Baseball is back! On April 2, the Tampa Bay Devil Rays spanked the visiting New York Yankees, 7-3, to kick off the 2017 season. Later that day, the defending World Series champion Chicago Cubbies fell to their usual last place in the National League Central. And Cincinnati Reds fans are still bitter that they don’t get to host the season’s first game like they did for so many years.
Everyone loves baseball, even the IRS! We realize that when you think of baseball stats, you think of batting averages, slugging percentages, and “wins above replacement.” But the nation’s tax collectors have some baseball stats they love to share, too. So let’s take a quick look:
Opening Day team payrolls topped $4 billion for the first time ever this year. The league minimum is out of the park at $535,000, which is enough that the IRS scoops up 39.6% of those dollars. Throw in paychecks for managers, coaches, trainers, and front-office employees, and we’re talking easily more than $1.5 billion in income taxes, plus millions more in payroll taxes. And that doesn’t begin to count taxes on the billions more that players earn in endorsements.
Players aren’t the only ones watching their incomes climb. Total team revenue from ticket sales, broadcast rights, and licensed apparel approached $10 billion last year. And while owners don’t publish their own stats the way they publish their players’, Forbes estimates the average team is worth $1.3 billion.
Television networks pay billions for the rights to broadcast games. Then they turn around and sell advertising to pay for those rights for billions more. The difference between the revenue and the rights winds up taxed at corporate rates of up to 35%.
What’s a ball game without peanuts and Cracker Jack? (Or beer, at a price per cup that’s more than a six pack at your local store?) The usual fan spends about $20 in concessions per game, which yields millions more in sales taxes, excise taxes, and income taxes on those ballpark markups.
Baseball has generated its fair share of quotable quotes over the years. There are even a few tax quotes lurking in that lore, although we’re not sure Yogi Berra ever said anything about the IRS:
“Baseball is a skilled game. It’s America’s game — it, and high taxes.”
“Look, we [baseball team owners] play the Star Spangled Banner before every game. You want us to pay income taxes, too?”
Bill Veeck (Owner, Chicago Cubs)
While we’re on the topic, how does your game plan looking this season? Have you even stepped up to the plate? Or are you still warming the bench? Remember that we’re here to help with a complete roster of infield and outfield plays. So call our tax preparers on 773-728-1500 and we’ve got the depth and experience you need to hit the home run you want this April 15!