Panama City News-Herald from Panama City, Florida on July 2, 1974 · Page 10
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Panama City News-Herald from Panama City, Florida · Page 10

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Tuesday, July 2, 1974
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Page 10
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H» tft t^tmttfiRALD, P»nam« City, FIft., Twsdny, Inly 2, IW4 The pro sports explosion Losing is winning in the loopliole league Standings Coostal, Beoch Supvlve IBy ftlehai^d Starnes (Second o( Three Related Articles) In professional sports win- nine is everything, right? Wrong, Tax accouting is almost everything. In fact, losing often becomes winning by the time an adroit tax lawyer wheels and deals his way to the bottom line of a team's profit and loss statement. Tax laws are at the root of the wild proliferation of new pro sports leagues and the ex* pension of established leagues. They explain an owner's apparent ability to absorb huge losses, to ignore empty stands, often to ride roughshod over his handful of loyal fans. Sports franchises are the nation's most glamorous tax shelters. And they offer fringe benefits that conventional tax shelters such as real estate developments do not A governor or a senator is a bush league celebrity compared to the man who sits in the owner's box, however seedy his team may be. But the real hero of the sports franchising boom Is never Introduced over the stadium p.a. system. Indeed he has to ouy a ticket even to get into the place. He is the ordinary taxpayer, who deprived of special tax gim- miclts - is subsidizing the new sports franchises that are springing up all over the country. All it really takes to create a new league Is a copying machine, a fertile imagination and detailed understanding of the whims of the Internal Revenue Service (IRS). A guided tour through the snarlof IRS rulings affecting pro sports is a difficult one even for accountants specializing In the field. But the saga of the Fun City Gollaths - a fanciful team In the equally mythical Cosmic Football League - can help show the way. Fun City has a wheeler- dealer who is making a lot of money In enterprises not related to sports. He Is an avid sports fan and long has cherished the notion of owning a team of his own. Moreover, our wheeler- dealer has a great deal of taxable income and he needs a tax shelter. The organizers of the new Cosmic Football League ap- (Richard Stames Is a staff writer for the Scrlpps-Howard newspapers.) Ky VMti Praa I»I»IMUIMI (TwIHtM, liiM PMM Ml iMhUiiO w. I. pd. g.b. M 32 .962 Bolton aeveUnd Baltlmoie Detroit Milwaukee New York OtkUnd KaiiMi City TeMi Oilcaio MInneeota CalUomli 38 34 .528 2^ 38 34 ,528 2^ 38 36 .514 3^ 36 3S .SOT 4 35 39 .473 6% w. I. M. I.*. 41 35 .539 37 36 ,6W 39 38 .506 36 36 .500 32 42 .432 32 46 .410 10 3 (AM ttmM wot) Milwaukee (Kobel 3-7) at Cleveland (J.Perry M), 7!30 p.m. Bofton (Moret 1-2) at Baltimore (Orlmaley 9-7), 7:30 p.m. New York (Dobton 6-9) at Detroit (Walker M), 8 p.m. Tema (Hargan 6-4) at Minneaota (Butler 3.2), 1:30 p.m. Kanaaa City (McDanlel 1-2) at Chicago (Wood 12-9), 9 p.m. Oakland (HolUman 8-9) at Calltomla (Tanana 4-11), 11 p.m. proach the Fun City wheeler- dealer and sing him a siren song full of such terms as "accelerated depreciation," "negative profits" and "book Our wheeler-dealer quickly g rasps the heady potential, [e can fulfill his ambition to own a team, spend little of his own money, and avoid a high percentage of the Income taxes he pays on his other earnings. All this Is possible because the IRS permits professional sports enterprises to write off player contracts at a much more rapid rate than, say, the real estate tycoon can depreciate a high rise. For most pro