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Baseball And Money

The owners and GMs are crying for help while the agents are saying that the sport may benefit from a hurting economy.  Who should you believe?  On one hand, guys like Jeff Borris of Beverly Hills Sports Council are quoted as saying, “If you examine history, during the worst economic times, people spend whatever they can to entertain themselves. And baseball still is the cheapest form of entertainment.”  Scott Boras was quoted at the GM meetings saying, “The downturn in the economy shouldn’t affect the kind of contracts offered to free agents. I think we have to look at the revenues today, which are historic.”  These guys know what they are talking about, but it’s hard to argue with the facts.

The Pittsburgh Pirates announced Tuesday that they have put a freeze on season-ticket prices and offered an interest-free payment plan. Arizona Diamondbacks CEO Jeff Moorad says his club has lost a corporate sponsorship with their ballpark pool. The San Diego Padres, general manager Kevin Towers said, are braced to cut payroll to $40 million.

Maybe the Yankees, Mets, and White Sox will survive the economic storm unscathed, but smaller market teams may take a big hit.

Besides injecting their persuasive words into negotiations to sway owners to give up more bucks in a hurting economy, agents are looking to what the future may hold in taxes now that Obama has been declared the next President of the United States.  Obama would like to raise the top federal income tax rate from 35% to 39.6%.  At this point, it is merely a wish.  There is no knowing whether such a plan ever goes into effect.  If the tax rate were to be increased for the next fiscal year, then signing bonuses paid before Jan. 1 should not be taxed at the higher rate.  Thus, some agents are thinking about getting their free-agents into an established uniform earlier this time around due to potential tax breaks over signing later on.

My thoughts are that the teams who notoriously spend money will continue to do so, while the Marlins, Rays, Royals, etc. keep their low payrolls.  The real change may be seen with those clubs that spend somewhere in the middle.  If sponsorships and/or ticket sales go down, expect those teams to cut salaries.  However, I do not see teams adopting such measures proactively.  Instead, I think that any salary cuts will be based off of lower figures once they start rolling in next year (if numbers are indeed down at all).  As far as the federal income tax rate, it should be interesting to see if free-agents tend to sign earlier this year due to the potential of a raise in rate by the new Democratic administration.

By Darren Heitner

Darren Adam Heitner, Esq., is a preeminent sports attorney and the founder of Heitner Legal, P.L.L.C., a Fort Lauderdale-based law firm specializing in sports law, contract negotiations, intellectual property, and arbitration. He earned his Juris Doctor from the University of Florida Levin College of Law in 2010 and a Bachelor of Arts in Political Science, magna cum laude, from the University of Florida in 2007, where he was named Valedictorian of the College of Liberal Arts and Sciences. Admitted to practice in the state bars of Florida, New York, and the District of Columbia, as well as multiple federal courts, Darren also serves as a certified arbitrator with the American Arbitration Association.

As an adjunct professor, Darren imparts his expertise through teaching Sports Law at the University of Florida Levin College of Law and Name, Image, and Likeness (NIL) at the University of Miami School of Law in the Entertainment, Arts, and Sports Law LL.M. program. His scholarly contributions include authoring several books published by the American Bar Association, such as How to Play the Game: What Every Sports Attorney Needs to Know, and numerous articles in prominent publications like Forbes, Inc. Magazine, and Above the Law. His thought leadership in NIL has earned him recognition as one of the foremost experts by The Wall Street Journal, USA TODAY, and On3, and he has been lauded as a “power player in NIL deals” by Action Network and a “top sports trademark attorney” by Sportico.

Darren’s passion for sports law led him to establish Sports Agent Blog on December 31, 2005, initially titled “I Want To Be A Sports Agent.” The platform, created as a New Year’s resolution, has grown into a cornerstone of the sports agency community, offering in-depth analysis of industry trends, legal disputes, and agent-player dynamics. His commitment to the field is further evidenced by his representation of numerous athletes and sports agents, as well as his prior role as an Adjunct Professor at Indiana University Bloomington, where he developed and taught a course on Sport Agency Management from 2011 to 2014.

Darren’s contributions have been recognized with prestigious honors, including the University of Florida’s 40 Under 40 Award, the University of Florida Levin College of Law’s Outstanding Young Alumnus Award, and designation as the best lawyer in Fort Lauderdale by Fort Lauderdale Magazine. He remains an active voice in the sports law community, sharing insights through his weekly NIL newsletter and his X posts, engaging a broad audience on legal developments in sports.