PFT: Comments from Jerry Richardson, Jerry Jones suggest lockout is coming

[FuzzyLumpkins]

Hey Fuzzy, do you remember in the '82 strike, the players were gonna play exhibition games on their own? I don't recall they ever actual played a game. I think the owners prevented it in some way. I can't remember the exact details. LOL! I am getting old:laugh2:

I am not that old.

But if they were on strike and tried to play still under contract then they would be open for litigation. In this case they are not being allowed to fulfill their contract by the owners so I think they could. I am not sure though.

 

[tenth]

GM is a perfect example to make my point. After the management change, they sell off their unprofitable EU interests as well as extraneous engineering projects like Olds they have gone through three quarters of billion dollar gains.

You can cook the books with ease to show a loss if you want to and an NFL franchise has more of a reason to do that than distribute a dividend. Net income is disguised in many ways. You for example can buy stock or any other asset, list it as an expense and voila your net decreases while your net worth increases.

In this case the Packers could --for the sake of argument-- buy a cheesehead factory in Brussels for $10mil and reduce their net income by that much. Its all about revenue, not net income.

NFL players are not employees in any sense of the word and I am not talking about public disclosure but instead disclosure in terms of the CBA. The NFLPA has every right to demand an independent audit if the cap is going to be based on revenues.

You really have a very misguided understanding of accounting. Accounting standards (and financial statement audits) prevent the exact situations you've described.

Stock investments are assets, and only the gain or loss on sale would be deductible, not the initial cash outlay. Otherwise it sits on your balance sheet and does not hit income.
That factory in Brussels they bought is an asset, which would be depreciated over the life of the factory (likely a very long time), and not an immediate hit. Even still, I would suspect there are rules against completely unrelated investments like this in the football entity at the NFL level.

As a former auditor and professional accountant, there is far less manipulation possible in net income than you believe possible. Sure there are too many examples of outright fraud being committed in the last decade, but despite what the media may have you believe, those are rare circumstances.

 

[FuzzyLumpkins]

Sure there are too many examples of outright fraud being committed in the last decade, but despite what the media may have you believe, those are rare circumstances.

You're right it is very hard to alter your stated income.



BTW thats sarcasm.

 

[tenth]

If you really believe that signficant fraud is occurring at a high percentage of the companies in the world, then I'll leave you to your tinfoil hat.

 

[FuzzyLumpkins]

If you really believe that signficant fraud is occurring at a high percentage of the companies in the world, then I'll leave you to your tinfoil hat.

I just want to make this clear.

You are saying that if my LLC buys a property in downtown Austin for a factory, that I have to declare its 'value' as income every year minus depreciation?

And its not a tinfoil hat to say that pretty much everyone manipulates their statements to their own benefit. I love my accountants. They turn my receipts into all manner of things for the purposes of taxes. With an ambiguous tax code like ours..... Come on.

 

[tenth]

I just want to make this clear.

You are saying that if my LLC buys a property in downtown Austin for a factory, that I have to declare its 'value' as income every year minus depreciation?

And its not a tinfoil hat to say that pretty much everyone manipulates their statements to their own benefit. I love my accountants. They turn my receipts into all manner of things for the purposes of taxes. With an ambiguous tax code like ours..... Come on.

Financial accounting differs wildly from the tax code. Based on your comments about receipts, I would guess you have a small business that has compilations/returns prepared by your accountants and you have no experience with an audit of financial statements? The tax code is far more open to interpretation than GAAP accounting standards. As I said, I'm a professional accountant with a background in financial statement audits, and I'm currently a corporate tax manager.

I'm not sure where your question came from, as i never said anything even remotely close. If you buy a factory, you add it to your asset pool, where the original cost is deducted from income very slowly over a period of many years. It is not a full deduction to income in the year of purchase as you suggested. That is the case for both financial accounting and tax purposes.

 

[FuzzyLumpkins]

Based on your comments about receipts, I would guess you have a small business that has compilations/returns prepared by your accountants and you have no experience with an audit of financial statements? The tax code is far more open to interpretation than GAAP accounting standards. As I said, I'm a professional accountant with a background in financial statement audits, and I'm currently a corporate tax manager.

