic environment. But "Unmet competition" is not my experience with our tickets. If there is such a demand for tickets, why are there so many for sale? We travel out of the state after November, and put our tix (that our children don't want) for sale through the Packers. More often than not they go unsold at face value. Preseason games are given away by season ticket holders. There are multiple tickets for sale around Lambeau now where it was not unusual 25 years ago to find ZERO tickets for sale on game day.

I see that for this year, the Packers have 107% of attendance at Lambeau. Maybe they're counting the same seat being sold several times. There have been empty seats around us at every game the past few years. So I don't think attendance figures are the same as turnstile figures.
There are a lot of tickets for sale because many of the season ticket holders buy them to resell.

While I generally discount the value of anecdotal evidence, I'll share a personal experience. The last time my wife and I went to a Packer game (Rams in 2011) we sat next to an elderly couple who have had 4 season tickets for decades. The couple was sitting in two of those seats; my wife and I were sitting in the other two using tickets purchased in the aftermarket through an on-line broker for considerably more than face value. That couple went to the games and made money in the process. I think this scenario is hardly unique.

As for the price of aftermarket tickets, it does appear they've gone down since 2011. While the Rams game I went to that year was in the fall and the Pack was coming off the SB, that opponent is hardly a hot item and I bought the tickets long before the team got to 5-0. Those two end zone seats, as an adjacent pair, cost me $540, and they were close to the cheapest among a couple on-line brokers I checked. Today, similar tickets can be gotten as a pair for the Carolina game for under $400. Buying a single ticket is cheaper than the per ticket cost of a pair, as one might expect:

http://www.ticketexchangebyticketma...eau-Field-in-Green-Bay-10-19-2014?PID=1555248

http://ticketzoom.com/tickets/lambe...na-panthers-at-green-bay-packers-tickets.aspx

I would expect last minute sales to be difficult. If I were looking to unload some tickets and wanted to be sure of a sale, I'd get them out several weeks in advance with a broker, pay the commission, and price them slightly under comparable seats already posted.
 

JBlood

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There is a common misconception about the taxation issue.

I'm under no misconception. There's an interesting article in The Atlantic a couple years ago that explains it quite well: http://www.theatlantic.com/magazine...fl-fleeces-taxpayers/309448/?single_page=true

You're right about individual teams paying taxes, but only because the Packers organization is a public company. Being a skeptic, I will bet you that other privately owned teams have much less bottom line (very likely 0) that is taxed. "Business and entertainment costs" must be astronomical.....
The NFL is a 2 bit outfit compared to Goldman Sachs or Bank of America in all of this, which certainly in no way excuses the league.
 

JBlood

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There are a lot of tickets for sale because many of the season ticket holders buy them to resell.

You are correct. There used to be a bar in Shawano (You Make the Call) that owned several hundred tickets, and, of course, sold them to make money. I think the owner of the bar ponied up ~$400,000 in 2000 when the Packers charged the seat license fees. So I don't blame ticket holders selling their seats; but I'll bet most do not other than for a game or 2.

"I would expect last minute sales to be difficult. If I were looking to unload some tickets and wanted to be sure of a sale, I'd get them out several weeks in advance with a broker, pay the commission, and price them slightly under comparable seats already posted."

2 weeks before game time, we dropped our price on the Steelers game at the end of last year to $20 and they went unsold. Same thing with the Lions and Titans in Dec of 2012.

We avoid the secondary market because the Packers, for a cost of 10% of the sales price, guarantee that your ticket will not be revoked if an idiot buys it and runs out naked on the field, or is arrested for anything. If you sell through the secondary market, your seat is revoked in such a case.

There are empty seats at every game, and the Packers claim 107% attendance so far this year.
 
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HardRightEdge

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I'm under no misconception. There's an interesting article in The Atlantic a couple years ago that explains it quite well: http://www.theatlantic.com/magazine...fl-fleeces-taxpayers/309448/?single_page=true

You're right about individual teams paying taxes, but only because the Packers organization is a public company. Being a skeptic, I will bet you that other privately owned teams have much less bottom line (very likely 0) that is taxed. "Business and entertainment costs" must be astronomical.....
The NFL is a 2 bit outfit compared to Goldman Sachs or Bank of America in all of this, which certainly in no way excuses the league.
The fact that the Packers are a public company is irrelevant when it comes to federal tax treatment. All of the teams are for-profit entities and subject to federal tax.

In the great scheme of things, a football team is going to pay a lower amount of tax per revenue $ than, say, manufacturers which have high capital costs and material input costs. I'm not sure what you mean by "business and entertainment costs" being astronomical. A team's biggest expense deduction is clearly salary, akin to an investment bank. What seems to get lost in these discussions is the obvious point...nobody gets taxed on revenue; everybody is taxed on net profits.

This Atlantic article, too, conflates the federal taxation issue with the state and local taxation issues. It is typical of how this issue is framed in the popular press.

Congress' joint committee on taxation estimates that if the league's tax exempt status was revoked it would net the Treasury $10 million per year. C'mon...talk about a tempest in a teapot. That's 1/10 of 1% of the NFL's total revenue. It's less than one minimum rookie contract per team. It is clear evidence that a whopping percentage of NFL revenue flows through to the teams who are taxable.

