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Wednesday, February 23, 2011
THE PHILADELPHIA INQUIRER
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Trudy Rubin Michael Smerconish Karen Heller Guest columnist Julia Baird
What? NFL, players can’t agree on $9 billion N
o doubt, as you pay ever larger monthly bills with a stagnant or shrinking income, you have felt the pain of the National Football League and its owners. Certainly, as you attempt to be an informed citizen while earning a living and raising a family and trying to squeeze some leisure into your life, you fight back tears over the plight of NFL players. It may even be that you find yourself distracted at work and distant with the spouse and kids, so consumed are you by the lockout deadline looming just eight days away. OK, it’s more likely you’re sick of the whole thing and wish a pox on both owners and players. If the two sides can’t figure out a satisfactory way to divide $9 billion in annual revenues — for presenting and playing a glorified children’s game — maybe the NFL should just shut down operations. This is an understandable reaction whenever those things you seek to escape by following sports become the very things that dominate the sports pages. If you want disputes over money, arguments over health care, greedy manage-
ment and out-of-touch unions, you’ll stick to the front page for news from Washington and Wall Street. With all that granted, there are reasons for even a casual Eagles fan to know what’s happening in the ongoing negotiations between the NFL and its players. The closer you follow the game, the closer you should follow the issues that will be addressed in a new collective-bargaining agreement. Start with that. There will be a new CBA. There will be a Super Bowl next Feb. 5 in Indianapolis, which means there will be some kind of NFL season and postseason. At worst, the owners who created the current showdown by opting out of the previous CBA two years early might be willing to sacrifice a few regular-season games in order to prove their resolve.
Recent developments, however, suggest that a deal is possible much earlier. Since Friday, negotiators have met for seven to eight hours per day in the presence of George Cohen, director of the Federal Mediation and Conciliation Services. According to Sports Business Journal, the FMCS gets involved in about 5,000 disputes per year. It has an 86 percent success rate in helping to find solutions. Back on Feb. 4, New England Patriots owner Robert Kraft said a deal could be worked out “in a week” if negotiators actually sat down and negotiated. A league that keeps shattering its own records for success as measured in attendance, revenues and TV ratings seems like a pretty good candidate for finding compromise with its players’ union. That is especially true when both sides seem to comprehend the absurdity of a long labor war. “[I]f we do not reach an agreement and there is interruption in NFL football, we have failed to honor the commitment that our fans have made to this league and to this game,” NFL negotiator Jeff Pash said earlier this month.
“Look,” NFL Players Association executive director DeMaurice Smith said, “our job is to get a CBA done as quickly as possible.” And what would a deal look like? How will it change the NFL as you experience it? There could be significant changes. The owners want an 18-game regular-season schedule, with just two preseason games per team. Players say they are against that — more games represent more risk of injuries — but an estimated $500 million of annual revenue sounds very persuasive. A 20-week regular season, with two bye weeks built in, would affect how rosters are constructed, how division races play out and pretty much everything from training camp practices to the date of the Super Bowl. A rookie wage scale would remove the enormous bonuses teams now pay for unproven high draft picks. That would shift more pay to later picks and undrafted players who excel on the field. In theory, it would prevent players like Eagles wide receiver DeSean Jackson from growing dissatisfied because they’ve outperformed their rookie contracts.
Finally, there is much-needed focus on long-term benefits for retired players, an issue that fell between the two sides’ interests in previous agreements. If nothing else, it is easier to enjoy an NFL game if you don’t feel like you’re watching men destroy themselves for your entertainment. Can a lockout be avoided? We’ll know more after this first week with a grownup (Cohen, the federal mediator) in the room. If progress has been made, the two sides could push that March 4 deadline back. If these sessions produce nothing but spin and posturing, it could be a long battle. You will be excused if work, family and the constant pressure to pay those bills prevent you from caring very much. Follow columnist Phil Sheridan on Twitter at twitter.com/Sheridanscribe. Read his blog at http://go.philly.com/ philabuster or his recent columns at http://go.philly.com/philsheridan.
Karen Heller’s column does not appear today.
Hitting a less-taxed note
Opera singers
Ailyn Perez and Steven Costello have relocated to Chattanooga, Tenn., to avoid the business privilege tax. Some fear more artists will follow.
