SBD/December 16, 2013/Leagues and Governing Bodies

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  • Connecticut Governor Says Prospective NHL Team Buyers Are Interested In Hartford

    Malloy has encouraged two groups to explore NHL expansion in Hartford

    Connecticut Gov. Dannel Malloy on Friday said that the state "had been in touch with groups interested in bringing the NHL" back to Hartford, according to Paul Doyle of the HARTFORD COURANT. Malloy: "There are a number of teams in the NHL that are expected to change hands and there's also the possibility of additional teams being authorized by the league. I have, in the last six months, been contacted by several groups who are interested in knowing that, should they acquire a team and win the rights to move that team, would we be interested in competing for that team? That is, with facilities ... and I have indicated time and time again that we would be interested, although probably not at our sole expense." Doyle wrote while the XL Center is set to undergo renovations, it "is not considered a long-term option if the state lands an NHL franchise." Malloy said, "No promises made, but I have encouraged at least two groups who have expressed interest in acquiring a team to do so and that we would be active participants should they acquire a team and win the rights to move the team" (HARTFORD COURANT, 12/14).

    TWO BY TWO? NHL Deputy Commissioner Bill Daly said that league expansion "doesn't necessarily have to be by two franchises." ESPN.com's Craig Custance wrote, "If one city meets the criteria the league is looking for, most notably a suitable arena and ownership group, it will get the team first." Custance: "To me, there's too much risk putting two more teams in Canada, considering how much the fluctuation of the Canadian dollar impacts NHL revenue." Plus, the "long-term success of the league depends on growth" in the U.S. Custance: "I'd anticipate one U.S. team and one Canadian ... I really believe Seattle will ultimately get a team" (ESPN.com, 12/13).

    GEOGRAPHY LESSON: The Minneapolis STAR TRIBUNE wrote, "There seems to be definite traction toward the NHL expanding by two franchises in the next few years." Seattle is "the biggest front-runner, with Quebec City or a second team in Toronto also a possibility." Additionally, there is a "well-organized group interested in putting an expansion team in Las Vegas," and a new arena built by AEG and MGM Resorts "should be completed" by '16. Unless a team from the East is "going to move back to the Western Conference, the West could actually be in line for two expansion teams" (Minneapolis STAR TRIBUNE, 12/15). In Boston, Fluto Shinzawa wrote, "Part of the impetus behind a 32-team league is to correct the imbalance between the conferences." Seattle "would be the top landing spot in the West." Portland "could also sustain an NHL franchise," with the backing of Trail Blazers and Moda Center Owner Paul Allen (BOSTON GLOBE, 12/15).

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  • PGA Tour's Tax-Exempt Status Called Into Question After Proposed Legislation

    Experts estimate the lost tax revenue from the PGA Tour could top $200M

    The PGA Tour's tax-exempt status as a non-profit organization allows it to generate "millions of dollars tax-free," according to ESPN's Paula Lavigne. But U.S. Sen. Tom Coburn (R-Okla.) has introduced legislation that would strip pro sports leagues of tax exempt status, and Lavigne said when Coburn's office "calculated how much tax-free revenue each sports league generated, one stood out." Lavigne: "The PGA Tour has been able to stockpile $700 million dollars on which it hasn’t had to pay taxes. And what’s more, most individual tournaments are run as public charities. Together, that means lots of tax breaks to support lavish tournaments awarding millions to professional golfers." Coburn said he was not "just picking on" the PGA Tour, but taxpayers subsidizing the Tour with $8-9M per year is "ludicrous." Lavigne noted complex tax codes "made it to hard to say exactly how much lost tax revenue we're talking, but tax experts estimate it could add up" to over $200M over the past 20 years. That does not include the "tournaments themselves that are tax-exempt charities under the PGA Tour brand, with some of those also not paying sales tax." The show examined the "finances of all 25 U.S. tournaments on the PGA Tour that operate as charities." On average, 16% of the spending "goes to charitable grants or services," which is "far below" the recommended 65%. But the PGA Tour stated it has donated $1.1B to various charities in the past eight years, and one should "consider that it took the NFL 40 years to donate just a third of that." Lavigne also notes the Tour's stance that the recommended 65% threshold "doesn't apply to PGA Tour tournament charities because they don't necessarily run charitable programs, they just raise money for them" ("OTL," ESPN2, 12/15).

    POINT/COUNTERPOINT: A GOLF.com roundtable examined the Tour's tax-exempt status, with SI's Alan Shipnuck saying, "If you take away the tax-exempt status, the whole business model falls apart. The government would get a slice, but the overall size of the pie would shrink dramatically. So paying the bloated salaries of all the VPs in Ponte Vedra Beach is an unfortunate cost of doing business." SI's Gary Van Sickle: "It's pretty obvious that the NFL, NHL and the PGA Tour and all of the other major pro sports are businesses. They raise money for charity, some much more than others, but they're businesses. I'd hate to see anything hurt the amount of money the golf charities receive, but [PGA Tour Exec VP & Chief Global Communications Officer Ty Votaw] is a smart guy." Golf.com's Eamon Lynch added, "Nonprofits are not the same as charities, and I think the PGA Tour fairly qualifies as a nonprofit by the legal definition. I'd also argue that there is considerable value for charities in using the Tour as a marketing platform" (GOLF.com, 12/15).

    Print | Tags: Leagues and Governing Bodies, PGA Tour
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