Recruit Shuns KPMG for a Football Team, Surprising No One
Hell hath no fury like an accounting firm shunned, the old saying goes. Except that’s not an old saying, it’s something silly I just made up. Anyway, we stumbled across this article about a recently graduated Texas A&M football player, Connor McQueen, who is opting for a job on the team’s coaching staff rather than […]
Tax Nerds Set Record Straight on Tax Code vs. NFL Rulebook Complexity
If there's one thing tax people can't stand, it's other people saying incorrect things about taxes. I know this because I used to be a tax person who spent lots time listening to superiors correct me (and others) constantly on nuances of the code. But, it's fine! Taxes are hard and people like showing off. […]
Confirmed: An Audit Firm Will Resign From an Engagement If You Threaten Its Employees
Deloitte audited the Glasgow-based Rangers football club up until recently when the firm wrote a letter to shareholders detailing some disturbing news:
Did KPMG Flop as FIFA’s Auditor?
The FIFA scandal is increasingly ridiculous as was so deftly shown by John Oliver last night. But now a Big 4 firm appears to be caught in the tentacles of it, which further demonstrates its depth and reach. A tipster dropped us a link to very interesting post from Matt Scott, a journalist who has […]
The Washington Redskins Got Beat by the Green Bay Packers, Presented By BDO
As you know, BDO serves as the official accounting firm of asshole of the century Dan Snyder's football team. Now, you might ask yourself, what would the exclusive provider of professional services of an asshole's professional football team actually do? Excellent question! The answer is: Stats-Pack presented by BDO. What is that exactly? A list of notes […]
BDO Adds a Feather to Its Cap After Landing Exclusive Deal with Offensively Nicknamed Football Team
I can't help but think of this: Anyway, here are the canned quotes from the principals: "We are thrilled to serve as the exclusive accounting firm of The Washington Redskins," said Wayne Berson, CEO of BDO USA, LLP. "The team's focus on providing a winning experience for fans and business partners complements BDO's commitment to […]
Americans for Tax Reform: Playing Professional Football in Texas to Save Taxes > Working for Jerry Jones
Tony Romo will make a lot of money playing quarterback for the Dallas Cowboys under his new contract. How much money that contract is actually worth depends on how you look at the situation. Americans for Tax Reform looks at the situation in the following terms: if, you opt to play for a team in a state […]
A Bunch of Jerks in San Diego Booed Phil Mickelson and His KPMG Hat for Donating Money That Will Buy Books for Kids
In today's there's no way we could completely mock this and feel good about ourselves news, Phil Mickelson and his hat did something awfully nice at last night's Monday Night Football game between the Chargers and Broncos, even if things didn't quite go as smashingly as the post-game press releases made it seem. You see, […]
“Emerging Growth Company” Manchester United Ltd. Not Quite Ready to Take Advantage of All the Reporting Exemptions Under the JOBS Act
As you know, the Jumpstart Our Business Startups Act was made law earlier this year, in part, to exempt "emerging growth companies" (or "EGC" for you acronym junkies) from certain reporting and disclosure requirements. "Emerging growth companies" being those with less than $1 billion in revenues in a fiscal year and the best known exemption allowed […]
Right Now KPMG CEO John Veihmeyer Is Locked in His Office Watching This Clip From “Rudy” Over and Over and Fighting Tears
This far from being Notre Dame's Jerry Sandusky moment but it still has to hurt. The Securities and Exchange Commission today charged Daniel Ruettiger and 12 other participants in a scheme to deceive investors into buying stock in his sports drink company. Ruettiger is widely known for having inspired the 1993 motion picture "Rudy." According to […]
“The Packer Franchise Has Such a Deep History,” The Email Begins
If this doesn’t convince you accountants are important, nothing will:
I noticed this article during a visit back to my hometown of Green Bay. Now this is something I think we all can aspire to. The Packer franchise has such a deep history, and especially interesting as the Packers are the only publicly-owned professional football franchise in the NFL (and maybe the only sports franchise in the US) where you can purchase shares of its stock. Go Pack.
Enjoy:
“Green Bay Packers likely owe existence to treasurer Frank Jonet”
The Green Bay Press-Gazette shares the story of guys with money who stepped up to save a team they loved:
Even casual students of Green Bay Packers history might recognize the names of the local businessmen who played the key roles in keeping the franchise afloat through its economically turbulent first 30 years.
