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Volume 20 No. 42

Labor and Agents

The governor of Tennessee recently signed into law a repeal of the so-called jock tax that taxed NHL and NBA players as much as $7,500 a year when they played games in Nashville and Memphis.

The NHL Players’ Association and the National Basketball Players Association both lobbied to repeal the Professional Privilege Tax for Professional Athletes, which taxed NBA and NHL players who played games in the state $2,500 a game with an annual cap of $7,500. The Tennessee Legislature approved the bill to repeal the tax in April, and Gov. Bill Haslam signed the bill into law last month.

The Nashville Predators, along with the NHL and the NHLPA, fought the $2,500-a-game tax on visiting players.

The tax, which went into effect in 2009, was unusual in that the money from NBA and NHL players playing the Tennessee clubs, the Grizzlies and Predators, went to the owners of those clubs, with the idea that they could use it to bring events to their arenas. NFL players who played the Tennessee Titans were not subject to the tax. 

For NHL players, the repeal of the tax is effective immediately, but for NBA players, the tax will remain in effect until June 1, 2016. The reason NHL players are getting immediate relief and NBA players are not is that the Grizzlies opposed the bill while the Predators did not.

“The Nashville Predators and the NHL joined the NHLPA in supporting immediate repeal of the bill,” said Ron Klempner, NBPA acting executive director. “The Memphis Grizzlies, on the other hand, aggressively fought and lobbied against repeal. The two-year phase-out is the Legislature’s compromise. It was the only way the Legislature would support repeal.”

The 2013 NHL collective-bargaining agreement contained in it a provision in which the NHL agreed to work to repeal such taxes on NHL players.

Jason Wexler, chief operating officer of the Grizzlies and FedEx Forum, has said the tax served as an economic development incentive that benefited the residents of Tennessee because it was used to help attract high-profile music acts such as Elton John, Paul McCartney and the Eagles to the Memphis arena.

Last week, Wexler wrote in an email: “On behalf of FedExForum, the Grizzlies worked closely with state legislators in crafting the two-year sunset provision on the Athlete’s Privilege Tax as it relates to FedExForum. The Privilege Tax remains an important economic development incentive that helps FedExForum create jobs and revenue for Memphis and Shelby County. The sunset provision provides a window to transition on that front.”

NHL and NBA players union officials, however, said the tax was discriminatory. “We are obviously pleased that the correct decision was made by the state of Tennessee to repeal a tax that unfairly targeted NHL and NBA players,” NHLPA Executive Director Don Fehr said.

Taxes targeting professional athletes have been around since at least the early 1990s, said Robert Raiola, who advises more than 100 athletes in the four major North American team sports as senior manager of the sports and entertainment group of O’Connor Davies. Raiola said he is aware of such taxes in 22 states and 10 cities in the United States.

“What made this tax different is every player paid a flat rate whether they were making the league minimum or $10 million year,” he said. “The other thing that was different is the money went to the owners who owned the teams.”

The repeal bill was sponsored by Tennessee state Sen. Jack Johnson, a Republican. 

“Sen. Johnson decided to repeal the law because he felt it was an inappropriate use of the state tax authority, because the state would not get the benefit of the tax money; it was going back directly to the teams,” said Luke Gustafson, spokesman for Johnson.

Landmark Sports Agency, the NBA player representation firm owned by Rob Pelinka, has signed two projected first-round draft picks for representation, including an expected lottery pick: Australian point guard Dante Exum.

Landmark also has signed point guard Shabazz Napier, most outstanding player in this year’s NCAA tournament playing for the champion University of Connecticut Huskies. Website had Exum ranked No. 4 among draft prospects and Napier No. 28 as of last week. 

At Landmark, Exum will be represented by Pelinka and Brandon Rosenthal; Napier will be represented by Pelinka and Joe Branch

> PUIG GOES COCONUTS: Los Angeles Dodgers right fielder Yasiel Puig is endorsing Vita Coco Coconut Water, in a deal negotiated by his new agents at Wasserman Media Group

Terms of the deal were not disclosed. Wasserman agents Adam Katz and Andy Mota signed Puig for playing contract work in March, as has been reported, but they signed him for all off-the-field endeavors as well. 

Puig was formerly represented by Radegen Sports Management off the field. His other sponsors include Power Balance and Sony PlayStation

> WGL REPPING MITCHELL: WGL Management is representing former NBA player and coach Sam Mitchell, whose name has surfaced in media reports as a candidate for some NBA head coaching positions this offseason. WGL Management founder and veteran coaches agent Warren LeGarie is representing Mitchell. 

Undefeated super middleweight and HBO commentator Andre Ward has signed wth WME.

He was formerly represented by CSE.  

> WME SIGNS WARD: WME has signed undefeated super middleweight boxer, Olympic gold medalist and HBO commentator Andre Ward in all areas, including endorsements, film, television, books and broadcasting. At WME, Ward will be represented by partner Dave Wirtschafter and commercial agent Rob Koslowsky. He will continue to be represented by his attorney, Damien Granderson. He was previously represented by CAA

> TANDEM SIGNS CLIENTS: Tandem Sports & Entertainment, founded last year by veteran NBA agent Jim Tanner, has signed several clients for the NBA draft, including two former University of North Carolina Tar Heels: forward James Michael McAdoo and guard Leslie McDonald.

Tandem also has signed Georgetown guard Markel Starks and Florida center Patric Young, and Tandem will be co-representing Greek professional guard/forward Thanasis Antetokounmpo, who played in the NBA D-League last year, with his Greek agent, Nick Lotsos of Sports ProMotion in Athens. 

Agents Tanner, Graham Boone and Derrick Powell will represent the players. 

Tandem also has signed Bobby Hurley, head coach of the University at Buffalo basketball team, for marketing endeavors, and author and New York Times columnist William C. Rhoden for publicity, marketing, broadcasting, speaking and new business ventures. Tanner will lead the representation for both Hurley and Rhoden. Neither Hurley nor Rhoden was previously represented. 

> NFL AGENT SWITCHES: Buffalo Bills offensive lineman Doug Legursky, who plays both center and guard, has signed with Athletes First agent Cameron Hahn. He was formerly represented by Dave Rich, president and CEO of Rich Sports. “Legursky was one of our first guys,” Rich said. “We wish him nothing but the best.”

n Relativity Sports has signed Indianapolis Colts punter Pat McAfee and negotiated his five-year, $14.5 million deal. At Relativity Sports, McAfee is represented by Roosevelt Barnes and Todd Sermersheim, a longtime marketing agent who was certified to represent NFL players in contract talks in 2013. n

Liz Mullen can be reached at Follow her on Twitter @SBJLizMullen.