April 15, 2024

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Today’s tax filing deadline, always a complicated affair for many pro athletes, has even more drama this year, thanks to Shohei Ohtani. … Wrexham’s promotion to EFL League One highlights what was a dramatic weekend in European pro soccer. … Emmanuel Macron is thinking about a backup plan for the Paris Olympics opening ceremony. … ESPN drew a strong audience for its portion of Masters coverage. … Plus: More on the Fever, Caitlin Clark’s Saturday Night Live appearance, the Sparks, and WNBA rookie salaries.

— Eric Fisher [[link removed]] and David Rumsey [[link removed]]

States Want Tax Reform As Ohtani’s Deal Deferrals Stir Controversy [[link removed]]

Matt Krohn-USA TODAY Sports

It’s Tax Day across the U.S., the deadline by which individuals and organizations must report their financial state for 2023 to the Internal Revenue Service and state officials. But some California legislators are already thinking ahead to future tax years, with Dodgers superstar Shohei Ohtani at the center of their focus.

Ohtani’s unprecedented $680 million in deferrals [[link removed]] in his record-setting $700 million contract, to be paid out between 2034 and ’43, have inspired a legislative bill calling on the U.S. Congress to establish a “reasonable cap on deferred compensation,” in turn allowing individual states to capture more tax revenue. The California Center for Jobs and the Economy has calculated [[link removed]] that Ohtani could save up to $98 million in state taxes by moving to another state or out of the country, and some in the Golden State want at least a meaningful portion of that money.

“It is disturbing that Shohei Ohtani and other individuals can perform a hidden ball trick using an obscure tax loophole to avoid hundreds of millions of dollars, and it’s a concerning precedent,” said California state Sen. Josh Becker, author of the legislation. “The current system exacerbates the unequal distribution of taxes.”

Soon after Ohtani signed his Dodgers contract, California controller Malia Cohen called [[link removed]] on the IRS for help. The proposed state legislation seeks to take the matter a meaningful step further, though the bill text at present only speaks to California “urging” Congress to take action on this issue. The legislation, also sponsored by Cohen, has cleared the state senate committee on revenue and taxation, and could come up for a full senate floor vote in the coming weeks.

Even beyond the proposed California measure, the issue of deferred compensation is becoming increasingly prevalent, particularly in sports, as it is structured into a growing number of contracts.

“Salaries are rising, and structuring compensation and making different arrangements to obtain talent in states like California is definitely a trend. Teams are getting more creative in a lot of different ways, deferred compensation being one of them,” Michael Rueda, partner and head of the U.S. sports and entertainment practice group at the Withers law firm, tells Front Office Sports. “It’s definitely on the radar across different leagues and different markets.”

Ohtani’s tax situation also was something of a subplot in the recent federal tax fraud charges levied [[link removed]] on former interpreter Ippei Mizuhara. Accountants and financial advisers employed by Ohtani told federal investigators that Mizuhara told them that the account he was using was supposed to be “private” despite their concerns about Ohtani possibly having tax issues around the account.

Filing Complexities

The Ohtani-led deferral issue highlights what is already a complicated situation for most pro athletes centered around their tax filing. Most players are subject to “ jock taxes [[link removed]],” requiring the filing of non-resident returns for every state where they play road games in a given year. That means an average NFL player will file eight to 12 non-resident state returns, an NBA or NHL player 16 to 20, and an MLB player often 20 to 25.

The California legislation, if successful, could have a meaningful impact on that jock tax by bringing more income into current-year taxation.

“If California persuaded Congress to change the deferred comp system somehow, it would presumably not only benefit California, but all states where professional athletes are playing,” Elizabeth Bawden, a partner with Withers’ private client and tax team, tells FOS.

Still, Rueda and Bawden predict an uphill fight for the California measure, with federal officials having many other priorities beyond a state-level issue such as this, and 2024 also being a presidential election year.

Wrexham, Leverkusen Write Hollywood Stories [[link removed]]

Orlando Ramirez-USA TODAY Sports

European soccer leagues are approaching the home stretches of their respective seasons, but already some clubs have accomplished significant on-field achievements that will lead to major financial gains.

To the Stars

A victory on Saturday by Wrexham AFC—the Welsh club purchased by Hollywood stars Ryan Reynolds and Rob McElhenney in 2021 for $2.5 million—secured promotion for the second straight year, this time up to EFL League One. That’s the third tier of English soccer and just two steps away from reaching the Premier League.

The guaranteed payoff for Wrexham is modest but still significant for a club that sat in the fifth tier just two seasons ago. Automatic revenue distribution [[link removed]] (combined from both the EFL and EPL) will jump from roughly $1.44 million to $2.15 million. In its most recent financial report, last month, Wrexham said annual income moving forward was projected to be sufficient to meet operational costs, despite reporting a loss of $6.36 million.

As the club keeps pushing toward the EPL, the FX series Welcome to Wrexham, now in its third season documenting the journey of Reynolds and Rob McElhenney, continues to be popular, particularly among fans in the U.S. Wrexham will make another U.S. tour this summer, with one match already scheduled against Chelsea at the San Francisco 49ers’ Levi’s Stadium in July. Meanwhile, Wrexham’s women’s side seeks to ride that American interest, with its first U.S. tour in the works.

New Kid on the Block

In Germany, the Bundesliga has a new champion as Bayer Leverkusen became the first club other than Bayern Munich to clinch the league title since Borussia Dortmund in 2012.