Business tax has some self-employed artists moving out of town. By David Patrick Stearns
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INQUIRER MUSIC CRITIC
f ever a musical power couple were destined to settle in Philadelphia, it’s Ailyn Perez and Stephen Costello. This is where the up-and-coming soprano and tenor met as Academy of Vocal Arts students, bonded over an evening of salsa dancing, and moved into a Center City apartment just blocks from the headquarters of the Opera Company of Philadelphia, which recently starred them in a production of Romeo et Juliette. But today, they are former Philadelphians, living in Chattanooga, Tenn., near Perez’s parents. The reason: taxes. “We’d have to pay 4 percent [net profit] tax on worldwide income, plus self-employment tax [on money earned in Philadelphia] — and for that you have to … prepay the next year,” said Perez. “And we’re rarely home, at most a week and a half at a time.” In their joint return, the reward for leaving Philadelphia was an annual saving of $10,000 to $20,000. Though Chattanooga is an extra two hours’ travel time from Europe, where they often perform, and the airfare is often $100 or so more, the Scenic City, population 170,000, made Forbes magazine’s 10 top
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Today’s Question: Should Philadelphia do more to keep its creative talent? A. Yes, that $100,000 business-privilege tax deduction is a good start. B. Yes, though there’s no need to give away the store. C. No, they should compete on the same playing field as everyone else. D. No, who’s to decide what’s “creative”? “Bang For Your Buck” cities. But is there salsa dancing? Perez doesn’t know — she has lived there a total of 12 days. Every place has taxes, but Philadelphia’s business privilege tax results in a 6.5 percent tax total on Philadelphia income (compared with city wage tax alone, which is slightly under 4 percent). That’s what motivated Perez and Costello to look elsewhere. The tax has been the subject of an apparent wave of compliance enforce-
ment that is much discussed among self-employed musicians whose TurboTax software told them they were doing all the right things, but who received letters summoning them to the city tax authorities. “Any over-the-counter tax software is only as good as our knowledge,” said Collingswood accountant Steven Pollock, who works with many music professionals. But “the City of Philadelphia could do a better job of educating its citizens on tax responsibilities for the self-employed.” Whatever the taxes, some artists find life in Philadelphia attractively less expensive than, say, in New York City. Violinist Sarah Chang, now in the 20th year of an international career, leaves tax matters to her accountant and wouldn’t dream of leaving her hometown. “I have so many friends here and we have a phenomenal orchestra. My old babysitter is in the orchestra, the person who taught me how to drive is in the orchestra. It really is family! I love the restaurants, the energy …,” Chang wrote in an e-mail. Now a year out of the Curtis Institute, violinist Ray Chen, whose debut album on Sony Classical was released this month, recently bought a Center City apartment. He loves the city and its convenience.
MICHAEL BRYANT / Staff Photographer
“One of the coolest things is that the elevators go all the way down to a private area in Suburban Station [with trains to the airport]. I literally don’t have to resurface until I’m in my final destination, whether that be Europe, Asia, or Australia!” he wrote in an e-mail — from Paris. They’re not singers, though, and singers have careers more akin to those of athletes than instrumentalists; there’s no deduction for, say, an expensive violin. Also, though a typical operatic engagement is at least a month, singers are paid only for performances and not for weeks of rehearsal. For violinists, an orchestral engagement is a week — one rehearsal and two to four performances. Even superstar tenor Luciano Pavarotti kept a Monaco residence for tax reasons. “As artists, we have to be so careful with our money,” said Perez, “… and make the most of
every opportunity.” This isn’t good news for Gary Steuer, chief cultural officer for the City of Philadelphia. The business privilege tax, he says, “is clearly an adversity to the creative sector. We have good training grounds here. When they come here to study, we want them to fall in love with the city and make their lives here.” Steuer has been advocating a $100,000 deduction for the self-employed, keeping in mind that the majority of Philadelphia’s artists’ incomes fall below that. It was discussed in the last cycle of City Council sessions and will come up again during the next year. “That would be considerably great,” Perez said on hearing about the proposal. “We might move back!” Contact music critic David Patrick Stearns at dstearns@phillynews.com.