And let's say the federal tax exempt status was revoked to collect that scant $10 million per year. What does that have to do with state and local jurisdictions funding stadiums with tax dollars, as liberally documented in the Atlantic article? There's no connection whatsoever. Whether the NFL pays that pittance in federal tax or not, teams will still seek and get state and local stadium funding just as they always have.

You're right...the NFL has a far greater cultural impact than a financial one. A $10 billion revenue operation just isn't that big in the great scheme of things...well down the Fortune 500 list. You mentioned Goldman and BOA; certainly there's no comparison. I was speaking of hedge funds, the top 10 of which I would venture a guess 90% of the posters on these boards never heard of which is probably why there's no outrage about how the managers of those funds avoid paying taxes at ordinary income rates...some of whom are billionaires.

That big, 'ol stadium is easy to understand and looms as a constant reminder of it's cost. At least half the population doesn't care about NFL football and nobody likes paying for something they don't use. It's something easy to make into a hot button. Hedge fund carried interest is not easy to understand; bring up the subject and people just turn the channel or turn the page; it's not an issue with which you can sell advertising.
 
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JBlood

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The fact that the Packers are a public company is irrelevant when it comes to federal tax treatment. All of the teams are for-profit entities and subject to federal tax.
.....Hedge fund carried interest is not easy to understand;.

The point is that only through the release of Packers' (a non-profit entity, I believe) financials do we have any idea of NFL business. All other teams are for-profit private entities and release nothing--which I suspect is close to the tax bill any of them pay.

If it were common knowledge that teams pay virtually no taxes, federal or state, even state and city governments might act to stop the welfare checks.

Carried interest is one of the things that brought down the last Republican Presidential candidate. People are starting to catch on, which is encouraging.
 

TJV

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And you called me a liberal! ;)
:D I am an avid advocate for capitalism but I do recognize taxpayers contribute to the cost of stadiums so I don't think teams, particularly the Packers, should attempt to squeeze the last dollar available from ticket sales.

The waiting list is probably inflated, but I would guess a pretty good majority are ready buyers. With regard to ticket sales, the state of the economy (not the markets) plays a significant role as well. If the labor participation rate (not a change in the phony unemployment figures) increased significantly and middle class incomes increase, I'll bet demand for tickets would go up.

You're right about the taxation of hedge funds - IMO its disgraceful.
 

longtimefan

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There are a lot of tickets for sale because many of the season ticket holders buy them to resell.

While I generally discount the value of anecdotal evidence, I'll share a personal experience. The last time my wife and I went to a Packer game (Rams in 2011) we sat next to an elderly couple who have had 4 season tickets for decades. The couple was sitting in two of those seats; my wife and I were sitting in the other two using tickets purchased in the aftermarket through an on-line broker for considerably more than face value. That couple went to the games and made money in the process. I think this scenario is hardly unique.

As for the price of aftermarket tickets, it does appear they've gone down since 2011. While the Rams game I went to that year was in the fall and the Pack was coming off the SB, that opponent is hardly a hot item and I bought the tickets long before the team got to 5-0. Those two end zone seats, as an adjacent pair, cost me $540, and they were close to the cheapest among a couple on-line brokers I checked. Today, similar tickets can be gotten as a pair for the Carolina game for under $400. Buying a single ticket is cheaper than the per ticket cost of a pair, as one might expect:

http://www.ticketexchangebyticketma...eau-Field-in-Green-Bay-10-19-2014?PID=1555248

http://ticketzoom.com/tickets/lambe...na-panthers-at-green-bay-packers-tickets.aspx

I would expect last minute sales to be difficult. If I were looking to unload some tickets and wanted to be sure of a sale, I'd get them out several weeks in advance with a broker, pay the commission, and price them slightly under comparable seats already posted.


Where is seathound

Seathound is part of this forum you know
 
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HardRightEdge

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All other teams are for-profit private entities and release nothing--which I suspect is close to the tax bill any of them pay. If it were common knowledge that teams pay virtually no taxes, federal or state....
There is no basis for thinking NFL teams pay no taxes.

It would not surprise me if some don't in certain years, for instance low revenue teams in a year where player cash costs are particularly high and/or capital expenses are high might not have any income to tax. That would not be uncommon across the business landscape. Singling out the NFL is just a political football, pardon the pun.
 
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HardRightEdge

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:D I am an avid advocate for capitalism but I do recognize taxpayers contribute to the cost of stadiums so I don't think teams, particularly the Packers, should attempt to squeeze the last dollar available from ticket sales.

The waiting list is probably inflated, but I would guess a pretty good majority are ready buyers. With regard to ticket sales, the state of the economy (not the markets) plays a significant role as well. If the labor participation rate (not a change in the phony unemployment figures) increased significantly and middle class incomes increase, I'll bet demand for tickets would go up.

You're right about the taxation of hedge funds - IMO its disgraceful.
I dunno, Thx. There's a whiff of socialism suggested in that first paragraph (which is a reflection of the corporate charter) and a hint of some Keynesian demand side economics in the second. ;)
 
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There are empty seats at every game, and the Packers claim 107% attendance so far this year.

The average attendance for the first two home games was 78,047 which is actually 96.7% of Lambeau´s capacity. It seems like they forgot about the fact they added 7,500 seats in 2013.
 

JBlood

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