There’s the legendary Curly Lambeau, whose statue sits in front of the Lambeau Field Atrium, and the rest of the “Hungry Five” who made sure the team stayed solvent in its most dire days: Andrew Turnbull, the former Green Bay Press-Gazette publisher and first team president; Lee Joannes, a local grocery wholesaler and team president from 1930-47; Dr. W.W. Kelly, another original franchise officer who doubled as the team’s first physician; and Gerald Clifford, the Packers’ long-time attorney who in 1923 drew up the papers for their one-of-a-kind incorporation.
And what’s early Packers history without mention of George Calhoun, the irascible Press-Gazette sports editor who relentlessly promoted the team after a chance meeting with Lambeau on a Green Bay street corner in 1919 spurred the idea for a local professional football club?
But even experts on the Packers’ early years might not have heard of Frank Jonet, the taciturn, civic-minded accountant who helped steer the franchise through bankruptcy receivership in the mid-1930s and played a key role in the desperate stock sales of 1935 and 1950 that kept the franchise alive.
“I find it strange that (Jonet) wasn’t better known, particularly because he was the financial receiver of the franchise at a time when this team was very, very close to going out of business,” said Bob Harlan, the Packers’ chairman emeritus, who will present Jonet into the team’s hall of fame on Saturday. “The Circuit Court really threatened him, either pay these bills or close up your shop. He was one of the leaders who saw to it that this team continued to exist.”
The entire thing is too long to read even for me and that’s my team but you’re welcome to.
The short version is that the team suffered through multiple financial crises and survived somehow.
Audited Financial Statements for NFL Ventures, L.P. Are Now Available for Your Viewing Pleasure
Today in leaked sports organization financial statements news, Deadspin’s latest scoop is the audited financial statements of NFL Ventures, L.P. and Subsidiaries. NFL Ventures consists of the following subsidiaries: NFL Enterprises, NFL Properties, NFL Productions and NFL International. These companies perform operations from broadcasting to advertising to the NFL Network to Super Bowl hospitality.
As you can imagine, professional football in the United States is a pretty lucrative business. Forget the mess that is the
Ugh. That’s an ugly one, huh? I managed to get pretty close on the math, however. If you multiply the total expenses by 1.09 and then subtract that total from the gross revenues of $1.7 billion, you get the $1.2 billion (within $15-20 million or so). Craggs writes that this “accounts for the drop in net income” although that doesn’t seem correct (I emailed him to see if he can clarify) but is correct in saying that this remittance is simply “money moving from one pocket to another.”
Other than that, the report, also audited by Deloitte, is fairly lengthy and seems fairly innocuous since the companies as a whole appear to be extremely healthy (e.g. robust working capital, growing operating profit, impressive cash flow). There was a cash distribution FYE ’10 of $136 million to the limited partners, however nothing else really stands out.
Of course if you’re a rabid football fan, this is all quite infuriating because it stands as evidence that the team owners simply want more money for themselves. And Craggs smartly points out that since the G-3 program ran dry in ’07, that left some owners in the lurch:
[T]he case could be made that the real dispute at the heart of the lockout lay between the owners who’d exploited the G-3 program to build bright new revenue-generating stadiums and those who hadn’t and now couldn’t because their peers had burned through the fund. In this light, the lockout looks like something else entirely — less a battle between management and labor and more a proxy war in which the owners, unwilling to fight each other for money, decided to extract it from the players instead.
The full report is on the next page. Enjoy.
Let’s Dig into the NFL League Office’s Audited Financial Statements, Shall We?
Once again, Deadspin has scooped up some audited financial statements of a sports organization and this time it’s a big fish – the National Football League League Office. Audited by Deloitte, these financial statements (in full on page 2) present the Statement of Financial Condition (I’ll call this the balance sheet to keep things easy), Statement of Activities and Changes in Net Liabilities (going with income statement here), and Statement of Cash Flows with the accompanying notes for the years ended March 31, 2010 and 2009. All right, let’s do this.
The presentation for the balance tement is broken out between the NFL League Office, the League’s G-3 Stadium Program with the total of the two making up the third column. Tommy Craggs focuses primarily on the G-3 Stadium Program which he points out is “a matter that lies at the heart of lockout.”