sports, writeoffs of player contracts are permitted in three to five years. This means that when the Gollaths sign linebacki:r Earthquake Bonebasher long a crowd pleaser in a rival football league - for $2 million for a 10-year contract, the team can depreciate (write ofD the contract for tax purposes in as little as three years. Hence for tax purposes, good old Earthquake Is generating a $700,000-a-year tax loss while costing the Goliaths only $200,000 a year in salary. The Goliaths sign other players, over-the-hill veterans, untried rookies, men cut from established teams. But every player is signed to a contract optioning him to the team for a period of years exceeding the period of accelerated depreciation IRS allows. At the end of the season the Goliaths have fulfilled predictions by having a lousy year. Even with parking fees, broadcast earnings and con­ cession profits, the team shows a book loss of, say $150,000. But our wheeler-dealer coudn't be happier. The team Is in last place and has lost money, true, but the owner is in high cotton. Due to the rapid depreciation allowed on his principal team assets - player contracts - the owner comes out with a loss for tax purposes of close to $1 million. Since the owner's other enterprises have produced a taxable Income of around $1 million, he will apply his book loss on the Goliaths to this taxable income. Now Instead of paying Uncle Sam some $700,000 in income taxes, the team's owner pays nothing. His tax shelter has cost him $150,000 out of pocket and has enabled him legally to avoid $700,000 in taxes. Net profit for the Goliath's happy owner is $550,000 in the team s first year. The long-term effect on pro sports is uncertain. In times past, new leagues have gone through occasionally traumatic growing pains and either have failed or muscled established leagues into merger as the only alternative to anarchy. But the long-term prospect for the wheeler-dealer from Fun City is more predictable. He has at least two happy avenues open to him after he has milked the rapid depreciation gimmick for all Its worth. If his team actually starts making money, he may keep the team - and dispatch his accountants on a safari to seek other tax shelters. But If the Gollaths continue to lose, and ultimately use up the rapid depreciation on his player contracts, our canny friend can sell the team. If he sells at a profit, he'll be taxed at capital gains rates of no more than 25 per cent. If he sells at a loss, the merely applies the loss to his other earnings. Either way, he beats the system. There are pitfalls, of course. One is the whimsical manner in which various IRS districts interpret the rules on player depreciation, according to Gerald H. Phipps, chairman of the board of Rocky Mountain Empire Sprts, Inc., the corporation that operates the NFL Denver Broncos and the Denver Bears, an American Association baseball club. "Up to this point the IRS has left the valuation of players to the local IRS office. It's been said that Miami had its f ilayers valued by the local RS at $100,000 each when they got them in an expansion draft, while Cincinnati reportedly was allowed to use a valuation of only $25,000 each. But the big hazard, according to Phipps, is that "sooner or later the IRS will take the position (on chronic losers) that you are doing this not to build to a profit situation but to use losses to offset income and disallow it. "Not only might the IRS disallow this write-off, but it might even go back and make it retroactive - which could be one hell of a jolt to anybody." (NEXT: The Mixed Omens.) (NEWSPAPER ENTERPRISE ASSN.) Wilson Blanks Braves ATLANTA (UPI) — Don up only five hits Monday night Atlanta Braves. Wilson doubled home one run to hit and pitch the Houston Wilson's double came in the