SBD/April 20, 2011/Marketing and Sponsorship

Wimbledon Boss Believes U.K.'s Endorsement Tax Could Deter Athletes

All England Lawn Tennis & Croquet Club CEO Ian Ritchie believes that “several of the world's top tennis players are likely to avoid leading tournaments in Britain because of the UK government's policy of taxing their endorsement income,” according to Mitch Phillips of REUTERS. U.K. government rules “state that sportsmen and women competing or even just practicing in the UK are taxed a proportion of their income from endorsements and sponsorships even if those deals have nothing to do with Britain.” Ritchie said, “I think the overarching view is that what will happen is that these guys will choose not to come.” He noted that tennis officials “have been lobbying the UK government for two years on the issue but have yet to receive any reply." AELTCC officials yesterday revealed that the purse for this year's Wimbledon will be $23.9M, up 6.4% from '10, while the men's and women's singles champions each will pocket $1.8M, up 10%. Ritchie said that “those numbers and the kudos of the tournament mean there is no risk of any player staying away from the grand slam," but the AEGON Championships and Barclays ATP World Tour Finals "could suffer” (REUTERS, 4/19). Ritchie said that it “seems unfair individual athletes such as professional golfers, tennis players and athletics stars are subject to the taxation, while stars in team sports such as soccer are not” (BLOOMBERG NEWS, 4/19).

TAXATION WITHOUT RESIDENCY: In DC, Tom Howell Jr. reports DC Council member Jack Evans yesterday introduced a bill “to collect taxes from professional athletes who earn money in the District, but do not live in the city -- a common yet controversial practice across the country.” Evans said that DC “could gain as much as $5 million a year from the levy.” The measure will “need an assist on Capitol Hill,” however, because the DC Home Rule Act of 1973 “prohibits the city from imposing a tax on nonresidents.” Players who live in DC “would be exempt" from the proposed tax, but the bill would extend to athletes who “play for Washington sports franchises but live outside the city’s limits," such as Capitals LW Alex Ovechkin (WASHINGTON TIMES, 4/20).
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