The G-3 Program is interesting because this is how the league has financed the boom of new stadiums in the last year or so. Currently 13 teams are involved in the program for twelve new stadiums (the Jets and the Giants get to share). Here’s the table from Note 5:
It’s pretty amusing to see some of the disparity in this table, most notably the Detroit LionsGreen Bay Packers owing the League a measly $6.9 million while the Jets and Giants owe over $150 million each. The total owed by the two New York teams accounts for over 40% of the total for FYE ’10 (and the principal balance managed to go up for both, the Chiefs being the only other franchise to have this happen). These funds owed to the League compromise for over 80% of their total assets, financed by notes payable that compromise more than three-quarters of the total liabilities. Essentially, the crux of the organization’s balance is in play here. Obviously, the culture of cheap cash in the Aughts was not lost on the ownership and if banks were handing out money left and right, why not take advantage?
Here are the details on the notes payable:
As you can see, the fun ended in 2008, just as things were getting interesting. The League has entered into a half dozen of interest rate swaps to protect themselves with notional amounts of $249 million.
Some other notable items:
• The Game Officials’ Pension Plan (under Note 7) is underfunded by approximately $20 million, although the majority of the benefit payments come between 2016 and 2020.
• Related Parties (Note 8) has plenty to dig through, however one thing that sticks out is under “Other Related Party Transactions” is the $2 million loan made to “a senior executive” in May 2007. As of March 31, 2010 not a cent of this had been paid back and the note states that “In accordance with the terms of an employment agreement” an amendment was made in March 2010.
• The following paragraph under “Other Related Party Transactions” discusses “amended certain terms of an employment agreement with an executive, including certain termination rights.” This executive can request renegotiation “following ratification of a new CBA agreement [repetitive?].” If a new employment deal cannot be reached, the executive can execute termination rights for approximately $19 million which is equivalent to two years compensation. Just spitballin’ here but it wouldn’t be a stretch to conclude that this part of Roger Goodell’s deal.
• Hilariously, under “Litigation” the matter of Richardson et al. v. NFL et al. we find that Drug Program Agents (i.e. guys who collect cups of piss) sued the NFL and several of its affiliates for treating them as independent contractors as opposed to employees. This was filed in 2007 but in 2008, the plaintiffs filed an amended complaint for “typographical errors” but the complaint didn’t change. In other words, the plaintiffs’ lawyers didn’t use spellcheck. Ultimately the claims were dismissed in 2009 against the NFL but a settlement was reached between the NFL Management Council and the piss collectors.
WHEW! Lots of good stuff in there, so enjoy over the weekend. Deadspin is promising more “documents from a different arm of the NFL,” so hopefully we’ll see more pieces of this. Stay tuned!
Ernst & Young Employee Disappointed with Boston Office’s Party Planning, Lack of Boozehounds
From the mailbag:
EY Boston Tax had their end of busy season party last week. On Tuesday, we had beer and wine in the office. Considering everyone had to work through the first football sunday of the year, the least they could do is get us drunk on a Thursday so we can enjoy ourselves. Who’s gonna get drunk in the office on a Tuesday? [Ed. note: show of hands?]
I have to say I’m disappointed with the social/drinking scene at this place compared to other Big 4s in this market. Pretty stiff, but I feel like the firm takes pride in that–I have no idea why.
Without the proper context, it’s difficult to know what kind of a drinker our tipster is. If he/she is merely a two wines/beers and out person then E&Y Boston is really bucking the trend in that fair city. However, if the tipster is Charlie Sheen, then there’s no cause for concern.
Any Bostonians familiar with the situation are invited to elaborate on the Big 4/next tier drinking scene below or share with us directly.
Winner of Dallas Cowboys Tickets Wasn’t Too Worried About Peasant Fans Showing Up to IRS Auction
The big winner in this morning’s auction of some primo seats at Texas Stadium went to Hank Wendorf of Dallas-based Ticketsource.com.
There was only one other registered bidder at the IRS auction and the total damage ended up being $311,000 which was in Wendorf’s range and he’s pretty flippin’ stoked, “These seat options are not available from the Cowboys. I think it’s a great opportunity for me to add to my inventory,” he told the Dallas Morning News and saying, “In my opinion, these are the best seats in the stadium.”
The package includes seasons tickets for this year plus options to buy the same seats – located behind the Cowboys bench near the 50 yard-line – for the next 30 years, hence, you’ll never get them.