and scored another while giving Astros to a 3-0 win over the fourth inning after Tommy Horizon RESORT V COMMUNITY July 5th, 6th an<i 7th Call 234-6663 No registration fees All age groups invited The tenr's courts at Horizon South have just been completed. Although construction is still going on at the project, we can't wait. Therefore v/e proudly present the 'FIRST ANNUAL HORIZON SOUTH TENNIS TOURNAMENT." Trophy and prize presentations will be held Sunday afternoon, July 7th. REGISTER NOW! You'll find us on US 98, Vi mile West of 79 or on Back Beach Rd. (30-A). Horizon South P.O. Box 9480 Panama City Beach Flo. 32401-234-6663 Helms doubled with one out to drive in the first run of the game and Wilson then made it 2-0 when he scored on Roger Metzger's single. The Astros scored their other run in the seventh inning when Bob Watson doubled with two out and was singled home by Lee May. Wilson, now 4-6, never gave up more than one hit In any inning. The only extra base hit was a double by Dave Johnson in the sixth. The win enabled the fourth- place Astros to move within three games of the third place Braves in the National League West. Mike Lum fouled a ball off his face in the eighth inning and was rushed to the hospital with nose and cheek injuries. There was a rhubarb in the top of the second inning when a ground-rule double by Dave Rader with a man aboard was at first ruled a home run then reversed. •brhW 3010 3 0 10 4000 3 0 00 0 0 0 0 4020 4 0 0 0 4010 2 0 0 0 1000 1000 1000 1000 0 0 0 0 1000 ntst MIMIt»-S mmtm-t LOB-Houiton GroM rf MeU(er H Cedcno cl WatMn U GtlUgher rf LM»y lb MMty c Rader 3b Heinu 2b MUboura 2b WUion p IMak akrhM 4010 CarrU 4 0 11 Evani 3b SOZO Baker r( 5 1 2 0 Lum lb 0 0 0 0 Perez 2b 4 0 2 1 DJohnnn 2b 4 0 10 Otflce c( 4 0 10 Oate* c 4120 Robinson sa 0 0 0 0 Tepedino ph 3 111 PNiekro p Uon p Murrell ph FrIaeUa p Correll pii niUI Mab NailMMl LMfK By UtIM rum MenMUiwMl (NliM lamM Mi lachiM) m 1. ret. R.l>. St. Louli 40 34 .541 Montreal 35 33 .515 2 Philadelphia 38 37 .607 PItUburch 32 40 .444 7 Chicago 30 41 .423 8W New York 30 44 .405 10 w. 1. »c4. g.b. Loa Anielei S2 24 .684 Cincinnati 44 31 .587 m Atlanta 42 35 .545 m Houston 38 39 .494 m San Franclico 34 45 .430 San Diego 35 47 .427 20 Taeaday'i Oamea (AU IUM EOT) Montreal (Blair 2-1) at PItUburgh (Hooker 44), 7:35 p.m. PhlUdelphIa (Ruthven 24) at New York (Parker 1-7). :05 p.m. Houston (Osteen 6-7) at (Harrison 6-9), 8:06 p.m. Ua Angeles (Sutton 64) at Cincinnati (Kirby 6-4), 8:0S p.m. Chicago (Todd M) at St. Louts (Slebert 7-5), 8:30 p.m. ' San Diego (Jones 4-12) at San Francisco (D'Acqulalto 64), 11 p.m. Atlanta Coastal and Beach all-star teams scored victories Monday night in losers' bracket semifinal action of the sub-district little major league tournaments. Coastal scored two runs In the bottom of the sixth to nip Fred Bishop, 7-6, In the East division while Beach romped over H.L. Johnson, 9-0, In the West section. Fred Bright and Jeff Hale collected hits In Coastal's big sixth, one being forced in on a hit batsman and the other scoring on a passed ball. Bright and Robert Burch each had two hits for the winners while Randy Rowell hit a grand slam homer, double and single and Tony Taylor two singles in a losing cause. Coastal meets Cedar Grove tonight at 7 at Springfield park, with the victor going on to the district tournament with Central. Olson Pitches Two-Hit Victory Randy Olson fired a two-hitter, registering 12 strikeouts along the way, Monday night to pitch Bay National Bank to a 4-2 win over Royal American Construction in Senior Major League action. Jay Craln slammed a triple and double for the winners while Ken Swearlngen had a triple for the losers. BayNatlonal 001 020 1-4 5 2 Royal American 000 101 0—2 2 1 Olson and Smith; Mattke and Robinson. Bo