Leverkusen’s first Bundesliga championship does come with a financial benefit. Clubs receive a weighted portion of league revenue, which last year totaled $4.45 billion, based largely on on-field performance over the past five years. And there could be more: Leverkusen heads into the quarterfinals of the UEFA Europa League as the betting favorites to win the competition and its roughly $9.15 million first-place prize.

An American Affair

Back in the U.K., two clubs owned by powerful American sports figures are in a three-horse race for the EPL title alongside three-time defending champion Manchester City with six matches remaining. Liverpool, owned by Boston Red Sox parent company Fenway Sports Group, and Arsenal, part of a Stan Kroenke sports empire that also includes the Los Angeles Rams, both sit two points behind Man City, which is the flagship club of the United Arab Emirates-controlled City Football Group.

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ONE BIG FIG Moving the Needle

Kyle Terada-USA TODAY Network

3.4 million

The average number of viewers over two days for ESPN’s afternoon coverage of the first and second rounds of the Masters. That’s the best figure since an average audience of 3.6 million in 2018, which was Tiger Woods’s first Masters following a two-year absence for the star. Despite finishing last among those golfers who made the cut, Woods (above, left) said he feels good and is planning to compete at the other three major championships this year. That’s welcome news to ESPN, which will have full first- and second-round coverage of next month’s PGA Championship.

STATUS REPORT WNBA: Three Up, One Down

Iowa City Press-Citizen

Fever fans ⬆ As Indiana is expected to select Caitlin Clark first in tonight’s WNBA draft, the team opened up individual-game ticket sales at 4 p.m. ET on Monday for every 2024 regular-season home game. For 15 days prior to the move, the team only offered tickets to two specific games at a time for a 24-hour period. After taking a more muted approach [[link removed]] toward marketing the expected arrival of Clark, the Fever began to get slightly more overt about what’s happening, posting [[link removed]] on X on Sunday “22 hours until draft,” referencing Clark’s uniform number at Iowa.

Caitlin Clark’s comedy chops ⬆ The Hawkeyes superstar (above) continued a whirlwind trip [[link removed]] to New York with a high-profile appearance on NBC’s Saturday Night Live, where she dragged Weekend Update anchor Michael Che for his history of mocking women’s sports. Clark showed strong timing and a natural presence [[link removed]] on camera, and as a result gave women’s basketball another big moment in the broader cultural zeitgeist.

The Sparks ⬆ Los Angeles enters the draft with the second and fourth overall selections as the team looks to rebuild and make the playoffs for the first time since 2020. With Clark expected to be off the board, the Sparks will be able to land two of the evening’s other biggest stars, with many mock drafts pointing to Stanford’s Cameron Brink, Tennessee’s Rickea Jackson, and South Carolina’s Kamilla Cardoso as the next best options.

Rookie salaries ⬇ Despite the hype surrounding this incoming draft class and the overall growth of the WNBA, contracts for first-year players remain modest. The top four picks are slotted to make $76,535 this season, while players selected outside of the top 12 will each make less than $70,000. And that’s if they make a roster, which isn’t guaranteed [[link removed]].

LOUD AND CLEAR Plenty of Options

Josh Morgan-USA TODAY

“There’s a Plan B and even a Plan C. We’re preparing them in parallel.”

—French President Emmanuel Macron (above), who said the elaborate opening ceremony planned [[link removed]] along the River Seine for this summer’s Paris Olympics could be scrapped if security risks are deemed to be too significant. The current schedule for July 26 calls for a parade of boats along the river—the first opening ceremony held outside a stadium—with a projected attendance of 300,000. But Macron acknowledged Monday in an interview on French television that alternate options could involve shifting the event to either the Stade de France, or the Trocadero plaza facing the Eiffel Tower. Ongoing conflicts in Ukraine and the Middle East led French officials late last month to raise the country’s security alert to its highest level.

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Conversation Starters The WNBA is launching its inaugural watch collection [[link removed]], a Tissot Seastar Wilson featuring a wristband crafted from the league’s official basketball. U.S. Soccer broke ground on its new headquarters, the Arthur M. Blank National Training Center in Fayette County, Ga., and it includes 200 acres of land with more than a dozen fields to accommodate all 27 U.S. national teams. Have a look [[link removed]]. When Scottie Scheffler won his second Masters on Sunday, Nike was ready with a punchy ad campaign. Check it out [[link removed]]. Editors’ Picks Boban’s Stunt Won Clippers Fans Thousands of Dollars of Chicken [[link removed]]by Margaret Fleming [[link removed]]High attendance and prices in L.A. are costly for Chick-fil-A. Scott Van Pelt’s Podcast Reboot Latest in Peyton Manning’s Budding ESPN/Omaha Fiefdom [[link removed]]by Michael McCarthy [[link removed]]ESPN star Scott Van Pelt is joining forces with Peyton Manning. Salt Lake City About to Land NHL’s Coyotes (Minus Their Name) [[link removed]]by A.J. Perez [[link removed]]Salt Lake City’s NHL franchise will have a new name. Advertise [[link removed]] Awards [[link removed]] Learning [[link removed]] Video [[link removed]] Podcast [[link removed]] Sports Careers [[link removed]] Written by Eric Fisher [[link removed]], David Rumsey [[link removed]] Edited by Matthew Tabeek [[link removed]], Adam Duerson [[link removed]]

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