Since the starting bid was around $180k, Wendorf wasn’t too concerned about too much competition showing up to today’s auction but at least he wasn’t smug about it, “If fans want to judge the seat quality for themselves, ‘they can buy tickets from me,’ he said with a laugh before heading off to sign lengthy legal documents.”
Prime Dallas Cowboys seats go to ticket broker for $241,000 in IRS auction [Dallas Morning News]
Attention Dallas Cowboys Fans: You Have Another Shot at Season Tickets Courtesy of the IRS
Tomorrow morning at 9 am Dallas time, bring your biggest suitcase filled with consecutively numbered hundos so you can watch Romo disappoint the faithful for yet another season:
The Internal Revenue Service plans to auction the six-seat package Tuesday, with bidding starting at about $185,000.
It’s the first time in at least five years that a season ticket package for any professional sports team has been auctioned to settle a debt, said Clay Sanford, an IRS spokesman in Dallas.
Sanford said the agency’s privacy rules prevented him from identifying the ticket holder. But a document relating to the auction shows the federal government is owed $4.5 million.
Technically, the IRS is auctioning off two contracts offering licenses, or “options,” for six seats. Included in the package are 2010 season tickets for the six seats and parking for the 10 home games.
The licenses grant the holder the right to buy season tickets for a given seat for 30 years. Licenses for those seats sell for $50,000 each, said Cowboys spokesman Brett Daniels.
That would be $300,000 for the six licenses up for bid.
All of the seats are in section C110 between the 40 and 50 yard lines on the lower level, the first level up from the field. The auction includes parking for the 2010 season.
We should tell you that you’ll also have to pay an additional $70,000 “still due on the contracts and to cover transfer fees.”
Accounting News Roundup: IRS Probing HSBC Clients with Accounts in Asia; Saints Deny State Money Was Taxable; Pot Tax Helps Helps Another California Budget | 07.07.10
HSBC Clients With Asian Accounts Said to Face Probe [Bloomberg BusinessWeek]
“The Justice Department is conducting a criminal investigation of HSBC Holdings Plc clients who may have failed to disclose accounts in India or Singapore to the Internal Revenue Service, according to three people familiar with the matter.
‘This is a global initiative by IRS and the Department of Justice,’ said Robert McKenzie, an attorney at Arnstein & Lehr in Chicago who said he spoke to two people who got letters.
The probes show how the U.S. is expanding its crackdown on offshore tax evasion beyond Switzerland and UBS AG, the largest Swiss bank, s a tax lawyer at Greenberg Traurig LLP in New York. London-based HSBC is Europe’s biggest lender by market value.
‘It’s clear that the IRS and the Department of Justice are intending to pursue other depositors outside of Switzerland,’ Kaplan said. ‘They’ve announced it before, and they are moving forward in that regard.’ ”
A.T. Kearney, Booz Call Off Merger Talks [WSJ]
“A.T. Kearney Inc. and Booz & Co. called off discussions about a possible merger that would have given the two midsize firms greater scale in a highly competitive industry.
The two have flirted with each other multiple times over the years without completing a deal. The most recent talks occurred on and off over the past six months, says a person familiar with the matter.
The combined firm would still have been smaller than market leaders such as Deloitte LLP, McKinsey & Co. and Accenture Ltd in an industry where scale is increasingly important in wooing global business.”
Did Tax Ploy Help Saints Win Super Bowl? [Forbes]
If you feel so inclined, you could probably blame this on Reggie Bush but otherwise it’s probably due to some clever tax attorneys, “In a just-filed U.S. Tax Court lawsuit, the partnership owning the Saints acknowledges that it didn’t treat an $8.5 million annual payment from the state of Louisiana as income and therefore didn’t pay taxes on the sum. Rather, the team said the money was an addition to “working capital” and a nontaxable transaction.
The Internal Revenue Service insists the money should have been included in income by the franchise, owned for a quarter-century by auto dealer Thomas M. Benson Jr. The Tax Court case challenges that position.”
Pot Tax Helping Long Beach Plug Budget Deficit Faces Vote in California [Bloomberg]
“The city council of Long Beach, California, voted last night to pursue taxes on medical marijuana dispensaries, part of what may become a wave of communities turning to such proceeds to plug budget deficits.