I'm not sure where your question came from, as i never said anything even remotely close. If you buy a factory, you add it to your asset pool, where the original cost is deducted from income very slowly over a period of many years. It is not a full deduction to income in the year of purchase as you suggested. That is the case for both financial accounting and tax purposes.

But it is an example of something that could be used to decrease your stated income as I suggested?

 

[tenth]

But it is an example of something that could be used to decrease your stated income as I suggested?

Ignoring the fact that it probably wouldn't be allowed for an NFL team to do and it is a terrible business decision, yes it would have a small impact on current year net income.

No shareholder would consent to it though because of how ridiculous it would be to have a huge immediate cash outflow on something completely unrelated to the business just to have a small decline in your business' net income.

 

[FuzzyLumpkins]

Ignoring the fact that it probably wouldn't be allowed for an NFL team to do and it is a terrible business decision, yes it would have a small impact on current year net income.

No shareholder would consent to it though because of how ridiculous it would be to have a huge immediate cash outflow on something completely unrelated to the business just to have a small decline in your business' net income.

What do you mean by small impact? 10% of the total expense?

That is just one example off the top of my head and it is not like that would be the only one.

I have no doubt that if your CFO went to you and said that he needed you to move them from to a different tax bracket that you would have plenty of ideas. I also have little doubt that you have been asked to do just that. I felt no ethical dilemma about asking my accountant to do that.

I do not doubt your ethics but at the same time I do doubt the ethics of financiers in general. Any industry that fights as hard as that to make the game not zero sum I will distrust.

 

[utrunner07]

The NFL isn't that DUMB...

Maybe not, but it is that money crazy.

 

[DWhite Fan]

I am not that old.

But if they were on strike and tried to play still under contract then they would be open for litigation. In this case they are not being allowed to fulfill their contract by the owners so I think they could. I am not sure though.

LOL! I am sorry, I thought you were older
I believe you are in that the owners threaten leagal action against the players if they pursued the exhibition games.

 

[dogberry]

If there is a lockout, wouldn't the players be free to stage their own games?

I can see prohibiting games while under contract during a strike but not a lockout.

 

[tenth]

What do you mean by small impact? 10% of the total expense?

That is just one example off the top of my head and it is not like that would be the only one.

I have no doubt that if your CFO went to you and said that he needed you to move them from to a different tax bracket that you would have plenty of ideas. I also have little doubt that you have been asked to do just that. I felt no ethical dilemma about asking my accountant to do that.

I do not doubt your ethics but at the same time I do doubt the ethics of financiers in general. Any industry that fights as hard as that to make the game not zero sum I will distrust.

I'm not going into any more detail into this, but really, while you have a little knowledge on what now sounds like individual tax planning (corporations don't have tax brackets), that is a far cry from the audited financial statements that any organization the size of an NFL football team would be required (by their owner or creditors) to prepare. There is nowhere near the amount of room for manipulation as you believe, especially after all the scandals of the early 2000s.

 

[FuzzyLumpkins]

I'm not going into any more detail into this, but really, while you have a little knowledge on what now sounds like individual tax planning (corporations don't have tax brackets), that is a far cry from the audited financial statements that any organization the size of an NFL football team would be required (by their owner or creditors) to prepare. There is nowhere near the amount of room for manipulation as you believe, especially after all the scandals of the early 2000s.

Federal corporate income tax is imposed at graduated rates. The lower rate brackets are phased out at higher rates of income. All taxable income is subject to tax at 34% or 35% where taxable income exceeds $335,000. Tax rates imposed below the federal level vary widely by jurisdiction, from under 1% to over 16%. State and local income taxes are allowed as tax deductions in computing Federal taxable income.

I do look things up before I say things I am unsure of and this also says nothing about the state taxes. You happen to be from Wisconsin?

I also am familiar with how balance sheets can be manipulated. I know for a fact that IBM has real estate assets in NY state that they will sell off from time to time to manipulate balance sheets.

You even say yourself that there are ways to manipulate. If GB decides to hire more people or reinvest capital in any number of things that affects the 'bottom line.'

I am not claiming they are being fraudulent by any means but this notion that what they say they make is what they make is what they make is asinine.

Isn't the corporate tax based off gross minus deductions anyway?

From a dividends perspective. GB has zero reason to be concerned with dividend ratio. They will always have a huge demand for the stock independent of that.