Pate hurled a three-hit shutout, with 10 strikeouts and no walks, and rapped two doubles for three runs-batted-in to pace Beach's win. Gary White had a two-run double in a six-run sixth inning that iced the win. Beach ^goes against R.L. Turner tonight at 7 at the Howard Parker League field, with the winner gaining a spot Rangers Ride Homers BLpOMINGTON, Minn (UPI) — Home runs by Jim Sundberg and Toby Harrah plus a fourrun ninth inning led the Texas Rangers to a 6-2 win over the Minnesota Twins Monday night. Pitcher Jackie Brown won his seventh game in 12 decisions even though he gave up 12 hits in 8 1-3 innings before being relieved by Steve Foucault. Texas took an early lead when Sundberg led off the third inning by hitting his first major league homer. Minnesota tied the score 1-1 in the fourth on three straight singles by Jim Holt, Eric Soderholm and Glenn Borgmann. Harrah then put the Rangers ahead to stay by hitting his 10th homer of the season leading off the Texas seventh. Harmon Killebrew accounted for Minnesota's second run by hitting his seventh homer of the season, a solo pinch shot in the ninth. It was the 553rd homer of Killebrew's career. Teua Tovar U Nelaon 2b Johnaon If Lovitto c( Burroghs rf Hargrove lb Spencer dh Randle 3b Harrah ss Sundberg c Brown p Foucault p Tstals Teiaa abrhM 4 1 2 2 Brye cf 5 110 Carew 2b 4 0 0 1 Ollva dh 0 0 00 Darwin rf 3 0 0 0 Braun U 4 0 0 0 Holt lb 4 0 0 0 Soderhlm 3b 4 13 0 Borgmann c 3 2 2 1 Ckimez as 2 111 KUIebrew ph 0 0 0 0 Decker p 0 0 0 0 Campbell p Mil* Mah E-Borgmann. DP-Texas 1, U)B-TeMS 8, Mlnne«)la U. 2B-Byre 2. HR-Sundberg (10), KUIebrew (7). abrhM 5 0 2 0 4 0 10 5 0 2 0 50 10 3010 4 110 4 0 2 0 4 0 11 3 0 0 0 nil 0 0 0 0 0 0 0 0 mtut miNiM-i mm Ml- 2 Minnesota 1. Indians Victors CLEVELAND (UPI) - John Ellis and Cieorge Hendrlck each drove In five runs Monday night to power the Cleveland Indians to a 3-1 and 9-3 doubleheader victory over the Milwaukee Brewers. Ellis, making his first start since being sidelined with a broken foot on May 31, drilled a three-run homer in the third inning of the nightcap and drove home two runs with a two out single. In the fifth. He also banged out a pair of singles as a designated hitter in the first game. Hendrick, who is hitting at a .438 clip in his last 14 games with six homers and 20 RBIs, hit a two-run smash In the sixth inning of the opener and hit a three-run blast over the left field fence to cap a four-run seventh inning in the nightcap. Fritz Peterson went the first seven Innings of the finale in picking up his sixth victory against four losses while Milwaukee starter Ed Rodriguez lost his second game in seven decisions. After the Brewers grabbed a 1-0 lead in the sixth inning of the opener, the Indians bounced back with three runs in the sixth on singles by John Lowenstein and Ellis, Charlie Spikes' sacrifice fly and Hendrick's 12th homer of the season of starter and loser Clyde Wright. Burroughs. S-Tovar, 7-5 (1), Harrah Nelson 2, Brown W Foucault Decker L Campbell T-2;58. A-9,068. SB-Johnaon, Sundberg. Ip h r er bb 8.7 81-3 U 2-3 0 81-3 8 2-3 1 Bosox Drop Birds BALTIMORE (UPI) - Cecil Cooper's two-run home run In the first Inning sparked the Boston Red Sox to a 6-4 victory over Baltimore Monday night, dropping the Orioles 3 1-2 games behind the American League Eastern Division leaders. MUwaakee devdaad •brkbt abrhM 3 0 1 0 Bell 3b 3 0 0 0 4 0 0 0 Brohamr 2b 4 0 10 4 12 0 Uwensten If 3 110 4 0 2 0 Ellis dh 4 12 0 4 0 0 1 Alvarado pr 0 0 0 0 4 0 10 Spikes Tt 3 0 0 1 2 0 0 0 Hendrick d 3 112 lOOOUslb 3000 3 0 0 0 Duncan c 3 0 10 1 0 0 0 Dutfy ss 3 0 0 0 3 000 Bosman p 0 000 0 0 0 0 Beene p 0 0 0 0 Mill IWab tISIS MINliM-l im -s Harper dh Miller cf Cater lb Cooper lb Benlquez cl Ystrunsk l( Carbo r( Petrocelll 3b Montgmry c Grtlfln 2b Guerrero ss Leep Segul p IMals akrhM 4 2 1 0 Blair d 3 12 0 Grich 2b 2 0 11 Davis dh 3 112 Williams c 2 0 11 Baylor If 2 111 Robinson 3b 4 0 2 1 Fuller rf 4 0 0 0 Powell lb 4 0 10 Cabell lb 4 110 Bumbry ph 4 0 0 0 Belanger ss 0 0 0 0 Coggins ph 0 0 0 0 Alexander p Jackson p Heynolda p Mini IWala E-Roblnson. DP-AtlanU 2. 