A look into why NFL (Love's) contract negotiations take SO LONG.

[MadScientist]

Things I find interesting in this story include:

- The CBA actually defines "Player Affiliate" to be any person or entity owned or controlled by, affiliated with, or related to a player.

- "Salary" is defined to include any compensation that a Player or Player Affiliate is entitled to under a Player Contract.

- "Salary" is defined to also include the amounts of loans made under a Player Contract.

It would seem that the CBA contemplates the concepts of making payments not just to a player but also to an entity (such as an LLC) owned or controlled by a player and loans made to a player; both to be included as salary under salary cap calculations.

Interesting. I would guess that those provisions are in the CBA to 1) prevent teams from finding ways around the cap and 2) to allow for creating annuities for long term income that players have used before. Williams might have been able to do something like that, but he's really looking to get all the money now, but not all the tax liability now.

[ThunderDan]

This is quite interesting. I had not previously considered how those changes affected professional athletes. The one that really jumps out to me is agent fees. After looking into it just a tiny bit, I understand that agents' fees for negotiating endorsement contracts are deductible but fees for negotiating playing contracts are not deductible. I don't see any reasonable basis for distinguishing between the two.

Agent fees. - Thats an awful lot of money that a player never sees that he has to pay taxes on.

The issue is how players get paid. They get a W-2 just like most people. That means they are an employee. That limits their deduction severely right now.

Endorsement Contracts are not W-2 income. Players receive a 1099 for the income. That goes to a Schedule C and you can deduct any expenses directly against that income.

[Patler]

The issue is how players get paid. They get a W-2 just like most people. That means they are an employee. That limits their deduction severely right now.

Endorsement Contracts are not W-2 income. Players receive a 1099 for the income. That goes to a Schedule C and you can deduct any expenses directly against that income.

Ya, I understand the mechanics of it and why it ends up being that way (W-2 income vs. 1099 income), but from the aspect of the services performed by the agent for the player, it's not really all that different for the two contracts. This hits the "run of the mill" athlete hard. Agent fees are significant, and the lower part of the roster isn't getting huge endorsement contracts anyway. The impact on them was significant.

[Tony Oday]

I am pretty sure most states and municipalities have "Jock Taxes". I do not see how they do not have the availability to be a 1099 employee, start and S Corp except this is how the NFL negotiated with DC scum to make sure they still send money to the corrupt government.

[Tony Oday]

The issue is how players get paid. They get a W-2 just like most people. That means they are an employee. That limits their deduction severely right now.

Endorsement Contracts are not W-2 income. Players receive a 1099 for the income. That goes to a Schedule C and you can deduct any expenses directly against that income.

I cannot imagine any athlete putting money into a sole proprietorship and instead put it in an S Crop, so if they can deduct the fees for agents, managers and staff.

[ThunderDan]

I cannot imagine any athlete putting money into a sole proprietorship and instead put it in an S Crop, so if they can deduct the fees for agents, managers and staff.

Sole Prop and S-Corps can both deduct all business expenses against income. Both come to the same bottom line number. It is when the income comes on a W-2 that the issues start to arise.

[ThunderDan]

I am pretty sure most states and municipalities have "Jock Taxes". I do not see how they do not have the availability to be a 1099 employee, start and S Corp except this is how the NFL negotiated with DC scum to make sure they still send money to the corrupt government.

Not true. Most states want to get paid on money that is earned in their state.

Doesn't matter if you are an athlete or a construction company. If you go into a state, they are going to want to get paid.

The tax law was probably already in effect way before the NFL started generating revenue anywhere near to what it is today.

[ThunderDan]

This all falls under Nexus rules. Each state has different rules and regulation regarding how much triggers a filing requirement and possible tax owed.

Of course, some states have no income tax at all.

[ThunderDan]

Sole Prop and S-Corps can both deduct all business expenses against income. Both come to the same bottom line number. It is when the income comes on a W-2 that the issues start to arise.

Well not exactly true, as an S-Corp owner you have to take reasonable compensation on a W-2.

The number before you consider the W-2 and associated payroll tax expense should be the same.

[red]

TD's lost it

he's now resorted to correcting himself

[MadtownPacker]

TD's lost it

he's now resorted to correcting himself

As long as we keep it about football and don’t cross that fine line….

[Fritz]

As long as we keep it about football and don’t cross that fine line….

This thread ain't exactly about football - I feel as if I'm in a room with a bunch of tax and finance experts discussing the ins and outs of capital market value versus deductible fee add-ins, or whatever this all is. Impressive, but way beyond my ken. Which means it could be political and I wouldn't even know it.

The only part I understood were the posts that hope this all signifies that Williams will be a problem child and the Bears will still suck.

[MadtownPacker]

This thread is completely about football. The tax discussion is about what williams is trying to do. Everyone has been doing fine and no one said “politics” until you did.

[Fritz]

My point was that this is some high-level discussion here, and I'm out of my depth when these guys start rolling. They could be talking in Polish about bamboo floors and I'd understand just as little.

Buy I DO understand that we all hope the Bears still suck.

[Tony Oday]

Well not exactly true, as an S-Corp owner you have to take reasonable compensation on a W-2.

The number before you consider the W-2 and associated payroll tax expense should be the same.

Thats true so he would be smart to put President as his role so he can make what he wants commiserate to the same revenue sized companies. In the end the guys a bust so he should make sure he saves his guaranteed cash, Because THE BEARS STILL SUCK