Revenue / 07.27.18

Will the Trump Tax Bill Drive Down Ticket Sales?

Access Staff

Original article published on the New York Times (07/27/18) by David Waldstein David

There are concerns that eliminating the 50-percent deduction for business entertainment expenses as part of the Tax Cuts and Jobs Act could spark a decline in ticket sales, despite an accompanying reduction of the corporate tax rate from 35 percent to 21 percent. If the minuses of these tax reforms outweigh the pluses, sports groups like Major League Baseball (MLB) could pay a heavy price, compounded by falling attendance. Business purchases constitute a significant portion of season-ticket sales for most teams, with MLB seeing an average 30-percent corporate ownership of season tickets, excluding the accounts of brokers who resell their tickets to corporate and noncorporate fans. One baseball executive says the rates of corporate sales for baseball range from about 15 percent to 50 percent. Public accountant Lance Christensen with Margolin Winer & Evens is cautioning his clients of the growing real cost of tickets, noting that firms would use assorted variables to calculate their costs and benefits, such as the reduction in the corporate tax rate, the state of the economy and the specific business, and the outcomes for the teams they pay to see. "When things start turning with your particular industry or company, or the economy in general, one of the first things companies look at is these types of entertainment expenses," Christensen notes.

Read the full story on the New York Times website.

Tags: Sports , Regulations , News , Stadium