10, AtlanU 9. 2B-Rader, Helms, WUson, Wataon, Johnson. S-MeUger, Wilson. Ip h r er hk sa Wilson W 44 9 S 0 0 4 3 PNIekra L 8-7 31-3 10 2 2 1 1 Leon 3 2-3 3 1 1 0 2 FrIselU 2 0 0 0 0 1 T-2:«. A.7.74S. Norris Hurls One-Hit Win Ken Norris pitched a one-hitter and Sam Raulerson socked a homer and single to lead Bay National Bank's 11-0 win over Elks Club Monday night in Rhett Borland Junior Major League play. Norris and David Stevens rapped triples while the lone safety for Elks waS a single by David Belt. BHEIT BORUNO LEAGUE BayNatlonal m70-U 9 2 ElkaClub 000 00-4 1 5 , NorrU and Flckllng; Williams^ Hawkins (4), • I Golden (4) and Turk. abrhM 5 0 2 0 4 12 0 4 110 3 12 1 2 0 0 1 3 0 0 1 3 110 1000 3 0 0 0 1000 3010 1000 0 0 0 0 0 0 0 0 0 0 0 0 Mill MllMlM -l MIMlM-4 E-Yutrtemakl, Belanger, Alexander. OP-Botton 2, Baltimore 1. LOB-Boston 6, Baltimore 6. 2B-Carbo. Griffin, Montgomery, Wl|. Uams. HR-Cooper (5), WUIiams (4). SB- Harper, Miller, Yastrzemaki, Benlquez. Ip b r er bb ss Lee W 9-7 £1-3 8 3 2 2 3 Segui 2 2-3 1 1 1 1 1 Alexander L 3-4 61-3 7 6 5 2 1 Jackion 13 0 0 0 1 Reynolds 12-3 1 0 0 0 0 Save -Segul (6). WP-Alexander, Segul. PB-Wllliams. T.2:41. A.U.6M. Money 3b Berry cf Scott lb Briggs if DJohnson dh Porter c Hegan ri Coluccio rf Garcia 2b Mayph TJohnson ss Wright p Ts4ato MUmuhee aeveUnd LOB-Mllwaukee 8. aeveland 5. 2B-Duncan, Briggs. HR-Hrndrick 12. SB-Money. SF-Splkes. Ip k r er bb ss Wright L 7-10 8 6 3 3 2 3 Bosman 5 5 112 0 Beene W 2-1 4 10 0 13 Bosma<i pitched to 2 batters In 6th. WP-Bosman. T-2:2> tMI game MUwaakee Money 3b Garcia 2b Briggs If Scott lb DJohnson dh Mitchell rf Moore c Coluccio cf TJohnson If Yount ss May ph Rodriguez p Travers p Champion p Clevelawl abrhM 5 0 0 0 Bell 3b 5 110 Brohamr 2b 4 0 0 0 Duffy ss 4 0 11 Lowenstn lb 4 0 1 0 Us lb 3 0 0 0 Ellis c 4 2 3 0 Duncan c 2 0 0 0 Gamble dh 1 0 0 0 Spikes ri 3 0 2 0 Hendrick cf 0 0 0 0 Torres cf 0 0 0 0 Lee If 0 000 Alvarado 2b 0 0 0 0 Peterson p Buskey p Wilcox p MlltlMais abrhM 4 0 0 0 4 110 1000 2 3 2 0 0 0 0 0 4 12 5 1000 5 12 1 4 110 3 12 3 0 0 0 0 4010 3 110 0 00 0 ooao 0 0 0 0 UlUf IMds MUwariiee Ml III III-1 ClevelaW muttH-* E -Ue, Bell. OP-Mllwaukee 1, Cleveland 1. tXIB-Mllwaukee 8. aeveland 8. JB-Hendrick. Xowensteln, Moore, Gar da. HR-Ellis (5), Hendrick (U). SB- Lowensleln. S<^luccio. I> h Rodriguez L 5-2 4 2-3 6 Travers 2 5 Champion 11-3 1 Peterson W 6A 7 7 Buakey ' 1 1 Wilcox 1 0 WP-Peterson, IVavers, Wilcox. Travers. r er bb 5 5 4 1 3 1 1 0 i 1 C 1 C Balk' ()lM:^l^(; SOON o\n:(,\ iM i:i{NA I io% AL 11(111 l}(si<j^ii niii lot M<n \ II (>/ii('fi Ken Davis & Fred Engle (Formerly of The Razor's Edge) ir>()l >1 IIIIH rrv Siiilr :i along with Mld-Clty In the district tournament. Mid-City and Central earlier advanced through the winners' bracket of the two sub-districts. I FredBlshop 040 002-4 10 6 CoatUI 100 222-7 8 5 Johnaon, Suggs (5), Lewli (5), Taylor (6) and Creel; Green and Bright, Beach 000 U»-» 3 0 H.L. Johnson 000 000-0 3 0 Pate and Hlgglns; Haynes, Benefleld (5) and Shivers. Sears Air Conditioners Energy Efficiency Ratio (BTU-Waii- HR). 6.0 18,000 BTU Air Conditioner Sears Price $ 258 Use Sears Easy Payment Plan 74181 Cooling Capacity Rating (BTU-HR.) 21,000 Energy Efficiency Ratio (BTU-Wall Hr.)6.l 7364 21,000 BTU Air Conditioners Sears Price •298 SHOP AT SKAK.S AND SAVK Snlinfarlinn liuaraiUeed or Your Mnnp\ Rack DOWNTOWN PANAMA Sears SE»B!. 1101!«UfK AND CO.- CITY

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