SBD/Issue 37/Law & Politics

Obama's Victory Already Making Waves In Sports Industry

Obama's Proposal To Increase Top Federal Tax
Rate Influencing How MLB Agents Work Deals
With Barack Obama last night defeating John McCain in the U.S. Presidential election, some MLB agents are "already thinking about trying to beat a possible tax increase for their well-paid clients," according to Ronald Blum of the AP. Obama has proposed increasing the "top federal income tax rate" from 35% to 39.6%, but if MLB signing bonuses are paid before January 1, they would "likely be taxed at the current rate and would not be subject to any tax increase." Agent Craig Landis yesterday at the MLB GM meetings in Dana Point, California, said, "It's something we'll consider. Besides the federal issue, we have a state issue in some cases, anyway, where it's advantageous to take signing bonuses because of the state income tax." Blum noted Obama's proposal would increase federal income tax on families earning more than $250,000 annually, and next year's MLB minimum salary is $400,000. Agent Scott Boras, who reps 16 free agents, has "already thought about the possibility of asking for larger signing bonuses payable this year in some of his contracts." Boras: "There's some consideration to be had with the impact of the election." Blum noted for a free agent earning $10M in '09, Obama's plan "could increase his federal tax by more than $400,000" (AP, 11/4).

A RINGING ENDORSEMENT: In Chicago, McKinney & Pallasch write with Obama winning the election, Chicago “just gained a more powerful and internationally respected friend to reel in the Olympics,” and many observers “think Obama’s ascension to the White House will boost the city’s bid to snare the 2016 Olympics.” Obama’s home in Chicago is “only a few blocks from Washington Park where the games would be based, and he has shared his passion for Chicago’s bid” (CHICAGO SUN-TIMES, 11/5). Obama is "expected to be on hand at some stage next October in Copenhagen when the IOC votes on a host" for the 2016 Games. Ireland IOC member Patrick Hickey said Obama will have a "gigantic influence" on the decision (, 11/5). Univ. of Chicago professor of sports economics Allen Sanderson said Obama "will be the rock star of Copenhagen. ... And he will remain in the glow of an historic election triumph when he asks for IOC votes" (, 11/5). Illinois state Treasurer Alexi Giannaoulias: "It'll probably get us the Olympics" (Springfield STATE JOURNAL-REGISTER, 11/5). Chicago Mayor Richard Daley before the election results came in said that a win by Obama "would boost" the city's chances at landing the Games (, 11/4). Meanwhile, Japanese Olympic officials fear that Obama's election "could hurt Tokyo's bid" for the 2016 Games, noting that "Obama's success could give his home city of Chicago a massive boost in the Olympic bidding process." Japan Olympic Committee BOD member Tomiaki Fukuda: "Obama is good at speeches and very popular. It could be a problem for Japan" (REUTERS, 11/5).

WHAT WILL CHANGE?’s Lester Munson writes under the header, "Change Is Coming To Sports, Too, Under Obama." An Obama administration is likely to “produce major tax increases for team owners and players; slow sales of professional teams; increase the powers of player unions; more vigorously enforce the requirements of Title IX; and begin to resolve the serious clashes between sports cable networks such as the NFL Network and the Big 10 Network and cable providers such as Comcast.” Obama’s “views on other critical sports issues, including performance-enhancing drugs and stricter controls on the powers and the finances of the NCAA, are unknown” (, 11/5).

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