The Los Angeles suburb with a population of almost 500,000 scheduled a public hearing on the drug levy for Aug. 3. If the council later approves the wording, a ballot initiative establishing a 5 percent tax on the city’s 35 dispensaries could go to voters in November, according to Lori Ann Farrell, Long Beach’s director of financial management.”
IRS Disbars CPA for Relying on Client’s Income and Expense Numbers [Tax Lawyer’s Blog]
How much due diligence should a tax preparer perform to be comfortable with their clients numbers?
Ex-Qwest Accountant Says SEC Should Be Sanctioned [CBS4]
“The SEC has said [James] Kozlowski hasn’t shown that it acted in bad faith. It has accused him of ‘theatrical conduct,’ including filing ‘numerous losing motions.’ Kozlowski’s attorneys dispute that.”
PwC Will Be There for You When Your Gridiron Dreams Come to an Abrupt Halt
PricewaterhouseCoopers understands that their employees have big dreams. But if those dreams come crashing down into a heap of flaming shit on the doorstep of your life that they’ll be there for you when you have nowhere else to turn.
Case-in-point, Danny Brannagan is a football player. A Canadian football player. And he has a dream to play in the CFL for the Toronto Argonauts. He also has an opportunity to realize his dream to become an auditor for a Big 4 firm but PwC is accommodating his desire to be a tackling dummy until his knees need replaced:
[PricewaterhouseCoopers] is willing to wait while the young quarterback sees how far his skills can take him in the Canadian Football League.
“They (PricewaterhouseCoopers) understand I have a limited window to participate at a high level in sports and they told me to take advantage of that,” the Queen’s graduate said on Wednesday.
Brannagan will get to experience the life of a CFL quarterback while on the practice roster, but more importantly continue to develop the skills that helped him take Queen’s all the way to a CIS title in 2009.
“It will give me an opportunity to learn and develop as a quarterback, get used to the system and get used to the professional aspect of the game,” he said.
Brannagan will be paid the handsome sum of $500 a week while on the practice roster, which is undoubtedly less than he would be making at PricewaterhouseCoopers, even at an entry-level position.
“I don’t know if it’s a sacrifice, necessarily,” Brannagan said.
“PricewaterhouseCoopers has been very accommodating. They have allowed to me to have a flexible start date there. I don’t necessarily look at it as giving something up as much as I’m postponing a career after football.”
Argonauts head coach Jim Barker was thrilled to be able to accommodate Brannagan on the practice roster.
“It’s a lot better than working for an accounting firm,” he said half-jokingly.
$500 a week to get crushed by the defensive starters? Picking up the starting QB’s leftovers (if you catch my drift)? Get snapped on the ass by a linebacker’s towel who may want to get to know him a little better in the shower? These are the things dreams are made of.
Fortunately for Dan-o, PwC has elevators in its offices because he probably isn’t going to be able to walk up stairs after his “football career” is over.
Plus, the nerve of this coach. There was no half-joking there. He was dead serious. Would the Argonauts be there for Danny if he was part of the next round of PwC layoffs? Not likley.
Deloitte Playing Superhero to Group Hoping to Buy Manchester United
Let’s stop digging E&Y for five minutes and talk about Deloitte trying to sex itself up as tax advisory coaches to the group hoping to purchase Manchester United.
Deloitte, which has worked hard to build up its sporting credentials with its annual audits of football’s finances and consultancy work for a host of clubs, is understood to have become the latest big financial hitter to become associated with the Red Knights, the would-be buyers of Manchester United, in an advisory capacity.
Alongside Freshfields, which is supplying legal expertise, and Nomura, the Japanese investment bank that has been responsible for contacting all the 40 or so wealthy individuals who expressed concrete interest in the plan, Deloitte is believed to have been supplying advice on tax structures and how to structure any bid most efficiently.
Yeeeeeeeeeeah I can see it now, “casual football Friday” memos circulated around Deloitte’s UK offices about appropriate garb for the field and some hokey “We Are the World” sing-a-long at the end when Manchester United kicks whomever’s ass (I don’t watch the stuff). Excellent.
In the spirit of not discriminating when ripping on the Big 4, this Deloitte flick nearly brought me to tears. Maybe it was the faux hawk or the overgrown baby beard. Perhaps it was the fucking cape. You decide.
The Green Dot FTW!